Policies to Promote Non-hydro Renewable Energy in the United States and Selected Countries–A Review by Paul Gipe

By Paul Gipe





The report by the Energy Information Administration’s, Office of Coal, Nuclear, Electric and Alternate Fuels, at the United States Department of Energy is current, and topical. Dated February, 2005 the document compares the performance of different policy mechanisms promoting the use of renewable energy in Europe, Japan, and the United States

EIA relies heavily on the doctoral dissertation of Janet Sawin, now with Worldwatch in Washington, DC. In fact, I suspect that it was Sawin’s dissertation and its circulation among Beltway policy wonks that stirred EIA to examine the issue of why is the USA so far behind the rest of the world in its use of renewable energy.

For more on Sawin’s recent work see National Policy Instruments: Policy Lessons for the Advancement & Diffusion of Renewable Energy Technologies Around the World.

The report’s authors did not include Renewable Portfolio Standards (RPS) in the study because there isn’t enough data available on the results from RPS programs where they are employed.

EIA examined renewable policies in the United States, Germany, Denmark, the Netherlands, and Japan.

While the report makes a few minor errors (it associates Janet Sawin with the World Resources Institute and not Worldwatch), and there are the occassional idealogical buzz words (“command and control,” “dictating,” and “market-driven” pop up), the document in its entirety is a valuable contribution to the discourse on what are successful policy mechanisms for developing renewable energy and why they work.

Most striking is the acknowledgement that “the German Feed-In Law had a significant positive effect on the development of renewable electricity generation in Germany, PURPA did not have a similar effect throughout the United States. While some States, including California, did manage to install new renewable electric generation capacity, PURPA was a necessary but not a sufficient incentive for investors to develop new renewable energy projects.”

This may seem like a fairly innocuous statement from a government agency to those unfamiliar with today’s political and idealogical climate in the United States. It is a striking statement because it publicly credits the success of an “old European” country, and it publicly credits a policy mechanism that the U.S. DOE has openly disparaged–an agency that has gone so far as to intimidate those who seek to open the policy debate by even discussing Feed Laws as a policy mechanism applicable to the United States.

In explaining the differences between PURPA (the Public Utility Regulatory Policies Act) and Germany’s Feed Law, the authors accurately note that the purpose of the Feed Law was simply to increase the use of renewable energy. PURPA, on the other hand, was intended to promote energy and economic efficiency.

For those of us who track such developments, the report is a useful compendium of program elements in the countries studied. For example, in the section on Denmark, the report notes that “Denmark’s basic guaranteed pricing and utility purchase obligations are very similar to those enacted in Germany . . .” And the report goes on to explain that the similarity ends there and that Denmark’s total program was far more byzantine than that in Germany with Denmark’s carbon-dioxide offsets and other incentives.

The report also acknowledges that “Denmark’s use of cooperative ownership structures helped overcome some public and political opposition to wind turbine technology. Finally, Denmark, Japan, and Germany enacted policies expressly for the purpose of promoting renewable energy–something the United States did not do until 1992 . . .”

The NeoCons in the Bush administration may want to note that the authors quote the minutes of a meeting of the German cabinet on November 7, 1990: “The Federal Government reaffirms its call for the longer-term economic potential of renewable energy sources to be tapped as rapidly as possible in light of the contribution they could make to CO2 reduction. . . the Federal Government will continue to work towards making it easier for renewable energy sources to gain a foothold in the market.” This was the underpinning of a policy decision not by the Greens (that would come later), nor by the Social Democrats (that too would come later) but by the conservative Christian Democrats under Helmut Kohl. Shortly thereafter the German parliament passed the groundbreaking stromeinspeisungsgesetz or electricity Feed Law.

The full EIA report is available at http://www.eia.doe.gov/fuelrenewable.html. A pdf version is also available.