US Government reaffirms commitment to renewables-Part I

Felicity Carus

REF contributor Felicity Carus looks at the upside (and potential shortcomings) of President Obama's Climate Action Plan, as it pertains to energy issues.

Prevailing winds at the end of 2013 indicated that the US is blowing towards a clean energy economy. In October, 99.3% of new capacity additions to the US electric grid were from renewables, such as wind and solar. By the end of the year, about 66GW of wind had been installed, with as much as 13Gw being solar.

During his State of the Union Address at the start of 2013, President Barack Obama told Americans that if Congress doesn't act, he would take matters into his own hands in the Oval Office. "If Congress won’t act soon to protect future generations, I will," President Obama stated. "I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”
The industry held its breath in anticipation of Obama's follow-up act to prevent momentum for renewables from fizzling out in the second half of this decade. With many state-renewable portfolio standards already meeting their targets for 2020, particularly in California, the expiration of the Production Tax Credit for wind energy at the end of 2013, and the sunset of solar's Investment Tax Credit from 2016, comments like Obama's do not pass without high hopes.
After all, in the long-term the future looks bright for renewables. The US Energy Information Agency forecasts that increased generation from renewable energy will account for 32% of the overall growth in electricity generation from 2011 to 2040 – a figure that assumes federal and state incentives.
But the renewable industry could only exhale after 10 months with the deployment this past December of Obama's weapon of last resort in the fight against climate change – the executive order.
"In order to create a clean energy economy that will increase our nation's prosperity, promote energy security, combat climate change, protect the interests of taxpayers, and safeguard the health of our environment, the federal government must lead by example," President Obama said at the time.
The order requires 20% of the total amount of electricity consumed by government agencies to be sourced from renewable energy, triple the current figure.
The initial industry response was favourable. “This is a landmark moment in our nation’s history," gushed Rhone Resch, president and CEO of the Solar Energy Industries Association, or SEIA. "Today, climate change is a real and growing threat to America and the rest of the world… it’s so important for the federal government to lead by example. We applaud President Obama for standing firm and following through on a key commitment he made as part of his Climate Action Plan … America’s solar energy industry is doing its part."
But here's the catch: The executive order states the target should be achieved to the extent that it is "economically feasible and technically practicable", providing a clear exit clause if the process of greening the federal government's 500,000 buildings and 600,000 vehicles looks like it might become too expensive.
Look for Part II in next week's REF e-newsletter.

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Energy efficiency  •  Energy infrastructure  •  Green building  •  Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity