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Limiting the costs of renewable portfolio standards: A review and critique of current methods

Author

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  • Stockmayer, Gabriella
  • Finch, Vanessa
  • Komor, Paul
  • Mignogna, Rich

Abstract

Over half of U.S. states have renewable portfolio standards (RPSs) mandating that a minimum percentage of electricity sold derives from renewable sources. State RPSs vary widely in how they attempt to control or limit the costs of these RPSs. Approaches utilized include alternative compliance payments, direct rate caps, and cost caps on resource acquisitions, while some states employ no specific limitation at all. This paper describes how states attempt to control RPS costs and discusses the strengths and weaknesses of these various cost controls. There is no one best method; however the experience to date suggests that the most important factors in implementing an effective mechanism to curtail costs are clarity of the rule, consistency in application, and transparency for customers.

Suggested Citation

  • Stockmayer, Gabriella & Finch, Vanessa & Komor, Paul & Mignogna, Rich, 2012. "Limiting the costs of renewable portfolio standards: A review and critique of current methods," Energy Policy, Elsevier, vol. 42(C), pages 155-163.
    • Handle: RePEc:eee:enepol:v:42:y:2012:i:c:p:155-163
    DOI: 10.1016/j.enpol.2011.11.060
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    Citations

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    Cited by:

    1. Xin-gang, Zhao & Yi, Zuo & Hui, Wang & Zhen, Wang, 2022. "How can the cost and effectiveness of renewable portfolio standards be coordinated? Incentive mechanism design from the coevolution perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    2. Liu, Shiyu & Bie, Zhaohong & Lin, Jiang & Wang, Xifan, 2018. "Curtailment of renewable energy in Northwest China and market-based solutions," Energy Policy, Elsevier, vol. 123(C), pages 494-502.
    3. Barry D. Solomon & Shan Zhou, 2021. "Renewable Portfolio Standards: Do Voluntary Goals vs. Mandatory Standards Make a Difference?," Review of Policy Research, Policy Studies Organization, vol. 38(2), pages 146-163, March.
    4. Schelly, Chelsea, 2014. "Implementing renewable energy portfolio standards: The good, the bad, and the ugly in a two state comparison," Energy Policy, Elsevier, vol. 67(C), pages 543-551.
    5. Barbose, Galen & Bird, Lori & Heeter, Jenny & Flores-Espino, Francisco & Wiser, Ryan, 2015. "Costs and benefits of renewables portfolio standards in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 523-533.
    6. Kim, Jung Eun & Tang, Tian, 2020. "Preventing early lock-in with technology-specific policy designs: The Renewable Portfolio Standards and diversity in renewable energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    7. Paulo Henrique de Mello Santana, 2015. "Cost-effectiveness as Energy Policy Mechanisms: The Paradox of Technology-neutral and Technology-specific Policies in the Short and Long Term," Working Papers Working Paper 2015-02, Regional Research Institute, West Virginia University.
    8. Lee, Minhyun & Hong, Taehoon & Yoo, Hyunji & Koo, Choongwan & Kim, Jimin & Jeong, Kwangbok & Jeong, Jaewook & Ji, Changyoon, 2017. "Establishment of a base price for the Solar Renewable Energy Credit (SREC) from the perspective of residents and state governments in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 1066-1080.
    9. de Mello Santana, Paulo Henrique, 2016. "Cost-effectiveness as energy policy mechanisms: The paradox of technology-neutral and technology-specific policies in the short and long term," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1216-1222.

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