by Bob Ciesielski and Bill Nowak
While the fossil fuel and nuclear industries continually tell New Yorkers that renewable energy can't work, the results of so-called CLEAN programs in other countries speak for themselves.
Now, with a push from Sierrans in California, CLEAN (Clean Local Energy Accessible Now) programs are gaining traction there, paving a path for New York and other states.
A CLEAN contract system (or feed-in-tariff, FIT, as it is known in Europe) sets a fair, fixed price for renewable energy sources. Renewable energy generators (homeowners, non-profits, or businesses generating power from sources such as solar, wind, geothermal, or agricultural biogas) are guaranteed long-term (usually 15- or 20-year) contracts with utilities at a fixed price. Generally, the contract price is set at the cost of construction of the renewable energy system plus a reasonable rate of return (5-10%). The renewable energy supplier is then able to obtain financing from banks and investors, which are assured a reasonable return.
This system of supporting renewable energy development has resulted in a rapid increase in well paying manufacturing jobs and has been implemented in over 50 countries. In contrast, domestic renewable energy manufacturing jobs have been slow to grow under the U.S. system, which is subject to huge spikes and slumps in the cost of energy.
Worldwide experience with FITs (especially in Europe) has created a number of best practices for setting prices. For example, prices can be set for different types of renewable energy, i.e., small solar (rooftop placement), large solar (solar industrial arrays), wind, geothermal, etc. This permits development of a variety of renewable energy sources. In most CLEAN programs, prices are set to decline from year to year by a fixed percentage until renewables reach parity with conventional sources.
The advantages of CLEAN contracts are significant:
-As renewable energy industries grow, their cost per unit of electricity decreases.
-Parties willing to produce renewable energy, even homeowners and small business owners, are able to add an income stream making them stakeholders in clean energy.
-The variety of renewable energy sources ensures a reliable, uninterrupted electricity flow.
- A reduction of fossil fuel emissions reduces health costs.
-The issue of global climate change is addressed on a small scale every time a solar panel or wind turbine is installed.
-Spikes in energy prices, which hamper economic activity, are leveled.
-The standard merit order of paying suppliers for electricity requires that each source of electricity purchased by a utility during a day be paid the same price as the most expensive purchase. Significant production of lower priced renewable energy, such as wind and biogas, can reduce the final daily costs paid by utilities, thus reducing costs to consumers.
The current New York Renewable Portfolio Standard (RPS) calls for 30% of our electricity to be produced by renewable sources by 2015. This standard already includes 19% of preexisting sources such as the hydroelectricity plants at Massena and Niagara Falls, so that the NYS goal is actually only 11% of additional electricity from renewables.
New York's RPS has been in place for several years. Despite fine efforts by the New York Solar Energy Research and Development Authority, existing incentives are producing renewable electricity only at 40% of the rate necessary to meet the state's meager renewable goal. New York's proposed Solar Industry Development and Jobs Act, based largely on New Jersey legislation, is also flawed. New Jersey solar development has been decimated by recent significant decreases in energy prices.
Short of a statewide CLEAN program, New Yorkers could choose to institute a pilot CLEAN program through the New York Power Authority (NYPA) and/or the Long Island Power Authority (LIPA). Authority commissioners can decide to set up renewable energy purchase contracts and use proven best practices of CLEAN contracts for pricing alternative energy. The Atlantic Chapterís Energy Committee and Beyond Coal Campaign are examining this avenue of kick-starting renewables. The CLEAN contract programs established by the Gainesville, Florida, municipal power authority resulted in a 2,000 percent increase in solar power output in two years, and has many good lessons for New York.
Ontario, Canada's CLEAN contract program has brought billions of dollars and thousands of jobs in renewable energy into the province since 2009. It is projected that Ontario will install twice as much solar power as California this year.
Germany, Europe's industrial powerhouse, currently produces 20% of its electricity from renewable sources. It has a goal of 35% renewable energy by 2020 and 80% by 2050. The country has over 370,000 well paying jobs in the renewable energy industry. Wind energy alone produced 36,500 billion kilowatt hours of electricity in 2010. In 2010 alone, Germany installed almost a quarter million individual solar systems, totaling 7,400 megawatts of solar capacity.
In contrast, New York, which gets more sunshine than Germany, currently has pending legislation to develop 5,000 megawatts of solar power by the year 2026. Even this weak bill failed to pass in the 2011 legislative session and was strongly opposed by the fossil fuel industry. What is wrong with this picture?
Nuclear disasters in Fukishima, Japan, have caused that country to establish a goal of 30,000 megawatts of electricity to be produced by FITs.
California is requiring 33% of its electricity to be produced by renewable sources by the year 2020, and forecasts 100,000 new green jobs as a result. Last year, California's informed citizens soundly defeated a ballot proposition proposed and funded by the fossil fuel industry to dismantle the state's clean energy legislation.
The fossil fuel industry uses a combination of media propaganda, lobbying efforts and political contributions (often funded by untaxed corporate profits and taxpayer subsidies) to maintain its stranglehold on America's energy policy. If we are serious about moving our country to a clean and sustainable future, this stranglehold must be broken. While federal Republican legislators hold up signs reading, "drilling equals jobs," real worldwide job growth is in renewable energy. While Exxon's paid experts question global climate change, the ice caps melt and the oil states of Texas and Oklahoma break records of 100-plus degree days capped by record drought.
In two notable cases (October 2010 and January 2011), the Federal Energy Regulatory Commission has ruled that CLEAN programs may be used where a jurisdiction's Renewable Portfolio Standard (RPS) requires a percentage of renewable energy to be developed within a certain time frame. These federal decisions have removed a major obstacle to the use of CLEAN contracts in New York.
Adopting a CLEAN program offers New York a proven way forward to create good jobs and move to a leadership position in the transition to renewable energy. What are we waiting for?
Bob Ciesielski and Bill Nowak are members of the Niagara Group.