Renewable Energy Standard Key to Oregon's Clean Energy Economy & Workforce Growth

John Audley | Oct 04, 2012

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Oregon's Renewable Energy Standard (RES) is one of the most thoughtful policies to promote clean energy in the country, a working model for other states to consider. In passing the RES in 2007, Oregon legislators created an effective mechanism to drive new markets, job creation and clean energy business investments in the state1, while at the same time protecting ratepayers from unreasonable costs. This proactive thinking has significantly benefited the Oregon economy, communities and environment through tough economic times. It is imperative that Oregon's strong clean energy policies and related benefits are accurately presented and further fulfilled.

If it ain't broke...

Following thoughtful input from a group of statewide experts in energy, Oregon legislators crafted an RES designed to guide a utility's long-term energy planning process towards more renewable energy. The state's three largest utilities must gradually meet the highest standard -- 25% by 2025. The threshold for being in the 25% category is whether the utility meets 3% or more of the states total load. Small and medium-sized utilities were given much smaller targets -- 10% by 2025 for medium sized utilities, 5% for the smallest. All utilities were given 18 years to reach their respective goals. Utilities were also given a wide variety of paths from which to meet their growing electricity demand with new renewable energy, such as: owning new renewable energy assets, purchasing green power from other producers, or purchasing renewable energy credits. If unforeseen events occur, utilities can set aside money for future investment in renewable resources.

When the law was passed in 2007, it might have been difficult to foresee the depth of the Great Recession that hit hard four years ago. Fortunately, Oregon's RES is designed to be flexible enough to accommodate a number of situations; a utility does not have to invest in power it doesn't need, and it does not have to give up clean energy purchased through long-term power contracts. To make sure that compliance is reasonable for customers, costs are capped at 4% of annual revenues. PGE and PacifiCorp's cost of renewable acquisitions so far are projected to be less than 1%.

Utilities that experience sustained growth, and pass the threshold of meeting 3% or more of the states demand are required to meet the higher RES standard of 25% by 2025. After all, the key policy question at the heart of the RES is, "With what mix of resources will utilities meet customers' electricity needs into the future?" The answer to that question is: Oregon has pledged to pursue a clean energy future by meeting our energy needs with aggressive energy efficiency and new renewable resources such as wind and solar. In order for its RES obligations to grow, a utility must average 3% of the state's total energy sales for three consecutive years. Additionally, a utility that started out as a "small utility" and experiences load growth enough to exceed the 3% threshold has a four-year "grace period" after three years of sustained load, before it must meet 5% of its energy needs with new renewables (it is put on the same time table of gradual increases of renewable energy supply as if the law had just taken effect). Since all utilities were planning on future new energy purchases under the RES, a 5% benchmark in four years should not come as a surprise.

Oregon RES Helps Companies Uphold Public Positions

Power in the Northwest region is among the lowest-priced in the nation, and Northwest industrial customers receive a better price for their power than do residential customers. Consequently, the Northwest has effectively attracted the investments of numerous high-tech data centers, as well as renewable energy companies, while other Oregon industries have declined or shipped jobs overseas.

While power prices are one factor in site selection, Oregon's relatively arid eastside climate and mild winters make it a prime location for data center developers2. These data centers do grow utility energy needs and may impact their RES obligations. However, tech companies and big brands like Facebook, Apple and Google have taken vocal public positions3 to uphold green practices as part of their corporate responsibility: they have pledged their intent to operate their facilities and products using clean, homegrown, renewable energy. It doesn't seem likely that these companies would want to fuel their operations with power that doesn't comply with Oregon's clean RES requirements.

Investments from Data Centers and Renewables Are Good For Oregon

Rural Oregon communities benefit from economic development through both data center construction and clean energy development. New renewable energy businesses -- including wind, solar and geothermal -- have brought over $5.4 billion4 of capital investment to Oregon, most of it invested in natural resource-dependent communities. Related project taxes paid to Oregon counties total more than $50 million dollars, breathing life back into rural communities in need of funds for schools, roads and social services. Furthermore, the influx of renewable energy businesses to Oregon drove job creation at such rapid rates in the sector -- amid recession years -- that major research institutions could not keep up and considered new means of counting jobs5.

Oregon is committed to a clean energy future, one that guarantees the highest quality of life for its citizens while fostering a prosperous business environment. Having to choose between clean energy or jobs and new business investment is a false dichotomy. Oregonians want more clean energy and they want more economic development. Recent polls6 and increases in voluntary clean power program participants show that support for renewable resources remains strong, no matter the nature of the economy. We should examine Oregon's RES successes -- including the clean energy economy and workforce it has helped to foster -- and identify how to expand them as our region strategizes to thrive past present challenges.

References

  1. Leaders announce Oregon's $5.4 renewalbe energy capital investment landmark at May 2011 press conference: http://www.youtube.com/watch?v=IctOfJK7omA

  2. Data Centers in Oregon; high tech meets high desert: http://www.oregonlive.com/business/index.ssf/2011/11/data_clouds_settle_in_oregon_w.html

  3. Apple Vows to Build '100% Renewable' Energy Data Center: http://www.wired.com/wiredenterprise/2012/04/applerenewable/

  4. Renewable Northwest Project data detailing $5.4 billion capital investment milestone: http://rnp.org/sites/default/files/pdfs/OR_5_billion_2-page_11Mar23.pdf

  5. Real Numbers Unveil Oregon's Unprecedented Renewable Energy Job Growth: http://www.rnp.org/index.php?=node/1297

  6. Davis Hibbitts & Midghall Research survey concluded Northwest residents indicated growing appetite for green energy: http://earthfix.opb.org/energy/article/understanding-where-energy-comes-and-why/

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Comments

ESPERIA ,still here. i really need to talk with proper lawyers.this is too big to let it go to the dogs.still need funding for proven technology,with a twist.literally ,turbine/alternator combos.driven by solar thermal.to the tune of 50 MW/acre.or tri-mode panels ;AC,DC,hot water from one panel.since a co. called true black has produced thin film cells,with a 30 percent output,a 100 percent increase over then current cells.this is not going to stay on the ground for long.we need to strike while the iron is hot.

Where energy is concerned, I make a point of not believing in miracles involving wind and solar. I was in the army for a while at Fort Lewis, near Seattle, and there were very few training days lost because of really bad weather, so maybe that part of the US is a region where wind and solar make economic sense. But I really wonder if the entire (US) Pacific Northwest is a dream-come-true for fanciers of wind and solar.

Oregon is committed to a clean energy future, one that guarantees the highest quality of life for its citizens while fostering a prosperous business environment. Having to choose between clean energy or jobs and new business investment is a false dichotomy. Oregonians want more clean energy and they want more economic development. Recent polls6 and increases in voluntary clean power program participants show that support for renewable resources remains strong, no matter the nature of the economy.

Rots of ruch, as they say in Japan and China.

The Oregon plan is complete nonsense on numerous fronts.


1. Requiring the use of renewable energy in a region heavily dependent on clean hydro-electric power will have virtually no impact on the global climate, even if one happens to subcribe to the dogma of man-created CO2 emissions causing the planet to lurch into catastrophe. The proof is simple mathematics. Peeing into an ocean has no observable impact on the level of the seas.


2. Power bills can only go up for a variety of reasons, including the law-of-unintended-consequences rearing its ugly little head. To wit, when less hydroelectric power is used, ever greater debt repayment costs must be added to the unit cost of hydroelectric power built by borrowing money from the Federal government. All this for an unreliable source of expensive power (renewable) that is not as clean as hydroelectric. Incidentally, this has already occurred when BPA balked at being forced to absorb wind power instead of using hydroelectric power during periods of spring run-off.


Oregon, like California, appears to be engaged in economic suicide in pursuit of a "green" mirage while sucking money from the increasingly barren wallets of the taxpayers. Further, like California, the consequences of running out of other people's money are becoming more apparent as time marches on. Perhaps the folks in both states should stop smoking so much weed.

What should be done is: (1) build power plants only when you actually need them and; (2) only build the most cost effective generating units. In the case of the Pacific Northwest, that best option is the combined-cycle, gas fired generating station, as hydroelectric is pretty much maxed out.

The position of Michael Keller is very similar to mine on this issue. Somebody is making fools of the Oregon voters, or maybe they are making fools of themselves. All of this is very disturbing for my good self, because what I do NOT want to do is to break a promise to my good self, and begin to seeriously study this thing called renewable-energy/clean-energy. You see, I think that somebody else should study it and write the book that I could/would write, because if they followed a serious program of study they would almost certainly find that clean-energy was incapable of providing what they want.

Let me say once more however that I basically have no problem with governments subsidizing clear-energy investments, up to a limit of course. The problem is that the green team is constitutionally unwilling/unable to accept the evidence that would be forthcoming from a sensiblel subsidization effort.