Comments on: Demand For Green Power Shows Resilience http://www.energypolicyblog.com/2009/12/13/demand-for-green-power-shows-resilience/ Sustainable energy policy, more competition, better regulation, improved policies. Fri, 03 Feb 2012 13:54:12 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Fei Wu http://www.energypolicyblog.com/2009/12/13/demand-for-green-power-shows-resilience/comment-page-1/#comment-67230 Fei Wu Mon, 12 Apr 2010 21:06:34 +0000 http://www.energypolicyblog.com/?p=904#comment-67230 It is reassuring to observe that the 2009 data from EPA further confirms the interest of US companies to go green: purchase from the top-50 companies increased by 4% to 1.3 TWh. The addition steamed entirely from the top-10 companies, 8 of which remained unchanged from the year before. Besides, US companies' growing readiness in green power is further supported by another survey published in January 2010 by Environment Leader and Retailer Daily*. According to the study, half of the companies that were not interested in clean energy are now considering various options, such as producing or buying renewable energy or purchasing Renewable Energy Certificats. Companies that are already on board intend to increase their energy portfolio exposure to the renewables. While the return on invest can be limited when it comes to renewable energy, the respondents of the above survey made it clear that financial viability was the necessary condition in changing their energy mix. As such, governmental policies were essential to make onsite energy generation affordable. As most forms of renewable energy still have not reached the mature stage where costs are lowered by economy of scale, governmental incentives through spending or regulation are key to promote new technologies. Most European governments implemented tariff mechanisms to guarantee green power output to be purchased at regulated price (i.e., feed-in tariffs). Yet setting the incentive price can be tricky: too-low and investments will be smothered, too-high and end-consumers will pay for excessive margin benefiting only developers (e.g., the Spanish case). Other countries choose to set a quota of clean energy then allow green energy credits to be traded on markets. This is namely the case in the US, where the state-level Renewable Portfolio Standard (RPS) combined with federal Production Tax Credit (PTC) is considered very effective. According to a report from the National Renewable Energy Laboratory**, states with stronger RPS tend to outperform others in expanding various forms of renewable energy. Endowed with hundreds of billions of dollars, the green program is on top of agenda of most developed and emerging countries. Besides the selfless pursuit of “the best world possible for future generations” and the fear of being left behind in the post-oil era without strategic technologies, it boils down to an economic calculation. Governments must seize the opportunity of creating millions of “green-collar job” in a context of global recession. In addition, better conscious may sweetens somewhat the bitter restructuring of existing technologies. * Enterprise Renewable Energy Adoption Survey: Benchmarking Onsite Renewable Energy Generation, Purchasing & REC Buying ** State of the States 2009: Renewable Energy Development and the Role of Policy It is reassuring to observe that the 2009 data from EPA further confirms the interest of US companies to go green: purchase from the top-50 companies increased by 4% to 1.3 TWh. The addition steamed entirely from the top-10 companies, 8 of which remained unchanged from the year before.

Besides, US companies’ growing readiness in green power is further supported by another survey published in January 2010 by Environment Leader and Retailer Daily*. According to the study, half of the companies that were not interested in clean energy are now considering various options, such as producing or buying renewable energy or purchasing Renewable Energy Certificats. Companies that are already on board intend to increase their energy portfolio exposure to the renewables.

While the return on invest can be limited when it comes to renewable energy, the respondents of the above survey made it clear that financial viability was the necessary condition in changing their energy mix. As such, governmental policies were essential to make onsite energy generation affordable. As most forms of renewable energy still have not reached the mature stage where costs are lowered by economy of scale, governmental incentives through spending or regulation are key to promote new technologies.

Most European governments implemented tariff mechanisms to guarantee green power output to be purchased at regulated price (i.e., feed-in tariffs). Yet setting the incentive price can be tricky: too-low and investments will be smothered, too-high and end-consumers will pay for excessive margin benefiting only developers (e.g., the Spanish case). Other countries choose to set a quota of clean energy then allow green energy credits to be traded on markets. This is namely the case in the US, where the state-level Renewable Portfolio Standard (RPS) combined with federal Production Tax Credit (PTC) is considered very effective. According to a report from the National Renewable Energy Laboratory**, states with stronger RPS tend to outperform others in expanding various forms of renewable energy.

Endowed with hundreds of billions of dollars, the green program is on top of agenda of most developed and emerging countries. Besides the selfless pursuit of “the best world possible for future generations” and the fear of being left behind in the post-oil era without strategic technologies, it boils down to an economic calculation. Governments must seize the opportunity of creating millions of “green-collar job” in a context of global recession. In addition, better conscious may sweetens somewhat the bitter restructuring of existing technologies.

* Enterprise Renewable Energy Adoption Survey: Benchmarking Onsite Renewable Energy Generation, Purchasing & REC Buying
** State of the States 2009: Renewable Energy Development and the Role of Policy

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