Congressional Research Service Reports Redistributed as a Service of the NLE*
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97031: Renewable Energy: Key to
Sustainable Energy Supply
Fred Sissine
Resources, Science, and Industry Division
May
27, 1999
97031
CONTENTS
| SUMMARY Debate in the 106th Congress over
the funding and direction of renewable energy programs
will likely focus on the FY2000 spending request, the
Administration's Climate Change Technology Initiative
(CCTI), and proposals for restructuring the electricity
industry. Energy security, a major driver of federal
energy efficiency programs in the past, is now somewhat
less of an issue. Although the Persian Gulf remains
volatile and oil imports make up one-fifth of the balance
of trade deficit, low oil prices and uninterrupted supply
have dampened concern about the potential for import
disruptions.
On the other hand,
worldwide emphasis on environmental problems of air and
water pollution and global climate change, and the
related development of clean energy technologies in
western Europe and Japan especially, have emerged as
important influences on energy efficiency policymaking.
The Clinton
Administration views renewable energy as the key part of
its energy supply policy, both for environmental and
technology competitiveness reasons. Accompanying the
FY1999 budget request, CCTI sought $6.3 billion of tax
incentives over the next 5 years to "encourage
energy efficiency and the use of cleaner energy
sources," plus a number of renewable energy
programs, notably through the Department of Energy (DOE).
For FY2000 request for
request for DOE's Renewable Energy Programs is $398.9
million, which is $62.9 million, or 19% more than the
FY1999 appropriation. This includes $21.1 million more
for Photovoltaics, $19.2 million more for Biomass, $10.8
million more for Wind, and $10 million more for Solar
Program Support. (See Table 1 at the end of this brief.)
At the 1998 Fourth
Conference of Parties (COP-4) to the United Nations'
Framework Convention on Climate Change in Buenos Aires,
the Administration signed the United Nations' Kyoto
Protocol on climate change. It calls upon the United
States to cut greenhouse gas (GHG) emissions to 7% below
the 1990 level during the period between 2008 and 2012.
If the agreement is ratified, the Administration projects
that renewable energy could play a significant role in
achieving emissions reduction.
The electricity
production tax credit for wind and certain biomass
systems is scheduled to expire on July 1, 1999. The
Administration's CCTI proposed a five-year extension of
this credit, as does H.R. 750 and S. 414. Debate over credit extension is
expected to intensify as the expiration date approaches.
Several electricity
industry restructuring bills propose to eliminate the
Public Utility Regulatory Policies Act (PURPA), which has
been key to the growth of renewable power facilities. To
ensure a role for renewables' in this industry, the
Administration-proposed restructuring legislation
includes a renewable energy portfolio standard (RPS),
public benefits fund (PBF), and an information disclosure
requirement that supports "green" pricing and
marketing of renewable power. Some states and electric
utility companies have already instituted such measures.
Debate is likely to focus on whether there should be a
federal role in restructuring generally and in creating
measures for renewables specifically.
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MOST RECENT
DEVELOPMENTS
On July 1, 1999, the energy
production tax credit for wind and certain biomass equipment will
expire. H.R. 750 and S. 414 would extend this credit. On March
26, 1999, the Department of Energy (DOE) proposed a bill to
restructure the electric power industry, "Comprehensive
Electricity Competition Plan," that includes three policies
to support renewable energy. On February 1, DOE released its
FY2000 budget request, which seeks $398.9 million for renewable
energy, which is $62.9 million, or 19% more than the FY1999
appropriation. This includes $21.1 million more for
Photovoltaics, $19.2 million more for Biomass, $10.8 million more
for Wind, and $10 million more for Solar Program Support. (The
budget request documents are available on DOE's web site.)
BACKGROUND AND
ANALYSIS
Renewable
Energy Concept
Renewable energy is derived from
resources that are generally not depleted by human use, such as
the sun, wind, and water movement. These sources of natural
energy can be converted into heat, electricity and mechanical
energy in several ways. There are some mature technologies for
conversion of renewable energy such as hydropower, biomass, and
waste combustion. Other conversion technologies, such as wind
turbines and photovoltaics, are already well-developed, but have
not achieved the technological efficiency and market penetration
of which they are expected to be ultimately capable. Although
geothermal energy is produced from geological rather than solar
sources, it is often included as a renewable energy resource and
this brief treats it as one. Commercial nuclear power is not
considered to be a renewable energy resource. (For further
definitions of renewable energy, see the National Renewable
Energy Laboratory's web site information on "Clean Energy
101" http://www.nrel.gov/ceb.html.)
Contribution
to National Energy Supply
Renewable energy contributes a
significant share of national energy supply. According to the
Energy Information Administration's (EIA's) Short-Term Energy
Outlook, April 1999, renewable energy resources supplied
about 6.7 Q (quadrillion Btu's or quads) of the 94.4 Q the nation
used in 1998, or about 7.2% of national demand. Declining
hydroelectric availability led to a 5% drop in 1998 and is
projected to result in a further 2% drop in 1999. Electricity
production supplies more than half of renewable energy use. Of
this, most is provided by utility hydropower, but a growing share
is provided by nonutility generators. Industry accounts for most
of the other use, supplied primarily by biofuels. EIA's 1999 Annual
Energy Outlook projects that current policies would yield a
0.8% average annual increase through 2020, resulting in a 22%
total increase in renewable energy production. This would amount
to about 6.8% of the projected 119 Q total demand in 2020.
(Detailed breakdowns of renewable energy use appear in EIA's Renewable
Energy Annual 1998 and Renewable Energy Issues and
Trends 1998.)
Role
in Long-Term Energy Supply
Our Common Future, the
1987 report of the World Commission on Environment and
Development found that "Energy efficiency can only buy time
for the world to develop 'low-energy paths' based on renewable
sources, which should form the foundation of the global energy
structure during the 21st century." Although many renewable
energy systems are in a relatively early stage of development,
they offer the world "a potentially huge primary energy
source, sustainable in perpetuity and available in various forms
to every nation on Earth." It suggests that an R,D&D
program of renewable energy projects is required to attain the
same level of primary energy that is now obtained from a mix of
fossil, nuclear, and renewable energy resources.
The Agenda 21 adopted at
the 1992 United Nation's Conference on Environment and
Development (UNCED) concludes that mitigating urban air pollution
and the adverse impacts of energy use on the atmosphere -- such
as acid rain, global warming, and climate change -- requires an
emphasis on "clean and renewable energy sources." A
1996 report by the President's Council on Sustainable
Development, Energy and Transportation, calls for
increasing the share of renewable energy in total U.S. energy
supply to 12% in 2010 and 25% in 2025.
History
The oil embargo of 1973 sparked a
quadrupling of energy prices, massive economic shock, and the
establishment of a comprehensive federal energy program to help
with the nation's immediate and long-term energy needs. During
the 1970s, the federal renewable energy program grew rapidly to
include not only basic and applied R&D, but also joint
federal participation with the private sector in demonstration
projects, commercialization, and information dissemination. In
addition, the federal government instituted market incentives,
such as business and residential tax credits, and created a
utility market for non-utility produced electric power through
the Public Utility Regulatory Policies Act (P.L. 95-617).
The subsequent failure of the oil
cartel and the return of low oil and gas prices in the early
1980s brought much of the federal program down but, from 1972
through 1993, Congress consistently supported a broader, more
aggressive renewable energy program than any Administration in
office. Lacking a sustained, long-range policy from the
Administration, Congress first took a major initiative in 1974.
Until 1994, Congress led policy development and funding through
legislative initiatives and close reviews of annual budget
submissions. FY1995 marked a noteworthy shift, with the 103rd
Congress, for the first time, approving less funding than the
Administration had requested. Driven by budget deficit concerns
and a distrust of federal interventions in market processes, this
shift was accelerated by the 104th Congress which approved 23%
less than the Administration request for FY1996 and 8% less for
FY1997. However, funding turned upward again during the 105th
Congress. (A detailed description of DOE programs appears in
DOE's FY2000 Congressional Budget Request, DOE/CR-0061,
v. 2, February 1999.)
From FY1973 through FY1998, the
federal government spent about $11.7 billion (in 1999 constant
dollars) for renewable energy R&D. Renewable energy R&D
funding grew from less than $1 million per year in the early
1970s to over $1.3 billion in FY1979 and FY1980, then declined
steadily to $136 million in FY1990. Spending rose from FY1991 to
FY1995, declined in FY1996 and FY1997, then rose again in FY1998,
reaching $275 million in 1999 constant dollars.
This spending history can be
viewed within the context of DOE spending for the three other
major energy R&D programs: nuclear, fossil, and energy
efficiency R&D. From FY1948 through FY1972, in real 1997
dollars, the federal government spent about $22.4 billion for
nuclear (fission and fusion) energy R&D and about $5.1
billion for fossil energy R&D. From FY1973 through FY1996, in
1999 constant dollars, the federal government spent $43.2 billion
for nuclear, $21.1 billion for fossil, $11.7 billion for
renewables, and $8 billion for energy efficiency. Total energy
R&D spending from FY1948-FY1998 reached $111.5 billion,
including $66 billion, or 59% for nuclear, $26 billion, or 23%,
for fossil, $12 billion, or 11%, for renewables, and $8 billion,
or 7%, for energy efficiency.
Tax Credits
Residential solar credits and the
residential and business credits for wind energy installations
expired on December 31, 1985. However, business investment
credits were extended repeatedly through the 1980s. Section 1916
of the Energy Policy Act (EPACT, P.L. 102-486) extends the 10% business tax credits for
solar and geothermal equipment indefinitely. Also, EPACT section
1914 created an income tax "production" credit of 1.5
cents/kwh for electricity produced by wind and closed-loop
biomass systems. This credit expires on July 1, 1999.
Public Utility Regulatory
Policies Act
The Public Utilities Regulatory
Policies Act (P.L. 96-917) requires electric utilities to purchase
power produced by renewable power facilities. Under PURPA, the
Federal Energy Regulatory Commission (FERC) established rules
requiring that electric utilities purchase power from windfarms
and other small power producers at an "avoided cost"
price based on energy and capacity costs that the utility would
otherwise incur by generating the power itself or purchasing it
elsewhere. However, to receive avoided cost payments, each
facility must file for, and obtain, qualifying facility (QF)
status from FERC. EIA's Renewable Energy 1998: Issues and
Trends (p. 4-5) reports that, by the end of 1996, nonutility
renewable power capacity reached 17,200 MW, of which 12,600 MW
came from QFs. These renewable power facilities generated nearly
90 billion kwh, of which 69 billion kwh was produced by QFs.
Thus, in 1996, QFs accounted for about 73% of nonutility
renewable power capacity and about 76% of nonutility renewable
power generation. QFs provided about 1.8% of national electric
capacity and about 2.2% of national electricity generation.
DOE's
Strategic and Performance Goals
DOE delivered its final Strategic
Plan to the Committee on September 30, 1997. Renewable
energy objectives and strategies appear under strategic goal #1,
"Energy Resources." In the DOE Annual Performance
Plan for FY2000, objective ER-1, regarding energy supply
disruption vulnerability, includes a goal (ER1-4, p. 10-12) to
"develop alternative transportation fuels to reduce
projected oil imports. It lays out two performance goals and
measures for FY2000 that involve converting agricultural wastes
to ethanol and demonstrating alternative fuel vehicles in
selected applications. Also, objective ER-2, regarding
competitive electricity, includes a goal (ER2-3, p. 15-17) to
"develop renewable energy technologies and supporting
policies capable of doubling non-hydroelectric renewable energy
generating capacity by 2010." Further, it lays out seven
specific performance measures and goals for FY2000 that involve
solar roofs, distributed concentrating solar, biomass co-firing
with coal, wind testing and design, and solar super energy saving
performance contracts (Super-ESPCs).
Production
Tax Credit
EPACT Section 1914 established an
income tax "production" credit of 1.5 cents/kwh to be
paid to businesses for electricity produced by wind and
closed-loop biomass systems. The credit applies to energy
produced from new facilities for the first 10 years. This credit
expires on July 1, 1999. The Administration's CCTI proposed a
five-year extension of this credit, as does H.R. 750 and S. 414. Supporters of the credit extension
contend, for example, that expiration of the credit, combined
with uncertainty created by electric utility restructuring, may
dampen wind energy facility installation. In contrast, a 1997
Cato Institute report, Renewable Energy: Not Cheap, Not Green,
finds that:
...new government subsidies for
favored renewable technologies are likely to create few
environmental benefits; increase electricity-generation
overcapacity in most regions of the United States; raise
electricity rates; and create new "environmental
pressures" ...
Debate over legislation to extend
the credit is likely to intensify as the expiration date
approaches.
Also, it should be noted that the
Renewable Energy Production Incentive (REPI) funded by DOE is a
different incentive that was created with the parallel purpose of
encouraging renewable energy use by state and local governments
and by non-profit electric cooperatives.
FY2000
DOE Budget
The Appendix to the Budget of the
United States' Government FY2000 (Chapter on "Department of
Energy," p. 397) says the FY2000 budget for the Renewable
Energy Program " ... will contribute to strengthening the
Nation's energy security, providing a cleaner environment,
enhancing global sales of U.S. energy products, and increasing
industrial competitiveness and federal technology transfer. The
solar and renewable energy program is a major component of the
Administration's activities to address global climate
change."
DOE's FY2000 budget request seeks
$398.9 million for renewable energy (including $41 million for
electric/storage programs), which is $62.9 million, or 19% more
than the FY1999 appropriation. This includes $21.1 million more
for Photovoltaics, $19.2 million more for Biomass, $10.8 million
more for Wind, and $10 million more for Solar Program Support.
(The budget request documents are available on DOE's web site.)
In the State of the Union address, President Clinton emphasized
concern about global warming and proposed a new "clean air
fund to help communities reduce greenhouse and other pollutants,
and tax incentives and investment to spur clean energy
technologies ... "
In DOE's request, Photovoltaics
would grow by $21 million, including $9 million more for research
and $12 million more for collector development. Biopower would
increase by $7.5 million and Biofuels would increase by $12
million. Under Biofuels, a new Integrated R&D Program would
be funded at $6 million. This Program aims to develop
technologies that integrate feedstocks, equipment and end
products to support the creation of a "broad-based bioenergy
industry." An $11 million increase for Wind Programs would
support the "Wind Partnerships for Advanced Component
Technologies" and other research and testing efforts. A key
motivation is to increase U.S. competitiveness with European
nations in growing global markets for wind energy.
A new $2 million Electricity
Restructuring Program would provide technical assessments of
policy concepts and programs such as renewable portfolio
standards (RPS), public benefits funds, consumer information and
disclosure provisions, green marking programs, and distributed
generation concepts. Also, a new Competitive Solicitation Program
would support cost-shared field verification projects, including
data on generation and system outages, to address market barriers
arising from a lack of cost and operational information. This
Program would combine and re-focus funding from two programs:
Renewable Indian Energy Resources and Federal Buildings/Remote
Power. (Details of the FY2000 DOE request appear in Table
1, at the end of this brief.)
For FY1999 renewable energy
programs, the Omnibus Appropriations bill raised the final
appropriation to $336 million, a $66 million increase. However,
$24 million of this increase reflects a decrease in use of prior
year balances. Of the remaining $42 million actual increase in
budget authority, Biofuels programs grew by $15 million,
Photovoltaics increased by $8 million, International programs
were boosted by $5 million, and Biopower programs grew by $4
million.
Climate
Change
The Administration has identified
renewable energy as a significant part of the strategy for
curbing carbon dioxide and other greenhouse gas emissions. This
is reflected in its CCTI proposals for increased renewable energy
R&D spending, tax credits, and other policy mechanisms at DOE
and other agencies. On March 25, the Senate Committee on Energy
and Natural Resources held a hearing on Economic Impacts of
the Kyoto Protocol. It focused on contending views of
potential costs to implement the 7% reduction in U.S. greenhouse
emissions called for in the Protocol. Also, EPA, DOE, and EIA
testified at the April 14 House Science Committee hearing, Fiscal
Year 2000 Climate Change Budget Authorization Request. EIA
contended that the CCTI provisions would provide a minimal impact
on greenhouse emissions. In contrast, EPA and DOE stressed the
urgency of action, noting that CCTI provisions would provide
immediate savings in energy, costs, and emissions.
S. 882, introduced April 27, 1999, proposes
R&D funding increases for renewable energy and other energy
technologies as an alternative to the CCTI. It would provide $200
million per year over 10 years to accelerate development of
energy efficiency, fossil energy, nuclear energy, and renewable
energy R&D. Through this means, the bill focuses on a
long-term strategy for curbing greenhouse gas emissions.
Energy Use Impact on
Climate
Except for biofuels and biopower,
wherever renewable energy equipment displaces fossil fuel use, it
will also reduce carbon dioxide (CO2) emissions, as well as
pollutants that contribute to water pollution, acid rain, and
urban smog. In general, the combustion of biomass for fuel and
power production releases CO2 at an intensity that may rival or
exceed that for natural gas. However, the growth of biomass
material offsets this release. Hence, net emissions occur only
when combustion is based on deforestation. Where the biomass
combustion is based on rotating energy crops, there is no net
release, and its displacement of any fossil fuel, including
natural gas, reduces CO2 emissions.
Human activities, particularly
burning of fossil fuels, have increased atmospheric CO2 and other
trace gases, including chlorofluorocarbons (CFCs), methane, and
nitrous oxide. If these gases continue to accumulate in the
atmosphere at current rates, global warming might occur through
intensification of the natural "greenhouse effect,"
moderating Earth's climate. Excess CO2 is the major contributor
to this effect. (For more information, see CRS Issue Brief 89005, Global Climate Change.)
U.S. fossil energy (coal, oil,
natural gas) use currently produces about one-fourth of the
world's CO2 emissions. Since 1988, the federal government has
accelerated programs that study the science of global climate
change and created programs aimed at mitigating fossil
fuel-generated carbon dioxide (CO2) and other human-generated
emissions. The federal government funds programs for renewable
energy as a mitigation measure at DOE, EPA, the Agency for
International Development (AID) and the World Bank. The latter
two agencies have received funding for renewable energy-related
climate actions through Foreign Operations appropriations bills.
Efforts to reduce greenhouse gas
emissions accelerated after the 1992 United Nations Conference on
Environment and Development (UNCED) concluded with the signing of
the Rio Declaration, Agenda 21 (an action program), and the
Framework Convention on Climate Change (FCCC). Agenda 21 promotes
the development, transfer, and use of renewable energy
technologies, the application of economic and regulatory means
that raise prices to reflect environmental and other social
costs, and other renewable energy- related measures. The FCCC
calls for each nation to develop a strategy for emissions
reduction, inventory emissions, and to promote energy and other
technologies that reduce emissions.
Electric
Industry Restructuring
In response to rising powerplant
construction costs and environmental concerns of the 1980s, many
states and electric utility companies created incentives and
other programs to promote renewable energy as a "clean"
or environmentally friendly ("green") alternative for
producing electric power. Combined with PURPA provisions for
"small power facilities," a new industry of non-utility
generators emerged, providing a small but growing share of
electric power production. However, after California issued its
first proposal for electric industry restructuring in 1994,
concerns arose that lower power prices could dampen demand for
renewables.
Environmental groups and some
energy producers raise concerns that federal efforts to
restructure the electric industry could lead to reduced use of
"clean" energy resources and increased pollution. They
cite the recent decline in state and utility incentives for
renewable energy in anticipation of state-based retail
competition and other restructuring policies. In Federal
Research: Changes in Electricity-Related R&D Funding,
GAO reports that spending on renewable energy R&D by states
and utilities has dropped rapidly. It also observes that the
environmental costs of pollution from supply sources are not
fully included in the price of electric power.
The system of mandatory utility
purchase requirements and avoided cost payments that evolved
under PURPA Section 210 is unlikely to be appropriate in the new
industry structures emerging under industry restructuring. As a
result, debate has become focused on three policy support
mechanisms for renewables: (1) the renewable energy portfolio
standard (RPS), (2) use of a distribution charge to create a
public benefits fund (PBF) that supports renewable energy and
other programs, and (3) voluntary renewable energy purchases by
electricity customers through "green pricing" and green
power marketing programs.
(1) An RPS sets a minimum
purchase requirement (as a percent of energy sales) on retail
suppliers that sell power to end-users. Several states have
adopted an RPS as part of their restructuring processes,
including Arizona, Connecticut, Maine, Massachusetts, New Jersey,
and Nevada. At the federal level, to add flexibility in meeting
the requirement, individual obligations could be tradeable
through a system of renewable energy credits. Some say this
tradeable credits system would be similar to the one for
marketable sulfur dioxide permits adopted by EPA under the Clean
Air Act. RPS proponents include most of the renewable energy
trade associations and a limited number of environmental groups.
They argue that the policy offers a market-based and
administratively simple mechanism. Opponents contend that RPS
lacks a cost control; would largely benefit existing, low-cost
renewables; and is poorly suited for promoting less mature,
higher-cost technologies.
(2) The PBF is based on an
electric service distribution surcharge; it is a way to collect
funds from customers to support a variety of policies with public
benefits, including renewable energy programs. Once collected, a
method of distributing the fund must be devised. California was
the first state to create an PBF. California's law (A.B. 1890,
Article 7) places a charge on all electricity bills from 1998
through 2001 that would provide $540 million for "new and
emerging" renewable energy technologies. In early 1998, the
Energy Commission adopted final rules for expending the $540
million.
Similar funds have been adopted
in Connecticut, Illinois, Massachusetts, Montana, New Jersey, New
York, Pennsylvania, and Rhode Island. Proponents of PBF include
several environmental organizations as well as some electric
utilities, industrial customers, and power marketers. They argue
that the PBF includes an explicit cost containment, is pragmatic,
and if linked to an auction could promote competition. Opponents
contend that PBF could be seen as a tax, may be administratively
complex and, thus, may not hold onto political acceptability.
(3) Green pricing draws from
customers' willingness to pay a premium for renewable energy
products due to their environmental benefits. More than 40
utilities have implemented green pricing programs. Also, green
power marketing -- the selling of green power in the competitive
marketplace -- is underway in the newly competitive markets of
California, Massachusetts, Rhode
Island, and Pennsylvania. The National Renewable Energy
Laboratory (NREL) says that the spread of competition in the
electric industry will lead to growth in the market for green
power services. It estimates that, by the end of 1999, nearly
one-fourth of all U.S. electricity consumers will have the option
to purchase "green power."
A requirement for fuel source
disclosure on customer bills is a key aspect of green pricing and
green marketing. Proponents argue that this option focuses on
enhancing information and customer choice with a minimum of
regulation. Further, it allows suppliers to encourage renewables
development at no competitive cost to themselves or to customers
uninterested in renewable. Opponents say green pricing transfers
the costs for environmental benefits from the general public to a
select group, thereby enabling utilities to avoid responsibility
and perpetuating a key market failure.
Some argue that the three
policies should be viewed as complementary, rather than
competitive. In particular, some contend that the PBF is
best-suited to funding the pre-competitive early stages of
renewable energy technology products -- research, development,
and prototype testing -- while the RPS is best-suited to the
initial and mature phases of market competition for these
products.
Several bills in the 105th
Congress included one or more of the three renewable energy
policies noted above. So far, none of the restructuring bills
introduced in this Congress incorporates policies for renewable
energy.
However, the Administration's
March 26 proposed bill, "Comprehensive Electricity
Competition Plan," includes elements of all three policies
described above. The proposal includes four provisions that could
help encourage renewable energy use: (1) an RPS that would
guarantee a minimum level of generation, rising to 7.5% of total
generation by 2010, (2) a PBF-type public benefit fund that would
provide matching funds to states for renewable energy and other
purposes, (3) a net metering provision that would assure
interconnection availability and allow production from very small
renewable energy projects to reduce utility bills, and (4) a
consumer information disclosure requirement that would show the
renewable energy share of the utility fuel mix.
Some representatives of states
with a restructuring policy in place prefer that their policy
remain in place, and hope that Congress will not set any federal
policy requirements.
Some in Congress believe that
state policy actions would create an uneven patchwork and other
inequities that justify a federal policy role. However, in 1996,
the National Association of Regulatory Utility Commissioners
(NARUC) issued a resolution which resolved that congressional
action on restructuring should support public benefits in
electricity markets. It specifically calls for retaining states'
authority to impose non-bypassable charges to fund programs that
promote renewable energy and other measures and to implement such
programs.
In contrast to all three policies
described above, a 1997 report by the Heritage Foundation, Energizing
America: A Blueprint for Deregulating the Electricity Market,
suggests that restructuring the industry by itself will help the
environment because "deregulation forces power companies to
meet higher standards of efficiency and cleanliness to ensure
that local communities are provided the power they want without
increased pollution." Further, some are opposed to an RPS in
congressional legislation and to set asides to support renewable
energy, arguing that they are unnecessary subsidies and that
solutions should be pursued that can survive in the market
without special protections that cost all Americans. For example,
a 1997 report by the Cato Institute, Renewable Energy: Not
Cheap, Not Green, argues that federal, state and other
sources of spending and incentives for renewables constitute
unneeded subsidies that "needlessly increase electric rates
in return for phantom environmental benefits." Further, the
Natural Gas Supply Association, which represents natural gas
suppliers, has attacked renewable energy sources as costly and
environmentally harmful, in an effort to stop RPS provisions in
congressional electricity restructuring legislation.
(For a discussion of broader
issues, see CRS Electronic Briefing Book on Electricity
Restructuring at http://www.congress.gov/brbk/html/ebeletop.html and CRS Issue Brief IB10006, Electricity: The Road to
Restructuring.)
Legislation
Funding levels for DOE's
renewable energy programs are considered in the FY2000 Energy and
Water Development appropriation bill. Similarly, funding for
GEF's renewable energy programs is considered in FY2000
appropriation bill for Foreign Operations, Export Financing, and
Related Programs.
H.R. 750 (Thomas)/S. 414 (Grassley)
Amends the Internal Revenue Code
of 1986 to provide a 5-year extension of the credit for producing
electricity from wind, and for other purposes. House bill
introduced, February 11, 1999; referred to Committee on Ways and
Means. Senate bill introduced February 11, 1999; referred to
Committee on Finance.
S. 882 (Murkowski)
Energy and Climate Policy Act of
1999. Establishes new Office of Global Climate Change at DOE and
authorizes $2 billion over 10 years to fund renewable energy and
other energy technology programs. Introduced April 27, 1999;
referred to Committee on Energy and Natural Resources.
S. 815 (Roth)
Poultry Electric Energy Power
(PEEP) Act. Amends the Internal Revenue Code of 1986 to extend
the credit for producing electricity from poultry waste.
Introduced April 15, 1999; referred to Committee on Finance.
CONGRESSIONAL
HEARINGS, REPORTS, AND DOCUMENTS
U.S. Congress. House. Committee
on Government Reform and Oversight. Subcommittee on National
Economic Growth, Natural Resources, and Regulatory Affairs.
Economic Costs of Kyoto Protocol. Hearing held September 16,
1998.
U.S. Congress. House. Committee
on Appropriations. Subcommittee on Energy and Water. FY1999
budget request: DOE Science and Renewable Energy Programs.
Hearing held March 11, 1998.
U.S. Congress. House. Committee
on Science and Technology Committee. Subcommittee on Energy and
Environment. Kyoto and the Administration's Fiscal Year 1999
Budget Request. Hearing held February 12, 1998.
U.S. Congress. Senate. Committee
on Appropriations. Subcommittee on Energy and Water. FY1999
budget request: DOE Renewable Energy Programs. Hearing held March
10, 1998.
FOR ADDITIONAL
READING
Tables showing DOE Renewable
Energy R&D Funding (current and constant), FY1974-FY1992; and
the DOE Defense, Science and Energy Funding, FY1973-FY1992 are
available from the author of this issue brief.
Alliance to Save Energy. Energy
innovations: a prosperous path to a clean environment. June
1997. 171 p.
California Energy Commission. Electricity
report. August 1997. [P300-97-001]
Edison Electric Institute. Renewable
resources and electricity generation: a report on utility
involvement and outlook. June 1995.
Electric Power Research
Institute. Renewable power industry status overview.
EPRI December 1998. 1 vol. (EPRI TR-111893).
---- Utility customers go for
the green. EPRI Journal, v. 22, March/April 1997: 6-15.
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Table 1.
DOE Renewable Energy Budget*
for FY1998-FY2000
($ millions)
| Program |
FY1998
Apprn. |
FY1999
Apprn. |
FY2000
Rqst. |
FY2000-
FY1999 |
FY2000-
FY1999
Percent |
| Solar
Buildings |
2.6 |
3.6 |
5.5 |
1.9 |
53% |
| Photovoltaics |
64.7 |
72.2 |
93.3 |
21.1 |
29% |
| Concentrating
Solar Power |
16.3 |
17.0 |
18.9 |
1.9 |
11% |
| Biomass
- Total |
58.1 |
73.2 |
92.4 |
19.2 |
26% |
| Biomass/Utility
Power |
27.8 |
31.5 |
39.0 |
7.5 |
24% |
| Biomass/Biofuels
Transp. |
30.3 |
41.8 |
53.4 |
11.7 |
28% |
| Wind |
32.1 |
34.8 |
45.6 |
10.8 |
31% |
| Production
Incentive |
3.0 |
4.0 |
1.5 |
-2.5 |
-63% |
| Solar
Program Support |
0.0 |
0.0 |
10.0 |
10.0 |
----- |
| International
Solar |
1.4 |
6.4 |
6.0 |
-0.3 |
-6% |
| NREL
(incl. construction) |
3.2 |
3.9 |
1.1 |
-2.8 |
-72% |
| Geothermal |
28.7 |
28.5 |
29.5 |
1.0 |
4% |
| Hydrogen |
15.8 |
22.3 |
28.0 |
5.8 |
26% |
| Small
Hydro |
0.7 |
3.3 |
7.0 |
3.8 |
115% |
| Renew.
Amer. Indian Res. |
3.9 |
4.8 |
0.0 |
-4.8 |
-100% |
| Electric/Storage |
43.3 |
40.1 |
41.0 |
0.9 |
2% |
| Program
Direction |
15.7 |
18.1 |
19.2 |
1.1 |
6% |
| Fed.Bldg/Remote
Power |
4.9 |
4.0 |
0.0 |
-4.0 |
-100% |
| RENEWABLES,
Subtotal |
294.4 |
336.0 |
398.9 |
62.9 |
19% |
| Reductions/Prior
Year/Increase |
-24.4 |
0.0 |
-0.8 |
-0.8 |
----- |
Source: DOE
FY2000 Cong. Budget Request, v. 2; Feb. 1999.
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*
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