Capturing Value for Rural America: Strategic Choices for Renewable Energy Investment
The train is leaving the station. The rapid build-out of renewable energy is a historic opportunity for rural America, and the pace of development is accelerating. In this issue of Rural Cooperatives, a team of USDA economists has ably summarized recent research on the strategic choices arising from this "renewables revolution" for farmers, investors, rural utilities and government at all levels.
The stakes are high:
* Since 2000, ethanol production in the United States has tripled. The aggressive Renewable Fuels Standard enacted in December--36 billion gallons by 2022--will keep this rapid development on track for years to come.
* Installed wind capacity in the United States has more than quadrupled in this decade. Germany still leads the world in total capacity, but the United States led in new capacity in 2005 and 2006, and the projections suggest that we will have done so again in 2007.
* Shipments of photovoltaic units in the United States have increased tenfold since 2000, and we lead the world in solar, thermal, geothermal and waste-to-energy applications. Renewable energy, in short, has become a noteworthy American success story, and I fully expect this progress to continue.
It is true that renewable energy is building out from a very low base, currently between 6 and 7 percent of total U.S. energy consumption. But it is also true that the growth rates described above, if sustained, will rapidly expand renewables' market share.
For rural America--and for USDA Rural Development--this is a challenge as well as an opportunity. Several new industries, largely rural and/or ag-based, are developing rapidly. There are opportunities at every point in the production chain. This is probably the greatest new opportunity for wealth creation in rural America in our lifetimes, and capturing a fair share of that value for rural America is an important objective.
To help rural stakeholders and policymakers expand the dialogue for winning strategies in this fast-moving and increasingly competitive arena, USDA Rural Development identified four areas which are discussed in this issue. The choices we make today will cast a long shadow:
* Distributed wind and solar power must be integrated into the grid. …