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©2016 E&E Publishing, LLC
Republished with permission
By Rod Kuckro
States with renewable portfolio standards have been highly successful at meeting their targets, with a handful of states setting higher targets within the past year while at the same time average compliance costs added an average of 1.3 percent to customer bills.
Those are among the findings of an annual report from Lawrence Berkeley National Laboratory that looks at the mandatory renewables policies in 29 states and the District of Columbia.
“RPS policies are just one part of the larger renewable electricity pie,” said Galen Barbose, the research scientist who authored the report, which is presented as a graphics-rich slide deck.
“Which is to say there is a lot of renewable energy development happening outside of these programs. But that’s not to say these programs haven’t been impactful and a critical driver for some of that growth,” he said in an interview.
Mandatory RPS policies require utilities or other electricity providers to generate a minimum portion of their supply from eligible forms of renewable electricity or renewable electricity certificates.
They have been around since 1983, when Iowa adopted the first one. But their prevalence took hold in the early 2000s, and many states have revised their standards since to make them more aggressive. A small number of states have voluntary goals for renewable energy deployment, and they are not tracked by this report.
The latest LBNL report found that more than half of all growth in renewable electricity generation (60 percent) since 2000 is associated with state RPS requirements, with wind energy being the primary form of new generation capacity (64 percent), except in 2015, when solar was the largest source at 69 percent.
But renewable energy is also expanding in states without an RPS, Barbose said, with 13 states installing capacity to serve the demands of other states in the region to meet their renewables goals.
“A lot of complex factors go into determining which states have and don’t have an RPS,” Barbose said, and that was especially true 10 to 15 years ago when the “economics of renewables were a little bit different and there was a greater need to provide some sort of impetus.”
Today, in states with and without a renewable standard, the addition of large amounts of wind and solar power is being used by “utilities procuring renewable energy on a straight economics basis or to hedge their exposure to fossil fuel price risk or environmental regulatory risk,” he said.
On top of that, large commercial and industrial customers are demanding renewables to satisfy corporate environmental goals and to lock in inexpensive long-term power contracts where variable fuel cost will not be an issue, Barbose said.
As a result, five states – Michigan, Montana, New York, Texas and Wisconsin – reached their RPS target in 2015, and most others are on track to meet their goals in 2020 or 2025, the report said.