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April 2, 2002-5
Copyright © 2002 Earth Policy Institute
Green Power Purchases Growing by Leaps and Bounds
Bernie Fischlowitz-Roberts
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 .)
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
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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 Programs
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
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