State Renewable Portfolio Standards Research Articles

The spillover effect of mandatory renewable portfolio standards

Renewable Portfolio Standards (RPSs) are one of the most prevalent and impactful clean energy policies implemented by states in the United States. This paper investigates the regional spillover effect of RPS policies using a directed dyad panel dataset of renewable electricity generation in US states from 1991 to 2021. Regional spillover effect is measured in two ways: by considering the influence of an RPS enacted in neighboring states and in states in the same regional transmission organization or independent system operator region. We use dyadic fixed effects estimation and conclude that the neighboring state’s RPS stringency score is a strong determinant of a state’s total renewable electricity generation. For states without an RPS, the positive influence of an RPS in a neighboring state is larger when the non-RPS state has more abundant renewable energy resources than the neighboring RPS state. Our findings suggest that past RPS policy evaluation research using a confined within-state focus may have underestimated the holistic impact of an RPS, as the impacts of an RPS policy can extend beyond the enacting state’s borders. Overall, this study contributes to an improved understanding of the holistic impact of state RPS policies.

Estimating the impacts of natural gas power generation growth on solar electricity development: PJM's evolving resource mix and ramping capability

AbstractExpansion of distributed solar photovoltaic (PV) and natural gas‐fired generation capacity in the United States has put a renewed spotlight on methods and tools for power system planning and grid modernization. This article investigates the impact of increasing natural gas‐fired electricity generation assets on installed distributed solar PV systems in the Pennsylvania–New Jersey–Maryland (PJM) Interconnection in the United States over the period 2008–2018. We developed an empirical dynamic panel data model using the system‐generalized method of moments (system‐GMM) estimation approach. The model accounts for the impact of past and current technical, market and policy changes over time, forecasting errors, and business cycles by controlling for PJM jurisdictions‐level effects and year fixed effects. Using an instrumental variable to control for endogeneity, we concluded that natural gas does not crowd out renewables like solar PV in the PJM capacity market; however, we also found considerable heterogeneity. Such heterogeneity was displayed in the relationship between solar PV systems and electricity prices. More interestingly, we found no evidence suggesting any relationship between distributed solar PV development and nuclear, coal, hydro, or electricity consumption. In addition, considering policy effects of state renewable portfolio standards, net energy metering, differences in the PJM market structure, and other demand and cost‐related factors proved important in assessing their impacts on solar PV generation capacity, including energy storage as a non‐wire alternative policy technique.This article is categorized under: Photovoltaics > Economics and Policy Fossil Fuels > Climate and Environment Energy Systems Economics > Economics and Policy

The interplay between renewable portfolio standards and voluntary green power markets in the United States

Utility voluntary green power programs that allow energy consumers to pay a premium for electricity generated from renewable energy sources have gained great momentum worldwide in recent years. While there is growing literature examining customer behaviors related to green power purchases, limited work has been done to systematically evaluate the efficacy of voluntary green power programs implemented in conjunction with government-led renewable energy policies. In this research, we construct an innovative panel dataset for 49 U.S. states and Washington, D.C. from 2001 to 2013, with the goal to understand factors influencing total sales and customers of voluntary green power programs. Hybrid random effects regression models are estimated to investigate the impact of state renewable portfolio standards (RPSs) on the performance of voluntary green power markets. We find that for a given state, an increase in RPS policy stringency by one unit would lead to a reduction of green power program customer enrollment by 12.37%, and a reduction in green power program sales by 12.98%. Our results suggest that the competing effect is dominant between the voluntary green power market and the renewable energy regulatory regime: state RPSs tend to crowd out cheap renewable-sourced electricity that is available for sale through utility green power programs.

Hierarchies, markets, and collaborative networks in energy governance: Multilevel drivers of renewable energy deployment

State renewable portfolio standard (RPS) mandates, competitive wholesale electricity markets, and cooperative regional transmission planning have all been identified as potential drivers of RE production. However, these factors are typically studied in isolation, and studies come to mixed conclusions about their actual effects on RE deployment. In this article, we a) use a novel “networks of action situations” (NAS) approach to examine the way that state RPS mandates, competitive markets, and regional transmission planning interact to jointly affect RE production; and b) ask whether these patterns differ across traditionally regulated and “deregulated” jurisdictions. We analyze and compare interactions between mandates, markets, and regional planning processes across two state-region dyads, both of which have achieved high levels of RE deployment but represent different institutional contexts. We find that RPS mandates are key drivers of RE deployment, but that these effects are realized through regional markets and planning processes. RPS mandates are similarly embedded in markets and networks in both cases with similar effects on RE production, but Minnesota's more traditional approach gives regulators greater authority over the type and location of RE production compared to Connecticut's more market-driven approach. Our analysis suggests that policy analysts should pay closer attention to the institutional environments in which policy instruments are embedded, and we offer several testable propositions about how mandate, market, and network interactions likely shape RE production.

Rethinking Low Impact Hydropower and Renewable Energy Certificates

Wind and solar projects along with their related renewable energy certificates (RECs) are on the minds of energy generators, consumers and policy makers. This begs the question as to why hydropower and specifically low impact hydropower are not eligible to receive the same attention. A closer look at the issue reveals both the states and consumers have much to say about the technologies that qualify for RECs. In fact, low impact hydropower projects may qualify for RECs under some individual State Renewable Portfolio Standards (RPS) or the US Environmental Protection Agency's (EPA) Green Power Partnership but not all.

Renewable Portfolio Standards: Do Voluntary Goals vs. Mandatory Standards Make a Difference?

AbstractThis research investigates whether an obligation to meet a Renewable Portfolio Standard (RPS) target in U.S. states affects the policy effectiveness, which is defined as the RPS‐related renewable electricity capacity additions. A voluntary RPS target can serve as a political device for signaling commitment to certain goals, though there is no penalty if the goal is not met. Alternatively, mandatory RPS targets have varying stringency and uneven enforcement. Our results indicate that the compulsoriness of a state RPS is an insignificant determinant of RPS‐related renewable electricity capacity additions. Factors other than whether an RPS target or goal is compulsory are more important in influencing renewable electricity development, including policy stringency. If a state seeks a modest level of renewable electricity development, setting a voluntary goal can sometimes be effective and more efficient. Nonetheless, a mandatory RPS may be required to accomplish a more significant level of renewable electricity deployment.

Repeal of the Clean Power Plan: Social Cost and Distributional Implications

The Clean Power Plan (CPP) was repealed due to concerns about the “unnecessary, costly burdens” it may impose on electric utilities, thereby delaying efforts to reduce carbon dioxide emissions (CO2) from the electricity sector. This paper examines the greenhouse gas and welfare implications of this repeal while incorporating the presence of the state renewable portfolio standards (RPS) in the US as the status quo. We assess the carbon abatement and welfare costs with the CPP relative to two alternative baselines: a no‐policy baseline and a pre‐existing policy baseline with the RPS. The CPP is implemented as a regional mass‐based standard, a regional rate‐based standard, or as a national mass‐based standard with trading of emissions across regions over the 2022–2030 period. We find that the incremental discounted welfare costs per metric ton of CO2 that would have been abated by the CPP relative to the RPS would be substantially lower than the global social cost of CO2. However, the overall costs of carbon abatement with the CPP added to the RPS would have become higher than the social cost of carbon when estimated relative to a no‐policy baseline, except with a national mass‐based CPP. Across all policy combinations and choice of baselines, the aggregate welfare costs were lowest under a national mass‐based standard and highest under the regional rate‐based standard. We also find that the CPP would have imposed large welfare costs on consumers and fossil fuel producers while benefiting the renewable fuel producers.

Renewable energy requirements on the ballot: An analysis of county-level voting results

National polling data consistently find a large, bipartisan group of Americans support state renewable portfolio standards (RPS), policies which mandate generation of electricity from renewable sources. However, when such policies are actually put before voters on the ballot, they have been met with mixed success: out of seven RPS ballot initiatives, only four have been approved. From a newly compiled dataset of county-level voting results, we use ordinary least-squares regression to investigate the determinants of public support for RPS ballot proposals. Two models are constructed based on literature related to legislative adoption of RPS and, separately, public support of pro-renewable policies. Consistent with previous studies, political, economic, and demographic variables are found to be significant in predicting voter behavior. State-level fixed effects, however, are the largest contributors to both models. A synthesis model, combining elements from both the legislative adoption and public acceptance literatures, performs best when fixed effects are removed. As climate advocates increasingly call for policies to more quickly transition the electricity sector to renewable energy sources, this research provides greater insight into the prospects of successfully achieving that aim through a ballot initiative. It also, however, reveals insights applicable to legislature-driven RPS policies.

Act locally, transition globally: Grassroots resilience, local politics, and five municipalities in the United States with 100% renewable electricity

This paper examines five communities in the United States (U.S.) that have transitioned to 100% use of renewable resources for electricity. The paper describes and compares social, political, and economic similarities and differences among these communities to improve understanding of the factors that support successful renewable energy (RE) transitions. The analysis builds on Geels’ multi-level perspective theory in assessing sustainable energy transitions and the energy transition process based on these five case studies. Main variables of interest considered for 100% renewable energy transition in these municipalities are renewable energy resource availability (solar, wind, and hydro), utility ownership, partisanship of municipal leadership, population size, and supporting energy legislation at state level renewable portfolio standard (RPS). Findings from this paper show that utility ownership appears to play a critical role in the transition process, as most of the municipalities have municipally owned utilities. State RPS programs are also prominent among all the states in which these the municipalities are located, indicating the importance of state legislation. Further, RE resource availability may not be required, as possibilities for hybridization of energy technologies are evident in the studied places. The most common pathway typology in these 100% RE transitions is reconfiguration. This typology results from technological innovations fuelled by development in RE technologies and stakeholder advocacy. Identified drivers from this research provide helpful parameters of consideration for energy transitions in other places in the U.S. and beyond.

The Dormant Commerce Clause and State Clean Energy Legislation

This Note analyzes recent litigation concerning the constitutionality of state renewable portfolio standards (RPSs) and similar environmental legislation designed to promote clean energy. It begins with a discussion of the current state of both federal and state responses to climate change. From there, it analyzes several legal challenges to state RPSs and other climate-related laws that focus on potential violations of the dormant Commerce Clause. It concludes with a brief exploration of how these cases fit the history and purpose of the dormant Commerce Clause. The Note argues that a narrow view of the doctrine is consistent with the purpose of the dormant Commerce Clause, will reaffirm principles of federalism, will enable state innovation in the renewable energy field, and will make a positive contribution to efforts to mitigate climate change. By structuring statutes so as to draw a court’s attention to the ways in which their legislation fits within the purpose of the dormant Commerce Clause, states can give themselves more space to take aggressive action to promote clean energy and reduce the impacts of climate change.

Punctuating the equilibrium: A lens to understand energy and environmental policy changes

Punctuating the equilibrium: A lens to understand energy and environmental policy changes

Empirical evaluation of the stringency and design of renewable portfolio standards

In two decades of experience with state renewable portfolio standards (RPSs), the United States has observed immense growth in renewable energy markets, initially in wind energy and more recently in solar power. During this time, RPSs have experienced considerable policy reinvention and increased diversity. Here, we explain how changes in RPS policy design features relate to different market outcomes. We develop a score for measuring RPS stringency and show that a one-point increase in RPS stringency leads to increases of 0.2%, 1% and 0.3% in renewable energy, solar generation and renewable energy capacity, respectively. Other important design features include resource eligibility, planning processes, cost recovery and geographical restrictions. These findings are then reaffirmed through 42 semi-structured phone interviews with experts in the field of RPS implementation from government agencies, including public utility commissions and state energy offices, electric utilities and various renewable energy firms and associations. Renewable policy standards have been instrumental in the growth of renewable energy in US states. Through a ranking of policy stringency and interviews with industry stakeholders, researchers show the significance of stringency and other policy design features towards a standard’s effectiveness.

Information Exchange and Policy Adoption Decisions in the Context of U.S. State Energy Policy

AbstractA persistent question in the literature on policy adoption and diffusion focuses on the ways in which jurisdictions gather policy information. Decades of research have offered numerous conclusions regarding knowledge transfer mechanisms assumed to drive diffusion. While important, we suggest that the characteristics of existing work may have limited what we know about the exchange of policy information among peers. Most studies infer learning indirectly, and as a result, the literature has tended to focus on exchange between geographic and ideological peers, to the exclusion of other channels. As an alternative, this study takes a more direct approach and draws on a survey of 112 U.S. expert informants in the area of energy policy. We use the information exchange channels revealed by these informants to predict the diffusion of state renewable portfolio standards and electricity deregulation among the American states to determine whether they offer explanatory leverage beyond the “traditional” channels.

The spatial distribution of welfare costs of Renewable Portfolio Standards in the United States electricity sector

In the US, renewable energy policy has largely followed a regional approach; 29 states are currently implementing Renewable Portfolio Standards (RPSs) at varying levels of stringency, while the other states have no renewable energy policy. Requiring individual states to achieve given targets is likely to be less efficient and lead to different levels of greenhouse gas (GHG) abatement than a national RPS that achieves the same national share of renewable electricity generation since the latter allows more flexibility in the regional shares based on their relative costs of renewable electricity generation. RPSs are also likely to be less efficient than a national GHG cap and trade (GHG Cap) policy which allow flexibility in achieving GHG abatement through a variety of approaches. We examine the welfare costs and GHG abatement achieved by the existing state RPSs relative to a hypothetical national RPS and a national GHG Cap policy. We undertake this analysis using a dynamic, multi-region, partial-equilibrium, price-endogenous model of the US electricity, agricultural, and transportation sectors, called the Biofuel and Environmental Policy Analysis Model (BEPAM-E). Our results show that a hypothetical national RPS and can induce an equivalent share of renewable-based electricity generation as the state RPSs but at a $61 billion lower welfare cost over the 2007–2030 period. The national RPS would also achieve greater GHG reductions than the state-level RPSs, as it induces a larger decrease in coal generation. We find that the national RPS and national GHG Cap are 55 and 74% more cost-effective in reducing GHG emissions than the state RPSs.

Politics in the U.S. energy transition: Case studies of solar, wind, biofuels and electric vehicles policy

We examine the politics of US state and federal policy supporting wind and solar in the electricity sector and biofuels and electric vehicles in the transportation sector. For each technology, we provide two policy case studies: the federal Production Tax Credit (PTC) and state Renewable Portfolio Standards (RPS) for wind; state Net Energy Metering (NEM) and the federal investment tax credit (ITC) for solar; federal excise tax incentives and the Renewable Fuel Standard (RFS) for biofuels; and California's Zero Emission Vehicle (ZEV) mandate and federal tax incentives for electric vehicles. Each case study traces the enactment and later revision of the policy, typically over a period of twenty-five years. We use these eight longitudinal case studies to identify common patterns in the politics of US renewable energy policy. Although electricity and transportation involve different actors and technologies, we find similar patterns across these sectors: immature technology is underestimated or misunderstood; large energy bills provide windows of opportunity for enactment; once enacted, policies are extended incrementally; there is increasing politicization as mature technology threatens incumbents.

Land reuse in support of renewable energy development

Renewable Portfolio Standards are U.S. state-level policies that encourage renewable energy development to meet a proportion of electricity demand. These policies, along with state and federal incentives and private sector demand, have motivated interest in renewable energy capacity, which is a function of available land. As global climate change has been driven by the combination of fossil fuel combustion and land cover change, renewable energy development is best achieved through sustainable land use practices. One option is to site renewable energy installations on land that has been contaminated or degraded. This analysis looks at the degree to which renewable energy demand created by state renewable portfolio standards in the United States could be met by contaminated or formerly contaminated sites. Results suggest that land resources are more than sufficient to meet current and possibly future RPS-generated demand in three out of four regions.

Demand for biomass to meet renewable energy targets in the United States: implications for land use

AbstractRenewable energy policies in the electricity and transportation sectors in the United States are expected to create demand for biomass and food crops (corn) that could divert land from food crop production. We develop a dynamic, open‐economy, price‐endogenous multi‐market model of the US agricultural, electricity and transportation sectors to endogenously determine the quantity and mix of bioenergy likely to be required to meet the state Renewable Portfolio Standards (RPSs) and the federal Renewable Fuel Standard (RFS) if implemented independently or jointly (RFS & RPS) over the 2007–2030 period and their implications for the extent and spatial pattern of diversion of land from other uses for biomass feedstock production. We find that the demand for biomass ranges from 100 million metric tons (MMT) under the RPS alone to 310 MMT under the RFS & RPS; 70% of the biomass in the latter case can be met by crop and forest residues, while the rest can be met by devoting 3% of cropland to energy crop production with 80% of this being marginal land. Our findings show significant potential to meet current renewable energy goals by expanding high‐yielding energy crop production on marginal land and using residues without conflicting with food crop production.

A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards

As states consider revising or developing renewable portfolio standards (RPS), they are evaluating policy costs, benefits, and other impacts. We present the first U. S. national-level assessment of state RPS program benefits and impacts, focusing on new renewable electricity resources used to meet RPS compliance obligations in 2013. In our central-case scenario, reductions in life-cycle greenhouse gas emissions from displaced fossil fuel-generated electricity resulted in $2.2 billion of global benefits. Health and environmental benefits from reductions in criteria air pollutants (sulfur dioxide, nitrogen oxides, and particulate matter 2.5) were even greater, estimated at $5.2 billion in the central case. Further benefits accrued in the form of reductions in water withdrawals and consumption for power generation. Finally, although best considered resource transfers rather than net societal benefits, new renewable electricity generation used for RPS compliance in 2013 also supported nearly 200,000 U. S.-based gross jobs and reduced wholesale electricity prices and natural gas prices, saving consumers a combined $1.3–$4.9 billion. In total, the estimated benefits and impacts well-exceed previous estimates of RPS compliance costs.

The Disparate Influence of State Renewable Portfolio Standards on Renewable Electricity Generation Capacity

Several papers have used panel data analyses to examine the effectiveness of U.S. state-level renewable portfolio standards (RPS) in promoting renewable capacity development, but the findings are inconclusive. Estimation of average treatment effects, however, can mask the fact that RPS policies across states are disparate and the treatment states are heterogeneous. We use the synthetic control method to conduct individual case studies of the early adopter states. Our findings indicate that the impact of RPS policies varied across states. We find Texas to be unique among these early adopters in that the RPS policy in Texas has led to increased renewable capacity. (JEL Q42, Q48)

Standing in the Shade of the Dormant Commerce Clause – Constitutionality of State Renewable Portfolio Standards after Epel

Standing in the Shade of the Dormant Commerce Clause – Constitutionality of State Renewable Portfolio Standards after Epel