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What Do You Mean by Green?

Seemingly eco-friendly definitions can prevent adoption of renewable portfolio standards.

Fortnightly Magazine - October 1 2003

bill are more than Illinois can be expected to support, leading to an unworkable situation. Illinois can support up to 9,000 MW of installed wind capacity, based on current estimates. 6 Including the upper limit of 200 MW of the average capacity of other renewable energy, all 9,000 MW of installed capacity would need to average an almost 32 percent capacity factor. Even with the most generous estimates, the RPS proposed by the Illinois bill remains an impossible dream.

How could an impossible definition for green almost become part of an Illinois mandate? First, in fairness, the definition used in the failed bill was somewhat more inclusive than in RPS legislation in most other states where such issues have been addressed, meaning that most green definitions would make the RPS unreachable. Second, some notions of green serve as a surrogate for other issue agendas.

The desire to fundamentally change the generation system may be driving some conceptions of green to the point of irrelevance. Definitions that include "new renewable/green" clauses seek to forcibly replace installed generation through mandates, regardless of costs or feasibility.

Some of the support for green development comes from developers seeking subsidies for wind, solar, or other projects. The problem is that merely funding specific politically preferred technologies does not address the real green issues efficiently or effectively.

While environmental advocates rightly address emissions from coal-fueled plants, there is not yet an adequate recognition of the variance of emissions from various types of coal plants. The focus on nuclear has been on radioactive waste-disposal issues, rather than the benefits from the lack of atmospheric emissions. Others publicly decry the dangers of nuclear meltdowns or terrorism while extolling the safety of volatile hydrogen gas. The argument here is not that the stated concerns are unjustified, but that the green energy agenda is sometimes ill-focused.

Illinois can move beyond the definitional barriers by adopting a clear, workable standard for green as the foundation for future debate. This new definitional approach will focus on environmental results and maximize the opportunities for compliance. Progress and benefits become measurable more concretely in terms of emissions avoided and volume of fossil fuels saved. Although a future RPS using this definition may still overreach Illinois' resources, depending on the effluent levels chosen or other factors, at least it would offer an opportunity for both progress and success and would be more receptive to adjustment as more was learned.

Adding an emissions allowance trade-and-retire system to the mix will enhance the ability to satisfy-or even exceed-RPS at the lowest cost. Trading systems have proven themselves in the past as powerful tools for reducing emissions. As in other trading systems, the producers able to install renewable-fueled generators or to cut the pollution from existing plants at the lowest price will do so. Further, because green energy produced by retiring credits is indistinguishable from other green energy, green pricing programs could make overcompliance economical if the marginal cost of retiring extra credits is lower than the premium from green power.

No party involved in supplying electricity will need to