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Renewable Energy: Toward A Portfolio Standard?

Fortnightly Magazine - August 1998

would be reduced by an estimated 2 percent as a result of displaced fossil fuel generation. Wind would account for almost half the new non-hydro renewable generation in 2010, and geothermal power would make up more than a third.

The Tellus researchers cautioned, however, that their method may have overestimated the cost of the RPS. Their model couldn't account for the "multitude of local, high-value applications of clean, small technologies" that could evolve under an RPS, more research and development investments, or the impact of green marketing initiatives.

An EIA analysis of S. 687, conducted at Sen. Jeffords' request, concluded that his inclusion of a CO2 emissions cap of 1,914 million tons, beginning in 2005, would prompt a rise in renewables above the bill's 10-percent requirement by 2010. Average regulated prices would be about 12 percent higher in 2020 if the bill's provisions were implemented. That's about $7 per month on the average residential bill. The report assumed that gas-fired and coal-fired generation would decline, while wind and biomass generation would increase.

But the EIA quickly pointed out that uncertainties couldn't be figured into the cost calculations. One of the biggest is the cost of developing enough renewable resources to meet the RPS level. New biomass plants will need a steady source of fuel from an energy crop industry that doesn't yet exist. And wind plant developers may face considerable difficulties in locating suitable sites. Those factors, the agency noted, could drive up costs beyond estimates.

The Natural Gas Supply Association, a staunch opponent of the RPS, argues it's just not reasonable to assume that a higher rate of renewable generation can be achieved simply by allowing the market to put green power plants where they're most cost-effective. For example, some communities would undoubtedly balk at becoming wind farm centers, says NGSA spokeswoman Charlotte LeGates.

"You can hear these blasted things a mile-and-a-half away," she says. "And because of the resonance problem, the noise can actually be worse inside your house than outside your house."

Moreover, contrary to the EIA's assessment that a nationwide RPS would reduce harmful air emissions, LeGates argues the RPS would "do nothing for the environment." That's because biomass, as the most reliable renewable energy source, would make the greatest immediate gains under an RPS, and biomass, she says, "is essentially uncontrolled burning."

AWEA has rebutted that claim, citing a National Renewable Energy Laboratory study of the environmental effects of California solid-fuel biomass plants. The study concluded that the use of biomass residues as fuel leads to large net reductions in emissions of air pollution compared with gas- or coal-fired generation. The new biomass gasification technologies which might be encouraged under a stronger renewables market would further reduce emissions, according to the report.

A Way to Gain an Edge?

For New Jersey's Public Service Electric and Gas Co., which serves 1.8 million electric and 1.5 million gas customers, support for a statewide RPS has competitive aspects as the state deregulates. In March, PSE&G issued a joint statement with the NRDC declaring common positions on environmental aspects of deregulation.