Sunday, September 4, 2011

US Renewable Energy Markets: Exciting Times Ahead

We are currently in a period of strife and are facing challenges of oil supply disruptions, declining natural gas production and global climate change. To such a world, renewable energy offers fresh hope and a plethora of benefits - reduced emissions, stabilized energy costs, and energy security. In recent times, the market for green energy has been growing rapidly. However, renewable energy still faces many challenges and obstacles on the way to realizing its full potential.

The year 2003 has so far been one of mixed fortunes for renewable energy in the US. Under the 2004 budget, funding for research in hydrogen technologies jumped 121 percent to $88 million. Combined with the FreedomCAR initiative, the total amount for hydrogen-based initiatives is $272.4 million for the upcoming year's energy spending. The administration has also promised $1.2 billion in spending over 10 years to help development of hydrogen-powered cars as well as supporting service stations and other infrastructure. However, many renewable energy research programs would be cut in the year 2004, though total research funding would increase by $1.3 million. Research money for wind energy would fall 5.5 percent, while solar energy funding would increase a mere 0.1 percent. In the administration's view, these technologies are already at an advanced stage and it should be possible for the private sector to adopt them and drive them towards commercialization without further federal funding. President Bush's plans for the Arctic National Wildlife Refuge (ANWR) included allocating a part ($1.2 billion) of the bid bonuses from leasing ANWR towards increased renewable funding and conservation efforts.

However, this funding seems to be in jeopardy after the defeat of the ANWR plan in the Senate last year and the Democrats vowing to use filibuster tactics to block vote on it this year. The DOE recently launched Climate VISION (Voluntary Innovative Sector Initiatives: Opportunities Now), a public-private partnership as part of the administration's strategy to reduce greenhouse gas intensity - the ratio of emissions to economic output - by 18 percent in the next decade. Though the initiative is driven by energy efficiency measures, there is no specific commitment to reduce emissions from current levels. Thus, even if energy intensity decreases, the growth of the economy will mean that emissions continue to increase. A specific commitment to expand the generation of power from renewable energy would help achieve this.

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