National RES Will Trigger Clean Jobs, Help Secure Energy Independence

by Andris E. Cukurs, Suzlon Energy Ltd.

The U.S. must generate millions of jobs to regain its economic vitality. As for President Barack Obama, he considers jobs “our No. 1 focus in 2010,” as he said in the State of the Union address. That’s why it’s hard to believe Congress hasn’t yet passed legislation essential if the U.S. is to continue attracting tens of thousands of clean-energy jobs. Moreover, the right bill would reduce our dependency on foreign oil.

Such legislation would approve a national renewable electricity standard, or RES. It would require electric utilities to obtain a certain percentage–presumably 12 to 20 percent–of their power by 2020 from wind and other alternative energy sources. The U.S. House of Representatives passed a bill in June 2009 that set a 15 percent requirement, but the Senate did not take it up in the most recent Congressional session. Now it must be cleared by both. A strong, bipartisan move to consider RES legislation has begun in the Senate. Bills already submitted or being prepared would eliminate or soften opposition from utilities and senators from regions where wind and solar power production lags behind the rest of the nation. Senate RES proponents want Congressional consideration soon.

The Stakes are High

Why is a national RES necessary? In the U.S., the explosive growth of the industry ranks among the most important energy developments of this century. From a nascent industry just a decade ago, it has generated more than 20,000 U.S. manufacturing jobs with another 65,000 related jobs spread across the economy. In the past two years, nearly $3 billion in 100-plus U.S. manufacturing facilities have been added, announced or expanded. Most important, companies from critical industries are flocking to the U.S. wind industry for new business and growth opportunities.

If Congress adopted a national RES that required utilities to get 15 percent of their electricity from renewable sources by 2020, that standard would, it is estimated, create demand for as much as 100 gigawatts of new wind capacity by that year–enough to power 9 million homes. A national RES also is critical to the U.S. because without it, utilities are hesitant to clear long-term deals for renewable energy. Banks have begun once again to undertake routine project financing, and the Department of Energy (DOE) is awarding grants for U.S. renewable energy projects. Still, in establishing a mandatory target for the percentage of electricity that must come from alternative energy by a certain year, a national standard would help in gaining the funds needed for new projects. And a national standard would spark plenty of new green jobs. A study released in February by Navigant Consulting Inc., the major global consultancy in energy, estimates that a 20 percent renewable energy standard in the U.S. by 2020 would generate 191,000 more jobs.

Where U.S. Jobs Could Emerge

The Navigant Consulting study indicates that a national RES would stimulate job growth in the wind, solar, biomass, waste-to-energy and hydropower industries that would benefit the southeastern U.S. and manufacturing states in particular. It also would complement tax benefits and ensure the preservation and creation of jobs throughout rural America, researchers say. A national RES, the study indicates, would benefit:

  • Louisiana, Alabama, Kentucky, Tennessee, Georgia and Florida, which will profit from substantial biomass and municipal solid waste to energy,
  • Ohio, Michigan, Pennsylvania and Indiana, which will gain from growth in manufacturing for a range of technologies,
  • North and South Dakota, Iowa, Kansas, Nebraska and Illinois, home to major wind resources,
  • Colorado, Arizona, Oregon and California, where solar, wind and hydropower have significant growth potential, and
  • States without renewables standards or targets, such as Indiana, Florida, Virginia, Kentucky, Tennessee, Georgia, Arkansas, Oklahoma and Alabama.

The benefits of a national RES for southern states are significant, especially because many southern lawmakers are skeptical about the benefits of a national energy policy for their states. The national RES provisions are included in a comprehensive national energy policy bill.

In its research and interviews, Navigant Consulting found several common themes from domestic and foreign manufacturing firms, and they relate to job creation. First, companies are most likely to locate manufacturing facilities where the market for their products is and will be long-term. Second, on-again, off-again short-term tax credits don’t guarantee a long-term market for renewable electricity. Third, a strong national RES guarantees a long-term market for renewable electricity. Fourth, a strong national RES is more likely to support more U.S. manufacturing jobs than several short-term tax-credit extensions would. That’s because companies tend to locate production facilities in regions with long-term demand.

Americans Strongly Support Alternative Fuel Sources

Surveyed Americans overwhelmingly favor renewable energy sources to reduce or eliminate the nation’s dependence on foreign oil and to create green jobs. In a survey released in late January, the Yale Climate Project and the George Mason University Center for Climate Change Communication found that 85 percent of respondents favor more research on renewable energy such as wind power.

Americans support wind energy but don’t want higher electricity bills. The cost of electricity from wind has dropped to nearly 4 cents per kilowatt-hour in 2008 from 25 cents in 1981, the DOE reports. And analysis by the department’s Lawrence Berkeley National Laboratory found that wind prices have been competitive with wholesale power since 2003. Surveys also maintain that a national RES will lower energy bills. Energy research firm Wood Mackenzie found that an RES would reduce natural gas prices and save more than $100 billion in electricity costs by 2026. And the Union of Concerned Scientists’ “Climate 2030: A National Blueprint for a Clean Energy Economy” figures net annual savings from reductions in electricity and fuel use from a national RES at $255 billion by 2030. The study concludes that businesses and homeowners in every region of the U.S., including coal-dependent regions, would share in those savings. U.S. lawmakers have said that a national RES would revitalize rural America because farmers and rural land owners in windy areas can receive payments of $3,000 to $8,000 per wind turbine a year while also still working their land.

Will Electric Utilities Still Strongly Oppose RES?

In his January State of the Union address, Obama reiterated his support for a bill with incentives “that will finally make clean energy the profitable kind of energy in America.” It’s still unclear whether the electric utility industry will continue to oppose legislation of the type being considered or introduced by senators who favor a national RES. Utilities invested in coal-fired power plants are expected to keep up their vigorous opposition. But many utilities such as Pacific Gas and Electric Co., Exelon Corp. and Duke Energy are moving heavily into wind and solar.

Passage of a U.S. national RES remains uncertain, but Congress has a history of doing what’s right. U.S. lawmakers also increasingly recognize that by setting mandatory renewable electricity standards, the U.S. will secure more clean-energy jobs and will help the country become independent from foreign oil, a top priority for their constituents. In a January survey by pollster Frank Luntz launched in conjunction with the Environmental Defense Fund, 48 percent of respondents cited ending dependence on foreign fuels as the most important environmental and economic goal. For the sake of jobs–meaningful green and clean jobs–and energy independence, perhaps Congress will act soon and pass a national RES.

Author

Andris “Andy” E. Cukurs is CEO of North American operations of India-based Suzlon Energy Ltd., the world’s third-largest wind turbine manufacturer.

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