Renewable Portfolio Standard
Encyclopedia
A Renewable Portfolio Standard (RPS) is a regulation
that requires the increased production of energy
from renewable energy sources
, such as wind
, solar
, biomass
, and geothermal
. Other common names for the same concept include Renewable Electricity Standard (RES) at the United States federal level and Renewables Obligation in the UK.
The RPS mechanism generally places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources. Certified renewable energy generators earn certificates for every unit
of electricity they produce and can sell these along with their electricity to supply companies. Supply companies then pass the certificates to some form of regulatory body to demonstrate their compliance with their regulatory obligations. Because it is a market
mandate, the RPS relies almost entirely on the private market for its implementation. Unlike feed-in tariffs which guarantee purchase of all renewable energy regardless of cost, RPS programs tend to allow more price competition between different types of renewable energy, but can be limited in competition through eligibility and multipliers for RPS programs. Those supporting the adoption of RPS mechanisms claim that market implementation will result in competition, efficiency and innovation that will deliver renewable energy at the lowest possible cost, allowing renewable energy to compete with cheaper fossil fuel
energy sources.
RPS-type mechanisms have been adopted in several countries, including Britain
, Italy
, Poland
, Sweden
, Belgium
, and Chile
, as well as in 30 of 50 U.S. state
s, including the District of Columbia. Regulations vary from state to state, and there is no federal policy
. Together these thirty states account for more than 42 percent of the electricity
sales in the United States.
RPS mechanisms have tended to be most successful in stimulating new renewable energy capacity in the United States where they have been used in combination with federal Production Tax Credits
(PTC). In periods, where PTC have been withdrawn the RPS alone has often proven to be insufficient stimulus to incentivise large volumes of capacity.
The Edison Electric Institute
, a trade association
for America’s investor-owned utilities, has taken a stand against a nationwide RPS, saying it would “raise consumers’ electricity prices and create inequities among states.”
In 2009, the US Congress has been considering Federal level RPS requirements. The "American Clean Energy Leadership Act" reported out of committee in July by the Senate Committee on Energy & Natural Resources includes a Renewable Electricity Standard that calls for 3% of U.S. electrical generation to come from non-hydro renewables by 2011–2013.
is a law, passed in 1978 by the United States Congress as part of the National Energy Act
. It is meant to promote greater use of renewable energy. The Support Renewable Energy Act of 2010 (Bill S.3021/111th Congress) amends the Public Utility Regulatory Policies Act
of 1978 to authorize the Secretary of Energy to promulgate regulation
s to allow electric utilities to use renewable energy
to comply with any Federal renewable-electricity standard.
of buyers for renewable energy producers who are eligible in a particular state's RPS program to issue RECs. Because of the wide variety and localized regulation of US RPS programs, they are vulnerable to regulatory capture
. A state may choose to promote new investment in renewable energy generation capacity by not making eligible existing renewable energy such as hydroelectric plants or geothermal energy to qualify under a RPS program.
(SRECs). The solar set-aside establishes a separate market for SRECs that encourages the inclusion of solar technology in the renewable energy mix. This differs from the REC multiplier approach used by some states in which a REC from solar might count 2-3 times as much as any other REC. Multipliers have had limited impact in promoting solar technology since most REC buyers will find it easier to source 2-3 times their REC needs from the economics and scale that come with wind farms. With a separate market for SRECs, states are able to ensure that a portion of their renewable energy comes from solar. As a result, states with solar carve-outs, such as New Jersey, have had more success in promoting solar energy through the RPS than states, such as Texas, with a generic REC market or REC multiplier.
, and whether an RPS program should consider environmental damage of a renewable energy source (for example, hydroelectric dams, bird strikes of wind turbines, geothermal earthquakes, solar thermal water use) affects RPS program implementations. A state can use a multiplier as protectionism
to local renewable energy generators from out of state renewable generators. Since RECs are regulated at a state level, their ability to be traded over state lines varies.
In a 2011 report published by the Union of Concerned Scientists
, Doug Koplow said:
in 2001 and expanded it in 2007 to the following EU-wide targets (although member states
are free to pass more aggressive targets):
, since its adoption in 2000, is producing strong growth in renewable power capacity by encouraging private investors through guaranteed Feed-in tariff
s.
Germany adopted targets more aggressive than EU mandated targets on September 2010:
The California
Renewables Portfolio Standard was created in 2002 under Senate Bill 1078 and further accelerated in 2006 under Senate Bill 107. The bills stipulate that California electricity corporations must expand their renewable portfolio by 1% each year until reaching 20% in 2010. On November 17, 2008, Governor Arnold Schwarzenegger signed executive order S-14-08 which mandated a RPS of 33% by 2020 which sits in addition to the 20% by 2010 order.
The Colorado Renewable Portfolio Standard was updated from 20% to 30% in the 2010 Legislative Session as House Bill 1001. This increase is anticipated to increase solar industry jobs from current (2009) estimated 2,500 to 33,500 by 2020. The updated RPS is also anticipated to create an additional $4.3B (U.S.) in state revenue within the industries.
In 1997 Nevada passed a Renewable Portfolio Standard as part of their 1997 Electric Restructuring Legislation (AB 366) It required any electric providers in the state to acquire actual renewable electric generation or purchase renewable energy credits so that each utility had 1 percent of total consumption in renewables. However, on June 8, 2001, Nevada Governor Kenny Guinn
signed SB 372, at the time the country's most aggressive renewable portfolio standard. The law requires that 15 percent of all electricity generated in Nevada be derived from new renewables by the year 2013.
The Nevada RPS includes double goal. The 2001 revision requires that at least 5 percent of the renewable energy projects must generate electricity from solar energy.
In June 2005, the Nevada legislature passed a bill during a special legislative session that modified the Nevada RPS (Assembly Bill 03). The bill extends the deadline and raised the requirements of the RPS to 20 percent of sales by 2015.
Florida
On Friday January 9, 2009 the Florida Public Service Commission unanimously agreed to require the state's utilities to generate 20 percent of their power from renewable resources by 2020.
This is still not law until the legislature approves.
This will drastically change the landscape for renewable energy applications for a state that gets less than 3 percent of its power from renewable energy. The proposal calls for 7 percent renewable energy by January 2013, 12 percent by 2016, 18 percent by 2019 and 20 percent by end of 2020.
In an April 2008 unanimous vote, the Ohio legislature passed a bill requiring 25 percent of Ohio's energy to be generated from alternative and renewable sources, of which half or 12.5 percent must derive from renewable sources.
Pennsylvania requires that 18 percent of all energy generated in the state come from alternative and renewable sources by 2021, including 0.5 percent from solar.
The Texas
Renewable Portfolio Standard was originally created by Senate Bill 7 in 1999. The Texas RPS mandated that utility companies jointly create 2000 new MWs of renewables by 2009 based on their market share. In 2005, Senate Bill 20, increased the state’s RPS requirement to 5,880 MW by 2015, of which, 500 MW must come from non-wind resources. The bill set a goal of 10,000 MW of renewable energy capacity for 2025.
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...
that requires the increased production of energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
from renewable energy sources
Renewable resource
A renewable resource is a natural resource with the ability of being replaced through biological or other natural processes and replenished with the passage of time...
, such as wind
Wind energy
Wind energy is the kinetic energy of air in motion; see also wind power.Total wind energy flowing through an imaginary area A during the time t is:E = ½ m v2 = ½ v 2...
, solar
Solar power
Solar energy, radiant light and heat from the sun, has been harnessed by humans since ancient times using a range of ever-evolving technologies. Solar radiation, along with secondary solar-powered resources such as wind and wave power, hydroelectricity and biomass, account for most of the available...
, biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
, and geothermal
Geothermal power
Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. Earth's geothermal energy originates from the original formation of the planet and from radioactive decay of minerals...
. Other common names for the same concept include Renewable Electricity Standard (RES) at the United States federal level and Renewables Obligation in the UK.
The RPS mechanism generally places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources. Certified renewable energy generators earn certificates for every unit
Units of measurement
A unit of measurement is a definite magnitude of a physical quantity, defined and adopted by convention and/or by law, that is used as a standard for measurement of the same physical quantity. Any other value of the physical quantity can be expressed as a simple multiple of the unit of...
of electricity they produce and can sell these along with their electricity to supply companies. Supply companies then pass the certificates to some form of regulatory body to demonstrate their compliance with their regulatory obligations. Because it is a market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
mandate, the RPS relies almost entirely on the private market for its implementation. Unlike feed-in tariffs which guarantee purchase of all renewable energy regardless of cost, RPS programs tend to allow more price competition between different types of renewable energy, but can be limited in competition through eligibility and multipliers for RPS programs. Those supporting the adoption of RPS mechanisms claim that market implementation will result in competition, efficiency and innovation that will deliver renewable energy at the lowest possible cost, allowing renewable energy to compete with cheaper fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...
energy sources.
RPS-type mechanisms have been adopted in several countries, including Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, and Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
, as well as in 30 of 50 U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
s, including the District of Columbia. Regulations vary from state to state, and there is no federal policy
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
. Together these thirty states account for more than 42 percent of the electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
sales in the United States.
RPS mechanisms have tended to be most successful in stimulating new renewable energy capacity in the United States where they have been used in combination with federal Production Tax Credits
Tax credit
A tax credit is a sum deducted from the total amount a taxpayer owes to the state. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors...
(PTC). In periods, where PTC have been withdrawn the RPS alone has often proven to be insufficient stimulus to incentivise large volumes of capacity.
The Edison Electric Institute
Edison Electric Institute
The Edison Electric Institute is the association of United States shareholder-owned electric power companies. Its members serve 95 percent of the ultimate customers in the shareholder-owned segment of the industry, and represent approximately 70 percent of the U.S. electric power industry...
, a trade association
Trade association
A trade association, also known as an industry trade group, business association or sector association, is an organization founded and funded by businesses that operate in a specific industry...
for America’s investor-owned utilities, has taken a stand against a nationwide RPS, saying it would “raise consumers’ electricity prices and create inequities among states.”
In 2009, the US Congress has been considering Federal level RPS requirements. The "American Clean Energy Leadership Act" reported out of committee in July by the Senate Committee on Energy & Natural Resources includes a Renewable Electricity Standard that calls for 3% of U.S. electrical generation to come from non-hydro renewables by 2011–2013.
Legislation
Public Utility Regulatory Policies ActPublic Utility Regulatory Policies Act
The Public Utility Regulatory Policies Act is a law, passed in 1978 by the United States Congress as part of the National Energy Act. It is meant to promote greater use of domestic renewable energy...
is a law, passed in 1978 by the United States Congress as part of the National Energy Act
National Energy Act
The National Energy Act of 1978 was a legislative response by the U.S. Congress to the 1973 energy crisis. It includes the following statutes:* Public Utility Regulatory Policies Act * Energy Tax Act * National Energy Conservation Policy Act...
. It is meant to promote greater use of renewable energy. The Support Renewable Energy Act of 2010 (Bill S.3021/111th Congress) amends the Public Utility Regulatory Policies Act
Public Utility Regulatory Policies Act
The Public Utility Regulatory Policies Act is a law, passed in 1978 by the United States Congress as part of the National Energy Act. It is meant to promote greater use of domestic renewable energy...
of 1978 to authorize the Secretary of Energy to promulgate regulation
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...
s to allow electric utilities to use renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
to comply with any Federal renewable-electricity standard.
Program diversity
Of all the state-based RPS programs in place today, no two are the same. Each has been designed taking into account state-specific policy objectives (e.g. economic growth, diversity of energy supply, environmental concerns), local resource endowment, political considerations, and the capacity to expand renewable energy production. At the most basic level, this gives rise to differing RPS targets and years (e.g. Arizona's 15% by 2025 and Colorado's 30% by 2020 ). Looking at these two values alone can however be misleading. Other factors in program design include resource eligibility, in-state requirements, new build requirements, technology favoritism, lobbying by industry associations and non-profits, groups cost caps, program coverage (IOUs versus Cooperatives and Municipal utilities), cost recovery by utilities, penalties for non-compliance, rules regarding REC creation and trading, and additional non-binding goals. Since RPS programs create a mandate to purchase renewable energy, they create a lucrative captive marketCaptive market
Captive markets are markets where the potential consumers face a severely limited amount of competitive suppliers; their only choices are to purchase what is available or to make no purchase at all. Captive markets result in higher prices and less diversity for consumers...
of buyers for renewable energy producers who are eligible in a particular state's RPS program to issue RECs. Because of the wide variety and localized regulation of US RPS programs, they are vulnerable to regulatory capture
Regulatory capture
In economics, regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can act as...
. A state may choose to promote new investment in renewable energy generation capacity by not making eligible existing renewable energy such as hydroelectric plants or geothermal energy to qualify under a RPS program.
Additional non-binding Goals
Many states that have mandatory Renewable Portfolio Standards also have additional voluntary targets either for the total proportion of renewable energy or for a particular technology type.Program coverage
Program coverage refers to those entities that are expected or obliged to meet the renewable portfolio targets and goals. In many states, municipalities and cooperatives are exempt from the RPS target, have a lower target, or are required to develop their own targets. Furthermore, in some states such as Minnesota, individual utilities (e.g., Xcel Energy) are singled out for special treatment.Renewable Energy Certificates (RECs)
Most states with RPS programs have associated renewable energy certificate trading programs. RECs provide a mechanism by which to track the amount of renewable power being sold and to financially reward eligible power producers. For each unit of power that an eligible producer generates, a certificate or credit is issued. These can then be sold either in conjunction with the underlying power or separately to energy supply companies. A market exists for RECs because energy supply companies are required to redeem certificates equal to their obligation under the RPS program. State specific programs or various applications (e.g., WREGIS, M-RETS, NEPOOL GIS) are used to track REC issuance and ownership. These credits can in some programs be 'banked' (for use in future years) or borrowed (to meet current year commitments). There is a great deal of variety among the states in the handling and functioning of RECs and this will be a major issue in integrating state and federal programs.Solar Renewable Energy Certificates (SRECs)
Over 16 of the approximately 30 states with RPS programs have also established a set-aside for solar energy. This results in the creation and trading of RECs specific to solar known as Solar Renewable Energy CertificatesSolar Renewable Energy Certificates
Solar Renewable Energy Certificates or Solar Renewable Energy Credits are a form of Renewable Energy Certificate or "Green tag". SRECs exist in states that have Renewable Portfolio Standard legislation with specific requirements for solar energy, usually referred to as a "solar carve-out"...
(SRECs). The solar set-aside establishes a separate market for SRECs that encourages the inclusion of solar technology in the renewable energy mix. This differs from the REC multiplier approach used by some states in which a REC from solar might count 2-3 times as much as any other REC. Multipliers have had limited impact in promoting solar technology since most REC buyers will find it easier to source 2-3 times their REC needs from the economics and scale that come with wind farms. With a separate market for SRECs, states are able to ensure that a portion of their renewable energy comes from solar. As a result, states with solar carve-outs, such as New Jersey, have had more success in promoting solar energy through the RPS than states, such as Texas, with a generic REC market or REC multiplier.
Renewable Energy Certificates (RECs) - Multipliers
For states with REC trading programs, a Renewable Energy Certificate is issued to eligible producers for each MWh of renewable energy production. Some state programs, in order to promote specific renewable technology types, apply a credit multiplier by which a MWh of electricity produced by a particular technology receives more than one REC. For example, a wind multiplier of 3 means that one MWh of electricity produced with wind technology provides the producer of that electricity with 3 certificates. RPS multipliers are powerful tools for regulators to direct revenue, investment, and job creation to particular types of renewable energy vs a free market of renewable energy. Since the definition of what is renewable energy isn't clear cut, for example, nuclear powerNuclear power proposed as renewable energy
Although nuclear power is considered a low carbon power generation source, its legal inclusion with renewable energy power sources has been the subject of debate. Statutory and scientific definitions of renewable energies usually exclude nuclear energy...
, and whether an RPS program should consider environmental damage of a renewable energy source (for example, hydroelectric dams, bird strikes of wind turbines, geothermal earthquakes, solar thermal water use) affects RPS program implementations. A state can use a multiplier as protectionism
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...
to local renewable energy generators from out of state renewable generators. Since RECs are regulated at a state level, their ability to be traded over state lines varies.
Tiers and Set Asides
Many state programs promote particular technology types by establishing sub-targets known as carve outs or set-asides. In addition to meeting the overall RPS targets, energy supply companies need to show that they have acquired a particular percentage of their power sales from the designated technology type. In some instances, multiple technology types are bundled together in 'tiers' or 'classes' with similar effect. Not all states have set-asides or tiers (some preferring to promote particular technologies through credit multipliers) and each state that groups technologies together in a tier does so differently.Eligible technologies
Every state defines 'renewable' technologies differently. Ohio, for example, is the only state that counts advanced nuclear power generation as an eligible technology. States often start with an assessment whether the renewable technology is economically feasible in the absence of an RPS program. This is best personified by distinguishing between small and large hydroelectric facilities. Many states exclude existing renewable facilities from benefiting from an RPS program for the same reason. A state's definition of eligible technologies is also driven by the objectives of the program. Programs designed to promote diversity in generation types may include or promote technologies different from programs designed to achieve environmental goals.In a 2011 report published by the Union of Concerned Scientists
Union of Concerned Scientists
The Union of Concerned Scientists is a nonprofit science advocacy group based in the United States. The UCS membership includes many private citizens in addition to professional scientists. James J...
, Doug Koplow said:
Nuclear power should not be eligible for inclusion in a renewable portfolio standard. Nuclear power is an established, mature technologyMature technologyA mature technology is a technology that has been in use for long enough that most of its initial faults and inherent problems have been removed or reduced by further development...
with a long history of government support. Furthermore, nuclear plants are unique in their potential to cause catastrophic damage (due to accidents, sabotage, or terrorism); to produce very long-lived radioactive wastes; and to exacerbate nuclear proliferation.
Penalties
In order to motivate compliance, states that have enforceable standards will have penalties for utilities that fail to reach the specified targets. States may choose to set penalty values or make arbitrary penalty amounts when suppliers fail to meet a renewable target. Where specific technologies are promoted through either tiers or set-aside provisions, the penalties for missing these targets are typically separate and higher. Some states have higher penalties for repeat violations and others escalate penalties on a yearly basis according to price indices.Cost caps
All states either place caps on the cost of the program or include some form of 'escape clause' whereby the regulatory authority can suspend the program or exempt utilities from meeting its requirements. The need for such measures arises from the difficulties in estimating in advance the actual cost of the RPS program. The realized cost to the utility and the ratepayer is not known until the supply and cost base of renewable power, along with actual demand, is established.Cost recovery
With few exceptions, utilities are allowed to recover the additional cost of procuring renewable power. The method by which this can be achieved varies by state. Some states opt for a ratepayer surcharge while others require utilities to include costs in rate base. In some instances, utilities are even able to recover the cost of penalties associated with non-compliance.China
China adopted a renewable energy target in 2006 and modified it in 2009 to the following targets:- Renewable electricityElectricityElectricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
- 500 GW by 2020 (300 from hydro, 150 from wind, 30 from biomass, and 20 from solar PV) - Renewable energyEnergyIn physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
- 15% by 2020
European Union
The European Union passed the Directive on Electricity Production from Renewable Energy SourcesDirective on Electricity Production from Renewable Energy Sources
The Directive on Electricity Production from Renewable Energy Sources is a European Union directive for promoting renewable energy use in electricity generation. It is officially named 2001/77/EC and popularly known as the RES Directive....
in 2001 and expanded it in 2007 to the following EU-wide targets (although member states
Member State of the European Union
A member state of the European Union is a state that is party to treaties of the European Union and has thereby undertaken the privileges and obligations that EU membership entails. Unlike membership of an international organisation, being an EU member state places a country under binding laws in...
are free to pass more aggressive targets):
- Renewable electricityElectricityElectricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
- 33% by 2020 - Renewable energyEnergyIn physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
- 20% by 2020
Germany
The German Renewable Energy ActGerman Renewable Energy Act
The German Renewable Energy Act was designed to encourage cost reductions based on improved energy efficiency from economies of scale over time...
, since its adoption in 2000, is producing strong growth in renewable power capacity by encouraging private investors through guaranteed Feed-in tariff
Feed-in Tariff
A feed-in tariff is a policy mechanism designed to accelerate investment in renewable energy technologies. It achieves this by offering long-term contracts to renewable energy producers, typically based on the cost of generation of each technology...
s.
Germany adopted targets more aggressive than EU mandated targets on September 2010:
- Renewable electricityElectricityElectricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
- 35% by 2020 and 80% by 2050 - Renewable energyEnergyIn physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
- 18% by 2020, 30% by 2020, and 60% by 2050
Federal
Reviewing state-by-state RPS programs, it is clear that the norm is to differentiate support by technology type. The varying degree and method by which state programs do this means that any move toward harmonizing existing RPS programs will be a difficult one. Support for particular renewable technologies, either through credit multipliers or technology set-asides, poses challenges. The issue lies with how RECs are used to meet both state and federal standards. A technology-neutral federal standard would either have to accept RECs that have been generated on an multiplied basis (e.g. 2:1 for solar in MI or VA) or require that the REC origin is labeled and valued according, thereby reducing the fungibility of the REC itself. Another (opposite) problem arises with states’ use of technology set-asides. Here a technology specific REC used to meet a set-aside requirement (e.g. a New Jersey S-REC) has a higher value in that state’s program but would be treated equally in a federal program. While acceptable at the federal level, the market for S-RECs would be driven by New Jersey’s demand and supply further reducing the pool of homogeneous tradable federal certificates.State
| State | Amount | Year | Notes |
|---|---|---|---|
| Arizona | 15% | 2025 | Of this percentage, 30% (i.e. 4.5% of total retail sales in 2025) must come from distributed renewable (DR) resources by 2012 and thereafter. One-half of the distributed renewable energy requirement must come from residential applications and the remaining one-half from nonresidential, non-utility applications. |
| California | 20% (33%) | 2010 (2020) | |
| Colorado | 30% | 2020 | Electric cooperatives: 10% by 2020 Municipal utilities serving more than 40,000 customers: 10% by 2020 |
| Connecticut | 27% | 2020 | |
| District of Columbia | 20.4% | 2020 | RECs retain a three-year trading lifetime from their generation date before they must be retired. |
| Delaware | 25% | 2025 | Suppliers will receive 300% credit toward RPS compliance for in-state customer-sited photovoltaic generation and fuel cells using renewable fuels that are installed on or before December 31, 2014. |
| Hawaii | 40% | 2030 | HB 1464, signed by the governor in June 2009, increased the amount of renewable electrical energy generation required by utilities to 40% by 2030. |
| Iowa | 105 MW | 1999 | |
| Illinois | 25% | 2025 | |
| Kansas | 20% | 2020 | 10% by 2010, 15% by 2019 |
| Massachusetts | 15% | 2020 | Rises by 1% per year until revised by the legislature. |
| Maryland | 20% | 2022 | |
| Maine | 10% (new renewable resources; existing RPS is 30% and has been since 2000) | 2017 (increasing 1% every year for 10 years, until reaching 10% by 2017) | |
| Michigan | 10% | 2015 | Detroit Edison Detroit Edison The Detroit Edison Company, founded in 1903, is an investor-owned electric utility which serves most of Southeast Michigan. Its parent company, DTE Energy , provides energy services to a variety of clients beyond Detroit Edison's service area.- History :... : 300 MW of new renewables by 2013 and 600 MW by 2015 Consumers Energy: 200 MW of new renewables by 2013 and 500 MW by 2015 |
| Minnesota | 25% | 2025 | Xcel Energy Xcel Energy Xcel Energy, Inc. is a public utility company based in Minneapolis, Minnesota, serving customers in Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. Primary services are electricity and natural gas... has its own individual standard: 30% by 31 December 2020. |
| Missouri | 15% | 2020 | In Nov. 2008 Missouri passed Proposition C, requiring the state's 3 largest utilities to generate or purchase at least 15% of their energy from renewable sources by 2021. |
| Montana | 15% | 2015 | For compliance year 2011 through compliance year 2014, public utilities (not applicable to competitive suppliers) must purchase both the renewable-energy credits (RECs) and the electricity output from community renewable-energy projects totaling at least 50 MW in nameplate capacity. |
| New Hampshire | 23.8% | 2025 | |
| New Jersey | 22.5% | 2021 | Alternate Compliance Credits (ACP) and Solar ACPs (SACP) can be purchased by retailers and used as RECs and Solar RECs. Starting on June 1, 2008, SACPs will be set according to the following schedule ($/MWh) decreasing by 3% per year until 2016: June 1, 2008 - May 31, 2009, $711; June 1, 2009 - May 31, 2010, $693; June 1, 2010 - May 31, 2011, $675; June 1, 2011 - May 31, 2012, $658; June 1, 2012 - May 31, 2013, $641; June 1, 2013 - May 31, 2014, $625; June 1, 2014 - May 31, 2015, $609; June 1, 2015 - May 31, 2016, $594. After May 31, 2016, the BPU will review the SACP annually in consultation with an advisory committee. . |
| New Mexico | 20% | 2020 | Rural electric cooperatives: 10% by 2020 |
| Nevada | 25% | 2025 | 5% solar |
| New York | 30% | 2015 | |
| North Carolina | 12.5% | 2021 | |
| Ohio | 12.5% | 2025 | Additional 12.5% from alternative sources |
| Oklahoma | 15% | 2015 | Signed May 27, 2010 |
| Oregon | 25% | 2025 | |
| Pennsylvania | 18% | 2020 | 0.5% solar |
| Rhode Island | 15% | 2020 | |
| South Dakota | 10% | 2015 | Compliance is not mandatory |
| Texas | 5,880 MW | 2015 | |
| Utah | 20% | 2025 | Voluntary |
| Vermont | 10% | 2013 | Voluntary |
| Virginia | 12% | 2022 | Voluntary |
| Washington | 15% | 2020 | |
| West Virginia | 25% | 2025 | WV's standard is an alternative energy standard, which permits fulfillment through nonrenewable sources |
| Wisconsin | 10% | 2015 |
California
The California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
Renewables Portfolio Standard was created in 2002 under Senate Bill 1078 and further accelerated in 2006 under Senate Bill 107. The bills stipulate that California electricity corporations must expand their renewable portfolio by 1% each year until reaching 20% in 2010. On November 17, 2008, Governor Arnold Schwarzenegger signed executive order S-14-08 which mandated a RPS of 33% by 2020 which sits in addition to the 20% by 2010 order.
Colorado
The Colorado Renewable Portfolio Standard was updated from 20% to 30% in the 2010 Legislative Session as House Bill 1001. This increase is anticipated to increase solar industry jobs from current (2009) estimated 2,500 to 33,500 by 2020. The updated RPS is also anticipated to create an additional $4.3B (U.S.) in state revenue within the industries.
Nevada
In 1997 Nevada passed a Renewable Portfolio Standard as part of their 1997 Electric Restructuring Legislation (AB 366) It required any electric providers in the state to acquire actual renewable electric generation or purchase renewable energy credits so that each utility had 1 percent of total consumption in renewables. However, on June 8, 2001, Nevada Governor Kenny Guinn
Kenny Guinn
Kenneth Carroll "Kenny" Guinn was an American businessman, educator and politician. He was the 27th Governor of Nevada from 1999 to 2007. He was a member of the Republican Party and a former member of the Democratic Party....
signed SB 372, at the time the country's most aggressive renewable portfolio standard. The law requires that 15 percent of all electricity generated in Nevada be derived from new renewables by the year 2013.
The Nevada RPS includes double goal. The 2001 revision requires that at least 5 percent of the renewable energy projects must generate electricity from solar energy.
In June 2005, the Nevada legislature passed a bill during a special legislative session that modified the Nevada RPS (Assembly Bill 03). The bill extends the deadline and raised the requirements of the RPS to 20 percent of sales by 2015.
Florida
On Friday January 9, 2009 the Florida Public Service Commission unanimously agreed to require the state's utilities to generate 20 percent of their power from renewable resources by 2020.
This is still not law until the legislature approves.
This will drastically change the landscape for renewable energy applications for a state that gets less than 3 percent of its power from renewable energy. The proposal calls for 7 percent renewable energy by January 2013, 12 percent by 2016, 18 percent by 2019 and 20 percent by end of 2020.
Ohio
In an April 2008 unanimous vote, the Ohio legislature passed a bill requiring 25 percent of Ohio's energy to be generated from alternative and renewable sources, of which half or 12.5 percent must derive from renewable sources.
Pennsylvania
Pennsylvania requires that 18 percent of all energy generated in the state come from alternative and renewable sources by 2021, including 0.5 percent from solar.
Texas
The Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
Renewable Portfolio Standard was originally created by Senate Bill 7 in 1999. The Texas RPS mandated that utility companies jointly create 2000 new MWs of renewables by 2009 based on their market share. In 2005, Senate Bill 20, increased the state’s RPS requirement to 5,880 MW by 2015, of which, 500 MW must come from non-wind resources. The bill set a goal of 10,000 MW of renewable energy capacity for 2025.
External links
- Compare State Renewable Portfolio Standard Programs at RPS EDGE Databases
- What are Renewable Electricity Standards?
- Pew Center Climate Change RPS Map
- States with RPS Regulations
- Solar Energy Industries Association
- American Wind Energy Association
- Edison Electric Institute
- Renewables Portfolio Standard
- California's Renewable Energy Law Lives!
- The New York Renewable Portfolio Standard