Renewable and alternative energy

Scope

A company is not required to use renewable or alternative energy. Businesses can obtain renewable energy in three different ways:

1. Owning renewable energy systems and using the energy those systems generate,
2. Buying renewable power from various third-party-owned systems, or
3. Buying unbundled renewable energy certificates (RECs). These are market-based instruments that represent the property rights to the environmental, social, and other non-power features of renewable electricity generation. RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource.

Partaking in shared renewables is a growing choice that allows more than one customer to buy, lease, or subscribe to part of a renewable energy project that is usually in a company’s county or state. It may be appealing to electricity customers who want to assist emerging renewable resources but do not have a business that is suitable for a renewable energy generator on-site.

However, installing a renewable energy project onsite may be an option for some businesses. There are typically two choices available:

• Self-financing. The customer is the one who pays for the onsite project. This tactic requires upfront funding, but the customer can lower electric bills and can decide to be green powered by keeping RECs produced by the onsite project.
• Third-party financing. The customer enters a contract or lease with a certain project developer who will own and run the renewable project on the consumer’s land. The customer does not have to provide upfront funding, but usually agrees to buy electricity for 7-20 years. If the customer wants green power, they need to buy RECs as well. 

Regulatory citations

• None

Key definitions

• Conventional hydroelectric plant: A plant in which all the power is made from natural streamflow as managed by accessible storage.
• Greenhouse gases: Gases in Earth’s atmosphere that trap heat. Examples include water vapor, carbon dioxide, methane, ozone, nitrous oxide, and chlorofluorocarbons.
• Photovoltaic cell (PVC): An electronic device with layers of semiconductor matter created to develop layers of materials with various electronic traits and contacts that can turn incident light into electricity.
• Solar thermal panels: A system that concentrates thermal energy coming from the sun through solar collector panels. The panels usually have large, sun-oriented boxes with clear covers, with water tubes of air baffles under a black-colored heat absorbent panel. The energy is generally used for space heating and water heating.
• Wind power plant: A collection of wind turbines connected to a utility system through an arrangement of transformers, distribution lines, and typically one substation.
• Wind turbine: Wind energy conversion apparatus that makes electricity. It usually has three blades that turn about a horizontal axis and that is positioned up-wind from the supporting tower.

Summary of requirements

Each alternative and renewable energy source has benefits and drawbacks. By understanding energy effects and how each energy source works, a company can better select which source is a good fit for offsite investment or onsite project development. 

Alternative energy sources include:

• Natural gas
  • Natural gas can be excavated from subsurface porous rock reservoirs through mining methods.
  • Benefit: It can be easily transported.
  • Drawback: It emits carbon dioxide.

• Nuclear energy
  • Atoms split apart and make electricity.
  • Benefit: A nuclear power plant does not create air pollution while running.
  • Drawback: These power plants produce radioactive waste.

The main kinds of renewable energy sources include:

• Biomass
  • Biomass is renewable organic matter that originates from plants and animals. Sources include wood and wood processing wastes, farming crops and waste matter, sewage, and community solid waste from paper, cotton, and yards.
  • Benefit: Biomass aids U.S. farming and forest-commodity industries.
  • Drawback: Biomass crops can only grow for a portion of the year and may not be successful due to climate events out a farmer’s control.

• Geothermal
  • Geothermal technology captures heat below Earth’s surface.
  • Benefit: Most geothermal power plants insert the geothermal steam and water used back into the ground. This recycling process helps to renew geothermal resources and to lower emissions.
  • Drawback: Secondary or backup heat sources are needed in colder environments, causing geothermal to not be as practical in certain locations as others.

• Hydropower
  • Hydropower generates power by using a dam or diversion structure to change the natural flow of a river or other body of water.
  • Benefit: Hydroelectric power plant reservoirs gather rainwater, which can be used for drinking or farming irrigation.
  • Drawback: Hydropower plants have a restricted lifespan from sediment building up on one side of the dam which stops the plant from functioning like it should.

• Solar
  • Solar technologies convert sunlight into electrical energy through photovoltaic (PV) panels or through mirrors that concentrate solar radiation.
  • Benefit: Solar energy can produce electricity in remote areas that are not connected to the grid.
  • Drawback: Solar energy can only be produced during daytime and can be unreliable on cloudy days.

• Wind
  • Wind turbines utilize wind to produce electricity. Wind moves the blades of a turbine around a rotor, which turn a generator, which then produces electricity.
  • Benefit: Wind turbines can be constructed on already present farms or ranches.
  • Drawback: Wind is irregular and may not make power all the time. Some days the wind blows more intensely than others.