President Doubles Renewable Energy Targets

Globe with RibbonIf less greenhouse gas pollution and more jobs and energy independence are on your holiday list, President Obama unwrapped an early gift for you. On December 5, he signed a memorandum to implement the next step in his Climate Action Plan, directing federal agencies to consume 20% of their electricity from renewable sources by 2020. The new goal would more than double the agencies’ current consumption of wind, solar, geothermal and hydropower.

The administration had already set targets in 2009 for improving federal energy efficiency and reducing waste by issuing Executive Order 13514 (Federal Leadership in Environmental, Energy, and Economic Performance). As a result, agencies have shrunk their greenhouse gas emissions by more than 15% and cut energy use per square foot in federal buildings by more than 9% since Obama took office. That progress, plus improved renewable technologies and availability, gave the administration confidence that still more could be achieved. “The federal government must lead by example,” Obama wrote, to combat climate change, protect the natural environment, improve energy security and save taxpayer dollars.

Specific agency actions identified to achieve renewable targets include, in order of priority:

  • Install agency-funded renewable energy on-site and retain renewable energy certificates (i.e., documentation that 1 megawatt-hour of electricity was generated from renewable resources and can be sold);
  • Contract for renewable energy installed onsite or offsite and retention of certificates for term of contract;
  • Purchase electricity and corresponding renewable energy certificates; and
  • Purchase renewable energy certificates.

Notably, the renewable energy certificates must be from 100% renewable sources defined as “new” (i.e., placed in service within 10 years before the start of the fiscal year). Installation is especially encouraged on brownfields, landfills or mine sites as a way to return contaminated land to productive uses.

To help agencies along the clean energy path, the memorandum directs them to enhance their energy management practices. Facility managers and others are instructed to use the Energy Star Portfolio Manager, developed by the EPA to facilitate online energy and water consumption measurement and tracking, and Green Button, developed by the industry-led North American Energy Standards Board to provide web-based access to utilities’ energy consumption data. Both tools are designed to help quantify current use and identify where performance improvements are most needed. Each agency is expected to install building energy and water meters and submeters, enter metered data into the Energy Star Portfolio Manager monthly and publicly disclose annual benchmark energy performance data. As the Energy Star Portfolio Manager website says, “You can’t manage what you don’t measure.”

Milestones set up by the memorandum require a swift ramping up of renewable use—from the current requirement of 7.5% to not less than 10% in FY 2015, and not less than 17.5 in FY 2018. The Director of National Intelligence may exempt intelligence activities, and any agency head may exempt particular activities and facilities in the interest of national security. Meter installation is also only required “where cost effective and appropriate.” Despite the wiggle room allowed for agency efforts, numerous green energy advocates released statements praising the announcement. The League of Conservation Voters called it “an important step forward” in energy policy, and the Wilderness Society applauded it as part of the overall Climate Action Plan, “inarguably the most ambitious plan by any American president to combat climate change.”

Critics countered that renewables still cannot deliver reliable electricity nationwide at reasonable costs. A coal industry spokesman called the directive too expensive to emulate in the private sector but “workable with the limitless funds of federal government.” Some of those “limitless” funds have been invested to resolve the problems posed by distributed renewable energy sources for our aging grid, particularly at the DOE’s sparkling new Energy Systems Integration Facility. But the problem of cost may be exacerbated if the renewable electricity production tax credit (PTC) is allowed to expire as expected at the end of 2013. According to a Forbes.com commentary, the annual cost of PTC expiration to the wind industry alone would be $25 billion, while the five-year cost to the government for extending the credit would be $9.7 billion. Increasing federal agency demand for renewables would be more successful in driving the market for homegrown clean energy if tax incentives would also remain in effect.

But even with the headwind of expiring tax credits, other forces could help contribute momentum toward renewable energy sources. Many states, for example, have set 20% renewable energy goals, and the Pentagon last year committed to obtaining 25% of its energy from renewables by 2025. If such national and state leadership helps spur renewable investments and building performance measurement and improvements, the future may bring clean energy targets still bolder than the 20% by 2020 announced earlier this month.

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