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InsightJim A. Roth

Wind gets caught in political volley

By June 13th, 2022No Comments

Jim Roth’s Friday column, Earth Business, appears in The Journal Record.
Originally published in The Journal Record on Feb. 13, 2015.
View Jim Roth’s attorney profile here.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oklahoma’s cleanest and cheapest form of electricity comes from its own wind projects. Although our utilities don’t operate under a mandate, or what’s known as a renewable energy portfolio standard, like many states, we have a goal calling for 15-percent renewable energy by 2015. According to the Corporation Commission, our state enjoyed 18.42 percent of its energy from eligible renewable energy resources in 2013. That trend continues. With the American portfolio of renewable energy growing and utility portfolios further diversifying, wind energy produced 14 percent of American electricity in 2013 and early 2014. Turbine technology is improving; wind is more available to generate electricity than ever. We’re on the map as the sixth-largest state for wind power. The future of renewables here seems very promising.

Yet a few case studies address what can happen when political winds change and politicians begin to push policies choosing coal at the expense of wind development.

Investments in the Australian market for renewable energy face a very stark contrast from where the country was headed, due in large part to the changing political winds. The Australian Renewable Energy Target is a key policy established in 2001 designed to ensure that 20 percent of the country’s electricity comes from renewable resources by 2020. Since the RET legislation in 2001, pro-renewable energy activist groups across Australia have raised substantial investments and awareness for the benefits of renewable energy. However, the fate of Australia’s RET has been placed in jeopardy by political leaders.

Reports show that investment in large-scale renewable energy projects have plummeted over the past year. While investment in global renewable energy is up by 16 percent, Australian numbers have dropped by 88 percent. Australia Prime Minister Tony Abbott and his pro-coal agenda have created serious ambiguity in federal government’s position on renewable energy policy and investors are leery. Many investors and developers are considering either downscaling or leaving Australia altogether. The downward trajectory will undoubtedly continue for years to come. Many Australian developers are looking to invest in the United States and other global renewable energy markets. A spokesperson for General Electric, an investor in renewable energy projects in Australia, said future investment will only occur once investor confidence in the policy environment is restored.

This sounds good for America and perhaps for Oklahoma, but only if our state and country continue to welcome and nurture this growing industry. It’s arguable that similar anti-renewable efforts in some states may damage the overall contributions to America’s growing portfolio of renewable energy resources. A reversal of policies could have the same chill on investments, steering billions of dollars to neighboring states or regions, as is happening with Kansas.

In 2009, Kansas legislators passed an RPS requiring state utilities to capture 20 percent of their electricity from renewables. Legislative efforts and debates last year failed to repeal this law, but newly re-elected Gov. Sam Brownback is beginning to sound more like Abbott than a governor of a wind-rich state, with no coal industry to speak of. Recent legislation proposed by state Rep. Ken Corbet, R-Topeka, seeks to reduce the RPS to 10 percent in 2015 and repeal the RPS statute by July 1, 2016.

Let’s hope that Oklahoma’s political leaders don’t forsake our state’s clean energy promise by following the lead of Kansas or Australia, or even fostering an anti-investment environment such that our state faces the same loss or potential loss beginning to appear elsewhere. Stay tuned to this legislative session.