Waxman-Markey RES creates land-use dilemmas.
Tom Hewson is principal with management consultancy Energy Ventures Analysis in Arlington, Va. Dave Pressman is an analyst with the firm.
Most policymakers consider renewable energy incentives as a cost-competitive approach to reduce fossil-fuel generation and reduce future greenhouse-gas (GHG) emissions from the utility sector. Because of renewable’s much higher production costs, 29 states have adopted renewable energy standards (RES) that close a portion of their retail electricity markets to only qualifying renewable energy generation sources—namely biomass, wind, solar, geothermal and in some cases new hydro (see Figure 1). These state standards have triggered the rapid expansion in non-hydro renewable generation that has grown by more than 50 percent from 81 TWh in 2000 to 123 TWh in 2008. Non-hydro renewable sources now account for 3 percent of U.S. power generation.
The full cost and impact of these state standards have yet to be felt since they are initially set at low market shares and are gradually increased over time. By 2020, the state renewable set-aside market is anticipated to reach 335 GWh (see Figure 2). This protected market will represent 7.9 percent of the 2020 U.S. retail power market.