Renewable portfolio standard

Last updated

A renewable portfolio standard (RPS) is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal. Other common names for the same concept include Renewable Electricity Standard (RES) at the United States federal level and Renewables Obligation in the UK.

Contents

The RPS mechanism places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources. Certified renewable energy generators earn certificates for every unit of electricity they produce and can sell these along with their electricity to supply companies. Supply companies then pass the certificates to some form of regulatory body to demonstrate their compliance with their regulatory obligations. RPS can rely on the private market for its implementation. In jurisdictions such as California, minimum RPS requirements are legislated. California Senate Bill 350 passed in October 2015 requires retail sellers and publicly owned utilities to procure 50 percent of their electricity from eligible renewable energy resources by 2030. RPS programs tend to allow more price competition between different types of renewable energy, but can be limited in competition through eligibility and multipliers for RPS programs. Those supporting the adoption of RPS mechanisms claim that market implementation will result in competition, efficiency, and innovation that will deliver renewable energy at the lowest possible cost, allowing renewable energy to compete with cheaper fossil fuel energy sources. [1] Since 2013, the levelized cost of electricity from wind energy has dropped below that of all fossil fuels, followed in 2015 by solar energy.

RPS-type mechanisms have been adopted in several countries, including the United Kingdom, Italy, Poland, Sweden, Belgium, [2] and Chile, as well as in 29 of 50 U.S. states, and the District of Columbia. [3] [4]

Policy by country

Australia

Renewable Energy (Electricity) Act 2000 (Cth)[ citation needed ]

China

China adopted a renewable energy target in 2006 and modified it in 2009 to the following targets: [5]

European Union

The European Union passed the Directive on Electricity Production from Renewable Energy Sources in 2001 and expanded it in 2007 to the following EU-wide targets (although member states are free to pass more aggressive targets): [6] [7]

Germany

The German Renewable Energy Act, since its adoption in 2000, is producing strong growth in renewable power capacity by encouraging private investors through guaranteed Feed-in tariffs. Germany adopted targets more aggressive than the EU mandated targets in September 2010:

  • Renewable electricity – 35% by 2020 and 80% by 2050
  • Renewable energy – 18% by 2020, 30% by 2030, and 60% by 2050 [8]

Japan

Based on the 1997 Act on the Promotion of New Energy Usage, 118 million KWh was targeted in 2012 (METI). [9]

Republic of Korea

The Republic of Korea adopted the Act on the Promotion of the Development, Use, and Diffusion of New and Renewable Energy since 2012. [10]

United Kingdom

The Renewables Obligation (RO) [11] is designed to encourage generation of electricity from eligible renewable sources in the United Kingdom. It was introduced in England and Wales and in a different form (the Renewables Obligation (Scotland)) in Scotland in April 2002 and in Northern Ireland in April 2005, replacing the Non-Fossil Fuel Obligation which operated from 1990. [12]

The RO places an obligation on licensed electricity suppliers in the United Kingdom to source an increasing proportion of electricity from renewable sources, similar to a renewable portfolio standard. In 2010/11 it is 11.1% (4.0% in Northern Ireland). This figure was initially set at 3% for the period 2002/03 and under current[ when? ] political commitments rose to 15.4% (6.3% in Northern Ireland) by the period 2015/16 and then it runs until 2037 (2033 in Northern Ireland). The extension of the scheme from 2027 to 2037 was declared on 1 April 2010 and is detailed in the National Renewable Energy Action Plan. [13] Since its introduction the RO has more than tripled the level of eligible renewable electricity generation (from 1.8%[ citation needed ] of total UK supply to 7.0% in 2010 [14] ).

United States

Selected state renewable portfolio standards with 2018 revisions. 29 states have adopted policies targeting a percentage of their energy to come from renewable sources. Renewable portfolio standards for selected U.S. states, 2010 through 2050 (46504655934).png
Selected state renewable portfolio standards with 2018 revisions. 29 states have adopted policies targeting a percentage of their energy to come from renewable sources.

The Public Utility Regulatory Policies Act is a law, passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote[ clarification needed ] greater use of renewable energy, mostly through feed-in tariffs, but contains little language declaring explicit renewable energy objectives or quotas.

In 2009, the US Congress considered Federal level RPS requirements. The American Clean Energy and Security Act reported out of committee in July by the Senate Committee on Energy & Natural Resources includes a Renewable Electricity Standard that called for 3% of U.S. electrical generation to come from non-hydro renewables by 2013, but the full Senate did not pass the bill. [15]

Different state RPS programs issue a different number of Renewable Energy Credits depending on the generation technology; for example, solar generation counts for twice as much as other renewable sources in Michigan and Virginia. [16]

The Lawrence Berkeley National Laboratory claims that RPS requirements were responsible for 60% of the total increase in American renewable electricity generation since the year 2000. However, the LBNL also reports that RPSs' role has been declining in recent years, from 71% of the annual American renewables builds in 2013, to 46% just two years later, in 2015. [17]

Related Research Articles

The United Kingdom's Climate Change Programme was launched in November 2000 by the British government in response to its commitment agreed at the 1992 United Nations Conference on Environment and Development (UNCED). The 2000 programme was updated in March 2006 following a review launched in September 2004.

The Renewables Obligation (RO) is a market support mechanism designed to encourage generation of electricity from eligible renewable sources in the United Kingdom. There are three related schemes for the three legal jurisdictions of the UK. In April 2002 the Renewables Obligation was introduced in England and Wales, and in Scotland as the Renewables Obligation (Scotland). The RO was later introduced in Northern Ireland in April 2005. In all cases, the RO replaced the Non-Fossil Fuel Obligation which operated from 1990.

Renewable Energy Certificates (RECs), also known as Green tags, Renewable Energy Credits, Renewable Electricity Certificates, or Tradable Renewable Certificates (TRCs), are tradable, non-tangible energy certificates in the United States that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource and was fed into the grid. Solar renewable energy certificates (SRECs) are RECs that are specifically generated by solar energy.

<span class="mw-page-title-main">Renewable energy in the European Union</span>

Renewable energy progress in the European Union (EU) is driven by the European Commission's 2023 revision of the Renewable Energy Directive, which raises the EU's binding renewable energy target for 2030 to at least 42.5%, up from the previous target of 32%. Effective since November 20, 2023, across all EU countries, this directive aligns with broader climate objectives, including reducing greenhouse gas emissions by at least 55% by 2030 and achieving climate neutrality by 2050. Additionally, the Energy 2020 strategy exceeded its goals, with the EU achieving a 22.1% share of renewable energy in 2020, surpassing the 20% target.

<span class="mw-page-title-main">Energy policy of the United Kingdom</span> United Kingdom legislation

The energy policy of the United Kingdom refers to the United Kingdom's efforts towards reducing energy intensity, reducing energy poverty, and maintaining energy supply reliability. The United Kingdom has had success in this, though energy intensity remains high. There is an ambitious goal to reduce carbon dioxide emissions in future years, but it is unclear whether the programmes in place are sufficient to achieve this objective. Regarding energy self-sufficiency, UK policy does not address this issue, other than to concede historic energy security is currently ceasing to exist.

The Fossil Fuel Levy (FFL) is a levy paid by suppliers of electricity from non-renewable energy sources in the United Kingdom. The costs are shared by the suppliers and consumers, as a proportion of the cost is passed on to consumers in the cost of the electricity supplied. The Fossil Fuel Levy was imposed to fund the Non-Fossil Fuel Obligation.

A Renewable Portfolio Standard (RPS) is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal, which have been adopted in 38 of 50 U.S. states and the District of Columbia. The United States federal RPS is called the Renewable Electricity Standard (RES). Several states have clean energy standards, which also allow for resources that do not produce emissions, such as large hydropower and nuclear power.

<span class="mw-page-title-main">Renewable energy commercialization</span> Deployment of technologies harnessing easily replenished natural resources

Renewable energy commercialization involves the deployment of three generations of renewable energy technologies dating back more than 100 years. First-generation technologies, which are already mature and economically competitive, include biomass, hydroelectricity, geothermal power and heat. Second-generation technologies are market-ready and are being deployed at the present time; they include solar heating, photovoltaics, wind power, solar thermal power stations, and modern forms of bioenergy. Third-generation technologies require continued R&D efforts in order to make large contributions on a global scale and include advanced biomass gasification, hot-dry-rock geothermal power, and ocean energy. In 2019, nearly 75% of new installed electricity generation capacity used renewable energy and the International Energy Agency (IEA) has predicted that by 2025, renewable capacity will meet 35% of global power generation.

Financial incentives for photovoltaics are incentives offered to electricity consumers to install and operate solar-electric generating systems, also known as photovoltaics (PV).

<span class="mw-page-title-main">Renewable energy in the United Kingdom</span>

Renewable energy in the United Kingdom contributes to production for electricity, heat, and transport.

A feed-in tariff is a policy mechanism designed to accelerate investment in renewable energy technologies by offering long-term contracts to renewable energy producers. This means promising renewable energy producers an above-market price and providing price certainty and long-term contracts that help finance renewable energy investments. Typically, FITs award different prices to different sources of renewable energy in order to encourage the development of one technology over another. For example, technologies such as wind power and solar PV are awarded a higher price per kWh than tidal power. FITs often include a "digression": a gradual decrease of the price or tariff in order to follow and encourage technological cost reductions.

<span class="mw-page-title-main">Renewable energy in Finland</span>

Renewable energy in Finland increased from 34% of the total final energy consumption (TFEC) in 2011 to 48% by the end of 2021, primarily driven by bioenergy (38%), hydroelectric power (6.1%), and wind energy (3.3%). In 2021, renewables covered 53% of heating and cooling, 39% of electricity generation, and 20% of the transport sector. By 2020, this growth positioned Finland as having the third highest share of renewables in TFEC among International Energy Agency (IEA) member countries.

Mandatory renewable energy targets are part of government legislated schemes which require electricity merchandisers to source-specific amounts of aggregate electricity sales from renewable energy sources according to a fixed time frame. The objective of these schemes is to promote renewable energy and decrease dependency on fossil fuels. If this results in an additional expenditure of electricity, the additional cost is distributed across most customers by increases in other tariffs. The cost of this measure is therefore not funded by the government budgets, except for costs of establishing and monitoring the scheme and any audit and enforcement actions. As the cost of renewable energy has become cheaper than other sources, meeting and exceeding a renewable energy target will also reduce the expenditure of electricity to consumers.

<span class="mw-page-title-main">Energy in Switzerland</span>

Energy in Switzerland is transitioning towards sustainability, targeting net zero emissions by 2050 and a 50% reduction in greenhouse gas emissions by 2030.

The Renewable Heat Incentive is a payment system in England, Scotland and Wales, for the generation of heat from renewable energy sources. Introduced on 28 November 2011, the RHI replaces the Low Carbon Building Programme, which closed in 2010.

<span class="mw-page-title-main">Green Puerto Rico</span> Series of green reforms

Green Puerto Rico is an umbrella term used to describe a pair of sustainable and renewable energy reforms that were signed into law on July 19, 2010 by Luis Fortuño during his governance of Puerto Rico. Two principle policies were developed in an effort to improve the Puerto Rican economy and to protect the environment. The first was aimed at decreasing Puerto Rico’s energy dependence on fossil fuels and increasing the development and ultimate use of renewable energy sources. This policy is titled Public Policy on Energy Diversification by Means of Sustainable and Alternative Renewable Energy in Puerto Rico Act. The second policy focuses on long-term economic savings and is titled the Green Energy Incentives Act of Puerto Rico. Both acts were designed to foster development and use of renewable energy sources to replace non-renewable energy sources such as oil. Energy policy in Puerto Rico has traditionally emphasized oil, but has made some strides over the last two decades with Green Puerto Rico which is an important step towards development and implementation of renewable energy in Puerto Rico.

A feed-in tariff (FIT) is paid by energy suppliers in the United Kingdom if a property or organisation generates their own electricity using technology such as solar panels or wind turbines and feeds any surplus back to the grid. The FIT scheme was imposed on suppliers by the UK government, and applied to installations completed between July 2009 and March 2019.

In 2013, renewable energy provided 26.44% of the total electricity in the Philippines and 19,903 gigawatt-hours (GWh) of electrical energy out of a total demand of 75,266 gigawatt-hours. The Philippines is a net importer of fossil fuels. For the sake of energy security, there is momentum to develop renewable energy sources. The types available include hydropower, geothermal power, wind power, solar power and biomass power. The government of the Philippines has legislated a number of policies in order to increase the use of renewable energy by the country.

Biofuels play a major part in the renewable energy strategy of Denmark. Denmark is using biofuel to achieve its target of using 100% renewable energy for all energy uses by 2050. Biofuels provide a large share of energy sources in Denmark when considering all sectors of energy demand. In conjunction with Denmark's highly developed renewable energy resources in other areas, biofuels are helping Denmark meet its ambitious renewable energy targets.

<span class="mw-page-title-main">Renewable energy in California</span> Solar, geothermal, and biomass and hydroelectric power generation

California produces more renewable energy than any other state in the United States except Texas. In 2018, California ranked first in the nation as a producer of electricity from solar, geothermal, and biomass resources and fourth in the nation in conventional hydroelectric power generation. As of 2017, over half of the electricity (52.7%) produced was from renewable sources.

References

  1. ↑ awea.org >> Policy Archived 2007-02-02 at the Wayback Machine
  2. ↑ Race to the Top: The Expanding Role of U.S. State Renewable Portfolio Standards Archived 2012-09-13 at the Wayback Machine
  3. ↑ "RPS Collaborative". www.cesa.org. Retrieved 2018-07-13.
  4. ↑ "State Renewable Portfolio Standards and Goals". www.ncsl.org. Archived from the original on 2015-06-08. Retrieved 2016-02-29.
  5. ↑ Martinot, Eric and Li Junfeng (2010-07-21). "Renewable Energy Policy Update For China". RenewableEnergyWorld. Retrieved 2010-11-14.
  6. ↑ "EU renewable energy policy". EurActiv. 2010-11-09. Retrieved 2010-11-14.
  7. ↑ Austin, Anna (2010-03-12). "EU to meet renewable energy target". Biomass Power & Thermal Magazine. Retrieved 2010-11-14.
  8. ↑ Barbose, Galen (September 2016). "A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards" (PDF). Energy Policy. 96: 645. Bibcode:2016EnPol..96..645B. doi: 10.1016/j.enpol.2016.06.035 .
  9. ↑ "日本法令外国語訳データベースシステム – [法令本文表示] – 新エネルギー利用等の促進に関する特別措置法".
  10. ↑ "국가법령정보센터".
  11. ↑ Ofgem and ROC Ofgem: What is the Renewables Obligation
  12. ↑ "Renewable Energy" (PDF). Postnote (164). Parliamentary Office of Science and Technology. October 2001. Retrieved June 13, 2011.
  13. ↑ http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/ored/25-nat-ren-energy-action-plan.pdf [ bare URL PDF ]
  14. ↑ "Archived copy" (PDF). Archived from the original (PDF) on 2011-08-29. Retrieved 2011-07-29.{{cite web}}: CS1 maint: archived copy as title (link)
  15. ↑ "House and Senate Move to Address Climate and Energy: Mixed Bag for Clean Energy".
  16. ↑ Challenges of Playing Favorites: State & Federal RPS Programs Archived October 15, 2009, at the Wayback Machine
  17. ↑ "Renewables Portfolio Standards Resources". rps.lbl.gov. Retrieved 2017-03-02.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.