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Energy Policy Forum > 2002
Articles
Green Power Purchases Growing by Leaps and Bounds
Bernie Fischlowitz-Roberts
http://www.earth-policy.org/Updates/Update9.htm
April 2, 2002
In June 2001, the city of Chicago
and 48 city government agencies signed a contract with local
utility ComEd to purchase
10 percent of their electricity from renewable sources, a
figure due to increase to 20 percent in five years. This
is the largest such purchase in the United States, but Chicago
is just one example of the many cities, businesses, and individuals
who are buying "green power." Utilities in 8 states
and many other industrial countries now offer such purchases.
(See map http://www.earth-policy.org/Updates/Update9.htm.)
In
October 1999, Leeds Metropolitan University in the United
Kingdom started buying at least 30 percent of its energy
from green power. Six months later, Edinburgh University
signed an agreement to obtain 40 percent of its energy this
way. Since renewable energy sources in the United Kingdom
are exempt from a climate change levy enacted in April 2001,
making this switch is virtually cost-free and can even save
money. The Netherlands has more than 775,000 green energy
customers, which represents 5 percent of the population.
The number of customers has tripled in just one year. This
rapid growth is due to an energy tax exemption for green
electricity, green energy deregulation, and successful marketing
campaigns. With Dutch demand outstripping supply, more than
30 percent of the green power used there is now imported.
Germany
has approximately 280,000 green energy customers. Many large
German companies are buying green power, helping
to create consumer demand to move beyond fossil fuels. Dresdner
Bank, Weleda AG, a large homeopathic medicine company, and
23 kindergartens in Lorrach all purchase 100 percent green
power.
In March 1999, a comprehensive ecological tax reform
law took effect in Germany that reduced income taxes, raised
taxes on energy sources tied to carbon emissions, and exempted
renewables. In February 2000, the parliament passed a renewable
energies law that included payments for excess green energy
generation fed back into the power grid; at those times,
the meters run backwards, reducing customers' electric bills.
These policies, which help make green energy cost-effective,
are essential to the ultimate success of green power programs.
Australia's
green power sales are evenly divided between 60,000 residential
customers and almost 2,500 commercial
ones. Most of the green energy supplied to date in Australia
is derived from biomass and hydroelectric power, with only
8 percent coming from wind or solar. With wind resource development
accelerating, however, wind's share is increasing rapidly.
In the U.S. state of Colorado, the Grassroots Campaign for
Wind Power has educated citizens about the benefits of wind
power and encouraged a shift in purchasing behavior. As a
result, Colorado has 20,000 residential green power subscribers
and numerous commercial ones, including IBM, Hewlett-Packard,
and Patagonia, as well as the cities of Denver, Fort Collins,
and Aspen. Even the governor's mansion buys green power.
At the University of Colorado, students voted overwhelmingly
during the spring of 2000 to raise student fees by $1 per
semester in order to purchase wind power. This fee increase
generates $50,000 per year, enough to buy the output of one
wind turbine, or 2 million kilowatt-hours of electricity.
A large number of U.S. businesses and other commercial customers
have also signed up. In addition to large, high-profile companies
like Toyota and Kinko's, lesser-known companies are aligning
their purchasing decisions with their environmental values.
Fetzer Vineyards, for example, began buying 5 million kilowatt-hours
of renewable energy annually for its organic wine operations
in Hopland, California.
In 1996, Salem, Oregon, was the first
U.S. city to go completely renewable for all power used in
the city. Already getting
83 percent of its electricity from hydropower, it replaced
the remaining 17 percent, which was from fossil fuels and
nuclear power, with wind energy purchased from the Bonneville
Power Administration (BPA). In 2000, Oakland, California,
signed up for 9 megawatts of green power to meet its entire
electricity load for city agencies. Santa Monica, California,
also uses exclusively green power for its city facilities.
Government
agencies are also signing up for green power. The U.S. Environmental
Protection Agency (EPA) purchases
100 percent green power at five of its facilities across
the country. In so doing, EPA currently obtains 9 percent
of its overall electricity consumption from green power.
In 2000, Secretary of Energy Bill Richardson directed the
U.S. Department of Energy (DOE) to purchase 3 percent of
total electricity needs from non-hydro renewable sources
by 2005, and 7.5 percent of total electricity purchases by
2010.
Green power offers an opportunity for citizens and corporations
to act on their environmental concerns and to demonstrate
support for public policies supporting renewable energy.
In Colorado, for example, the demand for green power is driving
the investment in wind farms, a fast-growing source of power
in the state.
It is clear, however, that green power purchase
options alone, even in fully deregulated markets, will not
bring about the
large-scale changes needed to move the world to a sustainable
energy economy. Individual and corporate choices based on
environmental concerns cannot replace the role of public
policies. Indeed, tax restructuring and renewables portfolio
standards, acting in concert with energy efficiency and green
power programs, represent the best hope for creating an ecologically
sustainable energy economy.
To be certified as a "green-e" product
in the United States by the Center for Resource Solutions
(CRS), a voluntary
program, green power offerings must contain more than half
renewable energy. Thus in many cases, almost half of the
mix can come from fossil fuels and nuclear power. CRS set
up the 50 percent standard mindful of the need for wide acceptance
by various stakeholders, and wary of setting the initial
standard too high for many companies to meet it. While such
concerns are important, the ideal green power products would
emphasize wind, solar, and geothermal, since they do not
contribute to climate change, air pollution, or acid rain.
Fossil fuels and nuclear power would be excluded from such
products.
The new green power standard in Illinois, unveiled
by environmental and consumer groups in the state, is the
greenest in the
U.S. To qualify, green power in Illinois must be from new
renewable sources, must be composed of at least two-thirds
wind and solar power, and must create air quality benefits
for the state. A similar standard, if adopted nationwide,
could yield substantial benefits.
The green power option
for consumers and businesses is generating demand, yet
its current definitions are flawed.
Unless standards
require much higher percentages of renewables that are
green, customers may be paying a premium for only marginally
cleaner
power. To address climate change, the global energy economy
needs to be fundamentally restructured. Green power purchase
options, one instrument among many to do this, can help
move us in the right direction.
Additional data and information sources at www.earth-policy.org
or contact bernie@earth-policy.org
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