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.
Renewable portfolio standards (RPS) are one of the most common state policies meant to encourage clean energy use. They require that utilities purchase electricity from certain qualifying electricity generators, usually with no reference to the cost of that electricity. AlthoughRPS are meant to clean up electricity generation through using clean energy sources instead of fossil fuels, they may not do so effectively. Further, some energy companies may lobby state legislators to include their energy sources regardless of their actual environmental benefit. The actual relationship between enacting an RPS and a state's emissions from energy production is unclear. I explore RPS associations with carbon emissions. I collect data from 1960 to 2017 on factors related to environmental quality, energy production, and state economic factors. The data availability varies, however, so the most expansive variables are from 1960 to 2017 while many others fall into a shorter timeframe.The dataset relies heavily on the State Energy Data System (SEDS) that the Department of Energy's Energy Information Administration (EIA) maintains, but also draws from a variety of other academic sources. Other variables, such as the dates of electricity market restructuring, I collect myself from primary sources.After accounting for existing linear trends in the data there appears to be no statistically significant relationship with RPS and carbon emissions.
Across the world, there is a growing commitment to power from renewable sources. The benefits are obvious and well known: reduce reliance on fossil fuel consumption and thereby achieve both lower greenhouse gas emissions and greater local control over the power industry. The main challenge, however, is that private costs of green power production remain higher than for power from conventional resources. There are numerous policy approaches that can be used to overcome this competitive disadvantage, one of which is to legislate that power from renewable sources is to constitute a minimum percent of all power sold to end users, i.e., a Renewable Portfolio Standard (RPS). Such standards have previously been reviewed in general terms by Rader and Norgaard (1996), who motivate the RPS on efficiency grounds given market imperfections. Rader (1998) points out that it is unlikely that restructured electricity markets will enhance the market position of renewable sources of electricity. Accordingly, many states and countries that have gone through restructuring to enhance competition have adopted an RPS. Berry and Jaccard (200 I) review implementation issues in several countries and US stales that have taken this route.
China officially implemented the renewable portfolio standard (RPS) on 1 January 2019, and it remains uncertain as to whether this can effectively solve the problem of renewable energy consumption in China and ease the pressure of government subsidies. In order to study the impact of this policy on China&rsquo ; s renewable energy power generation and explore RPS policy that is more suitable for the characteristics of China&rsquo ; s renewable energy, we first develop a revenue function model based on the just released RPS policy to explore the effectiveness of the policy, the feasibility conditions for successful implementation, and the problems that may be encountered during the implementation process. Then, we propose policy recommendations based on the possible problems of the current policy and design an &ldquo ; incremental electricity price&rdquo ; supplementary policy to improve the possibility of successful implementation of the RPS policy. Finally, an evolutionary game model is established to simulate and verify the possibility of successful implementation of the supplementary policy. The main research results are: (1) the essence of the current RPS policy is the comprehensive implementation policy of the RPS and feed-in-tariff (FiT) ; (2) because of the characteristics of China&rsquo ; s energy structure, the implementation of this policy reform is more resistant ; (3) the quantitative research on the revenue function model shows that the current transaction price of the green certificate market is very low, which is not conducive to alleviating the state&rsquo ; s subsidy pressure on renewable energy power generation ; and (4) analysis of empirical data shows that the successful implementation of the &ldquo ; incremental electricity price&rdquo ; policy relies on the initial strategies of grid companies and users.
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.
To further promote the low-carbon and sustainable development of China&rsquo ; s power industry, the Chinese government is vigorously introducing competition into power sales market. Simultaneously, On November 15, 2018, the National Development and Reform Commission issued the &ldquo ; Notice on Implementing the Renewable Portfolio Standards (Draft)&rdquo ; to propose the implementation of power sales side Renewable Portfolio Standards (RPS), which cannot be realized without an effective government regulation mechanism. However, information asymmetry and the limited rationality of the regulatory agencies and private power sales companies in the regulation process make the regulatory effect uncertain to the detriment of a sustainable regulation of the power industry. Thus, it is necessary to optimize the regulation mechanism of the RPS policy in China. We considered the competitive relationship between integrated power sales companies and independent power sales companies, and established an evolutionary game model based on a limited rationality. We also analyzed the implementation effects of the static reward penalty mechanism and dynamic reward penalty mechanism, respectively. The system dynamics (SD) simulation results showed that under the static reward penalty mechanism, there is no evolutionary stable equilibrium solution, and there will be volatility that exists in the evolution process. However, the dynamic reward penalty mechanism can effectively solve these problems. What is more, our results implied that governments should formulate appropriate RPS quotas, improve the green certificate trading mechanism, and take into account the market size of power sales while implementing RPS policy.
Berkeley Lab's annual status report on U.S. renewables portfolio standards (RPS) provides an overview of key trends associated with U.S. state RPS policies. The report, published in slide-deck form, describes recent legislative revisions, key policy design features, compliance with interim targets, past and projected impacts on renewables development, and compliance costs. The 2018 edition of the report presents historical data through year-end 2017 and projections through 2030. Key trends from this edition of the report include the following: • Evolution of state RPS programs: Significant RPS-related policy revisions in 2018 include increased RPS targets in CA, CT, MA, and NJ; a phase-out of NJ's solar carve-out; a clean peak standard in MA; and new or increased offshore wind carve-outs in NJ and NY. • Historical impacts on renewables development: Roughly half of all growth in U.S. renewable electricity (RE) generation and capacity since 2000 is associated with state RPS requirements. Nationally, the role of RPS policies has diminished over time, representing 34% of all U.S. RE capacity additions in 2017. However, within particular regions—namely, the Northeast, Mid-Atlantic, and West—RPS policies continue to play a central role in supporting RE growth. • Future RPS demand and incremental needs: Meeting RPS demand growth will require roughly a 50% increase in U.S. RE generation by 2030, equating to 56 GW of new RE capacity. To meet future RPS demand, total U.S. RE generation will need to reach 15% of electricity sales by 2030 (compared to 11% today), though other drivers will also continue to influence RE growth. • RPS target achievement to-date: States have generally met their interim RPS targets in recent years, with only a few exceptions reflecting unique, state-specific policy designs. • REC pricing trends: Prices for NEPOOL Class I RECs continued to fall in 2018, as surplus RPS supplies grew, while PJM Tier I REC prices began to rebound. Price trends for solar RECs vary by state, though no major shifts occurred in 2018. • RPS compliance costs and cost caps: RPS compliance costs totaled $4.1 billion in 2017, which equates to 2.0% of average retail electricity bills in RPS states. Though total U.S. RPS compliance costs rose from 2016, recent trends show that falling RE costs and REC prices have helped to offset the upward pressure on compliance costs from rising RPS targets.
The Feed-in Tariff (FIT) has been successfully used to promote the development of renewable energy; nevertheless, it may cause financial burden on the governments at the same time. Compared with FIT, Renewable Portfolio Standards (RPS) and the Renewable Energy Certificate (REC) trading have been considered to reduce the government's expenditure caused by the subsidization. To examine the effectiveness of RPS and REC trading, the development of renewable energy and the environmental and economic benefits under different policies have been quantitatively investigated by using a multi-region power market model and China has been chosen as a case study. The obtained results show that: (i) REC trading can efficiently reduce the government's expenditure on subsidies for the development of renewable energy; (ii) Compared to FIT, RPS and REC trading will reduce the power sectors' profit; and (iii) RPS and REC trading may not be enough to achieve the target on renewable energy especially when the capital cost is high, therefore, RPS, REC trade and FIT subsidy should be implemented as complementary policies, not independent.
AbstractThis research examines the impact of increasing the stringency of renewable portfolio standards (RPS) on the consumption of energy produced from renewable sources. Putting prior findings in the context of policy learning, first we focus on technological innovation, factor endowments, and economic energy dependence of American states to track how RPS have proliferated and strengthened. Next, we look at the net effect of this RPS evolution on state fossil fuel energy divestment. To evaluate the interplay between: a) the political desire to lower fossil fuel use, b) technological feasibility to do so, and c) the economic trade‐offs and risks, we focus on the industrial sector dependence on energy security and affordability. Our results indicate that energy security is a priority and even in light of increasing RPS stringency, states with relatively weak but mandatory RPS are leaders in aggregate renewable energy consumption. This fact is due to favoring biofuel and hydro generation rather than solar and wind because of lower deployment costs.
The constant effectiveness of a policy instrument was a major lacuna in energy policy for a long time. However, selecting and mixing appropriate policy instruments has become crucial in the era of climate change. The aim of this paper is to investigate the renewable portfolio standard (RPS) system as a sustainable policy instrument for promoting new and renewable energy. To answer the research question, we utilized the latent growth model by applying the data on 27 types of new and renewable energy production from 2014, 2015, and 2016. Our empirical analysis concluded that the effectiveness of the RPS as a policy instrument decreased linearly each year, and its effectiveness is expected to decrease in the long term from 2017 to 2023. Profound debates and evidence from other RPS-adopting countries should be additionally conducted to bolster this theme of sustainable energy policy instruments
Using a panel dataset of U.S. electric utilities, we investigate the effect of a Renewable Portfolio Standards (RPS) on the rates of electric utilities affected by the mandate. Our findings are twofold. First, we find that, on average, electric utilities affected by an RPS mandate charged a higher electricity rate. This would suggest that an RPS mandate is a costly constraint on the utilities that have to comply with the requirement. The second finding of our analysis is that marginal increases in a utility's RPS requirement do not necessarily translate into higher electricity rates. This would imply that the costs imposed on utilities affected by the RPS mandate tend to be fixed costs rather than variable costs. We also find that controlling for time‐varying unobserved factors at the state level is key to identifying the RPS effect on electricity retail rates. (JEL Q42, Q48, L98)
Berkeley Lab's annual status report on U.S. renewables portfolio standards (RPS) provides an overview of key trends associated with U.S. state RPS policies. The report, published in slide-deck form, describes recent legislative revisions, key policy design features, compliance with interim targets, past and projected impacts on renewables development, and compliance costs. The 2019 edition of the report presents historical data through year-end 2018 and projections through 2030. Key trends from this edition of the report include the following: • Evolution of state RPS programs: States continue to refine and revise their RPS policies. Among other significant changes since the start of 2018, ten states enacted higher RPS targets (CA, CT, DC, MA, MD, NE, NJ, NM, NV, and NY), in most cases setting targets equal to at least 50% of retail sales. One state (OH) reduced its RPS targets. • Historical impacts on renewables development: Roughly half of all growth in U.S. renewable electricity (RE) generation and capacity since 2000 is associated with state RPS requirements, though not all of that is strictly attributable to RPS policies. Nationally, the role of RPS policies has diminished over time, representing just under 30% of all U.S. RE capacity additions in 2018. However, within particular regions—especially the Northeast and Mid-Atlantic, and to a lesser extent the West—RPS policies continue to serve a central role in motivating RE growth. • Future RPS demand and incremental needs: RPS demand growth will require roughly a 50% increase in U.S. RE generation by 2030, equating to 73 GW of new RE capacity. To meet future RPS obligations, U.S. non-hydro RE generation will need to reach 17% of electricity sales by 2030 (compared to 12% today), though other drivers will also continue to influence RE growth. • RPS target achievement to-date: States have generally met their interim RPS targets in recent years, with only a few exceptions reflecting unique, state-specific policy designs. • REC pricing trends: Prices for NEPOOL Class I RECs fell in 2018, before rebounding in early 2019, while PJM Tier I REC prices have remained relatively flat. Price trends for solar RECs vary by state, with the highest prices in DC, MA, and NJ. • RPS compliance costs and cost caps: RPS compliance costs—which reflect only a sub-set of all impacts—totaled $4.7 billion in 2018, equating to 2.6% of average retail electricity bills in RPS states, compared to $4.0 billion and 1.7% of retail bills in 2017. Cost increases from rising RPS targets have been offset to some degree by falling RE costs and REC prices.
AbstractWe contribute to extant policy theory by focusing on interrelationships between existing policies and innovation. In particular, we call attention to the link between supply‐side incentives and demand‐side innovation, which has not been systematically investigated. Our research expectation is that supply‐side policies generally will complement demand‐side policy, leading to a positive impact on the adoption of demand‐side innovations. We test this idea by examining adoptions of renewable portfolio standards (RPS), a demand‐pull approach targeted to renewable energy generation by utilities, in the American states from 1991 to 2008. Event history models show that an index of supply‐side financial incentives has a strong positive influence on RPS adoption. We do not find support for the hypothesis that this effect is contingent on in‐state carbon‐based energy generation. In conclusion, we argue that the study of policy adoption needs to give greater consideration to the interrelationships among policy instruments.
We contribute to extant policy theory by focusing on interrelationships between existing policies and innovation. In particular, we call attention to the link between supply-side incentives and demand-side innovation, which has not been systematically investigated. Our research expectation is that supply-side policies generally will complement demand-side policy, leading to a positive impact on the adoption of demand-side innovations. We test this idea by examining adoptions of renewable portfolio standards (RPS), a demand-pull approach targeted to renewable energy generation by utilities, in the American states from 1991 to 2008. Event history models show that an index of supply-side financial incentives has a strong positive influence on RPS adoption. We do not find support for the hypothesis that this effect is contingent on in-state carbon-based energy generation. In conclusion, we argue that the study of policy adoption needs to give greater consideration to the interrelationships among policy instruments. Adapted from the source document.
