Update 9: April 2, 2002-5
Copyright © 2002 Earth Policy Institute
Green Power Purchases Growing by Leaps and Bounds
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.)
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.
Copyright ©
2002 Earth Policy Institute
FOR ADDITIONAL INFORMATION
From Earth Policy Institute
Lester R. Brown, Eco-Economy: Building an Economy for the Earth (New York: W.W. Norton & Company, 2001).
From Other Sources
Lori Bird and Blair Swezey, "Businesses Lead the 'Green Power' Charge," Solar Today, January/February 2001, pp. 22-25.
Lori Bird and Blair Swezey, "Estimates of Renewable Energy
Developed to Serve Green Power Markets," January 2002.
LINKS
Green Power Network
http://www.eere.energy.gov/greenpower/home.shtml
Green Power Network-- International Marketing
http://www.eere.energy.gov/greenpower/markets/international.shtml
GreenPrices: Green Energy in Europe
http://www.greenprices.com/eu/index.asp
Center for Resource Solutions
http://www.resource-solutions.org
Green-e Renewable Electricity Certification Program
http://www.green-e.org
Power Scorecard: Rating the Environmental Impact of Electricity Products
http://www.powerscorecard.org