Clean tech crosses its fingers for more financial incentives
Businesses say government efforts are crucial for developing a green energy future.
Fri, Nov 20, 2009 at 01:58 PM
Photo: Getty Images
Despite the current obsession over the climate summit in Copenhagen next month, clean energy companies are looking closer to home to determine whether developing technologies like wind, solar power and cellulosic ethanol will take off in the U.S., according to a recent New York Times piece.
Though what happens in Copenhagen obviously matters in terms of creating an international agreement on reducing carbon emissions, businesses are saying that what's really going to affect them right now are governmental incentives to push clean energy.
Copenhagen “is a very important backdrop,” said Tom Carnahan, the founder and president of Wind Capital Group, a wind developer in St. Louis. “But the real battle for what our energy future is going to be is Washington.”
Despite the usual governmental malaise in Washington, the clean energy industry in the U.S. has already taken off, partly because of incentives like tax credits for technologies like wind power and state policies that require specific targets for greenhouse gas reductions.
Thanks to the stimulus package, the Treasury and the Department of Energy began handing out grants to wind farm developers a few months ago, with some developers getting funds in as little as three weeks after sending in their applications.
Of course, grants and subsidies can only go so far, especially while the price of carbon continues to be cheap. That’s why many businesses are arguing that a carbon reduction plan will only help clean energy businesses if the cost of carbon is increased.
In addition, others, like Carlos A. Riva, the chief executive of Verenium, which plans to produce cellulosic ethanol from sugarcane bagasse, are focusing on policies more likely to be passed in the near future, like federal cellulosic ethanol mandates.
“It really is about what happens nationally,” said Riva.
In addition, developers are hopeful that a federal “renewable electricity standard” will be passed, which would require the country to get a certain percentage of its electricity mix from renewables and energy efficiency. Many states, such as California, already have this standard in place.
Though the Waxman-Markey climate bill contains this requirement (20 percent by 2020), the Senate is considering a slightly watered down version.
While senators continue to argue over the current climate bill, other countries are gaining ground in the clean tech sector. China, for example, is so aggressively pursuing wind and solar power manufacturing to help cut pollution that it’s beginning to pose a threat to the thousands of green jobs that are supposed to be created in America if a climate bill were to be passed.
Though it's clear that companies and politicians will always disagree on the types of policies that will help spur a green revolution, one thing is for sure -- gains made by the wind industry are “going to be short-lived if there is not a consistent federal policy,” said Carnahan of the Wind Capital Group.