Climate bill spurs less green power than hoped

By Ayesha Rascoe - Analysis

WASHINGTON (Reuters) - The renewable energy mandate in the climate change bill approved by the House of Representatives last week does not go far enough for green power proponents, but the proposed national standard is likely as strong as it will get.

Aimed at combating global warming, the House bill requires at least 15 percent of electricity generated by utilities to come from sources such as wind and solar by 2020, up from 2007 levels of around 2.5 percent.

President Barack Obama and clean energy advocates have called for a much higher national renewable electricity target of 25 percent by 2025, but House Democrats softened the goal to appease lawmakers from coal-dependent states.

Displeased with the concessions, two dozen renewable energy companies and trade groups ratcheted up lobbying efforts two weeks ago to spur Congress to boost the green energy target.

But experts say green power advocates probably will not be able to squeeze any more out of lawmakers, who fear saddling voters with higher energy bills in a recession.

"I think the less aggressive proposals show a concern by legislators that rates could change and go up, and that this is not a good way to get votes in recession," said Christine Tezak, senior energy policy analyst at Robert W. Baird and Co.

"A POSITIVE FOR RENEWABLE ENERGY"

Wind and solar producers still will benefit from the mandate if it becomes law, said Kevin Book, an energy analyst for ClearView Energy Partners.

"Despite appearances to the contrary, this is a positive for renewable energy because, like the Renewable Fuel Standard for biofuels, this is a real backstop," Book said.

Almost 30 states have already set targets for renewable energy production, and many exceed the House bill's proposed national standard.

While this may seem to make a watered-down national goal unnecessary, Book cautioned that many states already have altered their mandates when they became inconvenient.

"Even if the federal standard did nothing but hold states to their own targets, it would be considerably stronger than the status quo," Book said.

Even with a national mandate, renewable energy companies would face major hurdles, including competition from cheaper forms of power and lack of a modernized transmission grid.

"Targets below 25 percent by 2025 reflect a shade of realism regarding the scale of capital investment needed to hit such an unrealistic target," said Ken Medlock of the Baker Institute at Rice University in Houston, Texas.

RENEWABLE BOOSTERS LOOK TO THE SENATE