What is a Renewable Electricity Standard?

Although 2009 was a record year for U.S. wind power installations, the future growth of the industry is still uncertain because America has not yet made a long-term commitment to renewable energy.  Federal policies that demonstrate commitment to the renewable energy industries can change this dynamic.  The Renewable Electricity Standard (RES), also known as a Renewable Portfolio Standard (RPS), is such a policy.  Flexible and market-driven, the RES would require electric utilities to obtain a certain minimum percentage of the electricity they sell from renewable energy sources (wind, solar, biomass, geothermal, some types of hydro).  Renewable energy suppliers would compete against each other to provide that electricity.  The RES would enable renewable energy sources, such as wind, to provide the clean, reliable, domestic electricity the U.S. needs.

Why does the U.S. need an RES?  Why does an RES help wind work?

• An RES helps create a long-term, stable, competitive market for capital investment.
  • The long-term predictability of an RES will enable the industry to attract investment capital and achieve manufacturing economies of scale that will spur economic development, lower consumer prices, strengthen U.S. energy security, and help our environment.  This means more economic development here on our shores, instead of in countries that currently have a strong market signal.

What would a federal RES do?

• An RES helps create jobs.
  • A national RES would create jobs and increase income across the country, especially in economically hard-pressed rural areas and in industrial regions that have depended on traditional manufacturing.  Each large utility-scale wind turbine that goes online generates over $2 million in economic activity.
  • Wind power supports 85,000 jobs in the U.S. today, and the number of wind turbine and wind turbine component manufacturing facilities in the U.S. has blossomed to over 200 facilities across the U.S., up from fewer than 100 in 2007.  While new manufacturing investment dropped in 2009 compared to 2008, at least 39 wind manufacturing plants were expanded, announced or opened last year—suggesting wind power’s huge manufacturing investment and job creation potential given the right policies.
  • The “Job Impacts of a National Renewable Electricity Standard” study, conducted by independent firm Navigant Consulting, Inc. and released by the RES Alliance for Jobs, found that a 25% by 2025 national RES would support an additional 274,000 renewable energy jobs – the equivalent of a cumulative 2.36 million job-years of work – over a no-national policy option.  On the study, Don Furman, Senior Vice President of Business Development, Transmission and Policy, also said, “A target like 25% by 2025 would allow American wind companies to support double the amount of jobs than without a policy – about 125,000 additional jobs.  That’s a gain our country cannot afford to pass up.”
  • The CEO of GE Energy, John Krenicki, Jr., testified at a Congressional hearing that GE believes “wind and solar energy are likely to be among the largest sources of new manufacturing jobs worldwide during the 21st century.”
  • Last month, the BlueGreen Alliance, AWEA and the United Steelworkers released Winds of Change: A Manufacturing Blueprint for the Wind Industry, a new report which provides a comprehensive look at wind manufacturing in the United States and details key policies – including an RES – needed to increase domestic wind manufacturing.
• An RES saves American consumers money and protects against fuel spikes.
  • Diversifying our energy supply by developing our own homegrown, zero-fuel renewable energy resources like wind would help shield consumers from spikes in energy prices. Several studies – ranging from the Department of Energy’s Energy Information Administration to the Union of Concerned Scientists – have found that a national RES would save American consumers billions of dollars in lower electricity and natural gas bills.
• An RES provides an immediate down payment on climate change goals.
  •  A national RES will deploy currently available clean technology and create immediate emission reductions cost-effectively. To achieve the significant emission reduction goals needed for climate stabilization, a number of complementary policies will be needed, and the national RES is a critical first step that will have an immediate impact on emissions levels.
  • An RES is a commitment to renewable energy development in the U.S. which will help change the course of our energy future. As the most abundant, affordable, and readily available source of carbon-free electricity generation, wind power is uniquely positioned to contribute to the global warming solution, especially in the early years of the climate stabilization effort, when few other options are available.
  • Wind power is already reducing carbon dioxide emissions: the wind power installed in the U.S. through 2008 will displace over 44 million tons of carbon dioxide emissions this year.
  • A 25% RES by 2025 could reduce our CO2 emissions by 20% by 2020, putting the U.S. on the path to meet an emission reduction goal of 1990 levels by 2020.

How we know Renewable Electricity Standards work…

• Thirty seven countries around the world, including China and each nation in the European Union, have renewable energy targets.  Twenty eight U.S. states already have RES policies in place.  By enacting a national RES, the United States would, for the first time, declare a long-term commitment to renewable energy. The 28 individual state RES programs have helped jump-start renewable development in the U.S., but a national program is necessary in order to take advantage of the ample renewable resources that exist across the U.S. and to allow all states to enjoy the benefits of renewable energy development.  

I’m sold!  What do we need to do to pass an RES?

Background: National energy and climate legislation could provide the next step in deploying renewable energy and reducing carbon emissions.  To do so, climate legislation must provide an economic incentive to switch to clean energy resources.  AWEA seeks a national RES that calls for 25% of the nation’s electricity to come from renewable energy by 2025.  An aggressive near-term target, such as the 10% by 2012 objective called for in the Obama-Biden New Energy for America plan, is essential to ensure rapid renewable energy deployment. The target levels should increase incrementally in the years that follow.

On June 26, 2009 the House passed energy bill H.R. 2454, also known as the American Clean Energy and Security Act (ACES), to create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy. The bill contains a 20% RES by the year 2020.