Western states leading way toward sustainable energy

This article by Lesley Hunter originally appeared on the American Council on Renewable Energy (ACORE) blog, and is cross-posted with ACORE's permission.

The western United States’ remarkable renewable energy resource availability, supportive policies, and well-developed supply chains have transformed western states into national leaders in renewable energy development. In 2012, the 13 western states attracted more than half of the country’s combined venture capital, private equity and asset finance investment in the renewable energy sector, and produced approximately 31% of their total energy generation from renewable energy sources – compared to roughly 12% nationally (sources: Bloomberg New Energy Finance (BNEF) and the Energy Information Administration (EIA)).


Well-designed state policies have been instrumental in attracting renewable energy companies from around the world to deploy renewable energy in the region for power, heating and transportation. Nine of the 13 western states have binding mandates for renewable energy production, many with minimums for certain distributed generation technologies and/or solar energy. An array of state financial incentives pair with these rules and regulations to mitigate the cost of renewable energy systems. Many states continue to express political support for increased renewable energy development, like in Nevada, where the state government recently passed legislation that would close its remaining coal-fired plants and increase renewable energy production in the state. A number of states also defeated legislation over the past several months that would have weakened or repealed their renewable portfolio standards (RPSs).

Nearly all available renewable energy technologies are well suited for deployment in the West, including solar, wind, hydro, biomass, geothermal, marine, and waste energy, as well as biofuels.

  • The region benefits from some of the best solar resources in the country, responsible for roughly 65% of the nation’s solar photovoltaic capacity and 86% of the nation’s solar thermal electric capacity.
  • The country’s utility-scale geothermal power projects currently operate in this region exclusively. 
  • Hydropower accounts for about 25% of the region’s electricity generation.
  • California and Oregon rank within the top five states for wind power capacity. Wind power projects have been built in every western state.
  • Companies have begun producing advanced biofuels at a number of facilities and produce ethanol and biodiesel commercially to fuel the region’s many alternative-fueled vehicles.
  • A number of biomass facilities produce energy from municipal solid waste, wood waste, agricultural residues, and other organic feedstocks. 
  • Developers have chosen western states to be the site of groundbreaking, innovative renewable energy projects, like ocean thermal energy conversion (OTEC) and wave energy experiments in Hawaii and Oregon.
  • Waste heat can be converted into electricity at a number of industrial facilities, like steel mills, paper plants, refineries, chemical plants, oil and gas pipelines, as well as renewable and non-renewable power plants.
  • Residences, businesses, and government buildings use renewable resources for heating and cooling purposes throughout the region, from solar thermal, biomass thermal, and geothermal direct-use systems.

Investors feed billions of dollars to renewable energy projects, technologies, and companies in the western United States each year, spurring the creation of thousands of jobs and stimulating local economies. In 2012, the region was responsible for nearly half – 47% – of the nation’s new build asset finance for renewable energy ($11.3 billion), and an impressive 70% of the nation’s new venture capital and private equity investment raised by pure play renewable energy companies ($1.8 billion) (BNEF). The cost of building renewable energy projects in the west continues to drop. In certain states, the availability of resources and/or high conventional energy prices make new renewable energy projects very attractive. In fact, a solar energy power purchase agreement was recently approved in New Mexico at 5.7 cents per kWh – close to the price of energy at an existing coal plant in the state. 

Recent federal government actions have created new opportunities for renewable energy development. For example, the U.S. Department of Interior expedites the approval of certain renewable energy projects located on federal lands, particularly abundant in the west, and has established “renewable energy zones” to encourage utility-scale development in a number of western states. The U.S. Department of Defense has chosen many western military bases to be the site of renewable energy projects that will help achieve its aggressive clean energy goals, including solar, biomass, and ocean energy systems.

Certain challenges remain. The future of the renewable energy development in states without RPS policies–like Alaska, Wyoming, Idaho, Utah (which has a non-binding renewable portfolio goal) and Wyoming–is less clear than in states with renewable mandates. In Wyoming, with the lack of an RPS or financial incentives and with the country’s only imposed tax on wind power generation, developers built no utility-scale renewable energy projects in 2012, nor are any expected this year. In addition to the absence of state policy support, the availability of transmission also poses certain barriers to the effective use of renewable energy, especially when transporting power from projects located in rural areas, where resources are especially plentiful, to demand centers.

Despite these challenges, the long-term outlook for renewable energy in most western states is positive, with their unmatched resources and strong public and political support. To learn more about renewable energy in the western states, read ACORE’s new report: Renewable Energy in the 50 States: Western Region.

Lesley Hunter is the Research and Program Manager at ACORE.

Photo credit: First Wind (Milford, Utah)


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