Renewable portfolio standard
Electricity supply companies face a specific mandate under renewable portfolio standards. They must produce a defined fraction of their power from sources like wind, solar, biomass, and geothermal. Certified generators earn certificates for every unit of electricity they create. These entities sell the certificates alongside their physical power to suppliers. Suppliers then hand these documents to regulatory bodies to prove compliance. California Senate Bill 350 passed in October 2015 set a clear target. It requires retail sellers and publicly owned utilities to procure 50 percent of their electricity from eligible resources by 2030. This structure allows private markets to drive implementation while maintaining strict government oversight.
Renewable Energy Credits facilitate price competition between different energy types. Proponents claim this mechanism delivers innovation at the lowest possible cost. The goal is allowing renewables to compete with cheaper fossil fuel sources. Since 2013, the levelized cost of electricity from wind energy has dropped below that of all fossil fuels. Solar energy followed suit in 2015. Programs tend to allow more price competition but can be limited through eligibility rules. Multipliers exist within some RPS programs to favor specific technologies. Michigan and Virginia count solar generation as twice as much as other renewable sources. These adjustments aim to balance market forces with policy goals.
RPS-type mechanisms have been adopted across several countries including Italy, Poland, Sweden, Belgium, and Chile. Australia enacted the Renewable Energy (Electricity) Act 2000 to establish its framework. China adopted a renewable energy target in 2006 and modified it in 2009. That modification set targets for 500 GW of renewable electricity by 2020. The European Union passed the Directive on Electricity Production from Renewable Energy Sources in 2001. It expanded in 2007 to include EU-wide targets of 33 percent renewable electricity by 2020. Germany adopted targets more aggressive than the EU mandated requirements in September 2010. Their goal included 80 percent renewable electricity by 2050.
Twenty-nine states plus the District of Columbia have adopted policies targeting a percentage of their energy to come from renewable sources. Different state programs issue varying numbers of Renewable Energy Credits depending on the technology. This creates a decentralized adoption pattern since the year 2000. The Public Utility Regulatory Policies Act is a law passed in 1978 by the United States Congress. It was meant to promote greater use of renewable energy mostly through feed-in tariffs. However, it contains little language declaring explicit renewable energy objectives or quotas. In 2009, the US Congress considered Federal level RPS requirements under the American Clean Energy and Security Act. The full Senate did not pass that bill despite committee approval in July.
The Renewables Obligation replaced the Non-Fossil Fuel Obligation which operated from 1990 in the United Kingdom. It was introduced in England and Wales in April 2002. A different form called the Renewables Obligation (Scotland) appeared in Scotland during the same month. Northern Ireland received its version in April 2005. The scheme runs until 2037 with an extension declared on the 1st of April 2010. Since its introduction the RO has more than tripled the level of eligible renewable electricity generation. That figure rose from 1.8 percent of total UK supply to 7.0 percent in 2010. Japan based its approach on the 1997 Act on the Promotion of New Energy Usage. They targeted 118 million KWh by 2012 according to METI data.
RPS requirements were responsible for 60 percent of the total increase in American renewable electricity generation since the year 2000. The Lawrence Berkeley National Laboratory reported these findings regarding the impact of such policies. However, the LBNL also reports that RPSs role has been declining in recent years. Their share dropped from 71 percent of annual American renewables builds in 2013. This figure fell to 46 percent just two years later in 2015. The decline suggests a shift in how new capacity is being added across the nation. Despite this trend, the initial surge driven by state mandates remains a significant historical factor.
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Common questions
What is a renewable portfolio standard?
A renewable portfolio standard requires electricity supply companies to produce a defined fraction of their power from sources like wind, solar, biomass, and geothermal. Certified generators earn certificates for every unit of electricity they create and sell these documents alongside physical power to suppliers.
When did California Senate Bill 350 set its target date?
California Senate Bill 350 passed in October 2015 and requires retail sellers and publicly owned utilities to procure 50 percent of their electricity from eligible resources by 2030. This structure allows private markets to drive implementation while maintaining strict government oversight.
Which countries have adopted RPS-type mechanisms besides the United States?
RPS-type mechanisms have been adopted across several countries including Italy, Poland, Sweden, Belgium, and Chile. Australia enacted the Renewable Energy (Electricity) Act 2000 to establish its framework while China adopted a renewable energy target in 2006 and modified it in 2009.
How much has the Renewables Obligation increased eligible renewable electricity generation since introduction?
Since its introduction the Renewables Obligation has more than tripled the level of eligible renewable electricity generation. That figure rose from 1.8 percent of total UK supply to 7.0 percent in 2010 after being introduced in England and Wales in April 2002.
What percentage of American renewable electricity generation increase was due to RPS requirements since 2000?
RPS requirements were responsible for 60 percent of the total increase in American renewable electricity generation since the year 2000 according to findings reported by the Lawrence Berkeley National Laboratory. Their share dropped from 71 percent of annual American renewables builds in 2013 to 46 percent just two years later in 2015.