NREL Report Sees Near-Term Supply Shortage for Renewable Power

November 14, 2007

A combination of state renewable energy requirements and voluntary "green power" purchases of renewable energy are causing the demand for renewable energy to exceed the supply, according to a recent report from DOE's National Renewable Energy Laboratory. Published in late October, the report notes that green power purchases reached 12 million megawatt-hours in 2006, a three-fold increase from 2003. Meanwhile, 25 states and the District of Columbia have enacted laws that require renewable energy to provide from 2% to 30% of each state's electricity supply within the next 5 to 15 years.

Noting that most of the new renewable energy capacity is currently in the form of wind power, the report projects near-term renewable energy capacity increases using two scenarios: a steady increase of 4,000 megawatts (MW) per year through 2010, and an increase that accelerates to 7,000 MW per year by 2010. Assuming a continued growth in green power of 35% per year, and taking into account the amount of renewable power required by the states, the report finds that demand for renewable power is already slightly exceeding the supply. In the "steady increase" scenario, supply lags further and further behind demand through 2010, while the "accelerating supply" scenario comes much closer to meeting demand, but still falls short.

The report concludes that there is a national need to accelerate renewable energy deployment from all energy sources to meet the burgeoning demand for renewable power. It also notes that future policy changes could increase the demand or slow the increase in the supply, while a supply shortage could drive up costs in the green power market and discourage the voluntary purchasing of renewable power. See the NREL report on the Green Power Network Web site (PDF 521 KB). Download Adobe Reader.