How do you get people to use renewable energy when it’s more expensive than fossil-fueled power? For answers to that question, you might want to look at places with high adoption rates for renewables. Austin, for instance.
This month, Texas’s capital became the largest municipality in the country to use only renewable energy. That’s 100% of all of its energy. All the city’s public buildings, including its airport and water treatment plants, are now powered using wind from West Texas. In the last nine years, Austin Energy, the city’s publicly-owned utility, has produced more renewable energy than any in the country. And, the city is well on the way to sourcing 35% of all energy from renewables by 2020.<
And yet Austin’s consumers sometimes pay 15 to 25% more for electricity under the utility’s Greenchoice program than other customers. And the city government has paid $9 million a year extra to make the switch (from a total of bill of about $28 million). How come they’re willing to pay such a premium?
Well, not everyone has been that willing. Some voters and businesses have decried the move, saying it adds to living costs at a time when people can’t afford expensive choices.
But Ed Clark, a spokesperson for Austin Energy, points to a long history of green activity, and the city’s high number of tech companies as supportive. “Austin has a tremendous emphasis on quality of life. There is not a single significant polluting industry in this entire community,” he says.
The utility’s introduced its first energy efficiency scheme in 1982, its green building program in 1991, and its first wind project as long ago as 1995. Businesses account for about half the power sold under the Greenchoice program, with the city government, and 13,000 residential customers making up the rest.
Just as important is how the Greenchoice program is designed. Each time Austin Energy contracts a new batch of wind energy from a generating company, it offers customers a price as a proportion of the deal-amount. They pay a fixed cost over the life of the batch, and can benefit relative to the variable cost of other types of production.
That way, customers get cost-certainty as well as a sense of price transparency. Instead of green energy costs being subsumed in the overall bill, Greenchoice customers can understand what they are paying for, and why.
“It gives them a logical way to view renewable energy. It says 'we’re trying to grow a renewable energy portfolio component and here’s how you can assist. We’re not asking you to pay six dollars and we’ll do a couple of panels of solar energy,’” says Clark.
“We’re giving you something you can watch, and sees how it turns out. I think that has been a big difference between Austin and other cities, and why we’ve been able to continue to build wind power.”
Clark says although some customers have paid 25% more at the start of their contracts, the price has often evened out over time, as the price of other power has skyrocketed. Of the six batches so far, four now cost less than conventional power.
Austin Energy recently signed new agreements that will take its overall wind power use to more than 1000 MW by 2020. It also has smaller contracts for biomass and solar. But Clark says it is still necessary to balance out the intermittency of renewables with dirtier sources.
Texas has several big public renewables users. Houston and Dallas both figure in the EPA’s top-10 list of government clean power adopters.
As for Austin, a National Renewable Energy Laboratory a study, published in March, found that state-level renewable requirements and city-level financial commitments were both important to growing green energy programs. It also found that cities benefited from having municipally-owned utilities, and that concentrating on a city’s energy needs was a way to seed wider adoption.
Utilities in Palo Alto, Portland, Iowa, Madison (Wisconsin), and Sacramento have also driven high levels of participation in green energy programs. Hopefully, over time, other cities can learn from what the leaders are doing.