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Expectations for renewable energy under market restructuring: the U.S. experience

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  • Heiman, M.K.

Abstract

The 1992 Energy Policy Act encouraged states to open up electricity provision to market competition. Many analysts predicted that renewable energy would take off in the deregulated market where consumers could choose their power provider and utilities would no longer be enticed to build large central power plants under guaranteed rates of return. This article outlines the flaws with that expectation. Absent a strong federal commitment, the states continue to lead with support for renewable energy. However the base from which to expand is so low, and the level of support so tenuous, that renewable energy will continue to play only a minor role in meeting U.S. energy demands with current policy in place. Furthermore, the evidence does not support the expectation that market restructuring, in and of itself, leads to a stronger state commitment to renewable energy. The failure of renewable energy to become a major component of the U.S. energy mix is not due to any intrinsic problem with the technology employed, nor with the cost of generation. Rather weak penetration may be attributed to broader forces exacerbated by market restructuring and overcome only through strong and reliable federal intervention in support of renewable energy.

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  • Heiman, M.K., 2006. "Expectations for renewable energy under market restructuring: the U.S. experience," Energy, Elsevier, vol. 31(6), pages 1052-1066.
    • Handle: RePEc:eee:energy:v:31:y:2006:i:6:p:1052-1066
    DOI: 10.1016/j.energy.2005.02.014
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    4. Mohd Haizam Mohd Saudi & Obsatar Sinaga & Djoko Roespinoedji & Mohd Shahril Ahmad Razimi, 2019. "Environmental Sustainability in the Fourth Industrial Revolution: The Nexus between Green Product and Green Process Innovation," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 363-370.
    5. John Foster & Liam Wagner, 2014. "International experience with transformations in electricity markets: A Short Literature Review," Energy Economics and Management Group Working Papers 2-2014, School of Economics, University of Queensland, Australia.
    6. Srikanth Reddy, K. & Panwar, Lokesh & Panigrahi, B.K. & Kumar, Rajesh, 2018. "Modeling and analysis of profit based self scheduling of GENCO in electricity markets with renewable energy penetration and emission constraints," Renewable Energy, Elsevier, vol. 116(PA), pages 48-63.
    7. Howell, Jordan P., 2012. "Risk society without reflexive modernization? The case from northwestern Michigan," Technology in Society, Elsevier, vol. 34(3), pages 185-195.

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