Renewable energy and restructuring: Policy solutions for the financing dilemma

Electricity Journal

Volumn 10, Issue 10, 1997, Pages 65-75

  Wiser, Ryan ^a   Pickle, Steven ^a   Goldman, Charles ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0031471590     PISSN: 10406190     EISSN: None     Source Type: Journal    
DOI: 10.1016/S1040-6190(97)80321-1     Document Type: Article

References (26)

1. Kanner Marty. Federal Restructuring Legislation: A Recipe for Successful Action. ELEC. J. March 1997;20.
2. Fox-Penner Peter. Dear Mr. President ...: An Open Letter on Electricity Restructuring. ELEC. J. March 1997;13.
3. Cowart Richard H. Restructuring and the Public Good: Creating a National System Benefits Trust. ELEC. J. April 1997;52.
4. For example, resource-specific set-asides and environmental adders applied only to regulated utility suppliers (and not other retail suppliers) will no longer be viable policy options. Wiser Ryan, Pickle Steven, Goldman Charles. CALIFORNIA RENEWABLE ENERGY POLICY AND IMPLEMENTATION ISSUES: AN OVERVIEW OF RECENT REGULATORY AND LEGISLATIVE ACTION. 1996;Lawrence Berkeley National Laboratory, LBNL-39247.
5. Our emphasis is on policies that promote the near-term commercial development of renewable energy projects. We recognize, however, that a necessary complement to these commercialization strategies are research, development, and demonstration programs that encourage longer-term cost reductions and technology improvements.
6. Goldman Charles, et al. PRIMER ON GAS INTEGRATED RESOURCE PLANNING. 1993;Lawrence Berkeley National Laboratory, LBNL-34144. (prepared for Natl. Assn. of Reg. Utility Comm'rs).
7. Merchant power plants are generating facilities developed without a full set of sales contracts in place, but with good prospects for future sales.
8. As an indication of the consolidation process, Enron has recently bought Zond, the largest remaining U.S. wind company.
9. Farhar Barbara, Houston Ashley. WILLINGNESS TO PAY FOR ELECTRICITY FROM RENEWABLE ENERGY. 1996;National Renewable Energy Laboratory, NREL/TP-460-21216.
10. Holt Edward. Green Pricing Experience and Lessons Learned. PROCEEDINGS OF THE ACEEE SUMMER STUDY ON ENERGY EFFICIENCY. 1996.
11. Other green pricing programs that have been initiated but are not yet supplying renewable energy to customers include Public Service Company of Colorado (Windsource), Fort Collins Light and Power, Portland General Electric, Cooperative Power Association, Dakota Electric, City of Austin, etc. For a more comprehensive listing of utility programs, see the U.S. Department of Energy's Green Power Network (http://www.eren.doe.gov/greenpower/).
12. Holt Edward. Disclosure and Certification: Truth and Labeling for Electric Power. 1997;. (Renewable Energy Policy Project Issue Brief #5.
13. Moskovitz David, et al. Full Environmental Disclosure for Electricity: Tracking and Reporting Key Information. 1997;National Council on Competition and the Electric Industry.
14. The California Energy Commission, for example, is due to spend $75.6 million over four years on customer incentives and $5.4 million on consumer information programs for renewables. Policy Report on AB 1890 Renewables Funding. March 1997.
15. The lack of full disclosure and the shortage of renewables supply in New England certainly contributed to the type of green products offered in these pilot programs. Nonetheless, even where renewables are available and disclosure is in place, there is still a risk that non-hydro renewables projects will not be the most common "greening" strategy.
16. For more discussion on the implications of the public goods theory for green power marketers Wiser Ryan, Pickle Steven. GREEN MARKETING, RENEWABLES, AND FREE RIDERS: INCREASING CUSTOMERS DEMAND FOR A PUBLIC GOOD. 1997;Lawrence Berkeley National Laboratory, LBNL-40636.
17. Overall, between NFFO2 and NFFO3, costs decreased by an average of 30 percent (60 percent for wind). Mitchell Catherine. Renewable Energy in the UK: Financing Options for the Future (1995). 1995;. (prepared for the Council for the Protection of Rural England.
18. Cox Alan, Blumstein Carl, Gilbert Richard. Wind Power in California: A Case of Targeted Tax Subsidies. Gilbert R. Regulatory Choices: A Perspective on Developments in Energy Policy. 1991;Univ. of Calif. Press.
19. Wiser Ryan, Pickle Steven. FINANCING INVESTMENTS IN RENEWABLE ENERGY: THE ROLE OF POLICY DESIGN AND RESTRUCTURING. 1997;Lawrence Berkeley National Laboratory, LBNL-39826.
20. Lotker Michael. BARRIERS TO COMMERCIALIZATION OF LARGE-SCALE SOLAR ELECTRICITY: LESSONS LEARNED FROM THE LUZ EXPERIENCE. 1991;Sandia National Laboratory, SAND 91-7014.
21. Rader Nancy, Norgaard Richard. Efficiency and Sustainability in Restructured Electricity Markets: The Renewables Portfolio Standard. ELEC. J. July 1996;37.
22. Kirshner Daniel, et al. A Cost-Effective Renewables Policy Can Advance the Transition to Competition. ELEC. J. Jan./Feb. 1997;54.
23. If performance requirements are included, policymakers will avoid the capital-induced performance problems described earlier.
24. Wiser and Pickle, note 18, supra.
25. Most important, long-term commitments can result in a loss of policy flexibility. For example, if funding priorities change or a program is no longer required, a long-term commitment may reduce the ability of policy-makers to eliminate or alter the program. To improve flexibility without sacrificing stability, off-ramp triggers (e.g., making funding contingent upon particular market conditions) could be built into a policy.
26. These drawbacks include the following. First, there is a conflict between certain types of low-cost financing programs and federal tax credits for renewable energy. To reduce "double dipping," (the federal production tax credit available to wind and closed-loop biomass and the federal investment tax credit for solar and geothermal are reduced if projects also avail themselves of certain forms of subsidized energy financing. Second, the Tax Reform Act of 1986 limits the amount of state funds that can be raised for private purpose activities. Third, administration of financing programs requires project-specific due diligence and therefore a relatively involved administrative process.