Texas Renewable Energy Targets Beat EU

When the Earth Summit started in Johannesburg a week ago expectations were low. There were no major treaties or conventions on the agenda and several countries -- including the US -- had indicated they were against setting any form of targets or timetables aimed at reducing world poverty, protecting the environment, or ensuring sustainable development. And yet, despite this opposition, a number of businesses and activists working on issues of renewable energy remained hopeful that the Summit, at the instigation of the European Union, would agree on a bold new program of action to stimulate renewable energy around the world.

On Monday, even these small hopes were dashed. The EU backed away twice from its original strong proposals on renewable energy. First, the EU had suggested that the summit should agree to bring renewable energy to 1 bln people worldwide by 2010. Though this latter proposal sounds strong, the catch is that the EU includes hydropower and traditional biomass in their definition of renewable energy and, by this measure, the world already gets about 14 pct of global total energy from renewables. Finally, on Monday it was announced that the summit had agreed to a watered-down proposal on renewable energy, one totally devoid of targets or timetables.

Randall Swisher, the Executive Director of the Washington DC-based American Wind Energy Association (AWEA) says that even the 14 pct target is "embarrassingly low" and that the EU's backpeddaling is "most disappointing." He says that he believes wind energy alone could provide as much as 12 pct of the world's energy supply by 2020, but that for this to happen governments have to commit to providing the necessary policy support to renewables. He points out that fossil fuels and nuclear energy have always received subsidies and that "if governments are serious about dealing with climate change, then it is essential for them to facilitate the emergence of wind and other renewables worldwide." Asked to comment on the US government's reported opposition to the target, Swisher points out that "the interesting thing there is that one of the best examples of an effective renewable energy target, what we call a Renewable Portfolio Standard, being set anywhere in the world comes from the US, from the state of Texas. In fact it comes as a result of a law signed by the then Governor of Texas, George W Bush." He adds that it is clear that the US President and those around him are well aware of how simple and cost-effective renewable energy targets can be, and that their opposition to these targets in Johannesburg is "simply ideologically driven." "They are simply opposed to any international mandates of any sort," Swisher concludes.

Roy McCoy, who manages the renewable energy trading program at the Electric Reliability Council of Texas, says that the key to the success of renewable energy in Texas was that they set a renewable energy target for the state and then they put in place a system that allowed generators to trade "Renewable Energy Credits", or RECs, in order to meet that target. "It's a little bit like a renewable energy stock market," says McCoy. He explains that a law signed by Governor Bush, the same law that called for a deregulation of the electricity market in Texas, called on the state to obtain 2000 megawatts of energy from renewable sources by 2009. The state then imposed a percentage target for renewables for all Texas utilities and created the credit trading system. This system allows utilities to meet their government-imposed targets by buying renewable energy credits from producers who have more than their necessary share. "So far," says McCoy, "the system has been an outstanding success. Trading in RECs only began officially in January of 2002 and we have already obtained nearly 1000 megawatts, half of our target, of new renewable energy in the state. The vast majority of that new capacity comes from wind power." McCoy says he is very confident Texas will meet its 2000 MW target well in advance of the 2009 deadline. "Clearly every state and every country is different," he adds, "so this sort of thing won't work everywhere, but it's been very good for Texas. "It has helped reduce pollution and provided incentives for wind generators to come into the state." He also thinks it is what the people of Texas wanted -- clean air and clean energy. As far as a global target is concerned, McCoy says that, in his personal capacity, he thinks it would be a "great and noble idea," but that he realizes that it would be politically very difficult. Negotiators in Johannesburg HAVE PROVEN him right.