Keep building those windmills.

Photographer: Daniel Acker/Bloomberg

Don't Celebrate a Renewables Victory Yet

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
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There's a story line around the United Nations climate talks in Lima that says developing countries are standing in the way of lower global carbon emissions, while U.S. urges them to follow its lead. The second half of that story could use some work.

The Barack Obama administration went into the talks with a lot to brag about, including new fuel-efficiency standards, proposed rules on power plants and a commitment to cut emissions by as much as 28 percent below 2005 levels by 2025. Meanwhile, solar power production is set to double this year, for the seventh year in a row. It's an impressive record, not least in light of opposition from Congress.

Except for one number: 9 percent. That's the share of electricity generation that will come from renewable power, excluding hydroelectric sources, in 2030, according to the Environmental Protection Agency. (Include hydro, and that figure is still just 16 percent.) And that's with the proposed power-plant rule. Without it, the EPA projects renewables will make up just 8 percent of generation capacity, or 14 percent including hydropower.

In other words, the Obama administration's signature change to electricity production will lead to an increase in the share of power from solar, wind and similar sources of just one percentage point. The fast growth in solar and wind still isn't fast enough to make a significant dent in the national power fleet.  

Compare that with other countries. The European Commission has a target to reach 20 percent renewable power by 2020. Mexico's target is to get one-third of its power from clean sources by 2024 (that includes nuclear, hydro and highly efficient fossil-fuel-based generation). Even China, in its deal last month with the U.S., pledged to get 20 percent of its power from non-fossil-fuel sources by 2030.

Why is the U.S. trailing on renewables, even with the new rule? One reason is how the EPA structured that rule, giving each state enormous flexibility to meet emissions targets that are far less demanding than opponents suggest. That flexibility includes the ability to choose whether, and how much, renewable power is used to hit those targets.

Another reason is that, according to the U.S. Energy Information Administration, big increases in U.S. renewable power depend in part on better storage technologies, which the EIA says are "in early stages of development or not yet commercially established." When that will change is anyone's bet; I asked the Department of Energy two weeks ago how much it's spending on researching storage technology, and have yet to get an answer.

Why does it matter how much of the country's power supply comes from renewables, so long as emissions are going down? I put that question to Robert Cowin, director of government affairs for the climate and energy program at the Union of Concerned Scientists, which has urged the EPA to put higher targets on renewables.

Cowin said that meaningful, lasting emissions reductions require moving away from fossil fuels, not just making them more efficient or shifting the distribution from oil to natural gas. "In the long term, we're going to have to get away from gas," he said.

In the administration's defense, beating the current low estimates would be a lot easier with help from Congress. A carbon tax set at $25 a ton in 2015 and rising 5 percent each year would roughly double U.S. electricity generation from renewable sources, excluding hydropower, in 2030, the EIA estimates -- a far greater increase than reducing the cost of renewable technology by a hypothetical 20 percent. But as Eduardo Porter wrote last month, that solution "remains off the table" for now.

Another way Congress could help is by keeping the production tax credit for renewable energy, which paid companies for each kilowatt they produced before it expired at the end of last year. Retaining that credit, along with another credit for investment, would also produce greater gains in renewable electricity generation than lower technology costs, according to the EIA.

None of that means the EPA and Obama don't deserve credit on emissions. And estimates can be wrong; Bloomberg New Energy Finance, for example, has more optimistic projections for U.S. renewable power growth than either the EPA or the EIA.

But if the government's own projections are right, it means that absent more aggressive policy -- such as increasing the renewable targets in the EPA's final power-plant rule, action from Congress or tougher renewable mandates from states -- the U.S. won't break double digits on solar and wind by 2030. And at that rate, we're not fixing the climate problem.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Christopher Flavelle at cflavelle@bloomberg.net

To contact the editor on this story:
Stacey Shick at sshick@bloomberg.net