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Mountain News: Feed-in tariffs may stimulate clean energy



BOULDER, Colo. - Already, 75 per cent of the electricity distributed by the municipal utility department in Aspen, Colo., comes from renewable sources, mostly wind. The city hopes to push that to 83 per cent with installation of a small hydroelectric plant on a local creek.

Could something called a feed-in tariff push Aspen toward its goal of 100 per cent renewable energy?

"We are certainly going to look at it intensely to see if it has merit," says Dave Hornbacher, the city's deputy director of utilities and renewable energy. "It appears to have the potential to facilitate additional photovoltaic installations," he added.

In the wonkish world of energy policy, feed-in tariffs occupy a particularly esoteric niche. But speakers at a workshop last week in Boulder, Colo., said they will be crucial in accelerating the effort to reduce greenhouse gas emissions.

"We're not thinking grandly enough, boldly enough," said Randy Udall, an energy analyst and activist from the Aspen area. Feed-in tariffs, he said, are the only way to achieve the giant steps that are needed.

Jim Woolsey, a former director of the U.S. Central Intelligence Agency, said they would also provide environmental benefits by reducing atmospheric pollution by mercury, nitrous oxide and other toxins produced by burning coal.

Woolsey said feed-in tariffs could also make the United States less vulnerable to terrorists by making our energy supplies less centralized. An ordinary squirrel in Ohio was able to put New York as well as other states and parts of Canada into the dark in 2003. He suggested a few people with far more malevolent intentions could do far worse.

Feed-in tariffs provide generators of small to intermediate amounts of renewable energy fixed prices and long-term guarantees from their utility. The guarantees give entrepreneurs easier access to financing.

The effect of the tariffs would be to substantially change the nature of our electrical supply. That existing system is centralized around large coal-fired plants. But feed-in tariffs would create more diverse and dispersed energy sources.

Several countries have adopted feed-in tariffs, as has the Canadian province of Ontario and at least one U.S. city: Gainesville, Fla.

But price is a major stumbling block. In the short term, renewables generally cost more than fossil fuels. So why would a utility - and its customers - be willing to pay more for electricity from renewable sources?

Possibly because coal will become far more expensive in the long run - conceivably more expensive than renewables, even if you don't account for the greenhouse gas emissions or the health impacts.

In Aspen, city officials expect price hikes of 8.5 per cent each year for the next two years, with an unspecified increase the year after, for coal-generated electricity they purchase from Municipal Energy Association of Nebraska.