A mission of the 25x’25 Alliance is to help policy makers and stakeholders explore those options that give our rural communities the tools needed for economic turnaround. As a result, the Alliance has been investigating pathways for growing distributed renewable energy generation in America. Those pathways include incentive-based rate structures – Standard Offer Contracts, Renewable Energy Dividends, and Feed-in Tariffs (FITs), among others – that have become the most widely used policies in the world for accelerating renewable energy development.
Recognizing the potential of incentive-based rate structures to help the 25x’25 Alliance achieve its vision of producing 25 percent of our nation’s energy from farms, forests, and ranches by the year 2025, the 25x’25 Steering Committee launched in 2011 the Energy for Economic Growth (EEG) Initiative , a Work Group charged with determining how incentive policies might be used to accelerate economic development and distributed renewable energy generation.
The Work Group last week issued a report summarizing its progress and reinforcing the role that rural electric utilities can play in creating new economic opportunities for their members through renewable energy. That role was demonstrated last fall when Work Group members and rural utility leaders traveled to Germany, a world leader in renewable energy, and met with policy makers and rural communities there to learn from a nation that has seen renewable energy grow from six percent of total energy consumption in 2000 to 25 percent today.
Much of the renewable energy growth in Germany, the U.S. delegation learned (see the report), comes from incentive-based rate structures, a development that Warren McKenna, manager of the Farmers Electric Cooperative in Kalona, IA, and a participant in the tour of Germany, observed in a blog posted here earlier this week. McKenna oversees a rural utility that now offers a number of unique programs, including a premium rate for members producing energy from solar and small wind systems, aimed at helping the FEC-Kalona reach a goal of meeting 20 percent of the utility’s energy needs with renewable resources by 2020.
McKenna’s is just one of many rural electric utilities and cooperatives in the United States the 25x’25 Energy for Economic Growth Work Group has found are interested in increasing renewable energy generation. With incentive-based rates structures have been demonstrated as an effective means of increasing distributed renewable energy and economic development in many rural areas around the world, including those in Germany, it stands to reason that they could represent a viable option for rural utilities here in the United States.
As part of the strategy laid out in its report last week, the Work Group will jump-start dialogues on renewable energy with rural utilities. The effort, which will be done in partnership with the National Rural Electric Cooperative Association, will allow rural electric cooperatives to discuss both the benefits and challenges posed by adding renewable energy to the grid.
In addition to opening up discussions among rural utilities here, other future steps the EEG Initiative Work Group plan to take include developing an information exchange program between U.S. and German energy cooperatives, and partnering with rural electric utilities in modeling and piloting incentive-based rate mechanisms for multiple renewable energy technologies, such as wind, solar, biomass, and heat.
As the Work Group heads into its next phase of exploring incentive-based policies for distributed renewable energy, interested stakeholders are urged to join 25x’25 in this important conversation on creating new economic opportunities and renewable generation in rural America. To learn more about this effort, contact project facilitator Tim Fink at 410-252-7079, or e-mail him at TFink@25×25.org.