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Renewable Energy Mandates

Jay Slough - Friday, March 12, 2010

Environmentalists and a bipartisan collection of Washington politicians are actively pushing for “green,” or “renewable,” power. These renewable energy sources include biomass, geothermal, hydroelectric, solar, and wind. Over the years of lengthy debates about adverse effects of fossil fuels - coal, natural gas, and petroleum - and nuclear energy, the U.S. Federal Government has crafted certain laws as a form of their mandate:

  • Clean Air Act of 1970 (as amended in 1990) - This legislation produced incentives to decrease mobile sources of pollutants.
  • Alternate Motor Fuels Act of 1988 - This established what is known as Corporate Average Fuel Economy Credits.
  • Energy Policy Act of 1992 - This required federal, state and alternate fuel provider fleets to come up with an inventory of alternate fuel vehicles.
  • Energy Policy Act of 2005 - This legislation focused on the utilization of alternative fuels along with the development of supporting infrastructure.
  • Energy Independence and Security Act of 2007 - This legislation brought forth provisions to boost the supply of renewable fuel sources and to reach 35 miles per gallon by 2020.
  • Emergency Economic Stabilization Act of 2008 - This legislation ratified the provisions of Energy Improvement and Extension Act of 2008.
  • American Clean Energy and Security Act of 2009 – The objective of this legislation is to create green energy jobs, fight global warming, achieve energy independence, and a transition to a clean energy economy.

Apart from the above-mentioned legislative breakthroughs, there are also Renewable Portfolio Standards or RPS which have been affirmed and approved by states to open up Green Energy Markets. To date, 27 states, along with the District of Columbia have already adopted the standards, while another 13 states are taking the idea of a standard into consideration. However, a well structured renewable portfolio standard at the federal legislation level is yet to be accomplished. States can now go beyond the federal legislation if they have the means to do so because delays are likely to continue at the federal level and it would be irresponsible for states to sit and wait when they actually have the resources to go about it.

There are two sides to the RPS: there are free market analysts who claim that this presents a dilemma since such mandates will result into higher energy costs, thereby hurting small business owners. Apparently, it can also take away a competitive advantage to manufacturing in one state and give it to another. On the other hand, proponents endorse it because it would translate into more research and development funds for new technologies, more profit for existing generation facilities which do not participate and it is somehow a local version of the "Kyoto Treaty" sans the severe impact on the economy.

President Obama's administration and the U.S. Congress are mandating utilities to generate 25 % of their electricity from renewable energy sources by the year 2025. The mandates pertaining to the RPS states that renewable energy sources include solar, wind, biomass, geothermal, tidal, landfill gas, qualified hydropower, hydrokinetic or marine technologies.


   

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