Renewable power: Environmental or political product?

What’s in a name? Plenty, if the word is "renewable." Intuitively, most people outside the energy industry consider hydroelectric power "renewable." The dictionary defines the word as follows: "capable of being replaced by natural ecological cycles." Accordingly, rainwater should indisputably qualify as renewable. Yet since the early days of renewable portfolio objectives, most hydro projects have been purposely denied renewable status.

Unfortunately, political considerations analogous to those that deem hydroelectric power a renewable outcast continue to determine whether other generation technologies and fuels receive the valuable "renewable" designation. All too often, these determinations exclude demonstrably renewable power sources from the renewables club. Such politically disfavored power sources do not qualify for state renewable portfolio mandates and, thus, are not developed. These practices perpetuate reliance on fossil fuels—a result in exact opposition to the mandates" objective.

Environmental criteria, not political expediency

State legislatures and regulators should base criteria for renewable status on objective and consistent environmental metrics, not on which fuel or technology leads in the polls at the moment. Such an approach will best serve to maximize the economic deployment of renewable generation technology. In contrast, the latest iteration of California’s renewable portfolio mandate and its legislation restricting greenhouse gas (GHG) emissions from power plants make clear that renewable power designations remain unduly subject to politics.

The California Legislature recently amended the state’s renewable portfolio mandate for the fifth time in five years, changing its definition of "renewable" yet again. Counterintuitively, the new law, which becomes effective in 2007, denies renewable status to ostensibly "green" sources, such as power generated by solid waste conversion or combustion, large hydroelectric facilities, and certain renewable power originating in other states.

Nonrenewable renewable resources

Under California law, power produced by solid waste conversion—using noncombustion technology to convert solid waste into clean synthetic gas for fueling a turbine-generator—is not "renewable" unless the process produces "zero" GHG emissions. The zero-emission requirement is simply not achievable and thus bars this technology from the renewables designation.

The politicization of renewable power is further evidenced by California’s prohibition on power from new, presumably more efficient solid waste combustion facilities. Yet, ironically, the renewable status of certain older facilities of this type is permanently grandfathered: "A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable resource unless it is located in Stanislaus County and was operational prior to September 26, 1996."

The categorical restrictions on solid waste conversion and new solid waste combustion facilities ignore the significant environmental and power supply benefits these technologies provide—reliable baseload generation, diversion of solid waste from landfills, decreased GHG emissions from decomposing organic waste, and reduction in forest fire fuels—with no rational basis for the distinction. The year of initial operation should not determine the renewable status of a generation technology.

California also bars certain power produced outside California from being counted as renewable, even if the same power would qualify if produced in the state. Out-of-state power qualifies as "renewable" if the plant began operating in 2005 or later. If the out-of-state facility operated prior to 2005, it can qualify only if it sold power to a California investor-owned utility any time before 2007. On the other hand, if this pre-2005 facility lacked this unique foresight and had sold its power only to a California municipal utility, it would not be "renewable" in California. Renewable determinations based on chronological coincidences and the regulatory status of the purchaser bear no relation to whether the generation source is "capable of being replaced by natural ecological cycles."

The California GHG legislation also reveals the invisible hand of political preferences trumping long-term environmental values. California utilities are barred from entering into power-purchase agreements of longer than five years" duration unless the generator achieves a certain GHG emission level, but no such restriction is imposed on shorter-term contracts. Obviously, there is no scientific evidence that the acceptable level of GHG emissions depends on the term of a contract.

Level green playing field

States" adoption of policies to increase the use of renewable power and reduce the power industry’s GHG emissions is a positive step. These efforts would be more legitimate and effective if states resisted pork-barrel legislative tactics designed to favor certain generating technologies and fuels over others based on factors other than objective and consistent environmental criteria.

—Christopher A. Hilen is Of Counsel to the Energy Practice Group of the national law firm Davis Wright Tremaine LLP. He can be reached at 415-276-6573 or [email protected]. Steven F. Greenwald leads Davis Wright Tremaine’s Energy Practice Group. He can be reached at 415-276-6528 or [email protected].