Abuse of Power

The Responsibility of Government to Encourage the Development of Renewable Energy Resources

By
The Windy Future
Abuse of Power : The Responsibility of Government to Encourage the Development of Renewable Energy Resources - Michael Obeiter

Abstract

As economies develop, they increasingly rely on energy to fuel their growth. This energy has historically come from traditional power sources – notably oil and coal – as they are relatively cheap and easily exploitable. Developed economies have derived much of their strength from the use of these energy sources, at the expense of environmental quality. These economies now have the responsibility to lead the world in advancing the utilization of renewable energy; the deregulation of the electric industry in many of these countries offers the perfect opportunity for governments to encourage the promotion of renewable energy through a variety of policies.

Introduction

The last years of the 20th century brought with them a considerable move towards deregulation in the United States and liberalization in Europe. This new tendency to favor free market enterprise over government management manifested itself in many industries, including perhaps the most well-known example – the electric industry. The liberalization of the electric industry in Europe – in which the markets in Belgium, Finland, the Netherlands, Norway, Sweden, the United Kingdom, Germany, Italy, Spain and France have participated – came close on the heels of a wave of privatization of many national industries, a trend that started in England under Margaret Thatcher and eventually included the telecommunications, automobile, banking, and energy sectors of many European nations.1

Many US states turned to deregulation to, ostensibly, lower the cost of electricity generation for consumers through increased competition and efficiency gains (electricity transmission, a clear natural monopoly situation, remains regulated). In both the US and European examples, opening up the electricity market to competition has allowed for the entry of new firms, and in nearly every instance has indeed lowered the cost of electricity for the end-user.

In examining these newly competitive markets, one can easily overlook the effect that deregulation and liberalization have had on the renewable energy (RE) industry. An oft-marginalized segment of the energy sector under the regulatory apparatus, deregulation has threatened its further marginalization as the price of conventional electricity generation decreases.2 Under state-controlled regulation or nationalization schemes, governments at the state and national level could dictate a requirement for the inclusion of RE in the mix of electricity supplied to the grid. With the advent of deregulation, however, the state loses its power to enforce such a requirement, and the utilization of renewable resources is left to the discretion of the market. Deregulation is a process in which “the institutions associated with vertically integrated, highly regulated electric utilities…are being replaced by new institutions, such as independent system operators and power pools and privately owned, distribution only companies;” there are opportunities for the government to get involved in this process and actively work to influence the supply and demand of renewables.3 As electricity markets are opened to competition, there is necessarily an influx of new producers supplying energy from easily exploitable and readily available conventional sources, notably the traditionally employed fossil fuels. This should not come as a surprise, as the infrastructure at every stage of development (including oil rigs, coal mines, and gas wells in the exploitation stage; and the tankers, trucks and trains, and pipelines in the transport and delivery stage) is already in place. All that remains for the new supplier is to site a power plant, interconnect it with the grid, and ensure delivery of the fuel of choice – admittedly difficult tasks, but unlike nearly every RE project, securing the necessary financing is not a Sisyphean struggle. The electric generation industry thus transforms from a regulated monopoly to a market structure that more closely resembles perfect or oligopolistic competition. In this manner, the price differential between RE and conventional energy – already quite large in the case of solar power and other less efficient systems – increases, as competition drives down the price of conventional energy while funding and siting difficulties keep the supply of RE systems low and prices relatively high.

In such a situation, there is a very clear market failure, as the positive externalities of RE (especially the mitigation of air pollution and the diminution of the effects of global warming) and the negative externalities of conventional sources (air and water pollution, greenhouse gas emissions, radioactive waste) are not internalized. This presents the opportunity for government intervention to reduce the sizable entry barriers that prevent the effective penetration of renewables into the electric supply market. Through a variety of measures, most of them fiscal in nature, state and national governments on both sides of the Atlantic have the ability to at least partially rectify the market imperfections inherent to a deregulated or liberalized electricity market. In presenting many of the means through which governments can help the RE industry to overcome entry barriers, this paper intends to argue that these governments have the responsibility to adopt any or all of these measures to ensure that renewable market penetration is non-negligible, and that the market share of RE sources grows to the extent that the world’s energy future is cleaner and more secure.

Environmental concerns, including RE and conservation, were largely non-factors in the debate over deregulation, and were not part of the rationale used to justify the course of action taken in many states and countries; what is more, no studies were performed to gauge the potential environmental effect of liberalization in Europe.4 Because RE was not considered during the debates over how deregulation should proceed, which were largely political in nature, governments must consider them after the commencement of deregulation in order to neutralize or reverse many of the negative effects deregulation has on the industry.

There are a number of ways that RE is hurt by deregulation. First, as the market shifts away from its traditional monopoly structure, research and development (R&D) is expected to decrease in the short run as firms try to cut costs and gain market share; R&D under deregulation becomes tied to business considerations, and no longer takes policy considerations into account.5 The benefits of energy R&D are well established, and include many environmental attributes such as reduced emissions and improved efficiency of renewable technologies. Many renewable technologies, including solar and fuel cells, are still in the early stages of development, and are considered high-risk, high-reward investments. As utilities begin to compete with one another, there will no longer be jointly conducted R&D projects, and the funding that is still devoted to R&D will likely shift to shorter-term projects with less risk. Spending on R&D is already declining in many countries: the electric industry in the US devoted 0.3 percent of sales revenue to R&D in 1994, and this figure is expected to decrease; from 1984-1998, energy R&D decreased in every US state; Dutch utilities are decreasing their investments from 0.7 percent to 0.6 percent of sales; and Spanish utilities, currently obligated to spend 0.85 percent of sales on R&D, will likely reduce this figure by 0.5 percent.6 These cuts in energy-related R&D are doubly damaging, as public sector investment often encourages private sector investment, and so as government funds devoted to R&D are reduced, so too will flows of private money dry up.7 Although empirical evidence suggests that oligopolistic markets have the greatest incentive to innovate, in a deregulated marketplace most of this innovation will likely be in slight improvements to current technologies, not advances in new technologies (including RE), as firms move away from higher-risk investments. Unless governments act to increase public investment in long-term energy R&D (and thus implicitly encourage more private investments), the RE sector will stagnate and will continue to be burdened with high costs. This means that “though utility customers may be short-term winners from the deregulation of utilities by paying less for energy, a national failure to invest in energy R&D is very likely to have long-term negative impacts on national energy sectors, the economies, and environmental well-being.”8

Long-term prospects for RE could be hurt further by dismantling or cutting back policies that had been previously provided by utilities under the regulatory framework. These policies that were beneficial to RE are considered inappropriate in a deregulated market, as they give preferential treatment to some suppliers. Renewables could also be hurt by new rules and requirements brought about by deregulation, such as increased transmission costs and the need to provide ancillary services. If decisions regarding the post-deregulation framework are made without considering the effects on renewable technologies, the RE industry may be disadvantaged.9

There are arguments, however, that restructuring the electric industry could potentially be a boon to the renewables industry. First, with the advent of competition in the market, consumers are now free to choose their supplier, and the more environmentally conscious among them may be willing to pay a small premium for electricity generated in a way that minimizes environmental impact. In addition, deregulation often brings with it increased access to the transmission grid, which in turn provides more opportunities for RE systems located far from load centers. Given the nature of many renewable resources – especially wind and hydroelectricity – the best sites are often far from population centers; deregulation could thus ease the grid interconnectivity for these systems.10 Lastly, and most appropriately for the purposes of this paper, deregulation offers state and federal governments the prospect of researching and implementing new policies to promote RE. If governments take full advantage of this opportunity, RE could emerge as a significant contributor to the electricity pool for the states and countries that encourage its development with far-reaching and forward-looking policy solutions.

Before delving into the various forms these solutions can take, the question of whether government intervention is necessary in a deregulated market should be addressed. As is the case with most economic issues, there is no definitive answer, although the presence of market failures is largely regarded as beyond question. Those who argue in favor of the efficacy of markets in providing the socially desired outcome generally shun the necessity of interventionist policies. Government intervention is often far from perfect, and does not come cheaply. Even when some fiscal policies could be considered helpful – such as pollution taxes, government R&D, and removal of subsidies to conventional energy suppliers – it can be argued that technology-specific policies are not necessary.11

However, it is the position of this author that private investment alone cannot adequately fund the development of a sizable market share for RE, due to the aforementioned market failures, which include the following:

• Uninternalized negative externalities stemming from the environmental costs of electricity generation through fossil fuel combustion or nuclear power, as mentioned above.

• Uninternalized positive externalities stemming from the mitigation of these negative environmental effects through the increased utilization of RE, which are difficult to measure as the benefits accrue in a large part to future generations.

• The presence of public goods, most notably energy R&D, that are historically under-funded by free markets.

• Imperfect information, which prevents the market from running as efficiently as it otherwise could. While perfect information is an unattainable goal, government intervention could alleviate many of the problems associated with this limitation of the market.

• Unequal tax treatment and subsidies given to the more well-established, traditional sources of electricity generation, which in turn lead to price distortions that favor conventional sources of energy to the detriment of RE.

Many existing policies have helped to overcome some of these market failures, and should continue.12 The processes of deregulation and liberalization of electricity markets present opportunities for the re-evaluation of existing policies, in addition to the formulation of new strategies to increase market penetration of RE. It has been argued that a small price differential of less than 20 percent between RE and conventional sources of energy, in conjunction with a campaign to inform customers as to the true costs of energy, could drive demand for RE.13 Too high of an initial demand, however, will lead to high RE prices, which will serve to discourage customers in the long-run from switching to green energy. On the other hand, if initial demand is too low, there is less incentive to develop new capacity, leading to higher unit costs of RE generation, less competitiveness on the part of suppliers, and the need for government support to keep the industry afloat. The goal of government policies should therefore be to ensure that demand for RE grows steadily, and that supply continues to grow to keep pace. The following policies, to be used in various combinations with one another depending on circumstances intrinsic to the market in which they are being considered, are suggested as means through which governments can play an active role in maintaining both the steady growth rate of demand for RE and the balance between that demand and concurrent supply.

Renewable Portfolio Standard

The concept of a renewable portfolio standard (RPS) has been widely adopted and praised as an effective policy for increasing RE generation and consumption. Under an RPS, regulators or lawmakers dictate a certain percentage of the state or country’s power that must come from RE. In a regulatory environment, such a requirement would force the regulated utility to invest in RE projects in order to increase the share of green electricity in their power mix. In a deregulated market, the same requirement serves to increase demand for RE on the part of suppliers, all of whom must now take their power mix into account. Flexibility is provided through the introduction of renewable energy credits (RECs), which are generated by wind farms, photovoltaic panels, landfill gas plants and other RE projects at the rate of one REC for each kilowatt-hour of electricity generated. The sale to, and trade between, suppliers of these RECs is made possible through the unbundling of the electricity generated by renewable systems from the environmental attributes (such as the mitigation of greenhouse gas emissions and other positive externalities mentioned above) these projects produce. Except in the case of distributed generation (described below), the electricity generated goes into the grid, while the attributes are sold and traded on the auxiliary REC market. This market functions in much the same way as the market for SO2 permits, which has worked to curb air pollution and limit acid rain since the early 1990s. Whether by investing in their own RE resources or buying them from other projects (both existing and those in the process of being built), retail suppliers must meet the RPS requirement, thus creating market opportunities for new projects.

Many US states already have, or are considering, RPS requirements. Massachusetts, for example, enacted its RPS in 2002 and it took effect beginning in 2003 with the initial requirement of 1 percent a year, to be increased by 0.5 percent each year until 2009, and by 1 percent each year thereafter (until the annual increase is suspended by the Massachusetts Division of Energy Resources).14 If a retail supplier is unable to purchase enough RECs to meet its requirement, it must purchase Alternative Compliance Credits at the prevailing REC market price. The revenues from the sale of these alternative credits are used by the Massachusetts Technology Collaborative, an organization created expressly for this purpose, to encourage RE project construction.

There is a similar policy in place in the United Kingdom to create opportunities for the construction of new RE projects. The Non-Fossil Fuel Order (NFFO) of 1995, later changed to the Renewables Obligation in 2002, was put into place with the stated objective of creating 1,500 MW of new renewable generation, representing approximately 2.5 percent of Britain’s electricity needs, by the year 2000.15 In each successive round of NFFO advancement, the intention of a convergence in the price of RE and conventional energy sources was reiterated, so that “in the not-too-distant future the most promising renewables can compete without financial support.”16 The goal was increased in 2004 to 15 percent of Britain’s electricity needs by 2015. Unlike an RPS, which relies on the creation of a new market for RECs to encourage the growth of the RE industry through normal market mechanisms, the NFFO in the UK subsidized investment in RE through a tax on consumers’ electric consumption.

Distribution Surcharge Programs and Educational Initiatives

There is a host of programs aimed at increasing RE market penetration that can be funded through a small surcharge added on to the distribution portion of a consumer’s electric bill. Charges are volumetric and non-bypassable, and are similar to the tax on electricity consumption used in the UK to fund the NFFO. The money raised in this way can be used by governments to directly fund the construction of new RE projects, as under the NFFO. Or it can be used to help correct various market imperfections, thereby allowing markets to function more efficiently, to the advantage of the RE industry. The surcharge could go towards funding long-term R&D, for example, or towards fiscal programs that serve to level the playing field between the RE and conventional energy camps. It could fund studies to develop new permitting and siting restrictions that would be specific to RE projects, or provide incentives to manufacturers of RE equipment. It could provide low-interest loans to project developers, or give production incentives to renewable production.17 Alternatively, surcharge revenues could encourage green power marketing, to be discussed in more detail below.

In addition, through the support of educational and informational programs aimed at end-users, a distribution surcharge could help eliminate the market imperfection created by incomplete information, in this case the lack of understanding of the true costs of electricity generation on the part of consumers. There exists empirical evidence in the economics literature that consumers’ willingness to pay for electricity increases in conjunction with their awareness of the environmental problems caused by its generation.18 In the transition period from regulation to free competition, end-users will likely continue to buy electricity from their usual suppliers as the lack of information about alternatives will lead to uncertainty and reluctance to change, especially among risk-averse firms.19 Early adopters are likely to be environmentally-minded, and any spillover from this group to other groups of consumers is unlikely. Therefore, RE should be targeted to different groups in different ways, so that initial demand rises.20 In this way, the positive network externality normally associated with RE (i.e., since most RE projects are not built until they have enough customers subscribed, low numbers of subscribers keeps supply low and RE prices high) can be proactively addressed.

Consumer preferences help determine the “technological trajectories” of the electricity market; these trajectories become more entrenched as time passes, so it is important to “give renewable energy consumption a boost at the beginning of the liberalized market.”21 This demonstrates the need for an active government-supported educational campaign, perhaps including the instruction of the benefits of RE in schools, so that consumers are better prepared to shoulder the onus of demanding technological change and progress that is placed on them.

Electricity generation is currently on a trajectory that has long favored non-renewable resources, and market-based approaches to diffusion of RE are unlikely to suffice for the long-run.22 What are needed, therefore, are policies that encourage the optimization of current technologies in the short-run while simultaneously promoting change and development in the electric market in favor of RE for the long-run. Renewables are not yet ready to meet the demands of the system, and RECs are likely to foster hybrid solutions that easily fit into the existing generation infrastructure (such as combined heat and power and biomass generation).23 More revolutionary technologies that buck the trend – such as wind, solar, and fuel cells – require public support, and the best way to drum up that support is through the dissemination of information that educates the public as to the environmental benefits of RE and the environmental costs of conventional fuel sources.

Green Power Marketing

As has already been mentioned, generating an appropriate level of demand at the time of deregulation will have a lasting effect on the success of various policies over the longer term. With the transition to a deregulated marketplace, prices of electricity should fall across the board, but with greater declines in the prices of conventional energy sources. Renewable generation will necessarily be inelastic in the short-run, even with an RPS or similar policy in place, due to the (often considerable) amount of time needed to secure investment, site, plan, develop, and build renewable projects. This inelasticity will likely dampen the demand for RE, and increase the tendency to free ride that could emerge even among well-informed consumers that do not want to pay more for RE despite their knowledge of the true costs of their electricity use (with the hope that others are willing to pay the premium). The aim of policies that deal with the marketing of green power, therefore, should be the creation of initial demand low enough to keep prices low and reduce the temptation to free ride, yet high enough to stimulate investment in the RE industry, and with the potential for future demand growth.24

The limited possibility of rapid growth in RE supply in the short-run, and the implications this causes for the inability of RE to capture increasing returns to scale, could continue to pose barriers to market entry for years after deregulation is initiated. Economies of scale are generated as RE capacity increases, due to the fact that this increasing capacity brings about a decline in the difference between average and peak generation requirements. This extra capacity from RE removes the need for the most expensive generators (“peakers”) to be active during peak transmission times – as well as increased supply reliability.

The price premium on RE should be enough of a deterrent on initial consumption to keep demand low; the government, without pushing demand too far above initial supply, should endeavor to grow demand to meet consistently growing supply. There are a number of ways that government intervention in the electricity market can assist RE companies to market their products. In addition to the public education programs mentioned above, which alert consumers as to the availability and benefits of RE, there are also monetary incentives that can be given either to customers that voluntarily purchase renewables, or to producers themselves.25 These fiscal incentives can take the form of price discounts or various types of subsidies to encourage the consumption and generation, respectively, of RE. Furthermore, some states have given funds collected through a distribution surcharge to green power suppliers in the form of rebates, which decrease as demand increases; these rebates are then used to offset the companies’ marketing costs, both raising the profile of RE and lowering costs to consumers.26

Other policies governments can pursue in order to support green power marketing include fuel source disclosure or standardized green power certification, so that consumers are aware of the fuel mix used in the generation of the electricity they are using; and government purchases of RE, to buoy demand. The success of green power marketing as a means through which to encourage RE production and consumption depends on the emergence of retail suppliers of green power; some argue that the materialization of these suppliers eliminates the need for continued government intervention, while others say a successful government RE policy requires active market intervention to sustain this niche market.27

Market forces alone would fight an uphill battle to convince any but the most environmentally conscious consumers to pay a significant premium on their electricity use and switch to green energy. Government policies to support green power marketers can help in lowering the price of RE, but only the most dedicated policies will reduce the difference between RE and electricity from conventional energy sources to a negligible amount. In many cases, however, there are also non-governmental actors working in the public interest to promote increased utilization of RE. One of these, the World Resources Institute’s Green Power Marketing Development Group, works with some of the world’s largest corporations to increase their RE purchases. The proposition is viewed as win-win, as large purchases serve to increase global demand for RE through better media coverage of the RE market and increased customer awareness, while for the company, they often serve as “an investment to develop, improve, or reinforce their corporate image.”28 Some states, including Rhode Island and Massachusetts, are encouraging their governments to buy RE or giving incentives for large customers to purchase RE and promote those purchases, thereby further raising the profile of RE and creating a stronger overall market for renewables.29

Encouragement of Distributed Generation

Distributed generation (DG) is the term applied to electricity generated close to the load it serves. In recent years, DG has increasingly taken the form of renewable microprojects, be they rooftop solar photovoltaic panels, isolated wind turbines, geothermal facilities, or the like. With the deregulation of electricity markets, demand for DG has increased rapidly, due to its increased utilization as a means through which consumers reduce their peak load requirements; the overload of the transmission grid; widespread resistance to the construction of new power plants; growing demand for more environmentally sound generation; and what one author calls “horribly botched deregulation and restructuring of the electricity industry.”30 Whether or not the savings attained through peak-shaving make DG economical in some instances, the fact remains that by its very nature, DG cannot take advantage of scale economies. Therefore, government policies to support renewable DG projects is imperative for their continued development.

Distributed generation projects face significant market entry barriers that discourage their construction, stemming from both technical and non-technical issues. On the technical side, not only are there scale economies attained by larger projects, but often the efficiency of the technology itself is not even viable on a smaller scale. Wind turbines, for example, require a minimum wind speed to make them efficient enough to warrant their construction, and often times this minimum speed isn’t reached below heights that would preclude their construction in many areas. On the non-technical side, entry barriers often emerge from the application of rules meant for larger projects to much smaller DG projects. In Massachusetts, for example, a one megawatt project was burdened with “tariffs, transmission costs, operating charges, and penalties for losses levied by ISO-NE [Independent Service Operator – New England], the region’s grid operator.” This problem was eventually solved by treating this particular DG as negative load instead of generation.31 Policies that work to incentivize DG, through tax credits or subsidies for example, can help raise the image of RE and promote its diffusion. Governments at the state and national level can even work together to foster larger markets for DG technologies.32

Conclusions

Each of the aforementioned policies to increase the market penetration of RE has its advantages and disadvantages. An RPS, for example, is a market-based, administratively simple mechanism that ensures a minimum amount of renewable generation while integrating RE into the competitive power market. At the same time, however, it brings with it uncertain costs and to some extent benefits existing renewable systems to the detriment of new projects (especially if the mandated quantity of RE in the power mix increases too slowly or not at all). A distribution surcharge, on the other hand, includes explicit cost containment and maximizes the exploitation of renewable resources within set cost limits, but could be perceived as a tax (making it somewhat politically unstable) and could marginalize RE in a competitive market.33 For these and other reasons, a combination of policies is often more viable and more suitable than any one policy, and the effectiveness of the policies developed during the restructuring process depends on their duration and stability. There exists concern that public support for efficiency and R&D programs, for example, will decline with the restructuring of the electric industry in many areas; RE and environmental advocates therefore need to work together and articulate the need for continued, effective support for RE.34

What is needed more than anything else, perhaps, is a paradigm shift in the electric industry that serves to shed new light on new and existing policies and uses the newly-available free market mechanisms to address the inertia that has stagnated innovation in the industry over the last century. Several years have passed since electric markets were liberalized in many European countries and US states, and other countries and states continue to debate costs and benefits in their own decisions to open their markets to competition. When considering what policy actions, if any, to take to support RE, these countries and states should surely consider the experiences of the UK, California and other pioneers and adapt the most successful policies to their individual situations.

They must also realize, however, the tendency to regress to the norm in situations involving change and uncertainty. For consumers, this means a reluctance to change suppliers; for producers, it means an aversion to risk as they try to establish their footing in the market. This is understandable, of course, but it remains the responsibility of the government to help the market overcome this industrial indolence, through informing customers of their options and providing them with incentives to switch to RE, and to shoulder much of the long-term risk inherent with energy R&D.

Electricity generation has evolved slowly throughout its history, generally seeming to follow a punctuated equilibrium model of evolution, to borrow a concept from biology. Long periods of relative inactivity in which existing technologies are refined and improved are interrupted by “punctuations” of more rapid change and drastic transitions; nuclear power and the increased reliance on RE after the oil crises constitute some of these punctuations, with the former more of an exclamation point and the latter more of an ellipsis. We have arrived at a point in history that seems appropriate for the continuation of the evolution of electricity generation that seems to have lost momentum over the past several decades. Present are both the need – global warming threatens our very survival, and RE is one of the most promising solutions – and the opportunity. All that is needed is the catalyst, in the form of proactive government policies that can overcome market failures, to open the door to a new era in electricity generation.

Notes

1 J.J. Dooley, “Unintended Consequences: Energy R&D in a Deregulated Energy Market,” Energy Market 26.7 (1998): p. 550.

2 For the purposes of this paper, renewable energy will include electricity generated from wind, solar, landfill gas, small-scale hydropower, and other sustainable resources. Conventional sources include oil, coal, natural gas, and nuclear power (nuclear power produces waste and is not generally considered renewable).

3 Bruce Edward Tonn and Martin Schweitzer, “Institutional and Programmatic Suggestions for Satisfying Public Policy Responsibilities in a Retail Competitive Electricity Market,” Energy Policy 25.1 (1997): p. 31.

4 Niels I. Meyer, “Distributed Generation and the Problematic Deregulation of Energy Markets in Europe,” International Journal of Sustainable Energy 23.4 (2003): pp. 217-219.

5 Dooley, p. 551.

6 Ibid.

7 Ibid, p. 549. 8 Ibid, p. 547.

9 Ryan Wiser et al, “Renewable Energy Policy and Electricity Restructuring: A California Case Study,” Energy Policy 26.6 (1998): p. 466.

10 Ibid.

11 Ibid, p. 467.

12 Ibid.

13 Roger Fouquet, “The United Kingdom Demand for Renewable Energy in a Liberalized Market,” Energy Policy 26.4 (1998): p. 281.

14 Massachusetts Renewable Energy Portfolio Standard Regulations <http:// www.mass.gov/doer/rps/225cmr.pdf>.

15 Fouquet, p. 287.

16 Ibid.

17 Wiser, p. 468.

18 Fouquet, p. 284.

19 Doris Fuchs and Maarten Arentsen, “Green Electricity in the Market Place: The Policy Challenge,” Energy Policy 30 (2002): p. 534.

21 Ibid. p. 535.

22 Ibid, p. 528.

23 Ibid, p. 529.

24 Fouquet, p. 281.

25 Wiser, p. 468.

26 Mark Bolinger et al. “States Emerge as Clean Energy Investors: A Review of

State Support for Renewable Energy.” The Electricity Journal November 2001: 85.

27 Ibid.

28 Fouquet, 286.

29 Bolinger, 93.

30 Thomas F Armistead, “Distributed Generation Seeks a Place in the Sun,” Engineering News-Record 246.14 (2001): p. 45.

31 Ibid, p. 46.

32 Bolinger, p. 94.

33 Wiser, p. 471-472.

34 Ibid, p. 465-466.

Michael Obeiter is an M.A. candidate at the Bologna Center, where he is concentrating in international environmental and energy policy. Before coming to SAIS, he was a utility analyst at Harvard University, where he was involved in decision-making processes related to the university’s energy needs. He holds a B.A. in mathematics and history from Williams College.