State-based targets for green electricity generation have been so successful in developing renewable energy projects that any current proposals for a federal clean energy standard could require little or no additional capacity, according to a leading academic.
Ryan Wiser, a scientist specializing in electricity markets and policy at Lawrence Berkeley National Laboratory, said recent data showed that any proposed federal RPS would require fewer additions than were seen in 2008-10 to meet state-based Renewable Portfolio Standards targets.
Recent renewable capacity additions in 2008 and 2010 had been growing at 6-11 GW a year. Projections for 2011-2025 to meet state RPS targets would only require an additional annual average of 4-5GW of renewable capacity.
Last year, US Senator Jeff Bingaman and Tom Udall introduced bipartisan legislation to create the first-ever national renewable electricity standard (RES). Utilities would be required to purchase at least 11% of their power from renewable sources of energy. But California’s RPS is far more aggressive, requiring 33% by 2020.
Wiser said that these proposals in addition to state RPS mandates would result in 4-9 GW of growth a year between 2011 and 2025.
“The federal RPS policies that have been considered and passed either the House or the Senate, the most recent versions of those polices would require renewable capacity additions that are not dramatically higher than the existing state RPS programs,” Wiser told Breaking Energy during the Renewable Energy Markets conference in San Francisco. We need to develop a policy that is more stringent than those that have been in consideration over the past few years.”
Facts On The Ground
He said that 27 GW of the 44 GW of non-hydro renewable additions from 1998-2010 have occurred in states with active or impending RPS compliance obligations. By 2035, there could be as much as 100 GW of new renewable energy if full compliance is achieved, he said.
In the absence of higher targets set by the RES or RPS, it would only be possible for installation rates seen between 2008 and 2010 to be maintained through increased activity in non-mandated markets.
“Being in a situation where we have oversupply–that we’ve done better than we ever thought we could have done–is a positive story,” Wiser said. But if it’s going to continue to be a positive story in terms of having a growing market at the pace that we’ve seen over the past couple of years, we’re either going to have to have the voluntary markets step up to the plate to a greater extent, or we’re going to have to have state or federal policy come in and provide further underpinnings to the market.”
A Sign Of Success
A drop in prices for Renewable Energy Credits was a sign of success of the RPS system but states might soon have to deal with oversupply in the market, he said.
“It’s really hard to say that dropping Renewable Energy Credit prices are a failure. What it means is that we’ve gone beyond what the states have required this is a success,” he said. “We’re now at a juncture where the states need to decide whether they want to go beyond their existing requirements or not.”
Although states were unlikely to introduce new RPS targets in the near term, the 29 states with mandated targets were fine-tuning and sometimes weakening their standards, he said. Wisconsin had expanded eligibility to include new large hydropower, while California had specified limits on unbundled RECs, for example.
Earlier in the conference, Dr. Paul MacGregor, senior vice president of clean energy markets at consultants Nexant, said that states needed to make good choices about technology eligibility.
Low emission RECs were being considered as eligible for RPS in Connecticut where natural gas fired fuel cells are already a category, but energy efficiency should not be rewarded to the detriment of renewables, he said.
“We see most states separating out these categories. Nothing is worse for the market than suddenly a change in technologies that are allowed in the category of RECs – nothing drives the market crazier. The market is crazy enough as it is in many cases.
“In the state markets, I think we’re going to see a lot more of these categories sectioned off with more technologies. That’s encouraging. It doesn’t impact on existing renewables, it just expands the marketplace.”
Photo Caption: A general view of the Mike O’Callaghan-Pat Tillman Memorial Bridge part of the Hoover Dam Bypass Project October 26, 2010 in the Lake Mead National Recreation Area, Nevada. The 1,900-foot-long structure sits 890 feet above the Colorado River, about a quarter of a mile downstream from the Hoover Dam. The $240 million four-lane bypass project to relieve vehicle traffic on the Hoover Dam began in 2003, and opened to traffic on October 19, 2010.