Renewable Portfolio Standards requires electric utilities and other retail electric providers to supply a particular minimum quantity of customer load with electricity from eligible renewable energy sources. This amount usually starts as a small percentage of the total electricity load that grows gradually over time.
RPS-type mechanisms have been adopted in Britain, Italy and Belgium. Through August 2008, RPS requirements or goals have been created in 33 states along with the District of Columbia. Most RPSs have been set up within the past five years, with 10 states enacting RPS policies in 2004 and 2005 alone. Regulations vary from state to state, and there is no federal policy. Four of the 33 states have voluntary rather than mandatory goals.
Together these 33 states account for more than 42% of the electricity sales in the United States. Enormous diversity prevails among these states with regard to the minimum needs of renewable energy, implementation timing, and eligible technologies and resources.
Thirteen of these states involve CHP or waste heat recovery as a qualifying resource, and Arizona distinctly includes renewable fueled CHP systems. Over 2,300 MW of new renewable energy potential through 2003 was determinable to RPS programs. From February 2009 onwards, the Union of Concerned Scientists projects that state standards will give support for 76,750 MW of new renewable power by 2025 - an increase of 570% over total 1997 U.S. levels (excluding hydro).
Of all the state-based Renewable Portfolio Standards programs in place today, no two
are the same. Each has been designed taking into account state-specific policy objectives (including economic growth, diversity of energy supply, environmental concerns), and local resource endowment 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 20% by 2020).
Looking at these two values alone can be misleading. Other factors in program design
include resource eligibility, in-state requirements, new build requirements, technology
favoritism, 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.
This report examines the Renewable Portfolio Standards in place in the United States at this time and explores the importance of RPS in promoting the use of renewable energy worldwide.
View Table of ContentsPages: 88
Publication Date: June 2009
Publisher: Energy Business Reports
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