# Presentation: 817224

## State Renewable Energy Requirements and Goals:  Status Through 2003

- Thomas Petersik
- Chris Namovicz

## End of 200315 States, 17 Programs

- 9 Renewable Portfolio Standards (RPS)
- 4 Mandates
- 4 Voluntary Goals

## In this presentation -

- Define RPS, Mandates, Goals
- Identify States With Each
- Briefly Describe Key Characteristics
- Show Amount of Capacity Built in Each
- Introduce Changes Since 2003
- Discuss Expectations for Future

## Renewable Portfolio Standards9 States

- RPS Set Increasing Percentages Over Time
- RPS Set Shares of Generation or Sales
- Do Not Specify or Project New Capacity
- Supplier Can Choose From a Menu (Portfolio) of Renewable Energy Choices
- Most Just Beginning, Peaking Around 2010
- Arizona, California, Connecticut, Maine, Massachusetts, Nevada, New Jersey, New Mexico, and Wisconsin

## RPS

- 5 of 9 Established as Part of Deregulation
- 7 of 9 Accept Existing Capacity
- All 9 Accept Out-of-State Supply
- 8 Accept Credit Trading
- All Accept  Landfill Gas, Solar, and Wind
- Acceptance of Biomass, Hydro Varies
- 3 Favor Some Renewables (usually solar)

## RPSFinancing, Alternatives

- 6 States Allow Costs Passed to Ratepayers
- Only 3 Allow Systems Benefits Charges
- Only 4 Explicitly Allow Green Power Contributions to RPS
- 8 of 9 Excuse if Costs are Excessive
- 7 of 9 Feature non-Cost Alternatives/Delays
- 8 of 9 Have Penalties, None Used

## Mandates4 States

- Set Specific Amounts of Capacity
- Sometimes targets are by technology
- Target may be set based on fraction of expected generation, but remains fixed once established
- Must be New Capacity
- Sets Deadlines (Many Already Met)
- Fewer Cost/non-Cost Outs than RPS
- Iowa (105 MW), Minnesota (1,250 MW), Texas (2000 MW), Wisconsin (50 MW)

## Voluntary Goals4 States

- Resemble RPS, but
- Lack Penalties
- Set Percentage Goals
- Hawaii, Illinois, Minnesota (except Xcel), Pennsylvania

## State Programs Through 2003 Added 2,335 Megawatts

## State Breakout of RPS Additions

- Not all RPS-qualified capacity was necessarily “caused” by the RPS

## State Breakout of Mandates

- Solar (PV) accounts for a few hundred kilowatts

## Tentative Conclusions Through 2003

- Mandates (Texas, Minnesota, Iowa, Wisconsin) have been the state-level primary drivers of new renewable energy capacity
- So Far, state RPS have not unambiguously resulted in much new capacity
- Most RPS programs are relatively new
- Most have compliance options without renewable generation
- Little new capacity observed in 2004 – PTC lapsed but anticipated.

## New Requirements Since 2003

- Colorado
- Ballot initiative, 10% by 2015
- Includes solar set-asides, credit trading, limits on electricity price impacts
- Awards “bonus” credits, which may effectively reduce target amount
- District of Columbia
- 11% by 2022
- Credit trading, penalty payments
- Awards “bonus” credits, which may effectively reduce target amount
- Maryland
- 7.5% by 2019 for “Tier I” resources, 2.5% for “Tier II”
- Has credit trading, alternative compliance payments
- Awards “bonus” credits, which may effectively reduce target amount
- New York
- Regulatory action, 25% by 2013 (up from current 19%)
- Portion of target to come from “voluntary” market
- Includes distributed resource set-asides
- Rhode Island
- 16% by 2020
- Has credit trading, alternative compliance payments

## Revised Requirements or Goals

- Changed target
- Minnesota: from 425 MW of wind to 1125 MW
- New Jersey: from 2% to 4%
- New Mexico: reduces target for large electricity consumers
- Goal replaced with RPS
- Pennsylvania: 8% “Tier I”, 10% “Tier II” by 2020
- Hawaii: 20% by 2020 (up from current 8%)
- Added credit trading
- Maine
- Nevada
- Other
- New Mexico: regulatory action recognized by statute; established maximum cost threshold
- Connecticut: RPS now applies to larger share of generation, new resources added

## AEO2005 projects 1,600 MW of additional state-mandated capacity through 2025
Based on consultations with state officials
13,300 MW of new commercial builds through 2025 (not mandated)
Union of Concerned Scientists estimates about 25,500 MW if all RPS/mandate targets are met with capacity additions

- Based on consultations with state officials
- 13,300 MW of new commercial builds through 2025 (not mandated)
- Union of Concerned Scientists estimates about 25,500 MW if all RPS/mandate targets are met with capacity additions

**Additions of Renewable Generating Capacity, 2003-2025**
**(gigawatts)**

**Unplanned**

**Other Planned**

**State Mandates**

## Expectations

- New states continue to propose, pass, and modify existing renewable target programs
- Specific programs match local needs and resources
- While some features seem to be popular, no common, comprehensive model has emerged
- Compliance with renewable capacity additions may hinge on Federal policy
- PTC has been seen as critical in wind market compliance
- FERC policy will play a role in both ability to comply and cost of compliance

## Massachusetts Compliance Report

- In 2003, MA estimates 45% of RPS compliance was from prior-year banked credits
- Outlook for 2004 suggests about 40% compliance from alternative compliance payments @ 51 $/MWh
- About 20 $/MWh is available from PTC
- Implies approx. 70-100 $/MWh in value available, including electricity value
- Wind costs estimated between 40 and 60 $/MWh
- New England has wind resource available
- What’s wrong with this picture?

## Questions?

- Report at _[http://www.eia.doe.gov/oiaf/analysis.htm](http://www.eia.doe.gov/oiaf/analysis.htm)_
- Contact:
- Tom Petersik
- _[tpetersi@eia.doe.gov](mailto:tpetersi@eia.doe.gov)_
- 202-586-6582
- Chris Namovicz
- _[cnamovicz@eia.doe.gov](mailto:cnamovicz@eia.doe.gov)_
- 202-586-7120