Electrical generation portfolio

Germany's Renewable Energy Portfolio Compared with That of Pennsylvania

INTRODUCTION & OBJECTIVES

The Lehigh University Energy Systems Engineering Institute has been working with PPL to understand and evaluate Germany's success in integrating renewable energy technologies into their electrical generation portfolio. Germany stands ahead of most countries in increasing its renewable energy generation. Understanding Germany's apparent success will help PPL satisfy renewable energy mandates as well as recognize the possibilities and opportunities of integrating renewable technology as it plans for the future. It will also determine what is feasible and infeasible as individual states and the federal government move forward on legislation with future renewable portfolio targets.

Mandates for renewable technology are driven to a large extent by the desire to reduce greenhouse gas emissions such as carbon dioxide that would otherwise be emitted by fossil fuel combustion. Other benefits of renewable energy address issues of conservation and energy independence. The Pennsylvania state government has enacted an Alternative Energy Portfolio Standard (AEPS) that includes renewable energy requirements, particularly under its Tier I category of technologies. Proposed federal legislation requires 15% of all electricity come from renewables by the same year. The Pennsylvania AEPS has an additional requirement that 10% of electrical generation come from Tier II sources of alternative energy (e.g.waste coal), of which many are not classified as renewable in German or pending federal legislation.

In this study, Pennsylvania's renewable portfolio is compared to the renewable portfolio of Germany. Germany's renewables have already exceeded the 2010 consumption goal of 12.5%. In fact, in Europe, several countries already claim to have met an established renewable portfolio target. Germany claims that they already have met their 2015 renewable portfolio consumption goal of 15%, meaning they have hit the benchmark five years early.

In order to understand how Germany has achieved 15% renewable energy consumption, Lehigh University has studied the penetration and mix of renewable technology into the German energy portfolio, the progress they have made, government legislation and incentives, and their means of paying for the rapid build out of renewables. Specifically, the objectives of this study are the following:

  1. Review the source of Germany's renewable portfolio information to determine if its claim is accurate and credible.
  2. Understand the timeline of Germany's renewable portfolio build out, technologies being used, and government legislation.
  3. Compare and contrast Pennsylvania's regulations and available technologies to those in use in Germany to determine similarities and differences between the two regions.
  4. Study additional parameters to determine whether there are climatological, geographical, environmental, historical or other cultural gaps between the two regions that would suggest inherent differences in setting and attaining renewable goals.
  5. Itemize the technologies that are classified as renewable in Germany and compare the list with those in pending legislation in Pennsylvania and the United States.
  6. Determine the fraction of each of Germany's renewable technologies that make up their total renewable portfolio. Represent the renewable portfolio in terms of total electricity delivered, as well as total electric capacity. Also, determine the fraction of each of the non-renewable technologies/fuels that provide the balance of electrical generation in Germany.
  7. Compare the government controlled and/or subsidized aspects and free market aspects of Germany's electrical power generation and distribution system to that of Pennsylvania.
  8. Identify the cost of electricity in Germany compared to Pennsylvania.
  9. These objectives will help PPL understand the potentially viable regulatory, technological and market-based solutions to achieving the desired levels or renewable energy.

    RESEARCH FINDINGS

    The following Subsections of this Section

    • Review Germany's RPS information
    • Review Germany's RPS timeline, build out and technologies and legislation
    • Compare Pennsylvania's and Germany's regulations and available technologies
    • Study climatological, geographic, environmental, historical and cultural differences
    • Compare electricity costs in Germany and Pennsylvania.

    Review of Germany Energy Portfolio Data

    To understand how to develop a plan to increase usage of clean energy sources, one needs to find a place that has already moved forward using clean energy. According to the German government, Germany is leading the world in clean energy. It is necessary to investigate whether this information is true, whether there is substantial data to back up the claim and how Germany reached its current point. We need to understand Germany's renewable energy portfolio and use it as a model to guide other countries and states in their development of clean energy, specifically in clean electrical power.

    According to the German government, over 15% of final electrical consumption comes from renewable energy sources. According to the U.S. Department of Energy's Energy Information Administration (EIA), in 2007 Germany had a total electrical generating capacity of 132.593 GW[1]. The EIA's general categories of power capacity are nuclear, conventional thermal (coal, gas, and oil), renewable (non hydro-electric), hydroelectric, and hydroelectric pumped storage. Hydroelectric power is separated, but is still considered a renewable energy source when talking about total renewable energy. German renewable energy sources, including hydroelectric, accounted for more than 25% of capacity, at 34.324 GW[2]. A breakdown of the EIA figures for German capacity is shown below in Table 1. These numbers only slightly differ from the German government figures presented in the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety publication titled "Renewable Energy Sources in Figures" which has a total renewable capacity of 33.921 GW, of which 4.72 GW was from hydro-power[3].

    While Germany's percent renewable capacity is clearly very high, capacity is not as relevant a statistic as its amount of energy generated and consumed. Many renewable sources, such as wind and solar, are highly intermittent. The wind does not always blow and the sun does not always shine, leading to low capacity factors for these technologies. Because of lower capacity factors, renewable energy represents a lower percent of total generation than it does in capacity. According to the EIA, the over 25% of electrical generating capacity in Germany represented by renewable sources in 2007 accounted for 16.5% (90,567 GWh[10]) of the total consumption of 547,326 GWh[11].This is slightly more than Germany's own estimate of 14.2% or 87,604 GWh of electrical consumption from renewable energy sources in 2007[12]. In 2008 electricity consumption from renewable energy sources (RES) in the Germany increased to over 15% at 92,779 GWh[13]. The EIA's figures on Germany's consumption for 2008 are incomplete so we cannot compare consumption data for 2008. Even with minor data inconsistencies and slight differences between sources, it is obvious that Germany is reaching its goal and that the numbers are not trivial.

    The International Energy Agency (IEA) publishes information on electrical energy statistics for Germany. The EIA provides a good breakdown of Germany's 2007 gross electricity production (before losses, internal use or import/export), shown here in Table 2. This shows the magnitude of coal and nuclear in the electricity sector.

    Another publication from the IEA is titled "Energy Policies of IEA Countries, Germany 2007 Review." This document gives a wealth of information on the breakdown of Germany's energy use. Particularly interesting is Table 17 in Chapter 9 which shows that over 40% of capacity in 2005 was from coal, and it highlights the importance of nuclear energy to Germany as a base load power source, as shown in figure 1.

    Even though nuclear power is not a renewable form of energy, it will have a huge impact on Germany's integration and utilization of renewable power. All nuclear power plants are scheduled to be shutdown by 2022[16]. This no-nuclear policy was agreed to in 2000, and legislation was passed in 2002[17]. This was a political decision so it could change with any new coalition government. No new governing coalition since has taken serious steps to change this law, and three nuclear power plants have been shut down since the original 2000 agreement. The rest of the plants are scheduled to be sequentially phased out between 2010 and 2022[18]. To get a perspective of what this means for the German power industry, in 2007 the remaining 17 nuclear plants had a capacity of 20.208 GW[19]. These will have to be replaced with base load power units. In 2007 this nuclear capacity contributed 133,507 GWh to total consumption, which was down from its peak in 2001 of 162,740 GWh[20]. The phasing out of nuclear power provides an opportunity for significantly increasing the renewable energy share of the market. It also hits at one of the key areas for improvement: making renewable, intermittent sources of power generation more reliable. However, Germany appears to have a backstop for this impending loss of capacity in the available interconnections with surrounding countries[21]. This interconnection however would most likely feed in nuclear power from other countries[22].

    At first glance, the definition of renewable energy seems simple: energy generated from a source that does not expire, but the definition is not always that straightforward. Different countries and even states within the United States have different definitions. Germany's definition aligns closely with what is generally referred to as renewable, that which comes from the environment without taking from it, such as wind and solar, but also includes some sources that most people would consider similar to fossil fuels (i.e. natural gas or methane). According to the German law Erneuerbare-Energien-Gesetz (EEG), renewable sources of electricity are: "hydropower (including wave power, tidal power, salt gradient and flow energy), wind energy, solar radiation, geothermal energy, energy from biomass (including biogas, landfill gas and sewage treatment gas,) as well as the biodegradable fraction of municipal waste and industrial waste."[23] The law also includes mine gas, while not defining it as a renewable it still counts towards the goal.[24]

    Timeline of Germany's RPS Buildout

    Germany started its move to renewable energy sources (RES) in 1990 with the passage of a law called Stromeinspeisungsgesetz, or Electricity Feed Act, which came into effect in 1991[25]. This law was amended several times until it was replaced in 2000 by the Erneuerbare-Eergien-Gesetz (Renewable Energy Sources Act) or EEG, which is akin to the US term Renewable Portfolio Standards (RPS). This law has been amended several times since it was first enacted. The changes generally have to do with addressing minor issues or updating parts of the law based on progress or lack thereof. The EEG was most recently updated in 2008, coming into effect in 2009[26]. One of the most substantial changes was to increase the 2020 requirement for electrical consumption from renewable sources to 30%[27]. Other changes also addressed tariff rates and schedules[28].

    The major shift in 2000 to the EEG is the real impetus for the substantial increase of RES. Its success is shown in Figure 2 from the BMU's publication titled "Renewable Energy Sources in Figures" where RES begin to increase significantly after the 2000 passage of EEG. Dissecting a little further, one can see an upward shift in solar photovoltaic (PV) after the 2004 amendment which included an increase in the PV tariff.

    Germany's almost 20 years of regulatory support for RES is paying off, from the increase in the EEG goal for 2020 to the success in recent years towards that goal and to technical integration of RES into the electric grid. This all helps Germany with the overall goal of sustainable energy. According to the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) renewables accounted for 9.5 percent of Final Energy Consumption (FEC) and as previously stated, 15.1 percent of electrical consumption in Germany in 2008[30]. This was up from 3.8 percent RES as part of Final Energy Consumption (FEC) and 6.3 percent RES as part of electrical consumption in 2000[31].

    This massive increase in renewable energy consumption from all the follow through over time with the existing laws and plans from government, industry and the population shows that increased RES use, whether mandated or not, is possible. Further support for a Feed-In-Tariff (FIT) type system is provided by Uwe Busgen and Wolfhar Durrschmidt in their paper entitled "The expansion of electricity generation from renewable energies in Germany: A review based on the Renewable Energy Sources Act Progress Report 2007 and the new German feed-in legislation" in the journal Energy Policy. Not only does this paper review Germany's EEG but it looks at other schemes to support RES and finds that Germany is meeting its goal and that a FIT is the best regulatory way to do it[32].

    Germany Technologies

    To make all of this electricity and on a broader sense all renewable energy, Germany must use a spectrum of technologies. Most technologies that are being used in substantial quantities are well established. Even if they are currently going through advances, changes and modernization through R&D, the basics are there and have been so for a while. To recap, the EEG classifies wind (on and off shore), solar photovoltaic, hydroelectric, biomass (in all its forms) and geothermal as renewable energy sources. While not defined as renewable, mine gas also qualifies for a set tariff basically making it a renewable source and it counts towards the EEG goals for portion of consumption from RES.

    The longest used RES is hydroelectric power. This makes sense since this is a well developed technology and one that has been largely used all over the world from the time of hero of Alexandria. In Germany, the EEG hydroelectric power includes small and large traditional hydroelectric barrage and run of the river plants, wave power, tidal power, salt gradient and flow energy[33] but not pumped storage[34]. Germany currently only has traditional hydroelectric power plants. As with all types of renewable power, the tariffs that are paid are based on commission date, size and age of installation. For hydroelectric power, only installations that were modernized or newly installed since 1 April 2000 receive a tariff. The original EEG limiting compensation to plants less than 5 MW, however the two revisions to the EEG changed this so that plants above 5 MW would receive the tariff rate if they were new (commissioned since 1 Jan 04) or were an existing plant that was modernized according to the EEG rules.

    Hydroelectric power in Germany had a capacity of 4,572 MW at the end of 2000 which increased to 4,720 MW in 2007 and 4,740 MW in 2008[35]. The recent increase is only due to modernization of existing plants which the 2nd and 3rd EEG amendment incentivized[36]. This capacity generated 24,936 GWh of electricity in 2000 decreasing to 21,249 GWh in 2007 and 21.300 GWh in 2008[37]. This compares favorable to the EIA estimate of 20.695 GWh in 2007[38]. Hydropowers advantage as a RES is its ability to function as a base load power source because it is generally predictable. Hydropower can be affected on an installation level by seasonal and annual cycles which are evidenced by the decrease in GWh's produced.

    The largest renewable energy source in Germany is wind power. Until mid 2009, when the first offshore wind turbine in Germany was completed and fed its first watt of electricity in the grid, Germany only had onshore wind power[39]. Germany has also been a world leader in wind power, being number one in installed capacity until 2008 when it was unseated by the United States[40]. In 2000, installed wind capacity was 6,112 MW growing to 22,247 MW and 23,895 MW in 2007 and 2008 respectively[41]. This makes wind the largest portion of Germany's electric RES (E-RES). This large capacity at more than 4 times that of the next largest E-RES, hydroelectric, provides almost half the E-RES to the grid at 40,400 GWh in 2008[42]. This was up from 7,550 GWh in 2000 and 39,713 GWh in 2007[43]. These large numbers highlight a problem with intermittent E-RES. For such a large installed capacity, wind had low capacity factors of 14.1%, 20.38% and 19.0 in 2000, 2007 and 2008 respectively. This requires larger installation over a wider section of the country to provide balanced and clean energy equivalent to and capable of displacing nonrenewable baseload power plants.

    Solar thermal and solar photovoltaics are the most frequent types of solar energy used. Solar thermal on a residential scale is used for heating purposes (environment, water, etc). Solar photovoltaic is used for direct electric generating power. On a large scale solar thermal can be used to generate electricity, and is generally called concentrating solar power. Germany's EEG addresses solar photovoltaics. Photovoltaic is a large growing area of renewable energy in Germany. It is mostly due to the high remuneration rate under the EEG, but has also seen increased demand due to high oil and gas prices. Photovoltaics also benefit from the ability of the small scale of installations so homeowners can install them on their property leading to much greater market penetration and availability for this technology. In three German government publications Renewable Energy Sources in Figures, New Thinking - New Energy, Energy Policy Road Map 2020 "Innovation Through Research 2008 Annual Report on Research Funding in the Renewable Sector" they note the maturity of the technology and that the cost of PV have come down significantly resulting in two major steps: an increase in the EEG degression rate to inspire more cost savings and the lowering cost of installation and operation making them more competitive[44],[45],[46]. These achievements make solar photovoltaic accessible to a wider group. Installation of PV was also helped by a 1999 "soft loan" program the "100,000 Roof Solar Electricity Programme" that ended in 2004 with much success of getting 300 MW of PV installed[47]. In 2000, installed PV capacity was 100 MW which grew to 3,811 MW in 2007 and 5,311 MW in 2008 according to the German Ministry for the Enviroment, Nature Conservation, and Nuclear Safety (BMU)[48]. Over the course of the EEG and 100,000 roof program, consumption since 2000 PV electrical consumption grew from 64 GWh to 3,075 GWh and 4,000 GWh in 2007 and 2008 respectively[49]. EIA statistics for 2007 and 2008 differ slightly at 2,921 GWh and 3,800 GWh[50]. This means that PV has a capacity factor of less than 9%.

    Surprisingly, the second most important E-RES in Germany is biomass. Biomass accounts for 4.5% of gross electrical consumption in Germany[51]. Biomass includes solid and liquid biomass, biogas, sewage gas and landfill gas and the biogenic portion of waste[52]. Biomass has an advantage over all other renewable sources of electricity in that it can be proportioned and controlled since it can be used in a similar fashion to traditional fossil fuel plants. A biomass plant can either be a boiler with steam driven turbine as in a coal plant or a gas fueled turbine similar to integrated gasification combined cycle (IGCC). A further advantage to using biomass is that for traditional turbines the technology already exists. Biomass also does helps the environment beyond being a renewable source of power. It removes something out of the environment whether it is the methane gas from landfills that is much more dangerous to the environment than carbon dioxide or reducing by over 10 times the volume of municipal solid waste[53]. In Germany the strict burning of municipal is not a renewable source, but as applied in the law that portion which is biodegradable[54], estimated at 50% of municipal solid waste in "Renewable Energy Sources in Figures" by the BMU, is considered biomass[55]. Table 3 shows a breakdown of the capacity and consumption of biomass and biogenic used for electricity in 2000, 2007 and 2008. Table 3 also shows how reliable biomass power can be with capacity factors over 80%.

    The smallest portion of E-RES in Germany is geothermal. Geothermal has a larger impact to overall RES since it is used primarily for heating and cooling in Germany. Actually the only real impetus for geothermal electricity generation in Germany is as part of a district heating system. This comes from technology and capability restrictions, as wells as from two laws affecting energy and renewable sources: the EEG and the Combined Heat and Power Act. Germany is making strides with geothermal as the third plant to produce electricity came on line in 2008[57]. The third plant doubled capacity from 3.2 MW to 6.6 MW from 2007 to 2008, but geothermal still accounts for less than 1/100th % of electricity consumption[58]. Consumption saw the largest gain in 2008 to 17 GWh from 0.4 GWh in 2007 since it started in 2004[59].

    Government Legislation and Costs/Tariffs

    The EEG initially established a requirement to reach 10% electrical consumption from RES by 2010[60]. This has been increased to 30% of consumed electricity from RES by 2020 in the 2008 EEG amendment[61]. This change was made because of the early achievement of the original goal of 12.5% RES by 2010 established with the 2004 EEG amendment. Consumption of renewable electrical energy increased from 6.3% in 2000 to 15.1 % in 2008[62].

    In addition to electrical generation, Germany also has a goal to increase the use of renewables for heating and cooling. Their goal is that 14% of heating and cooling consumption be from renewables by 2020. They are also encouraging the use of biofuels in for transportation vehicles, all of which goes to the overall goal of 18% RES as part of final energy consumption[63].

    Germany, under the EEG, uses a Feed-In-Tariff system that gives incentives to investors by making different, normally expensive renewable technologies, profitable by mandating that renewable sources of electricity be given access to the electric transmission and distribution grid and be bought first by the grid operator. In addition to making sure that all renewable energy is purchased, the EEG defines a set of above-market price rates, called feed-in-tariffs, which the grid operators must pay the operators of renewable energy installations. The tariff (sometimes called remuneration or fee) paid to the generator are established in the law. The tariffs are based on a declining scale, and guaranteed for up to 20 years. The scale, summarized in Table 4 below, is based on the specific technology, size of the installation, total capacity of technology installed and the year the installation was commissioned. For a particular technology such as photovoltaic, if there has been a lot of installed capacity over several years, the fee paid to the installer for the newest portion will be significantly less than the fee received by an installation from an earlier year. The purpose of this declining tariff rate over time is to encourage early development and deployment of renewables. This should drive down cost and increase availability. Otherwise, investors would wait until the technologies were well established before committing resources to such new technologies. It also addresses investor concerns by guaranteeing a rate of return for 15 to 20 years depending on the technology used.

    One of the items that make this law successful is the requirement that renewably generated electricity be fed directly into the grid for consumption and be the first electricity bought. Even though it is not possible to determine exactly which electricity came from which source in the grid, the EEG's "renewables first" policy basically dictates that renewables are 100% consumed. This policy has several problems including mismatches in electricity supply and demand. Also, not all the grid is tied together, so getting the electricity from generation to use can be problematic. However, the distributor will have to pay the generator even if the electricity is not used. This interesting facet is what makes this policy successful for a generator and problematic for a distributor/planner.

    Although the grid operator must provide access to the grid and purchase electricity generated by renewable sources, it is the obligation of the renewable energy producer to cover the costs of any needed connection to the grid. The grid and transmission owner/operator then passes the cost of the renewable tariff on to the consumer in the form of higher electricity prices and an apportionment for the Renewable Energy Sources Act. Since all parts of the country do not have the same proportion of renewables, Germany uses a cost equalization scheme throughout the country to avoid certain areas being overburdened by electricity costs.

    The pricing of the EEG is higher than the open market price of electricity, but according to the German government Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the EEG only adds about 2 to 6 Euros per month to an average household bill for a house that uses 3,500 kWh per year[65].

    To verify the above numbers, we will look at two separate residents electric bills in

    Germany. The first residence is in eastern Germany in the town of Glauchau. For six months from 1st October 2008 to 31st March 2009 they consumed 2,164 kWh costing 0.2015 Euro cents per kWh for a total cost of 436.05 plus a monthly fee of 9.38[67]. Without the EEG and using the German government's proposed calculations in the 2006 publication What Electricity from Renewable Energies Costs the displaced electricity would have cost 0.042 per kWh. Therefore if renewable energy accounts for 15% of electrical consumption, in theory the added cost to the bill would be 2.88 per month in 2005. The second residence is in northern Germany in the city of Northern Hamburg. It pays 0.22 per kWh, there was no information on usage, but they do not pay a monthly fee which is why the rate is slightly higher[68]. These numbers agree with the average cost of electricity as shown in figure 3 reported by the German government. With an estimated exchange rate of 0.85 euros per dollar, the average price per kilowatt-hour of electricity is $0.254 per kWh which is more than double the average American cost of electricity. This compares well to the average residential retail price as reported by EIA of $0.222 per kWh in Germany[69].

    Pennsylvania's Renewable Energy Capacity, Generation, and Consumption

    According to the Energy Information Administration, Pennsylvania had a net summer electrical generation capacity of 45.106 GW in 2007. [70] However, only 1.528 GW, or 3.4%, was from renewable sources, significantly less than Germany's 25.8%. Pennsylvania's comparatively small renewable energy capacity is about 50% hydroelectric, with municipal waste and biomass being the other main renewable sources. Solar appears to be too small to be statistically relevant. Table 5 shows the breakdown of net summer capacity by technology in Pennsylvania in 2007.

    Pennsylvania generated 226,088 GWh of electricity in 2007.[71] Only 4,782 GWh, or 2% of the total, was from renewable sources. This compares to Germany's 15.1% for 2007. Table 6 shows the breakdown of net generation for 2007.

    Pennsylvania's renewable portfolio is small compared to Germany's. Pennsylvania is very dependent on coal, which comprises half of the total electricity generated. The other two major sources are nuclear and natural gas. No other individual technology had above a 1% share of the total generation portfolio in 2007. Since renewable sources in general have lower capacity factors than nonrenewables, it makes sense that their share of total net generation is even lower than their share of total capacity. Pennsylvania lacks the rapid build-out of wind farms and biomass plants seen in Germany and it has no significant solar whatsoever. Table 6 summarizes Pennsylvania's electricity generation by technology.

    Once internal use, line losses, international and interstate trade are taken into account, Pennsylvania's 226,088 GWh of generation translate into 151,573 GWh consumed by in-state retail customers.[74] Pennsylvania exports a significant amount of its electricity to other states, which totaled 61,436 GWh in 2007. With a population of 12.5 million[75] and net consumption of 151,573 GWh, Pennsylvania consumes 12.63 MWh per person per year. In comparison, Germany has a population of 82 million people[76] and consumption of 547,326 GWh, meaning that its per capita consumption is much lower at 6.67 MWh/person/year. Pennsylvania consumes 1.89 times as much electricity as Germany per capita. For Pennsylvania to increase its share of renewable sources to that of Germany, it faces the additional challenge of implementing much more renewable capacity per person than Germany.

    Pennsylvania Alternative Energy Portfolio Standards Legislation

    In November 2004, the Pennsylvania General Assembly passed the Alternative Energy Portfolio Standard (AEPS) Act[77], which was subsequently updated in 2007[78] and 2008[79]. The AEPS requires electric utilities to supply 18% of their electricity to their retail customers using alternative energy sources by 2020.

    The use of the term "alternative" instead of "renewable" energy is noteworthy, as the technologies included in the AEPS go far beyond what is generally considered to be renewable. The AEPS divides alternative energy sources into two tiers: Tier I and Tier II. Tier I sources are renewable and are defined as solar, wind, geothermal, low impact hydro, biomass, biologically derived methane, fuel cells, and coal mine methane. These resources are analogous to what Germany considers to be renewable, with the exception of large-scale hydro.

    Tier II sources are waste coal, distributed generation systems, demand-side management, large scale hydro, municipal solid waste, out of state wood byproducts, and coal integrated gasification combined cycle (IGCC). Tier II not only includes some alternative technologies that still have significant pollutant emissions, but also some technologies that are fossil fuel based. Waste coal and IGCC put a significant amount of carbon dioxide into the atmosphere, on par with other fossil fuel technologies. IGCC technology, however, is intended to be "carbon-ready", meaning that its carbon dioxide emissions could be captured and geologically sequestered when such technology becomes commercially available. The inclusion of waste coal is largely driven by the significant amounts of waste coal left over from past anthracite coal mining.

    Also not included in common definitions of renewable environmentally friendly technologies but included in Tier II are distributed generation systems, which are typically fossil fuel-powered generators run on a small scale. As defined by the AEPS, these are small-scale generators of electricity that also provide thermal energy. These efficiently combust fossil fuels because the same energy is used for heating and generating electricity, and because the energy supply is located at the same location as the demand. Finally, Tier II includes demand-side management which involves energy savings through end-use efficiency. Since Tier II is a quite an all-encompassing category, even if Pennsylvania increases its use of Tier II technologies, this increase will not substantially appear in the EIA's renewable energy statistics and may be difficult to detect and evaluate.

    Tier I and Germany's definition of renewables are similar. Tier II sources that match up with Germany's are municipal waste and large-scale hydro. While the AEPS creates a tier distinction for hydro based on capacity, Germany has different tariffs based on each hydroelectric facility's capacity and whether it is old, new, or has been modernized. It is also important to note that, unlike the EEG, the AEPS makes no mention of ocean wave or tidal energy. Although Pennsylvania does not have an ocean coastline, if ocean renewable technology were included in the AEPS, it could be imported from other states and count towards the renewable requirements. While Pennsylvania includes demand-side management directly in its AEPS, Germany has enacted separate legislation promoting smart-grid technologies and energy efficiency. Germany has no incentive for any fossil-fuel technologies other than mine gas, unlike Pennsylvania's inclusion of IGCC, waste coal, and distributed energy systems, which are all Tier

    Of the total 18% AEPS, 8% of this must come from Tier I by 2020. Within Tier I, there is a specific solar photovoltaic requirement mandating 0.5% PV by 2020. The remaining 10% is to come from Tier II sources. Also, the 2008 revision to the legislation states that the Pennsylvania Utility Commission shall review the requirement for Tier I quarterly and may increase it above the base rate to reflect the addition of new low-impact hydro and biomass generation resources.[81] For example, in the first quarter of 2010, the current Tier 1 requirement is 2.5124012%, which is slighter higher than the base requirement of 2.5%. The required AES levels for each year from now until 2020 are specified in the legislation, and Table 7 shows the requirements for each year.

    There is no requirement for renewable energy consumed to actually be produced in Pennsylvania, which differs from Germany where all qualifying renewable sources with a mandate to be purchased must be within Germany. However, the renewable energy must generally come from within the same regional transmission organization (RTO). In Pennsylvania, an electric distribution company (EDC) or electric generating supplier (EGS) that sells to retail customers does not actually have to be the producer of renewable energy, but it must demonstrate that the required portion of sold electricity came from renewables. The AEPS has established a tracking method through the use of Alternative Energy Credits (AEC). These are analogous to renewable energy credits (RECs) and solar renewable energy credits (SRECs) in use in other states. Each AEC represents 1 MWh of qualified alternative energy generation, whether it is self-generated or purchased. For demand-side management, each qualifying energy-efficient appliance counts as a fraction of an AEC. The Pennsylvania Utility Commission's (PUC) Technical Reference Manual determines exactly how many kWh of savings each appliance is worth based on size and type.[82] Utilities must acquire an amount of AECs equal to a certain percentage, determined from Table 7, of their total retail sales in a given reporting period. AECs must come from qualified sources: generators that meet either Tier I or II requirements and that have registered with the PUC. As stated above, most EDCs and EGSs are restricted to buying AECs from sources within their RTO, which is PJM. Pennsylvania Power Company (a MISO member) and the EGSs within its territory are allowed to purchase AECs from sources in both MISO and PJM. Although the law will eventually apply to all 11 electric distribution companies in Pennsylvania, the law grants exemptions for utilities that are still under rate freezes or cost restructuring cost recovery periods. As of early 2010, seven utilities have reached the end of their exemptions, with the remaining four's exemptions set to expire by the end of 2011.[83]

    Due to the setup of the law, the AEPS could lead to the development of the cheapest technology in each tier, at the expense of other technologies. For example, if a new experimental technology is three times the price of a well-established technology, there will be no incentive to invest in the new technology because the generated electricity will be too expensive for utilities to purchase. Unlike the AEPS which will likely lead to the dominance of a few less expensive renewables, the EEG attempts to create a market for all renewables by setting tariffs higher for more expensive technologies. However, the way Pennsylvania gives solar energy specific treatment mimics the way Germany pays its highest tariff, 0.4301 per kWh, for small PV installations. Solar photovoltaic is the most easily accessible technology for the average individual at home, and the only real barrier is a high cost per kWh. While the two different sets of regulations could lead to vastly different renewable energy portfolios, through special treatment of solar both Pennsylvania and Germany are giving thousands of people the incentive to put solar panels on their roofs.

    The EEG and AEPS's fundamental difference is the way they encourage renewable energy. Germany mandates that renewable energy be purchased no matter what, and sets a high enough purchase price for each technology to make it lucrative. This encourages long-term development of RES and a safer starting point for investment. The Pennsylvania AEPS, on the other hand, does not address production cost differences, and only breaks down technologies into two broad tiers. This could lead to the favoring of less expensive technologies over others . However, since the Pennsylvania electricity market will finish deregulation and the rate freeze will end in the next year, utilities will be able to pass the costs off to the consumer the same way that Germany does.

    AEPS compliance is monitored over a 12-month compliance period running from June to May of each year.[84] Each reporting period is followed by a three-month true-up period. To ensure compliance with the law, the AEPS imposes a penalty for utilities that fall short of the renewable energy credit requirements for any given year. These penalties are called alternative compliance payments (ACP), and are $45 dollars per MWh of renewably generated electricity short-fall (not solar photovoltaic).[85] The downside of this is that utilities can opt out of buying renewable energy by paying ACPs. By allowing utilities to pay ACPs, a potential disincentive to renewable energy developers is created. Even with increasing renewable energy demand in Pennsylvania, thanks to the AEPS, it is quite possible that utilities will still not buy the additional renewable energy. If renewable energy is expensive enough, utilities may likely purchase cheaper nonrenewable electricity and pay the $45/MWh penalty and still spend less than they would on renewable energy. This is in stark contrast to Germany, where all renewable energy developers are guaranteed a market. There is also a force majeure provision in the AEPS that suspends the requirement for renewables if they are not reasonably available.

    The penalty for noncompliance with the solar photovoltaic requirement is different than with other renewables. The ACP for solar PV is set at 200% of the average market value of the solar credits sold during a given reporting period. Therefore, the cost of solar photovoltaic energy is not a deterrent for its use. There is still, however, a concern that this could lead to the availability of more than 0.5% solar photovoltaic, and that the excess solar capacity could go unused because it is too expensive and not required to be bought by utilities.

    AEPS Impact and Pennsylvania Renewable Energy Buildout

    The Pennsylvania PUC 2007 AEPS Annual Report has a wealth of information pertaining to the outcome of the first three years of the legislation's effect. In 2007, only two of the eleven EDCs in Pennsylvania and the EGSs within the two EDCs' territory were required to comply with the AEPS. All of these companies were able to meet the threshold. To comply with the percentages set in the AEPS, they retired a combined 26 solar photovoltaic credits, 21,784 Tier I credits, and 61,037 Tier II credits. From 2005 to 2007, 756 Solar AECs, 8 million Tier I AECs and 89 million Tier 2 AECs were created by generators of alternative energy.[86] The extremely high amount of Tier II credits created each year is already much more than the amount that will be needed in 2021. Table 8, taken from the PUC's AEPS Annual Report 2007, shows the quantity of AECs created in each of the first three year of the legislation's effect. Of the 89 million Tier 2 credits created so far, 35 million were from waste coal. Waste coal qualifies for AECs in Pennsylvania, but is not accepted for credits in most other states' equivalent alternative energy programs. Waste coal created 12 million credits in 2007, which is equivalent to 60% of the total number of Tier II credits needed in the year 2021.[87] Waste coal piles are abundant in states with a long history of coal mining like Pennsylvania and West Virginia. Pennsylvania is also the only state in the region to include waste coal combustion in its definition of alternative energy, so power plants that burn waste coal sell all of their AECs in Pennsylvania. This leads to the dominance of Tier II by waste coal, which overshadows and disincentivizes other technologies in the tier, such as energy efficiency. As of 2008, there had still not been any registered energy efficiency credits yet, and as of 2010 there are only fifteen registered suppliers of energy efficiency credits. Legislation may need to be reworked to help out the energy efficiency program. Energy efficiency is the most cost-effective means of compliance because it reduces the need to add more generation and eases transmission congestion.

    A look at the list of registered generators approved to sell AECs (both Tier I and Tier II) in Pennsylvania shows the current state of the supply side of the alternative energy market in the state. As of March 2010, there are 1214 qualified facilities registered to sell AECs.[89] These facilities have a combined nameplate capacity of 18,256 MW. Several of the qualifying power plants are part renewable and part fossil, and there is no distinction in the data between the renewable and nonrenewable capacity of these facilities. The number of facilities and capacity of each installation varies widely from technology to technology. For example, 984 of the total 1214 generators are small photovoltaic installations which add up to only 12.1 MW of capacity, while the mere 35 wind farms have a capacity of 2546 MW. Six hundred twenty-nine installations with a total capacity of 7,808 MW are located within Pennsylvania, and 585 installations with a capacity of 10,448 MW are located out-of-state. Table 9 shows the number of installations and capacity by individual technology.

    The present greater supply than demand of renewable energy sources, as well as not all utilities being forced to comply yet, has led to low AEC prices in most cases. In the 2008-2009 compliance year, the weighted average price for Tier I and Tier II credits were $3.65 and $0.20, respectively.[91] Tier I credit prices had an overall range of $0.50 to $23.00, and the Tier II credit price range was $0.25 to $3.00. Solar photovoltaic credits, on the other hand, are selling for much more. The weighted average price of PV credits in 2008-2009 was $260.19, with a range of $225.00 to $690.00. Solar PV was therefore the only category to have any credit transaction prices exceed its respective ACP, which was $528.17 in 2008. Tier I and II prices did not come close to exceeding their ACP thresholds.

    The demand for AECs in Pennsylvania will increase rapidly as more utilities are forced to comply and the percentage requirements for each tier increase annually. Figure 4 shows PJM's Interconnection's queue for new capacity until 2015, as of 2008. It is important to note that historically as little as 25% of proposed capacity additions have been actually built, and this needs to be taken into account when forecasting the actual amount of capacity addition. Assuming that 30% of slated projects throughout their service territory are completed, PJM Interconnection forecasts that 34% of capacity additions in Pennsylvania (7091 MW) between 2008 and 2013 will come from renewable energy sources including 5657 MW from wind. [92]

    The PUC forecasted in its Annual AEPS Report 2007 that the capacities of Tier I and Tier II will not grow rapidly enough to keep up with demand all the way to 2020.[94] The PUC forecasts that there will be enough Tier I capacity growth to meet supply until the year 2012, after which point there may be a shortage. Tier II capacity may only be able to keep up with demand until 2015. The PUC, however, only looked at waste coal in Tier II and did not factor in any potential boom for development of landfill/municipal solid waste, hydro, and wood generation projects that qualify as Tier II and will likely extend the period of adequate Tier II resources beyond 2015. Efficiency gains are likely to slow the growth of energy demand in general, which will further extend the periods of adequate capacity of Tier I and II resources. As demand increases relative to supply, there may likely be an increase in AEC prices that will edge closer to the alternative compliance payment threshold of $45.

    The average cost of electricity in Pennsylvania in November 2009 was $0.1159 per kWh for household customers and $0.0699 for industrial customers, according to the EIA.[95] In comparison, German household customers paid US$0.222 per kWh on average in 2006[96], and industrial customers paid US$0.094[97]. Germany's electricity prices for residential and industrial customers are therefore significantly higher. There is expected to be a roughly 30% percent increase in electric rates as deregulation finishes in the Pennsylvania utility market. This rate increase reflects utilities' growing costs. By increasing their rates, utilities will be able to offset the burden of buying AECs.

    Proposed U.S. Federal Legislation: the Waxman Markey Bill

    In June 2009, the United States House of Representatives passed a landmark energy bill, the American Clean Energy and Security Act, colloquially known as the Waxman-Markey Bill.[98] One of the bill's main purposes is to limit the amount of total greenhouse gas emissions, and it proposes a cap-and-trade system to achieve this. One key element of the legislation is that it requires utilities to meet 20% of electric demand from renewables by 2020, which is a higher percentage than Pennsylvania's RPS. While only slightly higher than Pennsylvania's requirement, the Waxman-Markey Bill does not include many of Pennsylvania's Tier 2 technologies. Therefore Waxman-Markey's 20% in 2020 requirement should be compared to and is significantly higher than PA's Tier I requirement of 8%. The bill has annual benchmarks that start in 2012 at 6% and increase by 3.5% every two years. The renewable energy requirement does not breakdown further by specific technologies. Therefore it would likely lead to the development of cheapest technologies, similar to the effect of the Pennsylvania AEPS. It is important to keep in mind that the Waxman-Markey Bill was passed by the House in a very close vote of 219-212, and that it would have an even more difficult uphill battle ahead through the Senate. Other legislation is also being developed in the Senate, with the outcome uncertain at this time.

    Climate Comparison

    Pennsylvania and Germany have very different climates, which has an effect on the output of weather-dependent renewable energy sources such as solar and wind.

    Germany is at a higher latitude (47N to 55N) than Pennsylvania (40N to 42N). Germany's climate is exceptionally moderate for its high latitude, because temperatures are regulated by the North Atlantic Current.[99] Germany's temperate climate is characterized by mild winters and cool summers, with rare extended periods of heat and cold. However, Germany experiences quick variations caused by Atlantic winds colliding with cold air masses from northeastern Europe. The northwestern and coastal regions have a maritime climate because of warm westerly winds blowing in from the North Sea. The inland regions have a more continental climate with more temperature variation and hotter summer and colder winters. Germany has almost permanent overcast skies during the winter months, with infrequent precipitation. Germany receives an average 4.8 hours of sunshine per day. Annual precipitation varies widely from 20 inches per year in the northern plains to 80 inches per year in the Alpine regions to the south. Average temperatures range from 64 F in July to 31.5 F in January.

    Pennsylvania, on the other hand, has a humid continental climate characterized by wide fluctuations in season temperatures.[100] The average temperature statewide ranges from 70F in July to 28F in January. Highland areas in the Appalachians have a more severe continental climate with even greater temperature extremes. The southeastern corner of the state has a humid subtropical climate with somewhat milder winters. Philadelphia receives an average of 7.2 hours of sunlight per day, much higher than that of Germany. The northwest corner around the city of Erie receives over 100 inches of snow annually, while the state in general receives an annual 41 inches of rain on average.

    In terms of solar energy resources, Germany's climate is at a sizeable disadvantage to Pennsylvania climate-wise. Germany receives between 1100 and 1400 kWh/m2/year of insolation when photovoltaic panels are tilted at latitude, depending on the location within the country. The region with the most sun is the southernmost part of the country south of Munich. The least sunny region is a large area in central-west Germany stretching from Dusseldorf east to Hannover. Pennsylvania is one of the least sunny states in the United States, with 40% less insolation than the desert southwest. Pennsylvania's insolation is in the range of 1400 to 1600 kWh/m2/year. The sunniest areas of Pennsylvania are in the southeast and the least sunny are in the northwest. Pennsylvania's amount of insolation is substantially greater than Germany's, meaning that Pennsylvanian photovoltaic panels should have an output per unit area that is 20% higher than that of German panels. The map in Figure 5 shows that only the southernmost Alpine region of Germany has an equivalent amount of sunshine to any part of Pennsylvania. In fact, the map shows that Germany's sunshine is the same as or even less than that of Alaska, the United States least sunny state.

    In terms of wind resources, neither Pennsylvania nor Germany has a definite advantage over the other. While much of Germany is very calm, Germany has significant areas of Class 3 or higher wind along the North Sea and Baltic coasts. Class 3 is the minimum wind class needed for reliable wind power generation. The northern half of the country in general has more wind than the south, and as such, the vast majority of wind farms are in the north. The area with the most untapped wind potential lies offshore in the North Sea, where wind speeds reach Class 6. Figure 6 shows average wind speed in Germany at a height of 10 meters. The areas colored purple are windy enough to be suitable for wind farm development.

    Pennsylvania has nowhere near the wind resources that the Great Plains and Rocky Mountain states have. Large areas of the state have little wind, especially the western third and the southeast. There are, however, many pockets of Class 3 and 4 wind located at the tops of Appalachian mountain ridges, running from southwest to northeast across the state. The shore along Lake Erie reaches Class 4, and offshore reaches Class 5. A large untapped wind resource that has yet to be capitalized on is off the coast of New Jersey. Winds here are category 6, and any future offshore New Jersey wind farms could sell credits in Pennsylvania.

    Comparison of Historical and Political Factors Leading to Current Legislation

    In the 1970s and 1980s Germany and the United States had similar political approaches to renewable energy. The energy crises of 1973-1974 and 1979-1980 had a severe impact on the economy of just about every industrialized nation. Germany wanted to avoid becoming the victim of another energy crisis, so it began to promote renewable energy as a way to alleviate the risks associated with being overly dependent on imported fossil fuels. Germany dramatically increased spending on research and development on all forms of energy. Initially most of the spending was for nuclear and coal research, but the expenditures on renewables increased 15-fold from DM 20 million ($10 million) in 1974 to DM 300 million in 1982. Germany's renewable energy funding created a wealth of German technical knowledge about renewable energy technologies. Meanwhile, the United States reacted to the energy crisis by creating the Department of Energy (DOE) in 1977, which included a division for renewable energy with its own Assistant Secretary. This was the first time the United States had an agency supporting the renewable energy cause. The U.S. began to give tax credits to manufactures and purchasers of renewable energy equipment. Research and development money for renewable energy increased from $15 million in 1975 to $542 million in 1980. Both Germany and the U.S. experienced similar failures in developing renewable energy, however. Germany and the United States attempted a "top-down" strategy for promoting wind energy, subsidizing the output of energy-efficient turbines that were designed at a small scale and quickly scaled up to large sizes. The two governments underestimated the technical challenges of building large turbines, and Germany and the U.S. fell far behind Denmark in terms of wind energy output. Denmark was more successful because it started small and scaled up the size of wind turbines more gradually.

    During the early 1980s, renewable energy sources faced more setbacks. The German government significantly increased spending on developing domestic energy sources, but this money mostly went to nuclear and coal. There was not unified support for renewable technologies, and the Federal Ministry for the Economy (BMWi) argued that renewable energy technologies were not mature enough to be worth subsidizing. Renewables also became a partisan issue in the United States. President Reagan cut the funding for renewable drastically and reduced the size and staff of the renewables division of the DOE. In 1985, the tax credits for solar installations that had been created in the late 1970s expired. At the same time oil prices dropped, and the solar industry decreased in size by 70%.

    By the late 1980s, both countries experienced problems that led them to seriously reconsider renewable energy. In Germany both of renewables' two main competitors, coal and nuclear, came under fire in the mid 1980s. In 1986, the Chernobyl disaster led Germans to discredit nuclear as a viable technology. To this day, the nuclear industry has failed to improve its image. Around the same time, coal came under fire in Germany for two reasons. First, coal is expensive to mine in Germany and at the time coal mining was being supported by large government subsidies. The subsidies drew the scrutiny of the European Union, which declared these subsidies illegal. Also, averting climate change became a top priority on the environmental agenda of German policymakers. The Bundestag Commission on climate change recommended a sharp reduction in carbon dioxide emissions. The newfound aversion of Germany to both nuclear in the late 1980s opened up an opportunity for renewable electricity generation.

    The United States was not affected considerably by Chernobyl, because the American nuclear power industry had already been having problems for years because of 1979's Three Mile Island incident. However, incidents such as the Exxon-Valdez oil spill and the Persian Gulf War reminded Americans of the vulnerability of their energy situation. This led to the 1992 Energy Policy Act, which established production tax credits for renewable energy sources. The initial build out of wind farms in the United States is widely attributed to these production tax credits. The Energy Policy Act also provided for a substantial amount of money to be put to R&D of renewables, the Act but did not appropriate a budget for it. As such, there was a constant battle in Congress each year over the renewable R&D budget, and production tax credits had to be renewed almost annually, sometimes lapsing.

    Meanwhile, Germany's problems above led to an unlikely coalition of Green Party and Social Democratic Party members pushing a plan to establish a feed-in-tariff for renewable energy sources. This plan was backed by the newly-created Environment Ministry (BMU) but opposed by the Ministry of the Economy (BMWi). The BMWi's attempts to stop the bill failed, as the ministry's most important allies, the utility companies, were preoccupied with taking over East German utilities after the fall of the Berlin Wall and underestimated the impact of the bill. This feed-in-tariff became the Stromeinspeisegesetz (StrEG) or Feed-In-Law, which was passed in 1990 and was the predecessor to the EEG.

    As the StrEG took off in Germany, the United States renewable energy development path began to diverge from Germany's. The Energy Policy Act created incentives for development of renewable energy sources, but a renewable energy R&D budget tug-of-war took place in Congress throughout the 1990s into the early 2000s. In the early 1990s, when Democrats were the majority, Congress consistently matched the President's budget requests for renewable energy funding. After the Republicans took control of Congress, they began to consistently cut the President's budget requests for renewable energy. Then beginning in 2005, Congress made the renewable budget higher than requested by the President. The non-parliamentary system of the United States can lead to conflicts between the legislative and executive branches, making outside stakeholders unsure about the direction of the policy. The constant change in renewables' R&D budget meant that the United States did not experience the positive political feedback to renewable energy that Germany experienced. Universities and industry groups could not depend on having their renewable energy research funded. This stunted the growth of a large coherent group to support the policies. With volatility in the areas of R&D and subsidies for renewable energy, the renewable energy industry has not grown large enough to have the lobbying clout that its equivalent in Germany enjoys. In addition, the United States' preference for market-based solutions adds an additional barrier for renewable energy subsidies to overcome.

    With a shift in the control of the presidency and Congress in the last few years, renewable energy has again become a hot issue, with the Waxman-Markey being a prime example. This bill would create a nationwide renewable portfolio standard that could put the United States as a whole on a renewable energy path similar to Germany's.

    In the absence of a federal strategy to massively increase renewable energy use, many individual states have passed renewable portfolio legislation in the last decade. These states in general have not been keen on setting mandated prices for renewable energy or forcing utilities to buy from any particular source, because they choose to take a free-market approach. This means that the renewable portfolio is the overwhelming strategy of choice, rather than a feed-in-tariff strategy. To date, thirty-four states and the District of Columbia have RPSs, and no two are identical. Each individual RPS is different because of differences in the legislation such as target percentages, end-years, definitions of renewable energy, in-state requirements, and new-build requirements.

    PROCEDURES

    This paper was written based on information prepared mostly by the state government of Pennsylvania and the national governments of the United States and Germany. Additional sources, independent of government sources, were used to highlight and/or bring an independent outside view of the information. Additional information was mostly gathered through independent trade associations.

    The papers, publications and information were found using several sources including Google searches and the Lehigh University library online database access to Compendex, internet searches leading to the websites of German government websites, the Department of Energy, the US Federal Government, and the Pennsylvania legislature. Compendex provided large range of scholarly publications related to the topic.

    At first, it was difficult to get specific information regarding renewable energy for Germany and Pennsylvania, but a continuous approach, use of government websites and refinement of search criteria enabled the discovery and use of more specific information. To start with searches began with simply using "renewable energy' and either Germany or Pennsylvania. Refining this to the actual topic being discussed such as 'offshore wind power in Germany' instead of RES or wind power and the use of sites such as those of the EIA and trade associations to find base sources led to the greater depth of information.

    Use of information from all sources had to be examined in the light of the publisher and their intended purpose. We attempted to substantiate or at least get magnitude comparisons across multiple sources before using them in this paper. This led to a dilemma in a lot of the pure data numbers since we could not find original source definitions to determine what exactly was included or how the information was gathered. This means that source data from the EIA might have been collected via voluntary submission by either the states or companies and that a term such as "renewable" or "alternative" might not be consistent between sources. However, since magnitudes matched and, in general, data was less than 5% different, the information was used and thought useful for comparison.

    CONCLUSION

    Germany has successfully achieved its goals for integrating renewable energy sources into its energy portfolio, and as of 2007 generates 15.1% of its electricity from renewable sources. It has done this through a deliberate and coordinated use of legislation that gives renewable energy developers a guaranteed market in which their generated electricity is purchased at a set above-market price that exceeds production costs. These prices, or tariffs, are set differently for each installation, depending on an installation's size, technology, and year built. German renewable energy generators' tariffs are paid by the utility companies, who in turn pass the additional cost along to the customer.

    Pennsylvania generated only 2% of its electricity from renewable sources in 2007. The Pennsylvania Alternative Energy Portfolio Standards Act (AEPS) sets an increasing percentage of electricity consumption that utilities must purchase from alternative sources. The legislation's end goals are for 18% electricity consumption from alternative sources by 2020, with 8% from Tier I (renewable) and 10% from Tier II (some renewable and some not, such as waste coal). The legislation does not address production costs, and therefore it is possible that only the most inexpensive technologies will be developed at the expense of the others. Pennsylvania can achieve the goals it has set out for itself in its Alternative Energy Portfolio Standard in upcoming years, and as shown by the PUC report, they have achieved them so far. However, there may be a shortage of registered AEC sellers by 2015, as it is not certain if the growth of supply of AECs will keep up with demand. Further, utilities in Pennsylvania and the US will have an additional challenge to overcome if the Waxman-Markey becomes law.

    In general, the Pennsylvania AEPS increases the cost of electricity, and so would the Waxman-Markey bill, but as shown by the German example, cost increases could be minimal especially with the continued decreasing cost of installation of renewable energy technology. The increased cost of electricity might actually help address the use of renewables and the cleaning up of the environment by driving down demand making it easier for a smaller installed capacity of RES to have the desired impact (% of consumption).

    RECOMMENDATIONS

    This study is by no means an exhaustive study, which is evidenced by the amount of material that we reviewed for the paper. Some suggestions for future in-depth focused topics to further understand what direction Pennsylvania should take in terms of developing and succeeding in the use of renewable energy sources include:

    1. The study of the cost of renewables within the state of PA to include the review of installation costs, operation and maintenance, available state and federal grants, loans and subsidies, tax credits and finally the cost and impact of AECs.
    2. The potential use and effect of the impact of distributed renewable energy with a focus on small residential scale installations and ways in which they could be supported and integrated.
    3. The integration of intermittent renewable sources into the transmission and distribution grid without affecting quality or quantity with a focus on storage technologies such as pumped storage and batteries.
    4. The resource availability, technical viability and cost effectiveness of the different renewable energy sources in Pennsylvania.
    5. The review of the possible use of integrating legislation in Pennsylvania or the US similar to Germany's Combined Heat and Power Act, renewable energy sources in transportation, increasing efficiency, reduction in demand, and financial or regulatory tax on emissions or by products.
    6. The review of possibility of changing Pennsylvania to a feed-in-tariff type RPS.

    Areas that were not studied in PA or Germany were the affect that the introduction of intermittent renewable energy sources has on the grid, and the use of more efficient consumption devices. Also not studied was the benefit or impact of the offset greenhouse gases would have or the impact to the economy which could both be very high and a driver behind any changes to current posture and legislation. Questions that still need to be answered are:

    1. What impact does the sectionalizing of the German grid have on the use and implementation of renewable energy sources?
    2. How would renewables impact Pennsylvania's transmission and distribution grid? In Pennsylvania, as shown in Germany, if the grid does not have the availability to integrate and utilize renewable, it will limit and in some cases disproportionately affect distribution, use and cost of renewables.

    REFERENCES

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    [3] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [4] EIA, International Energy Statistics Capacity, Germany, Installed Nuclear Capacity, 2006 & 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=27&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK

    [5] EIA, International Energy Statistics Capacity, Germany, Total Conventional Thermal, 2006 & 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=28&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK

    [6] EIA International Energy Statistics, Capacity, Germany, Total Renewables, 2006 & 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=29&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK

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    [8] EIA International Energy Statistics, Capacity, Germany, Pumped Storage, 2006 & 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=82&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK

    [9] EIA International Energy Statistics, Capacity, Germany, Total Installed Capapcity, 2006 & 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=2&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK

    [10] EIA International Energy Statistics, Consumption, Germany, Total Renewables, 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=29&aid=2&cid=GM,&syid=2006&eyid=2008&unit=BKWH

    [11] EIA, International Energy Statistics Consumption, Germany, Total Consumption, 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=2&aid=2&cid=GM,&syid=2006&eyid=2008&unit=BKWH

    [12] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 16. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [13] Ibid, page 16.

    [14] International Energy Association, Statistics, Electricity, Electricity/Heat Data for Germany http://www.iea.org/stats/electricitydata.asp?COUNTRY_CODE=DE

    [15] IEA Energy Policies of Member Countries, Germany 2007 Review. International Energy Agency. 2007. http://iea.org/textbase/nppdf/free/2007/germany2007.pdf

    [16] New Thinking - New Energy, Energy Policy Road Map 2020. Maria Krassuski, Patrick Jochum, Julia Rufin, Hannes Ortmann and Patrick Graichen. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Jan 2009. Page 15. http://www.germany.info/Vertretung/usa/en/09__Press__InFocus__Interviews/03__Infocus/03__ClimateBridge/Downloads/Roadmap__DD,property=Daten.pdf. 13 Oct 2009.

    [17] Ibid, page 14

    [18] New Thinking - New Energy, Energy Policy Road Map 2020. Maria Krassuski, Patrick Jochum, Julia Rufin, Hannes Ortmann and Patrick Graichen. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Jan 2009. Page 15. http://www.germany.info/Vertretung/usa/en/09__Press__InFocus__Interviews/03__Infocus/03__ClimateBridge/Downloads/Roadmap__DD,property=Daten.pdf. 13 Oct 2009.

    [19] EIA, International Energy Statistics Capacity, Germany, Installed Nuclear Capacity, 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=27&aid=7&cid=GM,&syid=2006&eyid=2008&unit=MK.

    [20] EIA, International Energy Statistics Capacity, Germany, Consumption, Nuclear Electricity Consumption, 1980-2008. http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=27&aid=2&cid=GM,&syid=2000&eyid=2008&unit=BKWH.

    [21] World Nuclear Association, Nuclear Power in Germany. http://www.world-nuclear.org/info/inf43.html. 1 Dec 2009.

    [22] Ibid.

    [23] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 2. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [24] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 2. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [25] Electricity from Renewable Energy Sources What Does it Cost. Dr. Michael Van Mark, Dr. Wolfhart Drrschmidt. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. April 09. Page 20. http://www.erneuerbare-energien.de/files/pdfs/allgemein/application/pdf/brochure_electricity_costs_bf.pdf

    [26] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 26 http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [27] Ibid, page 2.

    [28] Ibid, page 2.

    [29] Ibid, Page 16.

    [30] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 11. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [31] Ibid, page 16.

    [32] "The Expansion of electricity generation from renewable energies in Germany. A review based on the Renewable Energy Sources Act Progress Report 2007and the new German feed-in legislation". Uwe Bsgen, Wolfhart Drrschmidt. Energy Policy. 2009 Volume 37 Issue 7. Elsevier Science. Page 2537.

    [33] Erneuerbare-Energen-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 2. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [34] Ibid, Page 8.

    [35] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [36] Ibid, page 10.

    [37] Ibid, page 16.

    [38] EIA, International Energy Statistics, Electricity, Consumption, Germany, Hydroelectric Electricity Net Consumption, 2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=33&aid=2&cid=GM,&syid=2000&eyid=2008&unit=BKWH

    [39] Wiese, Lutz. "Offshore wind power from the North Sea: alpha ventus supplies first kilowatt hours to the German power grid." Alpha Ventus. http://www.alpha-ventus.de/index.php?id=80.

    [40] Pullen, Angelika; Qiao, Liming; Sawyer, Steve. Global Wind 2008 Report. Global Wind Energy Council. Page 3. http://www.gwec.net/fileadmin/documents/Publications/Global%20Wind%202008%20Report.pdf

    [41] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [42] Ibid page 16.

    [43] Ibid, page 16.

    [44] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 10. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [45] New Thinking - New Energy, Energy Policy Road Map 2020. Maria Krassuski, Patrick Jochum, Julia Rufin, Hannes Ortmann and Patrick Graichen. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Jan 2009. Page 12. http://www.germany.info/Vertretung/usa/en/09__Press__InFocus__Interviews/03__Infocus/03__ClimateBridge/Downloads/Roadmap__DD,property=Daten.pdf. 13 Oct 2009.

    [46] Welke , Mareike. Nick-Leptin , Joachim. Noll, Ingo. Innovation Through Research, 2008 annual Report on Research Funding in the Renewable Energies Sector. Jan 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 15. http://www.erneuerbare-energien.de/files/pdfs/allgemein/application/pdf/broschuere_jahresbericht_forschung_ee_2008_en.pdf. 4 Nov 09.

    [47]EIA, Country Analysis Briefs, Germany Expanded Environmental Section, Germany: Environmental issues. Sept 2003. http://www.eia.doe.gov/cabs/germe.html.

    [48] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [49] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 16. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [50] EIA, International Energy Statistics Consumption, Germany, Solar tide and wave, 2000-2007, http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=36&aid=2&cid=GM,&syid=2000&eyid=2008&unit=BKWH.

    [51] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 9. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [52] Ibid.

    [53] Hodge, B. K. "Alternative Energy Systems and Applications." 2010. John Wiley & Sons, Inc. Page 322.

    [54] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 2. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [55] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 16. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [56] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 16-17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [57] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 9. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [58] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 17. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [59] Ibid, page 16.

    [60] Act on Granting Priority to Renewable Energy Sources (Renewable Energy Sources Act) from March 29th, 2000. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. http://www.bmu.de/files/pdfs/allgemein/application/pdf/res-act.pdf.

    [61] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Page 2. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [62] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 16. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09.

    [63] Renewable Energy Sources in Figures, Dipl.-Ing. (FH) Dieter Bhme, Dr. Wolfhart Drrschmidt, Dr. Michael van Mark. June 2009. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. Page 5. http://www.erneuerbare-energien.de/files/english/renewable_energy/downloads/application/pdf/broschuere_ee_zahlen_en_bf.pdf. 16 Sep 09

    [64] Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act) of 2008, English translation. Pages 6-10. http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2009_en.pdf

    [65] Electricity from Renewable Energy Sources What Does it Cost. Dr. Michael Van Mark, Dr. Wolfhart Drrschmidt. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. April 09. Page 27. http://www.erneuerbare-energien.de/files/pdfs/allgemein/application/pdf/brochure_electricity_costs_bf.pdf

    [66] Electricity from Renewable Energy Sources What Does it Cost. Dr. Michael Van Mark, Dr. Wolfhart Drrschmidt. Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. April 09. Page 9. http://www.erneuerbare-energien.de/files/pdfs/allgemein/application/pdf/brochure_electricity_costs_bf.pdf

    [67] Marts, Anke. "Answer to your question" e-mail dated 11 Nov 09.

    [68] Frey, Chip. "Re: Special request for info from your brother" E-mail dated 13 Nov 09.

    [69] EIA International Electricity Prices and Fuel Costs, Electricity Prices for Households, Germany, 2007, http://www.eia.doe.gov/emeu/international/elecprih.html

    [70]EIA, State Electricity Profiles 2008, page 230. http://www.eia.doe.gov/cneaf/electricity/st_profiles/pennsylvania.pdf

    [71] Ibid, page 231.

    [72]Ibid, page 230

    [73] Ibid, page 230.

    [74] Ibid, page 231.

    [75] U.S. Census Bureau, State and County QuickFacts, Pennsylvania, 2008. http://quickfacts.census.gov/qfd/states/42000.html

    [76] World Bank, World Development Indicators. 2010. http://datafinder.worldbank.org/population-total

    [77] Pennsylania Alternative Energy Portfolio Standards Act. 2008. http://www.dsireusa.org/documents/Incentives/PA06Ra.htm

    [78] Pennsylania House Bill 1203. 2007. http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=HTM&sessYr=2007&sessInd=0&billBody=H&billTyp=B&billNbr=1203&pn=2343

    [79] Pennsylania House Bill 2200. 2008. http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2007&sessInd=0&billBody=H&billTyp=B&billNbr=2200&pn=4526

    [80] Pennsylvania Alternative Portfolio Standards Act. 2008. http://www.dsireusa.org/documents/Incentives/PA06Ra.htm

    [81] Pennsylania Utility Commission, Implementation of Act 129 of 2008 Phase 4. 2009. http://www.puc.state.pa.us/pcdocs/1043496.doc

    [82] Pennsylvania Public Utility Commission, Implementation of the Alternative Energy Standards Portfolio Act: Standards for the Participation of Demand Side Energy Resources http://www.puc.state.pa.us/PcDocs/569133.doc

    [83] Pennsylvania Public Utility Commission, AEPS Annual Report 2007. Page 7. http://www.puc.state.pa.us/electric/pdf/AEPS/AEPS_Ann_Rpt_2007.pdf

    [84] Ibid. Page 5.

    [85] Pennsylvania Public Utility Commission, Implementation of the Alternative Energy Portfolio Standards Act. 2005. Page 11. www.puc.state.pa.us/PcDocs/547870.doc

    [86] Ibid. Page 6.

    [87] Ibid. Page 16.

    [88] Pennsylvania Public Utility Commission, AEPS Annual Report 2007. Page 8. http://www.puc.state.pa.us/electric/pdf/AEPS/AEPS_Ann_Rpt_2007.pdf

    [89] Pennsylvania Public Utility Commission, Qualified Generation Facilities Summary. 2010. http://paaeps.com/credit/listqualified.do?todo=qualified

    [90] Ibid.

    [91] Pennsylvania Public Utility Commission, AEPS Alternative Energy Credit Program Pricing, 2010. http://paaeps.com/credit/pricing.do

    [92] Pennsylvania Public Utility Commission, AEPS Annual Report 2007. Page5.

    [93] Ibid. Page 12.

    [94] Ibid. Page 14.

    [95] EIA, Average Retail Price of Electricity to Ultimate Customers by State, 2010. http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

    [96] EIA, International Electricity Prices and Fuel Costs: Electricity Prices for Households, 2008. http://www.eia.doe.gov/emeu/international/elecprih.html

    [97] EIA, International Electricity Prices and Fuel Costs: Electricity Prices for Industry. 2008. http://www.eia.doe.gov/emeu/international/elecprii.html

    [98] U.S. House of Representatives, American Clean Energy and Security Act Summary. 2009. http://energycommerce.house.gov/Press_111/20090724/hr2454_housesummary.pdf

    [99] Encylcopaedia Britannica, "Germany", 2010. http://search.eb.com/eb/article-78281

    [100] Encylopaedia Britannica, "Pennsylvania", 2010. http://search.eb.com/eb/article-78231

    [101] National Renewable Energy Laboratory, Photovoltaic Resource: United States and Germany. 2008. www.seia.org/galleries/default-file/PVMap_USandGermany.pdf

    [102] Universitt Mnchen, mittiere Windgeshwindigkeit Deutschland. http://www.renewable-energy-concepts.com/german/windenergie/standorte.html

    [103] NREL Renewable Energy Data Center, Pennsylvania Annual Average Wind Power. http://rredc.nrel.gov/wind/pubs/atlas/maps/chap3/3-26m.html

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