Despite the way some energy reports sound, the energy supplies we use are not a force of nature beyond our control. Whether it’s dirty energy or clean energy, both are choices that we make collectively, through a combination economic market forces and investments, and through government policy.
It’s the latter that we’ll deal with here, with the primary thing to remember, regardless of the exact form that renewable energy policy takes, is that predictable policy, that can be planned against, is superior to constantly fluctuating ambition, changing direction, and wavering commitment.
One just needs to look at the rate of wind power installations in the United States and the effect of tax credits that seemingly are always just about to expire to see how not being able to make long-term plans can play havoc with an industry.
Ambition is the first thing
Before we get to specific policy methods though, a few words on the importance of ambition. Perusing recent headlines, we’ve got some great examples. At the national level, several nations are really stepping it up.
Denmark has the goal of having 100% renewable electricity and heating by 2035, with 100% renewable energy across all sectors by 2050. Germany is looking to have 100% renewable energy by 2050, as well. Scotland has pledged 100% renewable electricity by 2020. At the state level in the US, Vermont says it’ll have 90% renewable energy by 2050. Even Saudi Arabia has pledged to go 100% renewable, although hasn’t specified a date.
It wasn’t long ago that such goals would’ve been met with extreme skepticism if not outright hostility from certain groups who benefit from the polluting status quo. Unfortunately this still goes on–via Kansas’ 20% renewable electricity target being challenged by a Koch Bros. front group–and perhaps explains why there’s only been vague lip service at the federal level in the US to coming out with a broad, committed vision for a renewable energy future.
All of which is to reinforce the notion that renewable energy is a collective choice, a political choice. It may not be wise for government to favor specific technologies within the spectrum of renewable energy, but without a rock solid mandate that we will use only renewable energy, inertia will triumph and the polluting status quo will remain.
The glory of the feed-in tariff
OK, so it’s definitely rhetorical flourish to call feed-in tariffs glorious, but they are quite effective in getting lots of renewable energy installed.
Under a feed-in tariff system, everyone generating renewable energy gets paid a premium rate for the power that they feed into the electrical grid. Whether you’re a homeowner with solar panels on your roof, a community group that’s installed solar panels or perhaps a single wind turbine, or a commercial operation, everyone gets paid a specific amount per unit of electricity generated that’s higher than what it costs to generate electricity from polluting sources. The exact amount varies both with the power source, generally declining at a predictable rate over time.
The cost of paying more for this type of power is then spread across everyone consuming that electricity, generally adding up to perhaps a few extra dollars a month on the electricity bill.
All in all the feed-in tariff is generally cited as being the most efficient direct method for encouraging people to install renewable energy. Though not every attempt at implementing a feed-in tariff has been smooth, there have been some stellar examples–such as Germany’s widely hailed success at generating record amounts of solar power, while keeping about half community owned, and in a country that has only modest solar power resources compared to many places in the world.
An alternative method, one which for a variety of reasons (mostly ideological) seems to be more favored in the US, is net metering. Here, the amount of power your renewable energy system generates in excess of that which you actually consume essentially comes off your electricity bill, at the retail rate of electricity paid in the area.
Both systems have their advocates and detractors–but in one crucial way the feed-in tariff is clearly superior: It recognizes, if only indirectly, that the playing field between renewable energy and fossil fuels is not level.
I’m not talking about the gross disparity in government support that renewables get compared to fossil fuels—fossil fuels got roughly $1 trillion in subsidies globally last year, compared to just under $70 billion for renewables.
Rather, the thing that fundamentally creates an uneven playing field is that the costs of pollution of both renewable energy and fossil fuels are not taken into account in how they are priced.
The importance of carbon pricing
If the costs of pollution were taken into account in the prices that get paid for energy, the price of generating a unit of energy from fossil fuels would rise significantly, likely much higher than that for the same amount of power from a renewable energy source.
Right now, the cost of carbon pollution in the atmosphere, of water pollution from oil spills, of groundwater contamination from natural gas exploration, of the lost ecosystem services of a mountaintop when it’s blown up to get coal, all of those are simply borne by society as a whole, not included in any real way in the price consumers see.
From that perspective, really all the prices we see, be it for gasoline or electricity are all kept artificially low, because our economic system fails to take into account environmental degradation.
When this is corrected (be it through one of the forms of pricing carbon such a direct carbon tax or a cap-and-trade system) all economic players can act with fuller knowledge and make better decisions because of it.
Again, this is about choices, with the clear choice being made right now to ignore this aspect of our energy generation and our economic system.
One final thing on this: Even with the unbalanced support for renewables vis-a-vis fossil fuels, and even with market distortions like failing to account for polluting in prices, the cost of renewable energy is falling.
Already the cost of electricity from wind power is less expensive in some places than from new coal or natural gas plants, with solar power to be less expensive by the end of the decade (if not sooner, the way things are going).
Technological advancement combined with good policy will tip the balance solidly towards renewables very quickly here.