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September 27, 2001
EPA Partners with Businesses to Promote Green Power
    by Mark Thomsen

Voluntary program has enlisted companies, cities, universities and others with the aim of boosting the market for renewable energy.


The Environmental Protection Agency (EPA) recently launched the Green Power Partnership, a voluntary program to increase the use of energy generated from renewable sources. Fortune 500 companies such as 3M (ticker: MMM), Ford (F), General Motors (GM) and office furniture manufacturer Steelcase (SCS) have signed on as founding partners, along with several cities, universities and federal government offices.

"Conventional electricity generation is the nation's single largest source of industrial air pollution," said Kurt Johnson, Director of the Green Power Partnership Program. "When enough organizations switch to green power, the result will be substantial environmental benefits."

Green power is electricity generated by renewable energy sources such as solar, wind, water (hydro), geothermal, biomass (combustion of organic materials such as wood or stalks), and biogas (combustion of naturally-produced methane). Partners in the program must pledge a switch to renewable energy for a portion of their electricity needs, and in return, EPA provides technical assistance and public recognition. Partner commitments can be made on a facility, operating unit, regional or organization-wide basis.

The founding partners have committed to procuring more than 280,000 megawatt-hours of electricity generated from renewable energy sources over the next year. This commitment will prevent 200,000 tons of carbon dioxide, the chief culprit behind global warming, from being emitted into the atmosphere.

The EPA says it is promoting green power to reduce the emissions associated electricity generation from fossil fuels. In addition to carbon dioxide, emissions from power plants can include nitrous oxides (NOx) and sulfur oxides (SOx), which contribute to smog and acid rain. Reductions in oil use also mean less reliance on other countries for energy supplies.

There is a cost for these benefits, though. Green power generally is more expensive than electricity generated from conventional energy sources. While the premium varies according to the type of renewable energy, typically the added cost is 2-2.5 cents per kilowatt-hour. But if demand can be increased, the cost of renewable energy technologies will decline.

Green power is available in four basic forms. Availability, however, partially depends upon the status of electric utility restructuring in the state where the electricity is being purchased. There are blended products, which allow customers in states with regulated or competitive electricity markets to buy electricity containing a percentage of green power. The percentage can vary from 2 percent to 100 percent, and customers usually pay a monthly charge in addition to their regular bill.

Another option is block products, where customers in regulated markets buy green power in standard units of energy at a fixed price. This purchase is in addition to their regular bill. Customers can choose how many blocks they want to purchase in a month.

A third option is renewable energy certificates (RECs), also known as green tags. The concept involves taking a quantity of green power, separating the environmental benefits and the actual energy, and then selling them separately. A renewable energy certificate represents the environmental benefits.

For example, a woman living in one state wants to purchase green power, but there are no green power producers in her state. A company in another state is generating electricity from renewable energy, which it sells to customers at above-market rates; however, it does not have enough customers willing to pay that premium. The company takes a quantity of its green power and sells it at the market rate. It then also sells RECs, which represent the environmental benefits of that quantity of green power. The woman buys one of those RECs in addition to purchasing her regular electricity, essentially meaning she has bought green power.

The fourth option is for customers to generate power at their site by installing renewable energy equipment. On-site generation can increase power reliability and provide more stable energy costs, and many states allow excess power to be sold back to the grid.

By participating in the program, businesses enjoy more benefits than just enhancing their public image. "By joining the Green Power Partnership, organizations can tap into EPA assistance, get public recognition and help establish a new green power standard in environmental responsibility," explained Mr. Johnson.

Businesses or other organizations interested participating in the Green Power Partnership can contact Mr. Johnson at 202-564-3481, or by e-mail at Johnson.Kurt@epamail.epa.gov

 

 
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