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.
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