Federal incentive payment of 1.8 cents/kWh for the generation of renewable energy—part of The Energy Policy Act of 2005—increases the economic attractiveness of many potential hydro sites,...
Mandatory portfolio standards have different implications for different technologies.
The federal government and several state governments are considering programs to increase the share of electricity produced by renewable generation resources to 20 percent or more. If these programs are implemented and pursued successfully, they will trigger a dramatic change in the role of renewable generation and the requirements placed upon it by the market.
State by state, or region by region, renewable generation must transition from a "source of opportunity" to a consistent, reliable source of power as the percentage of renewable generation exceeds the "reliable source" generation capacity reserve margin. This transition has different implications for the various renewable generation technologies.
The U.S. electric reliability concerns extend from generation, through transmission and distribution, to the point of consumption. The issue is complicated by industry restructuring and the emergence of a competitive wholesale market for electricity, which is altering historical supplier/customer relationships and historical power transmission paths. Continued U.S. population growth and resultant increases in electric consumption and demand, as well as proposed CO 2 emissions caps and reductions could further complicate the electric reliability scenario.
The U.S. population growth of approximately 1.3 percent per year would result in a doubling of population every 50 years and approximately 500 million U.S. citizens by 2050. U.S. energy consumption is growing slightly faster than population, at approximately 1.5 percent per year; electricity consumption is growing at approximately 2 percent per year. Thus electric consumption could increase approximately 150 percent by 2050.
Approximately 70 percent of U.S. electric production is provided by fossil-fueled generation (including biomass), which results in the production of CO 2 and a variety of air pollutants. Concerns about global climate change have resulted in proposed reductions in CO 2 emissions, which could have a dramatic effect on the current and future generation mix.
Renewable Energy Resources Today
Renewable energy resources provide approximately 10 percent of U.S. electricity consumption, representing approximately 4 quadrillion BTUs (quads) of annual energy consumption. Hydropower (2.7 quads) is the largest renewable electric source, followed by biomass (0.7 quads), geothermal (0.3 quads), wind (0.1 quads), and solar (0.06 quads).
Renewable electric generation resources can be categorized either as "reliable sources" or "sources of opportunity." The "reliable sources"-geo-thermal and biomass-can be used to produce base load power. The "sources of opportunity"-solar and wind-can be used when available and replaced by conventional generation when not.
Hydroelectric generation provides a combination of both reliable-source and source-of-opportunity power; some portion of hydro capacity is always available, while the remainder is available only to the extent that weather conditions in the watershed feeding the facility have been wetter than historic lows.
Treating solar and wind resources and a portion of hydroelectric capacity as sources of opportunity avoids the complications and expense of developing multiple, redundant renewable generation sources or electric energy storage for use during periods when one renewable generation resource is unavailable because of local wind or weather conditions.
Wind Generation: A Storage Issue
Wind generation likely will be the most severely affected renewable generation technology as a