Power to the people: Electric utility restructuring and the commitment to renewable energy

Document Type

Article

Publication Date

3-1-2004

Abstract

With electric generation responsible for 41 percent of U.S anthropogenic carbon dioxide (CO 2) emissions from energy use, development of clean energy sources is essential if the United States is to reduce release of greenhouse gases and slow global warming. Many proponents of sustainable energy anticipate that electric generation from renewable sources would thrive in a deregulated market, driven by consumer demand for "green" energy and the end of incentives to build large central power plants under the cost-plus profits guaranteed by state utility commissions. This paper examines the flaws in this expectation. After reviewing the highly cyclical nature of U.S. energy policy making in recent decades, the study links the ineffectiveness of policy with the institutional setting. Under electric utility market restructuring, renewable energy generation (wind, biomass, solar, geothermal, and small-scale hydro) must overcome barriers such as price distortions, lack of storage capability, discriminatory transmission system access, and the end of linked utility rate hikes guaranteed to cover the additional expense of renewable generation. In the absence of strong federal leadership, the state commitment to renewable energy has been uneven under utility restructuring. Moreover, nuclear power - the other leading alternative to fossil fuel use - is beset by serious problems. Only renewable energy options offer long-term hope for sustainability. Along these lines, green marketing, renewable portfolio standards, system benefit charges, carbon taxes, public power, "Community Choice," and production credits - all based on recent U.S. and European experience - are critically examined and recommendations made for changing course. At present, during this highly fluid period of utility restructuring, and absent more forceful regulation and demand management, it is dubious whether U.S. electricity market reform can encourage sufficient conversion to renewable energy to stem a rising tide of greenhouse gas emissions. © 2004 by Association of American Geographers.

Publication Title

Annals of the Association of American Geographers

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