When are we really going to change our policies, mindset, expectations, and provide the appropriate support to develop the renewable energy industry? We can be operating with more renewable energy every year but it takes persistence and a unilateral commitment to the long term goal. The renewable energy industry is going to require long term bi-partisan support programs. The trillions of dollars of investment in fossil fuels did not happen overnight and the renewable energy industry simply has little or no chance of competing against it. We need to accept this fact and move on to support the industry or simply let the renewable energy industry develop ad hoc and see what happens. We have to face the facts that our energy demands are only going to increase and fossil supplies are a limited commodity.
The government must provide the support necessary to develop and sustain a strong US renewable energy industry. The infrastructure investments require solid long term support. Adequate capital will not flow into new industries where you are the underdog and existing energy players can squash your efforts with minuscule amounts of money compared to their profits. Investments must be enhanced through fair guaranteed minimum returns.
The expiration of the bio-diesel tax credit at the end of 2009 started a chain reaction which has basically shut this industry down. The bio-diesel industry had already been hurt significantly by the drop in fuel prices during the economic down turn and the loss of the tax credit has added further strain.
The entire renewable energy industry would benefit immensely by using a price based model which allows investors to know that they will be guaranteed a fair return on their investments. We can forget the tax credits, blenders credits, producers credits, production tax credits, investment tax credits, and roll them into one universal renewable energy program.
If we define base technologies which are covered and appropriate margins for each we would have a self regulating system which would spur new investment in proven technologies and eliminate the subsidies when market prices provided the necessary support for the projects.
Maybe it is as simple as new wind power projects get $0.XX per kwh which is the baseline industry standard given reasonable production and fair investor return.
Biomass and CHP systems could have their own rates which ensured a fair return based on a processing spread between the biomass cost and the energy revenues.
You could use a crush margin for ethanol. The commodity prices for corn, ethanol, and energy will fluctuate but if you can control the crush margin you can secure investor concerns. This would also work for cellulosic ethanol, biodiesel, and other advanced biofuels as their technology was approved for the program.
The program would be available for facilities using approved technologies and production methods. This would help new technology companies focus on getting their processes approved and ready for commercial application. This would hopefully move the technology risk to the venture capital markets and away from the government as is currently common. The majority of the tax payers money should go towards development of proven technologies and renewable energy supply, not betting on the next technology breakthrough. The government's exposure to this risk should be limited, a small portion of the overall programs, and limited to specific areas which need to be boosted to meet renewable energy goals.
This universal renewable energy program can provide the structure for moving the capital into these companies as new technologies are proven, added to the approved list, and taken to market.
We need to help our government officials on both sides understand that renewable energy is not a "nice to have" option. It is something we "need to have"