State Renewable Portfolio Standards Research Articles

Implications of environmental regulation and coal plant retirements in systems with large scale penetration of wind power

Over the last decade there have been a growing number of federal and state regulations aimed at controlling air emissions at power plants and/or increasing the penetration of renewable resources in the grid. Environmental Protection Agency regulations will likely lead to the retrofit, retirement, or replacement of coal-fired power plants while the state Renewable Portfolio Standards will continue to drive large-scale deployment of renewable energy sources, primarily wind. Combined, these changes in the generation fleet could have profound implications for the operations of the power system. In this paper, we aim to better understand the interaction between coal plant retirements and increased levels of wind power. We extensively analyze the operations of the PJM electricity system under a broad set of scenarios that include varying levels of wind penetration and coal plant retirements. Not surprisingly, we find that without transmission upgrades, retirement of coal-fired power plants will likely result in considerable transmission congestion and higher energy prices. Increased wind penetration, with high geographic diversity, could mitigate some of the negative effects of coal plant retirement and lead to a significant reduction in air emissions, but wind forecast error might impose operational constraints on the system at times of peak load.

The Water-Energy-Environment Nexus in the Great Lakes Region: The Case for Integrated Resource Planning

<p>Water is a critical element of electric power production in the U.S., particularly in the Great Lakes Basin region. Thermoelectric power generation accounts for the majority of all water withdrawals in the Basin, in large part due to the comparatively heavy concentrations of coal and nuclear power generation that utilize open-loop cooling. This paper explores how different energy generation portfolios could affect the water resources of the Great Lakes Basin. The suite of power generation scenarios analyzed reflects a range of potential outcomes resulting from the implementation of key national and regional energy and environmental policies for the electric power industry. These policies include U.S. EPA’s pending power plant cooling water intake standards, state renewable energy portfolio standards, possible climate change legislation, and the 2005 Great Lakes regional water resource agreement (Great Lakes and St. Lawrence River Basin Water Resources Compact of 2005; Public Law 110–342). Five scenarios were analyzed, resulting in different levels and intensities of total water use (withdrawal and consumption) in hydrologically-sensitive watersheds. These results confirm the close relationship between water and energy in the Great Lakes, and point to the need to take into account water resource impacts in designing future energy and environmental policies.</p>

Welfare Spillovers from Renewable Portfolio Standards

Renewable portfolio standards (RPSs) are state-level policies that require in-state electricity providers to procure a minimum percentage of electricity sales from renewable sources. Using theoretical and empirical models, we show that RPSs induce out-of-state emissions reductions because states allow for inter-state trade of the credits used for RPS compliance. When one state passes an RPS, it increases demand for credits sold by firms in other (potentially non-RPS) states. We find that increasing one state's RPS decreases coal generation and increases wind generation in outside states. The annual aggregate value of avoided coal pollution ranges between $400 million and $2 billion.

Spillover Effects of Sector-Specific Renewable Energy Policies: Implications for GHG Emissions

Jointly implemented Renewable Fuel Standard (RFS) with the state Renewable Portfolio Standards (RPSs) can interact in complex ways that affect the mix of renewable energy and its greenhouse gas (GHG) intensity used to meet the RPS and the mix of fossil fuels displaced as both policies compete for bioenergy for electricity generation and biofuel production. We quantify the spillover effects of the RFS on the GHG mitigation potential of the RPSs by developing a spatially explicit, dynamic, integrated model of the agricultural, electricity, and transportation sectors in the US to examine the mix of renewable electricity under the RPS, the extent to which it will be affected by the RFS and its consequences for GHG emissions from these sectors. We find that the implementation of the RFS with the RPSs results in spillover effects in two opposing directions (1) it lowers the share of bio-electricity relative to wind and increases the extent to which renewable electricity displaces natural gas instead of coal, and (2) it decreases the average carbon intensity of bioenergy by increasing the share of energy crops; the net result is 6% lower GHG savings from the two policies combined compared to the sum of the reductions that would have been achieved by each policy independently over the 2007-2030 period. Our analysis shows the importance of market-mediated effects of concurrently implemented renewable energy policies in determining the mechanisms and extent to which they lead to GHG benefits.

Do Mandatory U.S. State Renewable Portfolio Standards Increase Electricity Prices?

AbstractRenewable Portfolio Standards (RPS) are U.S. state mandates that utilities produce some of their electricity using renewable energy sources in an effort to reduce greenhouse gas emissions. While advocates highlight the potential long‐term benefits of RPS, critics argue that RPS will increase electricity prices due to the higher costs of renewable energy generation. However, to date, there are no published empirical studies of the effect of RPS on electricity prices. Using state‐level panel data from 1990 to 2011 and the difference‐in‐differences method, I find that implementation increases electricity prices when the RPS policy first becomes binding.

Achieving 33% renewable electricity generation by 2020 in California

This paper investigates the impacts of California, USA reaching its renewable electricity target of 33%, excluding large hydro, by 2020, which is set out in the state's RPS (Renewable Portfolio Standard). The emerging renewable electricity mix in California and surrounding states which form the WECC (Western Electricity Coordination Council) is analysed using the CEPA (Carbon Emission Pinch Analysis) and EROI (Energy Return on Energy Invested) methodologies. The reduction in emissions with increased renewables is illustrated and the challenge of maintaining high EROI levels for renewable generation is examined for low and high electricity demand growth. Results demonstrate that wind and solar PV collectively form an integral part of California reaching the 33% renewables target by 2020. Government interventions of tax rebates and subsidies, net electricity metering and a four tiered electricity price have accelerated the uptake of electricity generation from wind and solar PV. Residential uptake of solar PV is also reducing overall California electricity grid demand. Emphasis on new renewable generation is stimulating development of affordable wind and solar technology in California which has the added benefit of enhancing social sustainability through improved employment opportunities at a variety of technical levels.

Evaluating Renewable Portfolio Standards for In-State Renewable Deployment: Accounting for Policy Heterogeneity

Renewable portfolio standards (RPS) are the most common state-level policies for promoting renewable electricity in the United States. State RPS policies are heterogeneously designed, particularly with respect to their use of flexibility mechanisms that allow obligations to be met with renewable energy generated in other states. However, the renewable energy that is produced within an RPS-enacting state itself is of high political importance, making in-state renewable energy deployment an important evaluation metric for RPS policies. In this paper, we develop a novel dataset of state-level RPS policies and renewable energy deployment. We show that failing to effectively limit comparisons to similarly designed RPS policies may lead to the misperception that more stringent RPS policies do not necessarily lead to higher renewable deployment. We then show that after controlling for specific policy design features, states with more stringent RPS policies tend to have greater in-state renewable energy deployment. Specifically, we find that a 1 percentage point increase in the stringency of an RPS policy is associated with a 0.28-0.29 percentage point increase in the share of in-state renewable electricity capacity. Articulate modeling of policy variety has been largely lacking from past studies and is essential for accurate econometric analysis of heterogeneous energy policies.

Driving energy: the enactment and ambitiousness of state renewable energy policy

AbstractU.S. states have led the federal government in instituting policies aimed at promoting renewable energy. Nearly all research on renewable portfolio standards (RPSs) has treated RPS adoption as a binary choice. Given the substantial variation in the renewable energy goals established by RPSs, we propose a new measure of RPS ambition that accounts for the amount of additional renewable energy production needed to reach the RPS goal and the number of years allotted to reach the standard. By measuring RPS policy with more precision, our analysis demonstrates that many factors found to affect whether a state will adopt an RPS do not exert a similar effect on the policy’s ambitiousness. Most notably, our analysis demonstrates that Democratic control of the state legislature is the most consequential factor in determining the ambitiousness of state RPS policies.

Are State Renewable Portfolio Standards Contagious?

AbstractThis study examines whether the target levels of a state's renewable portfolio standard (RPS) are influenced by target levels in neighboring states, controlling for state‐specific characteristics. Contrary to previous studies, target levels in neighboring states have a positive and statistically significant impact. In addition, the renewable energy potential and transmission capacity within a state, as well as in neighboring states, all have a positive and statistically significant impact. Both a state's unemployment rate and its educational attainment have a positive impact. Furthermore, states with Democratic governors have higher RPS target levels. The results also indicate significant regional variation in RPS target levels.

Regional Allocation of Biomass to U.S. Energy Demands under a Portfolio of Policy Scenarios

The potential for widespread use of domestically available energy resources, in conjunction with climate change concerns, suggest that biomass may be an essential component of U.S. energy systems in the near future. Cellulosic biomass in particular is anticipated to be used in increasing quantities because of policy efforts, such as federal renewable fuel standards and state renewable portfolio standards. Unfortunately, these independently designed biomass policies do not account for the fact that cellulosic biomass can equally be used for different, competing energy demands. An integrated assessment of multiple feedstocks, energy demands, and system costs is critical for making optimal decisions about a unified biomass energy strategy. This study develops a spatially explicit, best-use framework to optimally allocate cellulosic biomass feedstocks to energy demands in transportation, electricity, and residential heating sectors, while minimizing total system costs and tracking greenhouse gas emissions. Comparing biomass usage across three climate policy scenarios suggests that biomass used for space heating is a low cost emissions reduction option, while biomass for liquid fuel or for electricity becomes attractive only as emissions reduction targets or carbon prices increase. Regardless of the policy approach, study results make a strong case for national and regional coordination in policy design and compliance pathways.

The cost of carbon dioxide abatement from state renewable portfolio standards

Renewable portfolio standards (RPSs) have become a popular tool for state governments to promote renewable electricity generation and to decrease carbon dioxide emissions within a state or region. Renewable portfolio standards are a policy tool likely to persist for many decades due to the long term goals of many state RPSs and the likely creation of a federal RPS alongside any comprehensive climate change bill. Even though RPSs have become a popular policy tool, there is little empirical evidence about their costs. Using the temporal and regional variation in RPS requirements, I estimate the long-run price elasticity of supply of renewable electricity generation to be 2.67 (95% CI of 1.74, 3.60). Using my preferred elasticity estimate, I calculate the marginal cost of abatement from RPSs is at least $11 per ton of CO2 compared to a marginal cost of abatement of $3 per ton in the Regional Greenhouse Gas Initiative.

Utilizing GIS to Examine the Relationship Between State Renewable Portfolio Standards and the Adoption of Renewable Energy Technologies

In the United States, there is no comprehensive energy policy at the federal level. To address issues as diverse as climate change, energy security, and economic development, individual states have increasingly implemented Renewable Portfolio Standards (RPSs), which mandate that utility providers include a specified amount of electricity from renewable energy sources in their total energy portfolios. Some states have included incentives for individual energy technologies in their RPS, such as solar electric (also called photovoltaic or PV technology). Here, we use GIS to visualize adoption of RPSs and electricity generation from renewable energy sources in the US and examine changes in renewable electricity and solar electric generation over time with the goal of informing future policies aimed at promoting the adoption of renewable energy technologies.

A Climate Change Lens on the Dormant Commerce Clause

Our goal here is two-fold: first, to show that a climate change lens can make us understand that some apparently state treatment of like products is in fact differential treatment of different products, and, second, that there is precedential basis for courts to adopting the climate change lens and hence adopt a more deferential posture toward state climate change initiatives. We are focused on two kinds of state initiatives. The first is, as in California’s low carbon fuel standard, when a state assigns a cost of carbon to a fuel based on life cycle greenhouse gas emissions, with the near inevitable result that otherwise identical fuels produced far away and out-of-state will have a higher assigned carbon cost than fuels produced in-state. The second is, as in a number of state Renewable Portfolio Standards, where a state requires or incentivizes the satisfaction of the RPS by renewable fuel production in the state rather than through sole reliance on imports. Viewed outside the climate change lens, both these situations involve discrimination against like products. Viewed through a climate change lens, they do not. The climate change lens – and whether courts choose to see through it – matters a great deal.We view this lens as having three aspects. First, the GHG and hence climate change impact of any product depends on the lifecycle emissions associated with the product. A state’s residents do not confront merely an ideological or philosophical problem in climate change. It is instead a tangible — and for some states existential — problem in terms of the economic and environmental impacts associated with such fundamental health and welfare issues as coastal flooding, drought, wildfires, and invasive species. A court should understand that the lifecycle emissions of a product directly implicates traditional state police power concerns and in that sense should be understood as an integral characteristic of the product. Thus, ethanol from Ohio is not the same product as ethanol from California. California’s use of the Ohio ethanol means more net GHG emissions and a greater likelihood of real, material climate change impacts in California that will have impacts on the material circumstances of the lives of Californians. We believe this part of the climate change lens finds support in, even flows from, the reasoning adopted by the Supreme Court in Massachusetts v. EPA.Second, energy produced in-state is not necessarily the same or a like product as energy produced elsewhere and then imported because the production itself may have consequences for the environment within the state and hence for the health and welfare of state residents. When a state requires or incentivizes the production of a non-polluting renewable source within a state to meet part of state energy needs, a corresponding amount of dirtier, polluting energy production within the state is much more likely to cease as a consequence. Thus, imported wind power is different, is an unlike product, to locally required or incentivized wind power because a characteristic of the latter, but not the former, is that former it delivers a reduction in local air pollutants and consequent reduction in harms associated with local air pollutants.Third, local energy is a different product seen from a climate change lens because it is more robust with respect to climate-change-related interferences with transport and transmission — interferences from such things as extreme weather. This part of the climate change lens one might call a climate change adaptation lens. What would it mean if courts were to adopt the climate change lens? It would not mean that automatically all climate change or other environmentally-oriented state legislation would be upheld where distinctions were made between in-state and out-of-state products. Instead, the lens would free up courts not to impose the near strict scrutiny of facially discriminatory state legislation that has dominated much Dormant Commerce Clause jurisprudence. It would allow the courts to engage in a more contextual, and more deferential but not toothless, review — a balancing test that courts routinely use to decide Dormant Commerce Clause cases where discrimination does not amount to simple economic protectionism.

Including alternative resources in state renewable portfolio standards: Current design and implementation experience

Abstract As of October 2012, 29 states, the District of Columbia, and Puerto Rico have instituted a renewable portfolio standard (RPS). Each state policy is unique, varying in percentage targets, timetables, and eligible resources. Increasingly, new RPS polices have included alternative resources. Alternative resources have included energy efficiency, thermal resources, and, to a lesser extent, non-renewables. This paper examines state experience with implementing renewable portfolio standards that include energy efficiency, thermal resources, and non-renewable energy and explores compliance experience, costs, and how states evaluate, measure, and verify energy efficiency and convert thermal energy. It aims to gain insights from the experience of states for possible federal clean energy policy as well as to share experience and lessons for state RPS implementation.

Empirical Estimates of the Influence of Renewable Energy Portfolio Standards on the Green Economies of States

The contribution of state renewable energy portfolio standards (RPS) to green business and job growth is controversial. This research estimated the contribution of RPS to state green industrial growth empirically by stipulating and econometrically controlling for a range of state economic growth variables and, having done so, adding RPS variables. Our modeling framework assumed that if RPS have any effect on the green economy in a state, the effect occurs after a period of social and economic adjustment processes that began when the RPS were enacted. Our findings indicate that the presence of RPS have no discernible effect one way or the other on green job growth, but the persistence of RPS through time does cause an increase in the number of green businesses.

Revisiting renewable portfolio standard effectiveness: policy design and outcome specification matter

Renewable portfolio standards (RPS) differ widely across US states. Prior research findings on the effectiveness of these policies to stimulate renewable electricity deployment are equally wide ranging. This study investigates patterns of RPS policy design and analyzes the effects on policy outcomes measured at the level of utility compliance. Measuring organizational outcomes of RPS corrects for the first time the challenges of prior research focused on state-level renewable capacity or generation outcomes. The quantitative analysis also takes into account the complexity of RPS design, by making use of a state-by-state database of RPS design characteristics developed for this study. Patterns of RPS design across states are compared, including the compliance schedule, scope, eligibility of resources, quotas and subsidies, renewable energy credit provisions, as well as enforcement and penalties. Together, the map of state RPS design and the new approach to RPS outcome analysis illuminate the diversity of RPS policy practice across the United States. They suggest the need to both account for the variety of design characteristics and accurately specify the policy outcomes in evaluations of these policies.

Designing Renewable Electricity Policies to Reduce Emissions

A variety of renewable electricity policies to promote investment in wind, solar, and other types of renewable generators exist across the United States. The federal renewable energy investment tax credit, the federal renewable energy production tax credit, and state renewable portfolio standards are among the most notable. Whether the benefits of promoting new technology and reducing pollution emissions from the power sector justify these policies’ costs has been the subject of considerable debate. We argue in this paper that the debate is misguided because it does not consider two important interactions between renewable electricity generators and the rest of the power system. First, the value of electricity from a renewable generators depends on the generation and investment it displaces. Second, a large increase in renewable generation can reduce electricity prices, increasing consumption and emissions from fossil generators, and offsetting some of the environmental benefits of the policies. Two policy conclusions follow. First, existing renewable electricity policies can be redesigned to promote investment in the highest-value generators, which can greatly reduce the cost of achieving a given emissions reduction. Second, subsidies financed out of general tax revenue reduce emissions less than subsidies financed by charges to electricity consumers.

Have State Renewable Portfolio Standards Really Worked? Synthesizing Past Policy Assessments to Build an Integrated Econometric Analysis of RPS effectiveness in the U.S.

Renewable portfolio standards (RPS) are the most popular U.S. state-level policy tools for promoting deployment of electricity from renewable energy (RES-E). While several econometric studies have estimated the effect of RPS policies on RES-E deployment, results are sometimes contradictory. Thus, there is a need to not only reconcile these studies but also establish a definitive answer to the question whether RPS policies have been effective in increasing RES-E deployment. We use a panel – 50 states over 1990-2010 – of renewable deployment, policy design elements and market dynamics to capture the heterogeneity in state RPS design and state characteristics. We run time series cross sectional regressions with fixed effects, and verify the causal effect implied by our results with a nonparametric matching analysis. We trace discrepancies among past findings to differences in data classification and model specification. We show that the key feature of RPS policies – RPS stringency – has no effect, and in some cases a negative effect, on RES-E deployment. We also investigate the impact of individual RPS features. We show that renewable energy certificate (REC) unbundling as well as the presence of RPS in neighboring states is correlated with greater RES-E deployment locally, while other features – such as allowing greater flexibility to buy renewable energy from out-of-state – slows in-state RES-E deployment. We show that mandatory green power options have a positive effect on RES-E deployment while net metering schemes appear to have a negative impact. However, we were unable to detect any impact of an interaction effect between RPS and these policies. Finally, we investigate the impact of policies on the deployment of individual renewable technologies (biomass, geothermal, solar, and wind) and demonstrate differentiated policy impacts, such as biomass driving the result on RPS stringency.

Feasibility of U.S. renewable portfolio standards under cost caps and case study for Illinois

Recently enacted state renewable portfolio standards (RPSs) collectively require that U.S. electricity generation by non-hydro renewables more than double by 2025. These goals are not certain to be met, however, because many RPSs apply cost caps that alter requirements if costs exceed targets. We analyze here the 2008 Illinois RPS, which is fairly typical, and find that at current electricity prices, complete implementation will require significant decreases in renewables costs even given the continuation of federal renewables subsidies. Full implementation is possible but not assured. The statutory design raises additional concerns about unintended potential consequences. The fact that windpower and solar carveouts fall under a single cost cap means that in failure mode, a less cost-effective technology can curtail deployment of a more cost-effective one. Adjacent-state provisions mean the bulk of the RPS can be met by existing wind facilities, and that new wind builds will likely occur in Iowa. The Illinois RPS, like that of many other states, appears to combine objectives inherently in conflict: preferences for local jobs, for specific technologies, for environmental benefits, and for low costs. Revisiting the legislation may be needed to make legislative success likely and to ensure that failure modes do not compromise goals.

The impact of state financial incentives on market deployment of solar technology

Many states have adopted financial incentives to encourage market deployment of solar energy technology. This paper employs a cross-sectional time-series approach to evaluate the extent to which state solar financial incentives systematically encouraged market deployment of solar photovoltaic (PV) technology from 1997 to 2009. The results demonstrate that states offering cash incentives such as rebates and grants experienced more extensive and rapid deployment of grid-tied PV technology than states without cash incentives over the study period. The analysis also finds that the presence of state renewable energy portfolio standards and specific solar carve-out provisions within them heavily influenced the market deployment of grid-tied solar PV technology through 2009.