Despite the doom and gloom that seems to be dominating the renewable energy headlines of late, I’ve noticed an interesting trend that should bode very well for the continued development of renewable energy in the United States.  While the Federal Government’s lack of action on the 1603 grant has cast serious uncertainty about the future of federal tax incentives for renewables, many state governments have quietly introduced legislation to increase their Renewable Energy Standards (“RESs”) or Renewable Energy Portfolios (“REPs”).

I’ve provided an overview of these very important policies before, but as a quick refresher RES programs are essentially state legislative initiatives that require a certain threshold percentage of a utility’s total energy portfolio be generated from renewable sources (such as wind, solar, biomass, geothermal or other sources) by a certain date in the future.

For states that are trying to incentivize their public utilities to invest in renewable technologies, RES programs provide a relatively straight-forward way to achieve their goals.  However, RES programs are only effective for as long as it takes the utilities to build enough renewable generation or purchase enough Renewable Energy Credits (“RECs”) to meet the thresholds.  Encouragingly, many states that have set RES thresholds have seen their utilities quickly obtain sufficient renewable generation to satisfy the RES for years into the future.  However, once those projects have been developed, the utilities then have no further incentive to continue investing, so development of renewable projects unsurprisingly begins to languish.

This leads us to the good news.  Presented with undeniable evidence that RES programs do in fact lead to increased development of renewable projects, many states are now seeking to either implement RES programs for the first time, or increase the amount of renewable energy that is required.  Below are a few examples…

  • Kentucky: Legislation introduced by State Rep. Mary Lou Marzian, D-District 34, calls for the establishment of a RES which would require utilities to obtain 12.5% of their electricity from renewable energy by 2022.  (Source: NA Windpower)
  • MissouriRenew Missouri, a group formed several years ago to support the state’s first RES, is introducing a new ballot initiative to close existing loopholes that have delayed implementation and increase the thresholds to 25% by 2025.  Jeffrey Tomich of the St. Louis Post Dispatch recently wrote an excellent article summarizing the issue.
  • Illinois: A ballot initiative is being considered which would increase the state’s current 10% by 2015 mandate to 25% by 2025.
  • New Jersey: Though ultimately struck down by Gov. Christie, legislation sponsored by State Sen. Bob Smith and Assembly Member Upendra J. Chivukula sought to more than double the solar output from utilities by 2014.  Jessica Lillian of Solar Industry Magazine provides this overview.
  • Vermont:  Legislation proposed in Vermont seeks to adopt very aggressive RES thresholds, amounting to 40% from existing renewable resources, plus 10% more from new resources by 2013, and adding an additional 40% from new renewable resources by 2025.

I would be remiss if I didn’t also mention a wonderful defense of Renewable Energy Standards written by Peter Fox Penner, Principal and Chairman of the Brattle Group, on Think Progress.  The article is packed full of great information, but among my favorite facts is the following:

In the midst of the worst economy since the great depression, the worldwide market for renewable energy continues to provide jobs and investment. And states are recognizing these economic benefits when setting energy and environmental policies.  The nonpartisan Brookings Institution recently studied employment trends in the clean energy sector and found that, “though modest in size, the clean economy [in the U.S., which according to the study includes many sectors other than renewable energy] employs more workers than the fossil fuel industry and bulks larger than bioscience.” The study also found that the renewable energy sectors “added jobs at a torrid pace.”

Illinois has seen a flurry of activity at the county level regarding how to best balance the economic and environmental benefits of wind energy development in the state with the concerns of local landowners.  In addressing this issue, Bureau County and Iroquois County have recently decided upon dramatically different approaches, and the resulting economic impacts should provide an interesting comparison point for future legislative and permitting efforts within the state.

On the pro-development side, Donna Barker of the Bureau County Republican has reported that the County Board of Bureau County recently voted to not only extend the conditional use permits that had been previously awarded to Midwest Wind for the company’s planned 150-MW Big Sky project, but also went a step further and rejected a proposal to institute a wind moratorium in the county.  With moratoriums becoming a more common trend across the nation, it is refreshing to see a county take it upon itself to gain the necessary expertise within a time frame that won’t delay development of actual renewable projects.

On the anti-development side, Kevin Borgia of the Illinois Wind Daily recently reported that the County Board of Iroquois County recently approved a remarkable 2000-foot setback from non-participating property lines.  This would be among the most restrictive county setback requirements in the nation, and could have a significant negative impact on renewable energy investments in the county.

I’ve previously discussed the dramatic impact that local activism and permitting obstacles can have on the development of renewable projects, and I must admit that I’m very curious as to whether the amount of renewable energy investments that these two counties are able to generate support that conclusion.

I’ll be sure to keep you all updated on the status of these counties’ efforts going-forward, but in the meantime, I’d love to see whether you have run across any anecdotal evidence of the impact of local NIMBY activism or highly-restrictive permitting processes on renewable project development.  Feel free to leave a comment or drop me an email at lhagedorn@polsinelli.com with your experiences.