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U.S. Missing Renewable Energy Opportunities

Published by MAC on 2006-09-18

U.S. Missing Renewable Energy Opportunities


18th September 2006

Renewable energy technologies are fast becoming economically competitive with fossil fuels, but U.S. federal policy is hampering development of the nation's abundant renewable energy resources, according to a report released Monday by U.S. researchers.

The federal government continues to pour subsidies into oil, gas, coal, and nuclear energy, the report said, and has failed to aggressively shift energy policy to encourage rapid development of renewable energy sources.

Renewable energy sources provide only about 6 percent of total U.S. energy.

Of the nation's total renewable energy production, 90 percent comes from hydroelectric and biomass. Geothermal comprises 6 percent of U.S. renewable energy, with wind making up 2 percent and solar, 1 percent.

"With oil prices soaring, the security risks of petroleum dependence growing, and the environmental costs of today's fuels becoming more apparent, the country faces compelling reasons to put these technologies to use on a larger scale," said the report, which was authored by researchers from the Worldwatch Institute, an environmental research group, and the Center for American Progress, a liberal think tank.

The report notes that a quarter of U.S. land area has winds powerful enough to generate electricity as cheaply as natural gas and coal. In addition, the solar resources of just seven southwest states could provide 10 times the current electric generating capacity.

U.S. renewable energy policies over the past two decades "have been an ever-changing patchwork," the report said, and "abrupt changes in direction at the state and federal levels have deterred investors and led dozens of companies into bankruptcy."

This means the nation has not taken full advantage of global trends, which see dynamic growth in renewable energy production driving down costs and spurring rapid advances in technologies.

Annual global investment in "new" renewable energy has risen almost six fold since 1995, with cumulative investment over this period nearly $180 billion.

In the past six years, global wind energy generation has more than tripled and solar cell production has risen six-fold. In addition, production of fuel ethanol from crops has more than doubled since 2000 and biodiesel production has expanded nearly four-fold.

But the United States has not kept up with the strong growth in renewables over the past decade and its market share has fallen steadily.

Germany and Spain have taken the lead in wind power, the report said, and Japan and Germany are leading in solar technology. The U.S. share of global production of solar cells slipped from 44 percent in 1996 to 9 percent in 2005. Brazil is the world's largest producer of biofuels, and China has surged ahead in small hydro and solar water heating.

"Time is growing short for the United States to get back in the game and compete for what could be some of the largest new markets of the next few decades," the report said.

Although the federal government has recently boosted biofuel production and extended tax credits for other renewables, the investments still trail similar federal supports for fossil fuels.

The 2005 energy bill included $4.5 billion in tax credits for renewable energy and energy efficiency, but earmarked $6.9 billion for fossil fuels and nuclear power.

The report calls for the federal government to establish a long-term framework for investments and tax credits in renewable energy - current tax credits for wind, solar and geothermal energy development are renewed annually and can be hindered by the legislative process.

It recommends new pricing strategies to make renewable energy more attractive to electricity buyers, further efforts to boost energy efficiency as well as reductions in subsidies for fossil fuels.

The federal government should continue to use its massive purchasing power to build larger markets for renewable energy and should set a long-term targets for renewable energy use, along the lines of the goal to get 25 percent of its energy from renewables by 2025.

"Today's energy system has been shaped by government subsidies and regulatory support," the report said. "The key to a bright American energy future and a new wave of economic activity and innovation is a robust partnership between government and the private sector - providing incentives to jumpstart the new energy industries while minimizing the cost to American taxpayers."

The authors noted that states are increasingly taking the lead on renewable energy issues.

All but four U.S. states now have incentives in place to promote renewable energy. More than a dozen have enacted new renewable energy laws in the past few years, and four states strengthened their targets in 2005.

California gets 31 percent of its electricity from renewable resources - 12 percent of this comes from non-hydro sources such as wind and geothermal energy.

The United States led the world in wind energy installations in 2005 and Texas now has the country's largest collection of wind generators.

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