Colorado goes all-in on renewable energy

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"Colorado goes all-in on renewable energy"

Colorado isn’t waiting for Washington to move aggressively on clean energy, as CAP Senior Fellow Tom Kenworthy explains here.

On March 5, the state Senate approved a measure to increase Colorado’s renewable energy standard (RES) to 30% by 2020, and on March 8th, the House finalized the bill, sending it to Gov. Bill Ritter for his signature.

The legislation confirms Colorado’s leadership in nurturing the development of clean, renewable energy just six years after voters approved the state’s first RES – 10% by 2015. In 2006 the state legislature doubled the RES to 20% by 2020, and with enactment of the latest measure only California will have a set a more ambitious state requirement than Colorado, 33% by 2020.

As State Rep. Max Tyler wrote in Sunday’s Denver Post, “There’s new energy in town, and it’s powering a boom that will make Colorado a leader in recovering from this financial downturn. This clean renewable energy will grow Colorado’s economy and lead to a brighter future.”

The 30% renewables mandate, which covers large investor-owned utilities, also requires those utilities to get 3% of their power from distributed generation – rooftop solar and other small solar and wind sources owned by individuals, small businesses and communities. That requirement is expected to boost Colorado’s solar energy economy, which already includes 230 companies employing more than 2,500 people.

According to a new report by Vote Solar and Environment Colorado, a 3% distributed generation standard that is expanded to include all of the state’s utilities would mean 1,000 megawatts of distributed power generation and create 3,333 construction period jobs per year, save 6.8 billion gallons of water and avoid emissions of 30 million tons of CO2 – the equivalent of taking nearly 670,000 cars off the road.

The new, higher RES, wrote Tyler, “will continue to encourage the creation of our own energy businesses as well as drawing new energy companies and investment capital to Colorado. Good new jobs will be created for folks from engineers to construction workers. We will increase our energy independence, protect our environment, and cement Colorado as a leader in America’s clean energy revolution.”

– Tom Kenworthy

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14 Responses to Colorado goes all-in on renewable energy

  1. Sou says:

    Now that’s what I like to see. When I’m feeling optimistic, I figure that by the time national governments get their act together and decide to agree on targets, many people, businesses and state and local governments will have already got there. It’s good to see some signs that the world isn’t waiting for Mexico or whatever follows.

    I’m gradually saving up to become energy neutral at best but hopefully an energy generator – and I know lots of others who are doing the same. Within the next year or two the cost of PV cells should drop a lot and the next generation of solar should be well on its way. There are lots of other options getting cheaper as well. Soon more people will be switching for cost savings, not just because they are environmentally responsible.

  2. Lewis Cleverdon says:

    It is maybe worth noting here that in France, that epitomy of socialized energy supply via state-sponsored nuclear power,
    over a third of all households are heated by the oldest and most sustainable of fuels, being locally-grown firewood.

    Will Colorado’s new mandates help it to catch up with France’s sustainable forestry performance ?
    Or is wood considered too old-fashioned ?

    Regards,

    Lewis

  3. Mike#22 says:

    Excellent news. One hopes the RES in federal climate legislation is written so as not to override the state RESs. The 3% distributed generation standard is a great way to get utilities supporting the growth of small renewables within their service areas. They have to find that 3% or face penalties. Suddenly these small distributed sources like roof top solar, landfill methane, and small hydro look good to them. Projects happen when the corporate types make up their minds.

    Proponents of the tax and dividend strategy need to ask themselves this question: would taxing energy in Colorado have had anywhere near the same benefit? The RES will bring about 30% by 2020. The result of a tax is unpredictable. Some of the dividend would go to new RE, some would just go to cover the increased cost of energy.

  4. mike roddy says:

    Nice going, Colorado. If only Nevada and Arizona (ideal solar sites) did this, we could really start to change.

  5. dave says:

    Joe, George Monbiot in the Guardian has come out against the UK large solar feed in tariff (I agree with him). What do you think about such feed in tariffs, given that solar pv is a very expensive solution….

    [JR: I just don't think feeds in are how the U.S. is going to address renewables.]

  6. Daniel Ives says:

    RE: Mike #3,

    I believe you are mistaken about the tax and dividend stategy. This policy taxes carbon, not all energy equally. Only carbon-producing energy would be taxed under tax and dividend. Thus, a revenue-neutral tax and dividend policy would actually be an excellent way to achieve the 30% RES in Colorado. Think about it. People who put up solar panels on their homes do not pay the carbon tax on the electricity it produces, but they still get money in their pocket from the dividend. Suddenly solar panels look a lot more affordable, no? This policy would result in far far more than 3% distributed renewables as many more homeowners could afford small renewable units for their home. And rooftop solar is just one example of how tax and dividend works hand in hand with a strong RES.

    Cheers,

    -Dan

  7. EricG says:

    I live in Colorado, and while I’m very proud of this RES, I think it’s important to understand that the goal is not truly 30% RE. The standard gives utilities 125% credit for RE coming from in-state sources. As a result, the RES is close to 24% than 30%. It would have been better to recognize in-state RE at 100% with out of state RE at 80%, but that wouldn’t fly.

    DG energy does not get this premium. Therefore the 3% carve-out is really 3% of the utility’s energy production.

  8. Mark says:

    This is the kind of news that needs to be spread far and wide. Thanks!

  9. Richard Brenne says:

    It looks like I not only picked the wrong week to stop sniffing glue, but to leave Colorado as well.

    Oh well, I’m still betting on my friend with the best understanding of climate and energy issues of any politician since Gore, Bill Bradbury, to be Oregon’s next governor (and thus surpass even Colorado), betting on locally-grown food and marine vs. continental (and arid) climates, as well.

  10. Mike#22 says:

    Dan#6, “Think about it. People who put up solar panels on their homes do not pay the carbon tax on the electricity it produces, but they still get money in their pocket from the dividend. Suddenly solar panels look a lot more affordable, no?”

    well, I have thought about it. Empirically speaking, fossil fuels are already expensive, RE and efficiency is already affordable. There are lots of people with disposable wealth, and only a very small fraction take that wealth and buy RE or efficiency technology. More likely, they are headed in the opposite direction–they buy a big car, add a pool, and fly somewhere. Taxing carbon products would work only if everyone was like the self selected group frequenting JR’s pages, or better yet, the hippies who read Home Power mag (guilty). Given enough time, the RE and efficiency will change the market slowly–just like it has been already over the past 30 years. Not nearly fast enough.

  11. MarkB says:

    Nice to see this pass, despite Pielke Jr.’s best efforts in screaming economic alarmism.

    rogerpielkejr.blogspot.com/2010/02/decarbonization-of-colorado-economy.html

  12. Daniel Ives says:

    RE: Mike #10,

    “Empirically speaking, fossil fuels are already expensive, RE and efficiency is already affordable.”

    Fossil fuels are not expensive; they are still dirt cheap; the reason being that their current prices do not reflect their environmental costs. That is the whole point of a carbon tax: to make their prices reflect their true overall cost. Some forms of RE are cost-competitive with fossil fuels, and efficiency is certainly affordable to most homeowners. But take our previous discussion of rooftop solar panels. Even after the tax credits, they cost homeowners thousands of dollars and may not ever generate savings to pay back their initial cost (with a carbon tax however, they almost certainly would generate enough savings to justify the initial capital). We can debate the definition of affordability, but the fact is that most people will not spend their money on rooftop solar if it takes 20 years (if ever) to recoup the money invested. The incentive is just not there without a price on carbon.

    “More likely, they are headed in the opposite direction–they buy a big car, add a pool, and fly somewhere.”

    Wait. So if we implement a policy (carbon tax) that makes all three of these things more expensive, people will be more likely to do them? When instead they could invest their money in reducing their carbon intensity, and end up with even more money? I don’t follow. I believe you are referring to Jevon’s Paradox, but in the case of mature markets (i.e. energy) it almost always does not apply. Your argument that people will squander their dividends on carbon-intensive activities and raise overall consumption is pure speculation and also plain false.

    “Given enough time, the RE and efficiency will change the market slowly–just like it has been already over the past 30 years. Not nearly fast enough.”

    Your last sentence perfectly sums up why a carbon policy such as tax and dividend is needed.

  13. Mike#22 says:

    “Given enough time”…

    Time’s up.

  14. Rick Covert says:

    This is a far more robust effort to clean up the grid then the tepid one currently being advanced by Congress and which the Obama Administration hasn’t risen to the bully pulpit for as of yet.