Power Production from Renewable Energy Aided by Energy Act

August 10, 2005

The Energy Policy Act of 2005, which President Bush signed on August 8th, includes a number of provisions to increase the use of renewable energy as a source of electricity. The energy act extends the production tax credit through 2007 for electricity produced from wind power, geothermal power, biomass, landfill gas, small irrigation power, and trash combustion facilities. The credit would have expired at the end of this year. The act also extends the credit to include the hydropower generated from new facilities added to existing dams or conduits, and the additional hydropower generated because of efficiency improvements at existing hydropower stations. The American Wind Energy Association (AWEA) and the National Hydropower Association (NHA) hailed the credit extension. See the AWEA press release, the NHA fact sheet (PDF 31 KB), and pages 1222 to 1227 of the energy act (PDF 2.6 MB). Download Adobe Reader.

By 2013, the act requires the federal government to buy at least 7.5 percent of its electricity from renewable energy sources, including wind, solar, biomass, landfill gas, ocean, geothermal, municipal solid waste, and new hydroelectric generation achieved through efficiency improvements or capacity additions at existing hydroelectric plants. The act doubles the credit for power generated on-site or on federal or tribal lands.

The act updates the Geothermal Steam Act to require competitive lease sales at least every two years in states with geothermal resources. Land tracts offered for competitive leases but not bid upon can then be offered for non-competitive leases. Fees will be charged based on power production, and only nominal fees will be charged for geothermal resources not used to generate power. The act also reforms the hydropower licensing process. To help assess the availability of renewable energy, the energy act also requires an annual assessment of all renewable energy resources, including solar, wind, biomass, ocean, geothermal, and hydroelectric energy sources. See pages 161 to 251 of the energy act (PDF 2.6 MB).