Alternative Energy/Give an overall picture of the AE field

Answer the questions:

Give an overall picture of the field.

*How was this field born and how is it evolving?

US History

• 1970 Oil Embargo raised US interest in alternative energies for energy/economic security and resource and environmental sustainability.[1]
  
• Before 1970, hydropower was the predominant alternative energy in the US.
• After 1995 hydropower production stagnated due to lack of available water.
• Hydro facilities still account for the majority of alternative energy production in the US, but there has been very little growth in hydropower capacity or production since 1995.
• Alternative energy plants such as wind, solar, biomass, geothermal, and tidal cost more than coal and natural gas power plants.
• Since the 1970's the US has used government run subsidy programs to give these technologies a competitive advantage in the US market.

US Renewable Energy Policies[3]

• The Public Utilities and Regulatory Policy Act of 1978 (PURPA) was the first US policy that gave alternative energy a competitive advantage[3]:
  • Required Utilities to buy energy from alternative energy producers
  • Paid premium prices for each kilowatt hour of electricity produced
  • Guaranteed the prices for the entirety of 20 year contracts
  • Act was ultimately unpopular because:
  1. The high prices created windfall profits for alternative energy producers
  2. PURPA contracts were paid for by the electric utility, raising the price of electricity for all consumers
• After PURPAs initial, but brief, success, there was stagnation in US alternative energy development until 1997 caused by:
  • Electric power sector restructuring
  • repeal of federal and state incentives
  • sharply lower natural gas prices - making new natural gas plants more financially appealing
• In 1997 a new era of alternative energy policies began, which has helped to grow the alternative energy sector in the US.
• The most important of these policies are:
  • Renewable Portfolio Standards (RPS)
  1. Sets state goals for renewable energy (RE) generation in a %RE of total state electricity generation by a particular year (2020 for instance)
  2. Requires all state electric utilities to reach same level of RE generation and uses tradable credit market to drive process
  3. Credits are proof that one MWh (megawatt hour) of renewable energy has been produced and fed into the electricity grid.
  4. Utilities will decide to generate RE, buy RE from another retailer or buy the tradable credits to comply with RPS policy.
  5. Compliance measured by a state regulatory office which verifies that each electric utility holds the proper # of tradable credits by the end of the year.
  6. If utility generates 200,000 MWh per year, and the RPS goal is 10%, the utility must present 20,000 credits at the end of the year to show compliance.
  • The Business Energy Investment Tax Credit (ITC)
  1. Provides a 30% tax credit for qualified renewable developments. Most importantly solar developments.
  • The Renewable Energy Production Tax Credit (PTC)
  1. Provides a $0.01 - $0.02 payment per kWh for qualified renewable technologies. Most importantly, for wind energy.
  2. Recent change allows developers to opt instead for the 30% tax credit offered by the ITC.
  • U.S. Department of the Treasury Grant Program
  1. Recent Obama Administration addition which allows ITC or PTC eligible RE developments to opt for a grant equal to the 30% ITC tax credit in year 1 of the RE project.
  • Public Benefits Funds (PBFs)
  1. State renewable energy offices collect a small surcharge on all consumer electricity bills to fund renewable energy programs for the public.
  2. PBFs can be used for public education on RE and energy efficiency, or for programs that help fund RE or energy efficiency projects.

Technology History more on the way

*What are the main business models?

coming soon

*What are the innovation dynamics in this field? (inputs/outputs, timing of innovation/ disruptive or incremental innovation?)

coming soon

*How does knowledge flow in this field?

coming soon

*Is this field replicating models from other fields?

coming soon

*How many companies?

coming soon

*How much money do they make or how much money do they “move” in the American economy?

coming soon

*How important is research from universities in this specific field?

coming soon

*How important is public funding in this field?

coming soon

*How important is private funding / venture capital in this field?

coming soon

*Are there any specific public policies (from agencies, federal or state policies) that give incentives for openness or enclosure?

coming soon

*What is the cost structure of the field?

coming soon

*Who are the producers, the buyers, and the users?

coming soon

*What is the structure of power from the production side and what is the structure of power in the demand side? E.g., who has the power to control production and demand? How is the control distributed?

coming soon

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