Can the United States Get Renewables and Efficiency in Sync? (Part 1)

With the climate and energy bills stalling in the U.S. Congress, it seems that America’s energy future will depend increasingly on the success (or failure) of policy, investment, and development at the state level. In October, the American Council for an Energy-Efficient Economy (ACEEE) released its yearly report that ranks all 50 states based on their efficiency measures. The report dovetails nicely with the 2010 update of states’ renewable energy efforts from the American Council On Renewable Energy (ACORE) that was released in September. The studies share common themes, such as discussions on energy resource standards and public benefits funds. For this reason, it is a good exercise to look at them together.

The United States From Space

Satellite Image of the United States – NASA/Reto Stöckli (Flickr)

The usual suspects top both lists. California continues to be the model for renewable energy and energy efficiency in the United States—as well as an international sustainable energy leader. It has the largest installed capacity of renewable energy of any U.S. state: 2.7 gigawatts (GW) of wind power, 2.6 GW of geothermal power, 1.1 GW of grid-connected solar power, and 705 megawatts (MW) of biomass power. According to the U.S. Energy Information Administration, California’s diverse portfolio provides over 20 percent of the nation’s renewable electricity generation.

California also tops ACEEE’s list, a title that it has held for the last four years. California leads the United States in government and utility efficiency investments (nearly $1 billion annually), progressive public transportation policies (despite Los Angeles’s gridlocked streets and highways), and stringent building code and appliance standards (contrasting the many ostentatious and wasteful homes in Hollywood). Minnesota, Massachusetts, New York, Oregon, and Washington also stand out as states that have shown great commitment to both renewables and efficiency.

Similarly, the states that have lacked policy, investment, and development in either renewable energy or energy efficiency usually have to improve in both areas. Alabama, Arkansas, Louisiana, and Mississippi fall into this category. However, many utilities in southern states point out that they do not possess the renewable resources, particularly solar and wind potential, of other parts of the country. This has made most southern states reluctant to pass a state-level or federal renewable portfolio standard (RPS)—legislation that requires utilities to supply a certain percentage or quantity (kilowatt-hours) of electricity from renewable sources within a given time period. In September, a new federal RPS bill, to supplement the 29 states that already have RPS policies, was introduced in the Senate but will inevitably face the same opposition.

Efficiency, on the other hand, provides cost and energy savings regardless of geography. Currently, 24 states have implemented an energy efficiency resource standard (EERS), which mandates that utilities meet long-term efficiency targets within total end-user consumption. Despite their reluctance, southern states do have untapped renewable resources. For example, states in this region have better solar photovoltaic (PV) resources than Germany (the world leader in PV capacity) or New Jersey (home to the second largest PV market in the United States). Southern states can move ahead with both efficiency initiatives and renewable energy development.

Some states’ commitments to renewable energy and energy efficiency are not synchronized, however. Several states have mature renewable energy markets and policies but have done little when it comes to energy efficiency measures. Texas, for example, is a wind powerhouse with the largest installed wind power capacity in the country: 9.41 GW as of December 2009. The state is second only to California in annual renewable electricity generation, providing over 15 percent of the U.S. total, yet its investment and policies for efficiency are mediocre at best. Texas ranks 33rd on ACEEE’s list this year, dropping 9 spots from last year, due mainly to minimal public and utility benefits funds for efficiency programs and policies.

North Dakota has a similar disconnect between renewable energy and energy efficiency. In 2007, the American Wind Energy Association rated the state as having the nation’s best wind resources (potential electricity per year) as well as great biomass and bioethanol resources. Wind power development has exploded in North Dakota—nearly 500 MW was installed in 2009 alone—but the state was last in ACEEE’s efficiency rankings, lacking both policy and investment for efficiency measures.

A few states boast strong efficiency measures but have room for growth in renewable energy development. Vermont, for example, received the highest score in ACEEE’s report for its public and utility benefits fund. It gave the greatest share of its 2009 revenue to a state efficiency program: 4.4 percent, or $30.7 million. Vermont also had the best incremental energy savings: in 2008, it saved 148,549 megawatt-hours, equivalent to 2.6 percent of its annual electricity sales. Likewise, Vermont has established effective renewable energy policies, including a feed-in tariff for systems under 2.2 MW, and has invested substantially in renewable energy programs. Nevertheless, the state has shown little recent renewable energy development despite having adequate wind, hydroelectric, and biomass resources. With only 6 MW of wind power (which has been in operation since 1997) and 1.7 MW of solar power, Vermont has a good opportunity to build renewable energy infrastructure.

Both ACORE and ACEEE are non-profit organizations headquartered in Washington, D.C., and they have national and international clout in the renewable energy and energy efficiency industries, respectively. In the future, it would be great to see the two organizations work together on a state-level report that analyzes both renewables and efficiency. In Part 2 of this post, we will explore how an integrated renewables and efficiency approach will be more beneficial than a plan that pursues them separately.

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