The faint silver lining of the Waxman-Markey clean-energy-mandates cloud
The Waxman-Markey bill would require that 20% of the nation’s power supply come from clean energy (15%) and efficiency (5%) by 2020. But wouldn’t the U.S. have reached those mild targets without any government intervention, through natural market growth? Would the bill’s mandates have any effect at all?
A spate of recent analyses have argued that the bill’s Combined Efficiency and Renewable Energy Standard, or CERES, would induce no new deployment of renewable energy over and above the business-as-usual scenario. In other words, Waxman and Markey might as well not have bothered.
There’s not a ton you can do to shine this turd (pardon my French). Southern and midwestern legislators just don’t believe they have viable, scalable low-carbon alternatives other than CCS, which is a long way off. So they’ve whittled the target down and will probably whittle it down further.
If there’s any silver lining hidden in the cloud, it’s here in S610b1:
For each of calendar years 2012 through 2039, not later than March 31 of the following calendar year, each retail electric supplier shall submit to the Commission an amount of Federal renewable electricity credits and demonstrated total annual electricity savings that, in the aggregate, is equal to such retail electric supplier’s annual combined target …
Consider: the bulk of renewable energy growth in the business-as-usual scenario is going to happen in specific regions, mainly in states that have passed RES’s of their own. Think California sun, Texas wind, that kind of thing. But the national RES doesn’t require that the nation get 20 percent of its power from R&E. It requires that every utility get 20 percent from R&E, or at least every qualifying* utility. Even utilities that under business-as-usual would continue getting basically all their power from coal will have to start developing clean alternatives. (Worth noting: without the RES many utilities would satisfy any cap entirely by shifting to natural gas.) Think Southern Company and AEP.
That’s a bigger deal than it seems. Regulated utilities in the South and Midwest have been playing the electricity game a particular way for generations. There’s a cozy old boy’s network of regulators and legislators around many of these utilities that does not engage in much outside the box thinking. Forcing them to start looking for clean generating capacity, even if in the beginning it’s only biomass and some desultory efficiency, involves a cultural shift which isn’t entirely captured by the numbers.
So even if, when 2020 rolls around, national R&E numbers are where they would have been without an RES, it will nonetheless have prodded the nation’s stodgiest, most hidebound utilities to start taking some action, to break out of old habits, to … God forbid … innovate.
* Apparently there are squirrely issues around utility exemptions — the standards were loosened in committee. John Wilson at SACE has been all over it. Some 50% of TVA’s holdings will be exempt from RES standards. Blargh.