Renewable Energy Coming of Age - Part III | Competitive Ready

Renewable Energy Coming of Age - Part III

 

The specifics of where and when the growth of new energy economy jobs will occur remains sketchy. Big winners in terms of job growth will be those jurisdictions that carefully nurture cluster development. Germany, Spain, Italy and Japan were early entrants in support of solar, wind and biomass in the 1980s and 90s and remain strong global competitors. Since 2000 China has outpaced everyone in developing products and they are gearing to dominate renewable energy markets worldwide. 
 
As for the United States, a lack of continuity in government policy and the 50 state fragmentation of utility regulation have retarded domestic job growth. Continued bickering in Congress also does little to reduce uncertainty in domestic markets but goes a long way in bolstering development of foreign manufacturing clusters.  
In the wake of the November mid-term elections it appears unlikely that Congress will pass significant energy legislation over the next two years - including legislation that would accelerate industry growth such as regulation of greenhouse gas emissions, a national renewable energy portfolio standard (RPS) that mandates renewable energy production, or initiatives in support of power grid redesign.
Congressional inaction aside, continued growth in renewable energy and related industries in the U.S. is expected but perhaps not as robust as it might be. Helping move the market forward in the leadership vacuum are federal and state regulators who will likely step forward to drive industry supporting initiatives. Guaranteed markets for renewable energy products exist in the 29 states that have adopted mandatory RPS. An additional seven states have RPS goals.
Limits placed on greenhouse gas emissions, such as carbon cap-and-trade legislation, would help renewable energy markets to develop by shifting demand from coal to non-emitting power sources. The Environmental Protection Agency (EPA) has authority, under the Clean Air Act and confirmed by an April 2007 Supreme Court ruling, to regulate greenhouse gas emissions. However it is unlikely that the EPA will issue carbon regulations anytime soon. 
Congressional and EPA inaction on carbon doesn’t mean the EPA won’t dramatically impact the future for renewable energy. By mid-2011 the EPA is expected to finalize power plant emission regulations for mercury, SOx (sulfur oxides) and NOx (nitrogen oxides) under the current Clean Air Act. With compliance targeted for 2015, up to 30% of U.S. coal plants could be decommissioned because they use older technology and plant upgrades are not economical. When this happens greenhouse gas emissions will be reduced by default and renewable energy systems become more attractive from both cost and clean air standpoints. 
The country is also watching the states of New Mexico and California, both in the process of adopting cap-and trade regulations for greenhouse gases. State legislatures will monitor New Mexico and California programs to see what benefits may be derived from these initiatives.
The private sector will also drive investment to renewable energy as they respond to financial markets and regulatory trends emanating from climate change and sustainability initiatives. In response to these trends many companies have adopted sustainability policies that pledge to reduce their impact on the environment including zero solid waste and net-zero emission of greenhouse gases. Accounting and audit giant Ernst & Young guides corporations in being “carbon ready” - implementing a carbon management strategy to comply and account for existing and anticipated regulations.  Companies aligned with changing regulations and economics of energy are more likely to adopt renewable energy in the future and at the same time meet stockholder expectations.