Renewable Energy Report

Renewable energy sources are providing an increasing percentage of our nation’s energy supply according to a report issued by the Energy Information Administration office of the Department of Energy. Preliminary data indicates that total renewable energy consumption increased 7 percent between 2005 and 2006. In contrast, total U.S. energy consumption declined 1 percent mainly due to the decreased consumption of fossil fuels.

Ethanol production increased from 3.9 billion gallons in 2005 to 4.9 billion gallons in 2006. This was due to several factors including 1) continued replacement of MTBE by ethanol as a gasoline additive, 2) higher crude oil prices which have raised the price of gasoline and therefore increased the demand for ethanol as a substitute, 3) Federal tax incentives such as a 51 cent/gallon tax credit available to blenders for each gallon of ethanol blended into gasoline and 4) The Energy Policy Act of 2005 which mandates annual renewable fuel use in gasoline at 7.5 billion gallons by 2012.

At 2006 production levels, ethanol accounted for nearly 4 percent of U.S. finished gasoline production. The USDA estimates that 14 percent of corn use in the 2005/2006 crop year went for production of ethanol up from 11 percent in the 2004/2005 crop year and 6 percent in 1999/2000.

The number of ethanol plants operating in the U.S. increased from 95 in January 2006 to 110 in January 2007, with 76 plants under construction or expanding at that time. Production capacity in the U.S. stood at 5.5 billion gallons per year online in January 2007. Bio-diesel production stood at about 91 million gallons in 2005.

Wind generation in 2006 increased to 26 billion kilowatt hours, up from 18 billion kilowatt hours in 2005. This made wind’s share of the renewable generation market 7 percent, up from 5 percent the previous year. Wind capacity increased greater than any other renewable generation source in 2006.

The 3 states with the largest increases in wind capacity were Texas, Washington, and California in order of capacity increase. Texas added 943 megawatts. Total capacity of wind generation in Texas stood at 2,698 megawatts by the end of 2006 making it the nation’s leader in wind generation capacity.

In 1999, Texas adopted a renewable portfolio standard that required 2,000 megawatts of new renewable capacity be installed by 2009 in addition to the existing 880 megawatts. Texas has already met that requirement. In August 2005, that goal was raised to 5,880 megawatts by 2015 (about 5 percent of the state’s electricity demand). Legislation has been passed to streamline the installation of transmission lines to handle the increase in wind generated supply.

One megawatt of electricity can supply approximately 1,000 homes.