Technical Report

NREL/TP-6A2-45041

March 2009

An Examination of the Regional 

Supply and Demand Balance for 

Renewable Electricity in the 

United States through 2015

Lori Bird, David Hurlbut, Pearl Donohoo, 

Karlynn Cory, and Claire Kreycik
National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393

303-275-3000 • www.nrel.gov

NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

Contract No. DE-AC36-08-GO28308

Technical Report

NREL/TP-6A2-45041

March 2009

An Examination of the Regional 

Supply and Demand Balance for 

Renewable Electricity in the 

United States through 2015

Lori Bird, David Hurlbut, Pearl Donohoo, 

Karlynn Cory, and Claire Kreycik

Prepared under Task No. IGST.8370
NOTICE

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iii

Acknowledgments

This work was funded by the U.S. Department of Energy’s (DOE) Office of Energy 

Efficiency and Renewable Energy (EERE). The authors wish to thank Linda Silverman, 

John Atcheson, as well as EERE's Weatherization and Intergovernmental Program (WIP) 

and the Office of Planning, Budget, and Analysis (PBA) for their support of this work. 

The authors also wish to thank Galen Barbose of Lawrence Berkeley National 

Laboratory, Ed Holt of Ed Holt and Associates Inc., Charles Kubert of the Clean Energy 

Group, Kevin Porter of Exeter Associates, and David Kline of NREL for their thoughtful 

review of the document, as well as Michelle Kubik of NREL for her editorial support.
iv

List of Acronyms

ACP Alternative compliance payment

ARRA American Recovery and Reinvestment Act

AWEA American Wind Energy Association

BAU Business as usual

CREZ Competitive Renewable Energy Zone 

CSP Concentrating solar power

DOE Department of Energy (U.S.)

DSIRE Database of State Incentives for Renewables and Efficiency

EIA Energy Information Administration 

ERCOT Electric Reliability Council of Texas

EPA Environmental Protection Agency

EERE Energy Efficiency and Renewable Energy (Office of)

ETNNA Environmental Tracking Network of North America 

GEA Geothermal Energy Association

GW Gigawatts

GWh Gigawatt hours 

IREC Interstate Renewable Energy Council

ISO Independent system operator

ITC Investment tax credit

LBNL Lawrence Berkeley National Laboratory

LMOP Landfill Methane Outreach Program

MRO Midwest Reliability Organization

MSW Municipal solid waste

MW Megawatts

MWh Megawatt hours

NERC North American Electric Reliability Corporation

NWTC National Wind Technology Center

PBA Planning, Budget, and Analysis

PPA Power purchase agreements

PUCT Public Utility Commission of Texas 

PV Photovoltaic

REC Renewable energy certificate

ReEDS Regional Energy Deployment System (model)

RPS Renewable portfolio standard

RTO Regional transmission organization

SEIA Solar Energy Industries Association

SPP Southwest Power Pool

TVA Tennessee Valley Authority

TWh Terawatt hours

UCS Union of Concerned Scientists

WECC Western Electricity Coordinating Council

WGA Western Governors’ Association

WIP Weatherization and Intergovernmental Program
v

Table of Contents

Acknowledgments............................................................................................................ iii

List of Acronyms.............................................................................................................. iv

List of Tables.................................................................................................................... iv

List of Figures................................................................................................................... vi

Executive Summary.......................................................................................................... 1

Introduction....................................................................................................................... 3

Assumptions and Methodology........................................................................................ 5

Focus on New Renewable Energy Capacity................................................................... 5

Regional Breakdown....................................................................................................... 5

Supply-Side Analysis ........................................................................................................ 9

Estimates of Current Installed New Capacity (Through 2006) ...................................... 9

Estimates of Generation from Installed Facilities (Through 2006) .............................. 11

Supply Projection Methodology (2007-2015) .............................................................. 12

Supply Estimates, by Technology and Region ............................................................. 16

Demand-Side Analysis.................................................................................................... 19

Voluntary Markets........................................................................................................ 19

Compliance (RPS) Markets .......................................................................................... 21

Sum of Voluntary and Compliance Market Demand ................................................... 23

The Supply and Demand Balance ................................................................................. 24

Key Uncertainties............................................................................................................ 30

Conclusions...................................................................................................................... 33

References........................................................................................................................ 35

Appendix A. Planned Geothermal and CSP Projects ................................................. 38

Appendix B. Regional Balances..................................................................................... 39

List of Tables

Table 1. Geographic Eligibility Requirements for States with RPS................................... 8

Table 2. Cumulative “New” Renewable Energy Capacity by Technology through 2006 

(MW)................................................................................................................................. 10

Table 3. Cumulative “New” Renewable Energy Capacity by Region through 2006 (MW)

........................................................................................................................................... 10

Table 4. Wind Capacity Factors for Study Regions ......................................................... 11

Table 5. Renewable Energy Generation by Technology, 2004-2006 (GWh)................... 12

Table 6. Renewable Energy Generation by Region, 2004-2006 (GWh).......................... 12

Table 7. Projected Cumulative Installed New Renewable Energy Capacity by Resource, 

2007-2015 (MW) .............................................................................................................. 16

Table 8. Projected Cumulative Installed New Renewable Energy Capacity by Region: 

Business as Usual Case, 2007-2015 (MW)....................................................................... 17

Table 9. Projected Cumulative Installed New Renewable Energy Capacity by Region: 

High Wind Case, 2007-2015 (MW).................................................................................. 17

Table 10. Projected Renewable Energy Generation by Technology, 2007-2015 (GWh) 18
vi

Table 11. Projected Renewable Energy Generation: Business as Usual Case, 2007-2015 

(GWh) ............................................................................................................................... 18

Table 12. Projected Renewable Energy Generation: High Wind Case, 2007-2015 (GWh)

........................................................................................................................................... 18

Table 13. Voluntary Demand by Region, 2004-2007 (GWh) .......................................... 20

Table 14. Projected Voluntary Demand by Region, 2008-2015 (GWh) .......................... 20

Table 15. Compliance Requirements by Region for “New” Renewable Energy, 2004-

2007 (GWh) ...................................................................................................................... 22

Table 16. Compliance Requirements by Region for “New” Renewable Energy, 2008-

2015 (GWh) ...................................................................................................................... 22

Table 17. Business as Usual Case: Renewable Energy Generation Net of Regional RPS

Demand and Regional Voluntary Renewables Demand (GWh) ...................................... 28

Table 18. High Wind Case: Renewable Energy Generation Net of Regional RPS Demand 

and Regional Voluntary Renewables Demand (GWh)..................................................... 29

Table A1. Geothermal Developing Projects by Phase...................................................... 38

Table A2. CSP Developing Projects by Phase.................................................................. 38

List of Figures

Figure ES-1. Snapshot of regional demand and supply under the two cases in 2015 

(GWh) ................................................................................................................................. 2

Figure 1. Supply and demand regions as defined in the analysis ....................................... 7

Figure 2. Wind supply projections compared to 20% wind scenario ............................... 14

Figure 3. Historic and projected demand for “new” renewable energy, 2004-2015 ........ 23

Figure 4. Regional demand and supply under the two cases in 2010 and 2015 (GWh)... 24

Figure B1. Supply and demand projections in the Midwest, 2004-2015 (MWh)............. 39

Figure B2. Supply and demand projections for New England, 2004-2015 (MWh)......... 40

Figure B3. Supply and demand projections in New York, 2004-2015 (MWh)................ 40

Figure B4. Supply and demand projections in the Mid-Atlantic, 2004-2015 (MWh)...... 40

Figure B5. Supply and demand projections in the Heartland, 2004-2015 (MWh)........... 41

Figure B6. Supply and demand projections in the Southeast, 2004-2015 (MWh)........... 41

Figure B7. Supply and demand projections in Florida, 2004-2015 (MWh)..................... 42

Figure B8. Supply and demand projections in California, 2004-2015 (MWh) ................ 42

Figure B9. Supply and demand projections in the West, 2004-2015 (MWh) .................. 43

Figure B10. Supply and demand projections in Texas, 2004-2015 (MWh)..................... 43
1

Executive Summary

This report examines the balance between the demand and supply of new renewable 

electricity in the United States on a regional basis through 2015. It expands on a 2007 

NREL study (Swezey et al. 2007) that assessed the supply

national basis. As with the earlier study, this analysis relies on estimates of renewable 

energy supplies compared to demand for renewable energy generation needed to meet 

existing state renewable portfolio standard (RPS) policies in 28 states, as well as demand 

by consumers who voluntarily purchase renewable energy. However, it does not address 

demand by utilities that may procure cost-effective renewables through an integrated 

resource planning process or otherwise. 

The analysis examines two supply scenarios: 1) a business as usual (BAU) scenario based 

on current growth rates in renewable energy supply in each region and 2) a market-based

scenario that differs only in an assumed higher overall level of wind energy development 

nationally (based on estimates from BTM Consult and referred to as “high wind case”). 

Because the BTM Consult (2008) projections are only available nationally, and are not 

broken out regionally, this analysis uses results from a recent study by DOE (DOE 2008) 

that presents a scenario of 20% wind energy penetration by 2030 to apportion the wind 

energy capacity by region. 

The BAU case estimates future wind energy capacity using regression analysis that 

accounts for the accelerated growth in capacity additions from 2005-2008 for each 

region. The lower bound of the 95% confidence interval is applied to reflect a worst-case 

scenario based on extending historical trends. Under both scenarios, the estimates of nonwind renewables are based on current growth rates or account for planned capacity 

additions, which are derated to account for uncertainty. Estimates of future solar capacity 

assume that solar carve-outs in existing state RPS policies will be met; although this 

assumption is arguably optimistic, the long-term extension of the federal investment tax 

credit and availability to utilities may make this feasible. 

While the high wind case is a high case overall with respect to wind energy capacity 

additions nationally, the BAU case shows higher growth in wind energy capacity for 

some years in a few regions where wind energy capacity has shown recent rapid growth 

(e.g., Texas and the Midwest). 

The analysis found an overall national surplus of renewable energy generation to meet 

existing RPS policy targets and voluntary market demand over the study period. 

However, based on the assumptions in this analysis, there are some projected regional 

shortages, as well as regions with excess supplies. Figure ES-1 compares the two supply 

scenarios to renewable energy demand from RPS policies and voluntary markets in each 

of the regions considered in this analysis in 2015. 

 and demand balance on a 

If trends hold, renewable energy deficits are projected for New England, New York, and 

the Mid-Atlantic areas, with notable surpluses in the Midwest, the Heartland, Texas, and 

the West. The BAU scenario, which is based on an extrapolation of recent development 
2

trends, found an internal shortfall for California, while under the high wind energy 

scenario, California had excess generation except for one year (2010). This analysis does 

not assume trading between the regions specified in the analysis, although in some cases 

such trading may be feasible to the extent it is not limited by transmission access or state 

RPS renewable energy certificate (REC) trading rules. For example, shortages in 

California, which is treated as an independent region in the analysis, could possibly be 

offset by surplus supply projected elsewhere in the West to the extent it can meet 

California’s deliverability requirements.

0 20,000 40,000 60,000 80,000 100,000

Midwest

New England

New York

Mid Atlantic

Heartland

Southeast

California

West

Texas

Generation (GWh) 2015

Demand BAU Supply High Wind Supply

Figure ES-1. Snapshot of regional demand and supply under the two cases 

in 2015 (GWh)

In addition to interregional transfers where transmission is available, shortfalls could be 

addressed through price signals that may accelerate development of renewable energy 

resources that are currently uneconomic. This is particularly true in areas that have no or 

few market barriers. 

In areas with market barriers or transmission constraints, removing barriers to 

development, adding new transmission, and expanding interregional REC trading could 

alleviate potential regional shortfalls and enable states to access least-cost renewables. 

There are a number of key uncertainties in this analysis, including the impact of the 

global financial crisis as well as changes in incentives or policies. This analysis reflects 

existing policies, except those established very recently under the American Recovery 

and Reinvestment Act, signed into law by President Barack Obama in February 2009. 

The effects of the financial crisis are still unclear at this time, but it is possible that a lack 

of access to project financing in the short term could delay some project development and

shift it to later years. While the pace of development in coming years will depend on the 

ability of the federal government and the financial industry to address the financial crisis 

and increase the availability of debt for project financing, the estimates presented here

have not accounted for potential impacts of the crisis, because they are highly uncertain. 
3

Introduction

State and federal policies, the growth of voluntary green power purchase markets, and the 

improving economics of renewable energy development have accelerated the demand for 

renewable energy. A number of states have adopted renewable portfolio standards (RPS), 

requiring that renewable energy sources be used to supply a certain fraction of retail 

electricity sales; and many of these states recently expanded their targets significantly. 

Today, 28 states plus the District of Columbia have RPS requirements, with renewable 

energy targets ranging from 2% to 40% of total electricity supply, to be achieved over the 

next five to 15 years. At the end of 2007, these combined RPS policies – which cover 

46% of the nation’s electricity load – called for utilities to procure about 16 million 

megawatt hours (MWh) of new renewable energy generation. Going forward, they are

expected to drive the development of more than 30,000 MW of new renewable energy 

capacity by 2015 if fully met (Wiser and Barbose 2008). 

Voluntary consumer purchases of renewable energy have grown rapidly, primarily 

because more companies are purchasing renewable energy certificates (RECs) equivalent 

to their electricity needs. In addition, participation in utility green pricing programs is 

growing and more utilities are offering programs. The National Renewable Energy 

Laboratory (NREL) estimates that voluntary purchases of renewable energy from 

electricity providers and retail REC marketers by residential and business consumers 

totaled approximately 18 million MWh at the end of 2007, an increase of approximately 

50% from the previous year (Bird et al. 2008). 

A previous study by NREL found that aggregate U.S. demand for renewable energy 

resulting from current policies is growing so quickly that capacity growth would need to 

accelerate to keep pace (Swezey et al. 2007). Another recent study by Lawrence Berkeley 

National Laboratory (LBNL) found that some states have not achieved full compliance 

for their RPS mandates with renewable energy generation.1

This report examines the balance between the demand and supply of new renewable 

electricity in the United States on a regional basis through 2015. It expands on the 2007 

NREL study (Swezey et al. 2007) that assessed the supply demand balance on a 

national basis. As with the earlier study, this analysis relies on estimates of demand for 

renewable energy generation needed to meet existing state RPS policies, as well as 

demand by consumers who voluntarily purchase renewable energy. However, it does not 

address demand by utilities that may procure renewables for cost-effectiveness because 

of the difficulty in estimating such demand. The analysis examines two supply scenarios: 

 and 

Overall, states achieved a 

compliance rate (assuming use of renewable energy to meet targets as opposed to paying 

alternative compliance payments) of 94% in 2006, on a weighted-average basis. In 

several states, renewable energy was used to achieve only a portion of compliance, such 

as in Massachusetts (74%), New York (52%), Nevada (39%), and Arizona (25%) (Wiser 

and Barbose 2008). 

 

1 Some states allow obligated entities to pay an alternative compliance payment (ACP) to achieve 

compliance, rather than procuring renewable energy. The authors defined compliance strictly by the 

retirement of RECs and did not account for states in which ACPs are an accepted means of compliance.
4

1) a business as usual (BAU) scenario based on current growth rates in renewable energy 

supply in each region and 2) a market-based scenario that differs only in an assumed 

higher overall level of wind energy development nationally (based on estimates from 

BTM Consult and referred to as “high wind” case). Key uncertainties are discussed and 

the supply-demand balances are presented for each region through 2015. Finally, the 

paper discusses the implications of the regional supply-demand balances in terms of 

barriers to development, interregional trading opportunities, and the need for new 

transmission to facilitate interregional transfers.
5

Assumptions and Methodology

This analysis compares estimates of regional renewable energy supplies to estimates of 

regional demand for renewable energy from existing state RPS policies and voluntary 

markets through 2015. This section discusses the general methodology and assumptions 

used in the regional analysis. The following sections present additional details on the 

assumptions used to calculate available renewable energy supplies and demand from RPS 

and voluntary markets. 

Focus on New Renewable Energy Capacity

This analysis focuses on “new” renewable energy generation that may be used to meet 

state RPS requirements and voluntary market demand. In this analysis, “new” is defined 

as renewable energy projects installed on or after January 1, 1997 – this matches the 

generally accepted definition of “new” for voluntary market purposes.2

 Therefore, the 

projections developed here for both supply and demand focus on “new” renewables. 

While definitions of “new” renewables may vary among RPS requirements, most RPS 

policies were adopted after 1997 and were generally designed to support the development 

of new renewables.

3

Regional Breakdown

Many state mandates treat previously existing (e.g., pre-1997) 

renewable energy resources differently, and some states do not include them as eligible 

resources at all. A common threshold between “new” and “existing” capacity was 

established to represent the diverse state definitions. 

As a practical matter, most recent (post-1990) renewable energy development in the

United States has occurred since the late 1990s, after RPS mandates and voluntary 

markets began to take shape. Consequently, the further the analysis extends into the 

future, the less it matters precisely where the threshold between “new” and “existing” 

falls.

The regional divisions used for this analysis are designed to reflect the ability of 

renewable energy generators to meet state RPS demand within the presumed constraints 

of power markets or electricity-deliverability requirements. The regions used here are 

drawn from two sources: regional transmission organization (RTO) control areas, and 

reliability regions used by the North American Electric Reliability Corporation (NERC), 

which can serve as a proxy for RTOs or power markets where they do not exist.4

 2 This is a standard definition of both the Green-e renewable energy certification program 

(

Although every part of the country is in a NERC reliability region, large parts of the West 

http://www.green-e.org/getcert_re_stan.shtml) and the EPA Green Power Partnership 

(http://epa.gov/greenpower/buygp/product.htm). Also, due to limitations of the source data, this report does 

not address repowered plants that may be eligible for RPS compliance or the voluntary market.

3 Only three states adopted RPS policies prior to 1997, including Minnesota (1994), Arizona (1996), and 

Iowa (1983). Of these, Iowa’s standard has already been met and does not contribute to the demand 

estimates in this analysis. 

4 An RTO combines all generating units into an integrated wholesale market that responds to real-time 

changes in regional demand. NERC regions are the geographical framework for reliability standards and 

contingency plans designed to prevent failure of the electrical grid.
6

and the Southeast have no RTO. Furthermore, NERC regions are used because the 

national databases used to determine available renewable energy supplies identify 

specific plants by NERC region, not by RTO.

In this analysis, a region comprises a state or group of states whose combined area 

closely corresponds to the overlapping footprints of an RTO and a NERC region, or to 

the NERC region where no RTO is present.5

 5 In some cases, RTOs and NERC regions are not entirely congruent where a reliability region coexists 

with an RTO. For example, the PJM footprint does not exactly match ReliabilityFirst Corp. (RFC), the 

corresponding NERC region. In addition, RTOs and NERC regions do not necessarily align with state 

boundaries. In this analysis, we have defined regions along state boundaries that most closely match the 

footprint of the appropriate RTO or NERC region. 

Figure 1 presents the regions that are used 

in this analysis. Data for individual units in these grouped states are processed according 

to a state and NERC region. In this analysis, demand and supply are considered a 

function of the region in which the state is located; in some cases, the region is defined as 

an individual state. Differences among state RPS policies regarding geographic 

requirements for renewable energy generation are not addressed in all cases, because 

some policies encourage or require in-state renewable energy development. Table 1

summarizes state RPS requirements for geographic eligibility of renewable energy 

resources (i.e., the location of eligible renewable energy generators or the need for 

eligible renewable energy generation to be delivered into the state or region). 

Many RPS policies allow generation from within the RTO to meet the state renewable 

energy requirement. For example, the RPS for most states in the Mid-Atlantic region 

requires that renewable energy be delivered into the PJM Interconnection, meaning that 

out-of-state facilities can satisfy each state mandate as long as they deliver power to the 

RTO. Likewise, most states in New England require that the renewable energy used to 

meet the RPS requirements be generated within or delivered into the ISO New England, 

the region’s independent system operator (ISO) and RTO. This is also partly the case in 

the Midwest, where many state RPS policies allow delivery of renewable generation in 

the Midwest ISO or PJM Interconnection. A few states in the Midwest, such as Illinois 

and Ohio, require or encourage some renewable energy to be generated within the state, 

but that level of specificity is not addressed in this analysis. 

New York, Texas, and California – as well as Florida, Hawaii, and, Alaska – are treated 

as single-state regions in this analysis. Texas is treated separately because its RTO, the 

Electric Reliability Council of Texas (ERCOT), is largely not interconnected with the 

Eastern and Western Interconnections; in addition, the Texas RPS requires that the 

renewable energy capacity be built within Texas or be delivered with a dedicated 

transmission line into the state. New York has its own RTO. California also has its own 

RTO/ISO covering most of the state, and has a large RPS that requires delivery into the 

state. Alaska, Hawaii, and Florida are all treated as individual regions consistent with 

defined NERC regions. For all of these states, demand from the state RPS (if applicable) 

and estimates of voluntary market within the state are matched with supplies located in

the state. 
7

Finally, Illinois and Montana are split among two regions. This was done because wind 

generators are interconnected with other states via two RTOs.

West

California

Texas

Midwest

Heartland

Southeast

Florida

New York

New England

Mid Atlantic

Hawaii

Alaska

Figure 1. Supply and demand regions as defined in the analysis 

(modified NERC regions or ISOs)
8

Table 1. Geographic Eligibility Requirements for States with RPS

State

Region in 

Analysis Geographic Eligibility

AZ West Electricity delivery required to state or to load-serving entity (LSE)

CA California Electricity delivery required to state or to LSE

CO West No restriction on eligibility, but in-state is encouraged with mulitipliers

CT New England Renewable facilities must be located in New England ISO (NE ISO) or adjacent control areas 

DC Mid Atlantic Renewable facilities must be located in PJM Interconnection or adjacent states 

DE Mid Atlantic Generators outside of PJM must deliver electricity to the region

HI Hawaii In-state required

IA Midwest In-state required

IL Midwest/ Mid 

Atlantic

In-state generation encouraged, if not cost-effective, generation from adjacent states, then the 

whole region can be accepted

MA New England Renewable facilities must be located within NE ISO or adjacent control areas 

MD Mid Atlantic Renewable facilities must be located in PJM

ME New England Generators outside of NE ISO must deliver electricity to the region

MI Midwest Unbundled RECs or electricity must be generated in-state or within the utility's service territory, 

some exceptions apply

MN Midwest Generators must be within Midwest Renewable Tracking System (M-RETS)

MO Southeast No restriction on eligibility, but in-state is encouraged with mulitipliers

MT West/ 

Midwest Electricity delivery required to state or to LSE

NC Southeast Up to 25% of the RECs needed for compliance can be met with unbundled RECs from outside 

state. Rest must be in-state or delivered to LSE

NH New England Renewable facilities must be located within NE ISO or adjacent control areas 

NJ Mid Atlantic Generators must be within or deliver electricity to the region; resources outside of PJM must be 

"new"

NM West Electricity delivery required to state or to LSE

NV West Electricity delivery required to state or to LSE by direct transmission

NY New York Electricity delivery required to state or to LSE, subject to strict hourly scheduling to the state. 

Strong preference for in-state resources

OH Mid Atlantic Electricity delivery required to state or LSE, at least 50% must be generated in-state 

OR West Unbundled RECs must be generated in WECC. Electricity must be generated within the U.S. and 

delivered to LSE

PA Mid Atlantic Renewable facilities must be located in PJM or in Midwest ISO for some LSEs

RI New England Renewable facilities must be located within NE ISO or adjacent control areas 

TX Texas Electricity delivery required to state or to LSE by direct transmission

WA West Generators outside of the Pacific Northwest must deliver electricity to the state

WI Midwest Electricity delivery required to state or to LSE; facilities must be owned by or under contract to LSE

Source: Wiser and Barbose 2008, Bricker and Eckler 2008
9

Supply-Side Analysis

Estimates of Current Installed New Capacity (Through 2006)

To estimate current renewable energy supplies, the analysis relied primarily on data from 

the U.S. Energy Information Administration (EIA), which collects and reports data on net 

summer capacity and electricity generation from renewable energy sources annually.6 For 

2006, EIA estimates that non-hydro renewable energy sources total 28,721 MW of net 

summer capacity (EIA 2008a).7 However, the focus of this analysis was supply from new 

renewable energy-generating projects, which are generally defined as projects that came 

online on or after January 1, 1997, as discussed earlier. Therefore, the EIA data was 

filtered to identify capacity installed after 1997; Table 2 shows that 12,150 MW of 

“new” renewable capacity was online in 2006.8

In this analysis, the EIA capacity estimates are supplemented with data from the U.S. 

Environmental Protection Agency (EPA), the American Wind Energy Association 

(AWEA), and the Interstate Renewable Energy Council (IREC) to derive estimates of 

new renewable electricity availability. Wind capacity numbers were calculated from 

AWEA’s project database, which is frequently updated with information on wind energy 

installations. For landfill gas, the U.S. EPA’s Landfill Methane Outreach Program 

(LMOP) data were used for their comprehensiveness, because plants smaller than 1 MW 

are not required to report data to EIA.

9

The inclusion of hydropower and municipal solid waste (MSW) raises a number of issues 

for this analysis because these sources are not often included in “green power” 

definitions, although they may be acceptable for RPS compliance in some states. Early 

market definitions distinguished between small hydro (no more than 30 MW of 

nameplate capacity) and large hydro (larger than 30 MW). More recently, the green 

power industry has differentiated hydropower plants by their environmental impacts, 

such as “low-impact” hydropower.

Because many solar photovoltaic (PV) systems 

also fall under the 1 MW reporting threshold, this analysis relies on PV capacity 

estimates from IREC, which are based on data collected from states and are more 

comprehensive than EIA solar PV data (Sherwood 2008).

10

 6 The Energy Information Administration “EIA Form 860 – Annual Electric Generator Report” compiles 

information about generators at electric power plants. “EIA Form 906 Monthly Utility Power Plant 

Database” and “Form 920 Combined Heat and Power Plant Report” collects monthly and annual data on 

electricity generation and fuel consumption at the power plant and prime mover level for utility and 

nonutility electric power generators. EIA also collects data through “Form 767 – Annual Steam-Electric 

Plant Operation and Design Data.” 7 For renewables, EIA’s summary reports distinguish between “conventional hydropower” and “other 

renewables.” For this analysis, we are most interested in the “other renewables” resource category because 

(with some exceptions) “conventional hydropower” is generally excluded from certification for voluntary 

market purchases and from eligibility to meet state renewable portfolio standards. 

8 For 2006, EIA estimates that non-hydro renewable energy sources supplied 96,423 gigawatt hours (GWh) 

of electricity. In Table 5, we estimate that 37,068 GWh of “new” renewable energy was generated in 2006. 

For this analysis, only new hydropower generation 

from plants below the 30 MW capacity threshold were included. As for MSW, the EIA 

9 See EIA reporting requirements at http://www.eia.doe.gov/cneaf/electricity/page/forms.html and 

http://www.epa.gov/lmop/

10 See Low Impact Hydropower Institute, URL: http://lowimpacthydro.org/, accessed September 24, 2007. 
10

data showed only 18.5 MW of new capacity additions from 1997 to 2004, and it was 

included because it does not significantly affect the overall results.

For plants with boilers that can co-fire biomass and fossil fuels, the amount of eligible 

biomass capacity was estimated based on the fraction of biomass fuel used in the facility. 

The plant’s total capacity was multiplied by the fraction of total annual heat input 

provided by biomass fuels, as reported to EIA. 

Table 2 summarizes the cumulative quantity of “new” renewable energy capacity by 

resource. Table 3 shows the installed new capacity by the regions defined in this 

analysis.

Table 2. Cumulative “New” Renewable Energy Capacity by Technology 

through 2006 (MW)

2004 2005 2006

Biomass 649 680 785

Geothermal 129 164 217

Hydropower 271 301 311

Landfill Gas 561 611 698

MSW 19 19 38

Solar PV 119 160 236

Wind 5,036 7,442 9,866

Total 6,780 9,380 12,150

Note: Numbers may not sum due to independent rounding

Table 3. Cumulative “New” Renewable Energy Capacity by Region 

through 2006 (MW)

2004 2005 2006

Midwest 1,555 2,086 2,415

New England 109 136 148

New York 106 256 442

Mid Atlantic 582 580 702

Heartland 290 739 899

Southeast 377 383 460

Florida 104 80 102

California 797 920 1,245

West 1,519 2,143 2,896

Texas 1,315 2,010 2,756

Alaska 11 13 23

Hawaii 20 30 64

Total 6,780 9,380 12,150

Note: Numbers may not sum due to independent rounding
11

Estimates of Generation from Installed Facilities (Through 2006)

After determining eligible new capacity, the analysis estimated the generation output of 

the renewable energy facilities. Because EIA is not comprehensive in reporting the 

generation output from the renewable energy plants, weighted-average capacity factors 

for each resource (with some exceptions) were calculated for plants for which generation 

was reported. These capacity factors were then applied to plants with unreported 

generation to estimate total generation for each renewable energy fuel type.

11

For wind, solar thermal electric, and solar PV, capacity factors were developed from data 

sources other than EIA. Regional wind energy capacity factors were derived from the 

Department of Energy’s (DOE’s) annual report on the wind market, which provides 

regional capacity factors based on measured data (Wiser and Bolinger 2007, 2008). These 

factors reflect the variation in generation output of wind facilities by the year of 

installation and region. Table 4 presents a sample of these capacity factors, applied to the 

regions defined in this report.

Because 

black liquor and solid wood waste are often combusted in the same facility, a single 

capacity factor was used. 

12

Table 4. Wind Capacity Factors for Study Regions

PV capacity factors are based on NREL data and assume 

a 10-degree tilt and due-south orientation (Denholm 2008); they generally range from 

12% to 18%, with a lower capacity factor (8%) for Alaska. The analysis assumes a 35% 

capacity factor for new concentrating solar power (CSP) thermal plants installed in future 

years to reflect a mix of plants with and without storage.

Year of 

Installation Midwest

New 

England New York

Mid 

Atlantic Heartland Southeast California West Texas Hawaii

1998-99 26% 24% 22% 22% 28% 22% 30% 33% 29% -

2000-01 29% 24% 22% 23% 32% 22% 36% 29% 31% -

2002-03 29% 24% 29% 26% 34% 29% 31% 30% 35% -

2004-05 36% 24% 27% 29% 38% 27% 36% 37% 37% -

2006 37% 22% 29% 30% 41% 29% 37% 35% 30% 45%

Average 

2002-2006 34% 23% 29% 28% 37% 29% 35% 34% 34% 45%

Note: Original wind capacity factors are applied to regions defined in this analysis. The supply projections 

use the average wind capacity factors between 2002 and 2006. The Wiser et al. report does not include 

projects in Alaska, due to a small sample size.

Table 5 presents estimates of the generation output from new renewable energy facilities 

for 2004-2006 by resource. It is important to note that wind energy represents nearly 

three-quarters of the total generation from new facilities. New renewable energy 

generation totaled 21 terawatt hours (TWh) in 2004, 30 TWh in 2005, and 37 TWh in 

2006. Table 6 presents generation from new renewable energy facilities by the regions 

defined in this analysis. 

 11 Generation was estimated using the following weighted average capacity factors: Agricultural Crop 

Byproducts: 0.31; Black liquor: 0.49; Other Biomass Solid: 0.33; Other Biomass Gases: 0.17; Other 

Biomass Liquids .49; Geothermal: 0.96; Landfill gas: 0.68; Municipal solid waste: 0.3. Hydroelectric: 0.26: 

Small hydroelectric (≤30 MW): 0.4. These capacity factors were estimated using available capacity and 

generation data from EIA forms 860 and 906/920. 

12 The regions used in the DOE study are not the same as the regions used here. However, this analysis uses 

the appropriate capacity factors for each of the regions specified here.
12

Table 5. Renewable Energy Generation by Technology, 2004-2006 (GWh)

2004 2005 2006

Biomass 2,469 2,657 3,057

Geothermal 1,082 1,375 1,815

Hydropower 958 1,066 1,099

Landfill Gas 3,334 3,631 4,149

MSW 48 48 99

Solar PV 98 128 192

Wind 13,351 20,923 26,657

Total 21,340 29,828 37,068

Note: Figures may not sum due to independent rounding.

Table 6. Renewable Energy Generation by Region, 2004-2006 (GWh)

2004 2005 2006

Midwest 4,278 5,586 6,853

New England 485 629 654

New York 322 688 1,134

Mid Atlantic 2,330 2,645 3,009

Heartland 833 2,318 2,390

Southeast 1,522 1,588 1,903

Florida 391 327 408

California 2,712 3,035 4,047

West 4,666 6,891 7,573

Texas 3,698 5,988 8,799

Alaska 38 46 73

Hawaii 65 87 225

Total 21,340 29,828 37,068

Note: Figures may not sum due to independent rounding.

Supply Projection Methodology (2007-2015)

In most cases, data on installed renewable energy capacity are available only through 

2006, except in a few instances where 2007 and 2008 data exist. This analysis estimates

future renewable energy capacity for 2007 through 2015 using annual growth rates or 

other methodologies depending on the resource. In some cases, future capacity was 

estimated using information on plants under construction, under contract, or in 

development, derated depending on the stage of development of the project to reflect 

uncertainty. The specific methodologies and assumptions for each resource are described 

below. 

Wind 

For wind, installed capacity data were available from AWEA through 2008. The estimate 

for 2008 relied on AWEA’s preliminary estimates of installed wind capacity by region

for 2008 (AWEA 2009).
13

Wind energy capacity projections begin in 2009 and extend through 2015. This analysis 

presents two projection scenarios: 1) a business as usual (BAU) scenario based solely on 

current trends observed through 2008, and 2) a market forecast scenario that is a national 

high wind scenario (referred to as the “high wind” case) based on a market analysis by 

BTM Consult, an independent consulting firm from Denmark that specializes in 

renewable energy services, particularly wind energy. Two estimates of future wind 

capacity were prepared to represent the large fraction of new renewable energy 

generation currently installed and its rapid growth. As the dominant renewable 

technology, it has the most significant impact on the analysis. 

The BAU case is a trend analysis using historical data from 1999 to 2008 for total 

installed wind capacity. The forecast applies an ordinary least squares regression to 

identify the linear trend, representing a simple continuation of observed growth with no 

assumption about new state RPS policies, other future policy changes, or systemic 

disturbances. The model accounts for the observed acceleration in installed capacity that 

began after 2005. This analysis uses the lower bound of the model’s 95% confidence 

interval, rather than the mean estimates.13

The market forecast for 2009 and beyond – the high wind case – assumes future capacity 

additions based on a forecast by BTM Consult (BTM 2008). The BTM Consult 

projection assumes 6,500 MW of new incremental wind capacity installed in the United 

States in 2009 and assumes the addition of 10,500 MW of new incremental wind energy 

capacity in 2015. Because the BTM projections are only available nationally, and are not 

broken out regionally, wind energy capacity was apportioned by region using modeling 

results published in a recent study by DOE (DOE 2008) that presents a scenario of 20% 

wind energy penetration by 2030.

This makes the projection a reasonable worstcase scenario based on extending historical trends. An important caveat is that the 

forecast assumes transmission infrastructure will be built to meet new wind capacity 

additions, as it has in the past. If transmission expansion fails to keep pace, these 

forecasts will overestimate the amount of wind power that will be available in the future.

14

 13 The 95% confidence interval, which is bounded by lower and upper bound estimates and calculated using 

the standard error of the mean, is expected to include the true mean 95% of the time. 

14 To apportion the capacity among the regions assumed here, we used the 2008 NREL Regional Energy 

Deployment System (ReEDS) model output data, which are the basis of the 20% wind study.

The DOE 20% wind study is an optimization analysis 

that estimates where wind energy would be installed in the United States to most costeffectively generate 20% of the nation’s electricity demand from wind energy by 2030 

(DOE 2008). Figure 2 compares the wind energy capacity estimated through 2015 under 

the BAU scenario, the high wind case, and the DOE 20% wind study. Notably, both of 

the projections presented here are higher than the DOE 20% wind study up to 2012; but,

by 2015, both the high wind case and the DOE projections are well above the BAU 

projection.
14

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

Capacity (MW)

High Wind 

Projection

BAU Projection

20% Wind Study 

Projection

Figure 2. Wind supply projections compared to 20% wind scenario

Biomass, MSW, Hydropower

For biomass, MSW, and hydropower, projections of future capacity are based on 

assumptions of constant annual growth. The compound annual growth rates were 

calculated based on 2004-2006 EIA data. For biomass, separate growth rates were used 

for each of the EIA-reported biomass resource types.

15

Geothermal projections are based on announced projects identified by the Geothermal 

Energy Association (GEA) (see Appendix A). The GEA categorizes projects into four 

phases based on their development status. Only projects in the third and fourth phases

Growth rates were modified in 

three instances. The growth rate for “other biomass liquid” was assumed to be the same 

as that for black liquor, due to small-sample irregularities. For “other biomass solids” and 

“other biomass gases,” the analysis assumes no growth rather than the decrease shown 

over the sample period. 

Landfill Gas

Data on installed landfill gas-generating capacity is available from the U.S. EPA through 

2007. From 2008 through 2010, landfill gas capacity is assumed to grow at a constant 

annual growth rate (14% annually) based on historic levels. For each year from 2011-

2015, the analysis assumed 85 MW of new capacity was added each year, consistent with 

the average amount of capacity added annually from 2000 to 2007 (Goldstein 2008). 

Geothermal

16

 15 The following EIA biomass resource types were included in the analysis: agricultural biomass, black 

liquor, other biogas, other bio-liquid, other biomass solids, wood liquids, and wood solids. 16 Projects in Phase Four are those that are under construction or where production drilling is under way. 

Phase Three projects are defined as those securing power purchase agreements (PPA) and final permits. 

Phase Two projects are those where exploratory drilling and confirmation is being done and where a PPA is 

not secured. Phase One projects are those in which developers are identifying the site, conducting initial 

exploration drilling, and securing the right to the resource. 

(those nearest to completion) were included in these projections; capacity in very early 

development stages was not specifically considered because of the uncertainty in these 

projects. Projects under construction (in Phase Four) were assumed to come online in 
15

2009 at the full reported capacities. The total capacity of projects under contract (but not 

under construction) was spread evenly over the years 2010-2012, with the assumption 

that a total of 75% of the Phase Three capacity would come online (a derate of 25%). To 

estimate additional capacity that is in early stages of planning or has not yet been 

announced, capacity is assumed to grow in 2013-2015 based on a linear trend 

extrapolated from capacity installed in 2009-2012. All projected capacity is assumed to 

occur in California or the Western Electricity Coordinating Council (WECC) region, 

consistent with the list of announced plants from GEA. 

Solar Photovoltaics 

State-specific PV capacity data for 2007 (and earlier) was obtained from the Interstate 

Renewable Energy Council (Sherwood 2008). PV projections (for 2008-2015) are based 

on assumptions that vary by state. States with significant PV capacity and without an 

RPS solar set-aside17

For California, PV capacity is assumed to grow at the historical growth rate (41%) in 

2008. From 2009-2015, the analysis assumed California was on track to meet the 

California Solar Initiative, which has established a goal of installing 3,000 MW of new 

solar capacity by 2017.

were assumed to grow based on historical installation rates. The 

analysis used compound annual growth rates based on 2004-2007 data from IREC 

(Sherwood 2008). For states that have an RPS with a solar set-aside, the analysis assumes 

that the solar targets are met, which is arguably an optimistic assumption, but may be 

feasible given the long-term extension of the federal investment tax credits (ITC) for 

solar and the ability for utilities to take advantage of these incentives. On a generation 

basis, the contributions from solar are relatively small over the period of the analysis

(roughly 5% of generation under the scenarios), so this assumption does not materially 

affect the regional results. Data on the size of the solar set-asides was derived from Wiser 

and Barbose (2008). 

18 California is assumed to meet the goal linearly with equal 

capacity additions in each year during that period. Massachusetts is assumed to meet its 

goal of installing approximately 27 MW between 2008 and 2012 linearly, and a linear 

trend is used to project new capacity from 2013 to 2015.19

 17 An RPS set-aside is a provision within an RPS that calls for a certain fraction of electricity to be obtained 

from solar resources. Some states have specific requirements that a certain portion or all of the solar come 

from distributed systems; whereas others allow for utility-scale solar systems, which can include solar 

thermal electric systems. 

18 If the historical growth rate was applied through 2015, it would have resulted in more than 4,000 MW of 

capacity. Because the growth rate was on track to meet the initiative, we assumed California would meet 

the program goals. For more information on the California Solar Initiative, see 

http://www.gosolarcalifornia.org/csi/index.html. 19 In 2008, the Commonwealth of Massachusetts announced a program called Commonwealth Solar, 

designed to provide incentives for approximately 27 MW of new PV in the state between 2008-2012. The 

$68 million program is funded through a combination of renewable public benefit funds and RPS 

alternative compliance payments. For more information, see http://www.masstech.org/SOLAR/, accessed 

January 31, 2009. 
16

Concentrating Solar Power (CSP)

Solar thermal projections are based on planned projects identified in Wiser and Barbose 

(2008), the Prometheus Institute, and the Solar Energy Industries Association (SEIA) 

(2007) (see the projects in Appendix A). In addition, one other project not listed in these

reports was identified. Solar thermal projects were categorized based on their 

development status, as either contracted or in the feasibility stage, or announced or in the 

early planning stages. Projects in the contracted/feasibility phase were derated 40% to 

account for uncertainties associated with permitting, transmission availability, and other 

nonproject-specific variables. A higher derate factor is used for CSP than for geothermal

projects because the CSP industry is young and there are more speculative projects 

proposed. Projects in the announced/planning phase were derated 70% due to the greater 

uncertainties with project completion. Individual plants (derated) were assumed to begin 

operation in the announced operational year (whenever available) or were estimated 

using the best available information. One plant that was expected to enter commercial 

operation in 2009 was pushed back to 2010 due to known delays. Estimates for plants for 

which an operation date was unknown were spread evenly over 2011-2013. Estimated 

capacity installed in 2014 and 2015 were based on linear trend projections from 2010-

2013.

Supply Estimates, by Technology and Region

Table 7 presents projections (and some actual data for 2007 and 2008, as explained 

above) of the cumulative new capacity by resource for 2007-2015. Both the BAU and 

high wind case projections are presented, with the resulting totals. New renewable 

capacity would reach about 70 GW in 2015 under the BAU case and more than 100 GW 

under the high wind case. Note that this table includes new renewable energy capacity 

only – the pre-1997 capacity is not included. 

Table 7. Projected Cumulative Installed New Renewable Energy Capacity by Resource, 

2007-2015 (MW)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Biomass 881 992 1,120 1,267 1,437 1,633 1,861 2,125 2,431

Geothermal 217 217 641 778 915 1,053 1,190 1,326 1,463

Hydro 333 356 382 409 438 469 503 539 577

Landfill Gas 849 974 1,119 1,284 1,369 1,454 1,539 1,624 1,709

MSW 53 75 107 151 213 302 427 603 853

Solar - PV 361 602 1,016 1,489 1,995 2,593 3,182 3,841 4,704

Solar - CSP 65 65 66 502 1,074 1,761 1,935 2,565 3,063

BAU Wind 15,142 23,503 28,054 32,604 37,155 41,611 46,256 50,807 55,358

High Wind 15,142 23,503 30,003 37,503 46,503 56,504 67,004 77,504 88,004

Total - BAU 17,901 26,786 32,504 38,485 44,597 50,877 56,893 63,430 70,158

Total - High 

Wind 17,901 26,786 34,454 43,384 53,945 65,769 77,640 90,127 102,805

Tables 8 and 9 present the new renewable energy capacity projections by region under 

the BAU case and the high wind case, respectively. While the high wind case assumes 

more wind capacity is installed nationally over the time period considered, the allocation 

of capacity among regions is based on the assumptions in the NREL Regional Energy 

Deployment System (ReEDS) model. In the BAU case, the linear trends are calculated 
17

for each region, based on historic installations in the particular region. It is interesting to 

note that as a result of the different methods for allocating wind across regions in the two 

scenarios, the high wind case shows slightly less renewable energy capacity in some 

regions (e.g., Texas and the Midwest) in some years than the BAU case. 

Table 8. Projected Cumulative Installed New Renewable Energy Capacity by Region: 

Business as Usual Case, 2007-2015 (MW)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 3,959 7,075 8,796 10,523 12,235 13,950 15,666 17,386 19,110

New England 204 261 322 392 458 531 607 693 775

New York 520 937 1,024 1,112 1,198 1,285 1,373 1,463 1,554

Mid Atlantic 1,049 1,601 1,924 2,312 2,707 3,167 3,698 4,329 5,140

Heartland 1,053 1,523 1,639 1,756 1,872 1,988 2,105 2,221 2,337

Southeast 523 753 832 929 1,047 1,222 1,364 1,535 1,824

Florida 118 131 145 160 173 187 202 218 235

California 1,398 1,645 2,262 3,152 4,089 5,134 5,863 6,917 7,866

West 4,578 5,584 6,747 7,797 8,934 9,993 11,060 12,179 13,291

Texas 4,386 7,159 8,691 10,225 11,752 13,280 14,808 16,336 17,865

Alaska 25 28 30 32 35 37 40 43 46

Hawaii 87 88 91 94 97 102 106 110 114

Total 17,901 26,786 32,504 38,485 44,597 50,877 56,893 63,430 70,158

Table 9. Projected Cumulative Installed New Renewable Energy Capacity by Region: 

High Wind Case, 2007-2015 (MW)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 3,959 7,075 8,186 9,468 11,350 13,441 15,683 17,929 20,418

New England 204 261 360 477 636 815 999 1,194 1,548

New York 520 937 1,088 1,262 1,452 1,663 1,818 1,975 2,217

Mid Atlantic 1,049 1,601 2,045 2,600 3,312 4,147 5,061 6,075 7,292

Heartland 1,053 1,523 1,759 2,030 2,651 3,341 4,610 5,879 7,490

Southeast 523 753 888 1,050 1,256 1,530 1,847 2,193 2,737

Florida 118 131 145 160 173 187 202 218 235

California 1,398 1,645 3,471 5,769 7,838 10,247 11,924 14,021 15,686

West 4,578 5,584 8,363 11,408 14,671 18,187 21,362 24,588 27,512

Texas 4,386 7,159 8,004 8,979 10,382 11,940 13,813 15,685 17,249

Alaska 25 28 30 33 36 40 44 48 52

Hawaii 87 88 116 148 187 231 276 322 368

Total 17,901 26,786 34,454 43,384 53,945 65,769 77,640 90,127 102,805

sults on a generation basis. Table 10 

Table 10 presents projections of the generation from new renewable energy facilities by 

resource for 2007-2015. The BAU and high wind case projections are both presented, 

with the resulting totals. Note that the growth for non-wind renewables is the same for the 

two scenarios; the high wind case simply assumes greater wind energy development 

nationally. New renewable energy generation is expected to reach nearly 217 TWh in 

2015 under the BAU case and nearly 314 TWh under the high wind case. Tables 11 and 

12 present the projected renewable energy generation by the regions defined in this 

analysis for the BAU and high wind cases.
18

Table 10. Projected Renewable Energy Generation by Technology, 2007-2015 (GWh)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Biomass 3,491 3,956 4,493 5,113 5,830 6,659 7,621 8,736 10,030

Geothermal 1,818 1,818 5,373 6,517 7,661 8,805 9,949 11,094 12,238

Hydro 1,477 1,582 1,695 1,816 1,945 2,084 2,232 2,391 2,562

Landfill Gas 5,047 5,794 6,652 7,638 8,143 8,648 9,154 9,659 10,165

MSW 138 195 276 390 552 781 1,104 1,562 2,208

Solar - PV 507 834 1,419 2,069 2,756 3,547 4,324 5,180 6,264

Solar - CSP 199 199 202 1,540 3,294 5,398 5,934 7,863 9,392

BAU Wind 45,082 69,660 83,124 96,589 110,053 123,229 136,981 150,445 163,909

High Wind 45,082 69,660 88,937 111,178 137,847 167,478 198,737 229,997 261,080

Total - BAU 57,759 84,039 103,235 121,671 140,234 159,152 177,299 196,929 216,767

Total - High 

Wind 57,759 84,039 109,047 136,260 168,028 203,401 239,056 276,480 313,937

Table 11. Projected Renewable Energy Generation: Business as Usual Case, 

2007-2015 (GWh)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 12,369 21,733 26,956 32,212 37,376 42,548 47,732 52,928 58,139

New England 817 992 1,186 1,405 1,600 1,813 2,042 2,299 2,569

New York 1,452 2,513 2,750 2,994 3,218 3,445 3,674 3,904 4,138

Mid Atlantic 3,667 5,097 6,005 7,034 7,966 9,001 10,157 11,483 13,087

Heartland 3,445 4,983 5,364 5,744 6,125 6,506 6,886 7,267 7,647

Southeast 2,222 2,915 3,250 3,643 4,069 4,606 5,157 5,806 6,674

Florida 486 542 604 674 726 781 838 900 965

California 4,698 5,344 7,841 10,282 12,848 15,754 17,693 20,639 23,270

West 14,624 17,598 22,306 26,048 30,047 33,810 37,599 41,547 45,480

Texas 13,587 21,923 26,555 31,199 35,809 40,420 45,034 49,650 54,269

Alaska 79 88 95 102 110 118 127 137 147

Hawaii 311 313 324 333 341 350 360 370 381

Total 57,759 84,039 103,235 121,671 140,234 159,152 177,299 196,929 216,767

Table 12. Projected Renewable Energy Generation: High Wind Case, 2007-2015 (GWh)

2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 12,369 21,733 25,140 29,070 34,741 41,034 47,783 54,544 62,034

New England 817 992 1,261 1,577 1,959 2,388 2,836 3,311 4,133

New York 1,452 2,513 2,910 3,367 3,852 4,388 4,785 5,184 5,792

Mid Atlantic 3,667 5,097 6,303 7,748 9,470 11,433 13,540 15,817 18,430

Heartland 3,445 4,983 5,754 6,643 8,675 10,932 15,085 19,237 24,506

Southeast 2,222 2,915 3,389 3,943 4,591 5,375 6,363 7,449 8,953

Florida 486 542 604 674 726 781 838 900 965

California 4,698 5,344 11,514 18,238 24,245 31,296 36,117 42,233 47,043

West 14,624 17,598 27,151 36,871 47,245 58,373 68,480 78,746 88,108

Texas 13,587 21,923 24,502 27,476 31,713 36,417 42,059 47,704 52,428

Alaska 79 88 96 105 115 126 138 150 164

Hawaii 311 313 423 547 695 859 1,032 1,206 1,381

Total 57,759 84,039 109,047 136,260 168,028 203,401 239,056 276,480 313,937
19

Demand-Side Analysis

The two main demand sources are voluntary purchases of renewable energy and state 

RPS policies. Consumers – individuals, corporations, and institutions – usually make 

voluntary purchases of green power through optional utility programs or through 

renewable energy certificates (RECs), separate from electricity. Load-serving entities 

also purchase renewable power or RECs to meet state RPS requirements. This analysis 

focuses only on the new renewable energy required to meet state RPS requirements, 

consistent with the supply-side focus on new renewables. It is assumed that at least until 

2015, all eligible renewable energy generation will be used to supply either compliance 

(RPS) or voluntary renewable energy markets. 

Note that a few utilities have invested in owning or purchasing renewable energy or 

RECs, because they are least-cost resources in their area. These cases are ignored in this 

analysis, despite the fact that they are made regardless of RPS requirements or voluntary 

demand.

Voluntary Markets

Estimates of demand for renewable energy by voluntary purchasers are based on data 

reported by NREL for utility programs, competitively marketed green power products, 

and nationally sourced REC products offered by marketers (Bird et al. 2008). Table 13

presents estimates of voluntary market demand for 2004-2007. Demand is reported by 

region by assigning utility programs to the region in which the utility operates; this 

should be reasonably accurate because most utilities typically supply their programs with 

local sources of renewable energy. In addition, RECs sold by marketers are assigned to a 

particular region if the specific marketer focuses on serving customers and procuring 

supplies from a particular region. All other REC market transactions are categorized as 

“national,” because many marketers procure RECs from renewable energy sources 

located anywhere in the country and sell them primarily to businesses that have facilities 

scattered across the country. 

The projections for demand for nationally sourced RECs and regional voluntary demand 

are based on linear growth trends from 2004 through 2007. A linear regression was used 

to estimate future voluntary market demand in each region. The forecast for voluntary 

demand in Florida was modified due to the cancellation of the Florida Power and Light 

green power program in mid-2008, which represented more than 90% of voluntary 

demand in Florida in 2004-2007. The remaining demand in Florida is assumed to 

increase 10% annually. Table 14 presents regional projections of voluntary market 

demand in gigawatt hours by region from 2008-2015. The method used here is 

conservative compared to applying historic voluntary market annual growth rates going 

forward. The overall voluntary renewable energy market grew at a 48% annual average 

rate from 2003-2007.

The financial crisis is likely to impact voluntary market demand, particularly in the near 

term. Because the impact is difficult to predict, it is not specifically addressed; but, as 

noted, conservative assumptions about future growth are used. Also, it is important to 
20

note that voluntary market demand is price-sensitive and could be affected by growing 

RPS demand and price increases resulting from regional shortages. These issues are not 

specifically addressed in this analysis.

Table 13. Voluntary Demand by Region, 2004-2007 (GWh)

2004 2005 2006 2007

Midwest 159 283 439 499

New England 214 380 365 470

New York 132 202 200 296

Mid Atlantic 342 759 1,461 1,885

Heartland 57 69 144 182

Southeast 63 85 106 130

Florida 59 114 153 189

California 305 325 424 560

West 1,128 1,221 1,591 2,249

Texas 434 484 665 1,983

Alaska 0 0 0 0

Hawaii 0 0 0 0

National 3,321 4,564 6,364 9,576

Total 6,213 8,487 11,912 18,019

Table 14. Projected Voluntary Demand by Region, 2008-2015 (GWh)

2008 2009 2010 2011 2012 2013 2014 2015

Midwest 599 709 818 928 1,038 1,147 1,257 1,367

New England 564 643 722 800 879 958 1,037 1,116

New York 355 409 463 517 571 625 679 733

Mid Atlantic 2,261 2,758 3,254 3,751 4,248 4,744 5,241 5,737

Heartland 219 263 306 350 394 438 481 525

Southeast 156 179 202 225 248 271 294 317

Florida 227 40 45 49 54 59 65 72

California 672 769 866 963 1,060 1,157 1,253 1,350

West 2,699 3,116 3,533 3,950 4,367 4,783 5,200 5,617

Texas 2,380 2,919 3,458 3,997 4,536 5,075 5,614 6,153

Alaska 0 0 0 0 0 0 0 0

Hawaii 0 0 0 0 0 0 0 0

National 12,928 15,350 17,773 20,195 22,618 25,040 27,463 29,885

Total 23,059 27,154 31,439 35,725 40,011 44,298 48,585 52,873
21

Compliance (RPS) Markets

To determine demand from RPS policies, the analysis used estimates of the new 

renewable energy necessary to comply with each state policy through 2015. These RPS 

demand estimates were originally developed by the Union of Concerned Scientists (UCS) 

and updated and modified by Lawrence Berkeley National Laboratory (Barbose 2008,

Wiser and Barbose 2008).

20

 20 Note that the RPS compliance estimates presented here are considerably different than those reported in 

Swezey et al. (2007) because of modifications to the assumptions used in calculating the new renewables 

requirements in some states (most notably California), as well as the addition of new RPS policies and the 

expansion of a number of RPS targets. 

While some states allow existing renewables to meet the 

RPS requirement, the estimates used here focus on RPS demand for new renewable 

energy supplies that would be needed to fully comply with current RPS policies. Also, 

the estimates here do not account for utilities that may pay alternative compliance 

payments (ACPs) to achieve compliance with RPS policies, rather than procuring 

renewable energy. 

Table 15 shows the new renewable energy generation (GWh) required annually to meet 

existing state RPS policies between 2004 and 2007 in each region. Table 16 presents 

projections of the new renewable energy generation needed to meet RPS policies in each 

region through 2015, assuming full compliance with each state policy. State RPS demand 

was assigned to a region based on the assumptions described earlier; in two instances 

(Illinois and Montana), state demand was split across regions. 

Combining state RPS requirements by region assumes that a state can look beyond its 

borders for eligible resources. Regional trading is, in fact, allowed under many state RPS 

statutes, as discussed earlier. The regional trading space for RPS compliance is most 

often a function of the transmission network and wholesale power markets, which are the 

basis for the regions used in this analysis.
22

Table 15. Compliance Requirements by Region for “New” Renewable Energy, 

2004-2007 (GWh)

2004 2005 2006 2007

Midwest 2,641 2,958 4,682 4,097

New England 721 984 1,199 1,531

New York 0 0 1,147 2,377

Mid Atlantic 8 13 30 153

Heartland 0 0 0 0

Southeast 0 0 0 0

Florida 0 0 0 0

California 0 0 0 0

West 486 468 1,306 2,654

Texas 1,578 3,353 3,353 5,523

Alaska 0 0 0 0

Hawaii 0 54 0 0

Annual Total 5,434 7,830 11,717 16,335

Table 16. Compliance Requirements by Region for “New” Renewable Energy, 

2008-2015 (GWh)

2008 2009 2010 2011 2012 2013 2014 2015

Midwest 4,564 5,795 5,795 11,736 17,832 18,843 20,961 32,384

New England 2,334 3,186 4,321 5,588 6,900 8,204 9,549 10,570

New York 3,625 4,869 6,138 7,449 8,733 10,055 10,055 10,055

Mid Atlantic 1,112 2,520 6,168 8,875 11,642 14,454 18,084 22,140

Heartland 0 0 0 0 0 0 0 0

Southeast 0 0 7 988 2,300 2,479 4,105 5,928

Florida 0 0 0 0 0 0 0 0

California 1,583 4,083 17,815 21,093 22,151 22,885 23,628 24,972

West 4,185 6,943 8,450 13,665 16,634 19,252 20,987 30,619

Texas 5,523 9,436 9,436 13,349 13,349 17,262 17,262 19,724

Alaska 0 0 0 0 0 0 0 0

Hawaii 0 0 54 54 54 54 54 133

Annual Total 22,926 36,831 58,183 82,797 99,593 113,488 124,686 156,527
23

Sum of Voluntary and Compliance Market Demand

The projections in this analysis show that demand for new renewable energy will reach 

about 210 TWh annually by 2015 (this estimate does not include nonbinding state 

renewable energy targets). Figure 3 shows the sum of the state RPS demand and the 

voluntary market demand through 2015. It is important to note that the elasticity of 

voluntary demand is not taken into account. Unlike compliance demand, which feels little 

effect from price fluctuations, the level of voluntary demand can change inversely to 

changes in REC prices. In other words, extreme increases in REC prices due to overall 

scarcity may cause voluntary demand to be less than projected in Figure 3.

0

50,000

100,000

150,000

200,000

250,000

200420052006200720082009201020112012201320142015

Generation (GWh)

Compliance Demand

Voluntary Demand

Figure 3. Historic and projected demand for “new” renewable energy, 2004-2015
24

The Supply and Demand Balance

Figure 4 compares our demand estimate for new renewable electricity from voluntary 

and compliance (RPS) markets with our two renewable electricity supply scenarios in 

2010 and 2015. The business as usual (BAU) case reflects continued development of 

renewables at current rates. The high wind case represents an overall accelerated growth 

scenario for wind, or high renewable-generation case. Note that the “high wind case” is 

not a high case in all regions and years, because the method used in the high wind case to 

apportion wind across regions differs from that used in the BAU case (see earlier 

discussion under Supply Estimates section). 

Tables 17 and 18 show current and projected regional new renewable energy generation 

net of RPS demand and voluntary market demand within the region for 2004 through 

2015. Voluntary market demand for RECs sourced from facilities nationally is then 

subtracted from the sum of the regional balances. 

 

0 10,000 20,000 30,000 40,000

Midwest

New England

New York

Mid Atlantic

Heartland

Southeast

California

West

Texas

Generation (GWh) 2010

Demand BAU Supply High Wind Supply

0 20,000 40,000 60,000 80,000 100,000

Midwest

New England

New York

Mid Atlantic

Heartland

Southeast

California

West

Texas

Generation (GWh) 2015

Demand BAU Supply High Wind Supply

Figure 4. Regional demand and supply under the two cases in 2010 and 2015 (GWh)

Under both the BAU and high wind scenarios, renewable energy deficits are projected for 

New England, New York, and the Mid-Atlantic areas,

21

In New England, deficits are shown historically (years prior to 2008) and increase in size 

through 2015 under both scenarios. Projected shortages are about 3,500 GWh in 2010 

under both scenarios, and range from 7,500 GWh to more than 9,000 GWh in 2015. It is 

with notable surpluses projected 

for the Midwest, Heartland, Texas, and the West. It is important to note that this analysis 

does not assume trading between the regions specified in the analysis; although, in some 

cases, such trading may be feasible and could address potential shortages, to the extent 

that it is not limited by transmission access or state RPS REC trading rules.

 21 It is important to note that this analysis assumes that offshore wind does not come online during the 

period of the analysis. There are currently efforts to develop offshore wind in the New England and MidAtlantic regions. If those efforts are successful in the near term, the shortages projected here would likely 

not materialize. 
25

important to note that the study does not consider the development of offshore wind in 

the region over the study period. If offshore wind resources were developed, the 

shortages projected here for the Eastern regions most likely would not occur. 

Similarly, in New York, deficits appear in 2006 under both scenarios and extend through 

2015. Shortages are projected to grow in size through 2013 and then decline modestly. 

Projected shortages exceed 3,000 GWh in 2010 under both scenarios and range from 

about 5,000 GWh to nearly 7,000 GWh in 2015. 

In the Mid-Atlantic, deficits first appear in 2010 under both scenarios and increase in 

magnitude through 2015. Projected shortages are about 2,000 GWh in 2010 and range 

from about 9,000 GWh to 15,000 GWh in 2015. 

Relatively large amounts of excess renewable energy generation – about 10,000 GWh to 

50,000 GWh annually – are projected for the Midwest, the West, and Texas under both 

scenarios. In the Heartland region, excess generation is projected to be about 5,000 GWh 

in 2010 and to grow over time. There is a wide range in the estimates of excess 

generation in the Heartland in 2015 – ranging from 7,000 GWh to 24,000 GWh under the 

BAU and high wind scenarios, respectively, as the high wind case assumes a significant 

amount of relatively cost-effective wind generation is developed in the region. More 

modest surpluses are projected for the Southeast, Florida, Alaska, and Hawaii. 

In California, a shortfall of about 8,000 GWh is projected starting in 2010 under the BAU 

scenario but diminishes in later years. Under the high wind energy scenario, California is 

projected to have excess generation except for a small shortfall (400 GWh) in 2010.

Shortages in California, in particular, could potentially be offset by surplus supply 

projected elsewhere in the West, to the extent that excess generation can meet 

California’s RPS deliverability requirements.

22

In some regions where current and future shortfalls are shown in the analysis, barriers to 

development of renewables have played a role. For example, barriers to siting and 

permitting renewable energy projects, including offshore wind, have limited the 

development of new renewables in some regions. Furthermore, the load-serving entities 

subject to RPS requirements particularly in restructured electricity markets – such as in 

New England and the Mid-Atlantic – have been hesitant to enter into long-term contracts 

for renewable energy supplies, limiting the ability of renewable energy projects in the 

Such interregional transfers were not 

considered in the analysis. 

Appendix B provides graphs for each region and more detailed information on the 

regional renewable energy supply and demand balances. 

Addressing Barriers to Alleviate Shortfalls

 22 Excess supplies in the West could be used to meet projected shortfalls in California to the extent that they 

could meet California’s current RPS deliverability requirements. The expanded use of RECs in California 

has been considered; but, as of the time of this writing, had not been approved. 
26

region to obtain financing.23

While an interregional transmission strategy would increase the use of the least-cost wind 

resources – and consequently reduce wholesale power prices – the overall savings in 

production costs would have to be balanced against the additional transmission cost and 

the additional costs (if any) of maintaining grid reliability. As found in the 20% wind 

study, achieving this objective could create an incremental cost of 2% more than business 

However, these issues may be addressed in the future,

because a number of states have recently adopted policy changes to alleviate these 

problems. For example, Massachusetts requires the default service providers to sign 15-

year contracts (DSIRE 2009). If these policies succeed and the barriers are removed, the 

rate of renewable energy development will likely accelerate above historical rates in these 

regions.

Market Mechanisms for Alleviating Shortfalls 

In the absence of barriers, market economics are expected to gradually encourage the 

addition of new capacity and accelerated development in regions with projected 

shortfalls. As shortages push prices higher in New England, the Mid-Atlantic, and 

California, renewable resources in these regions that are currently marginal will become 

economically viable. At the same time, higher prices may put downward pressure on 

voluntary demand in these same regions.

Regional shortfalls could be alleviated by tapping into excess generation in adjacent 

regions. For example, shortfalls in generation within California could be addressed 

through excess supplies estimated for the West, if generation can comply with the 

California RPS deliverability requirements. And while not addressed in this analysis, 

imports from Canada could contribute supply, if excess generation is available.

Transmission Limits and Interregional Trading

The ability of interregional deliveries to address shortage situations will be limited by the 

availability of transmission and the cost of delivering electricity. In some cases, moving 

sufficient quantities of electricity interregionally requires using bulk transmission lines, 

which currently do not exist. For example, while excess generation in the Midwest

Reliability Organization (MRO) in the out-years could be used to meet projected 

shortfalls in the Mid-Atlantic (RFC and NY), transmission does not exist to facilitate 

interregional deliverability. Although the technical feasibility of interregional 

transmission is under study in both the Western and Eastern Interconnections, the greatest 

obstacles are institutional rather than technical. Critical issues such as cost allocation for

interstate transmission are beyond the jurisdiction of any individual state, while federal 

authority on route approval and site permitting is generally limited.

 23 Many of these states underwent electric-generation deregulation – or electric-sector restructuring – and 

for both the competitive suppliers and the default investor-owned utilities, it is unclear how much demand 

they will have more than a few years out. Under these uncertain circumstances, it would not make much 

sense to sign long-term contracts of 10 or 20 years that are needed to help finance and build new renewable 

projects in the area.
27

as usual, including the cost of new transmission and natural gas combustion turbines to 

maintain adequate reserves (DOE 2008).

What is clear, however, is that marginal resources will replace those that could provide 

more power at a lower cost if there is insufficient infrastructure to bring the least-cost 

resources to market. Most of the lowest-cost inland wind resources, for example, are in 

the Great Plains where growth has been robust but intraregional demand is relatively 

small. Without bulk transmission across regional seams, much of the nation’s least-cost 

wind resources may remain untapped.

For example, a production cost analysis conducted by a consortium of RTOs in the 

Eastern Interconnection suggested that wholesale power prices in PJM, New York, and 

New England would be 34% to 41% lower by 2027 if a high-penetration wind scenario 

were achieved with expanded interregional transmission. This is opposed to achieving the 

same wind target using local transmission upgrades on the existing system as currently 

constrained between regions (JCSP 2008). Accompanying the price reduction was a 

change where wind capacity growth would occur: less in PJM and SERC (where the 

average wind capacity factor was estimated at around 35%) and more in MRO and SPP 

(with an estimated wind capacity factor of 45%). 

Expanded Regional REC Trading as Solution 

A more policy-driven approach to addressing potential shortfalls is expanded REC 

trading across regional seams.24

 24 The Environmental Tracking Network of North America (ETNNA) is convening a national dialogue, the 

goal of which is to address the technical issues associated with interregional REC trading. If successful, 

ETNNA’s efforts will create a foundation where it will be possible to trade RECs among regions; the actual 

practice will likely depend on the state rules for eligible renewable resources for their RPS (not addressed 

by ETNNA).

At least in the near term, a surplus in one region would 

most likely be large enough to satisfy internal shortages in neighboring regions. For 

example, if states adopted broader geographic eligibility regions – which would relax 

deliverability requirements – excess supplies in the upper Midwest could be used to 

achieve compliance in New England and the Mid-Atlantic, and perhaps take advantage of 

lower-cost resources. However, such trading may come at the expense of interest on the 

part of states in driving more local economic development, which is often a goal of statelevel RPS requirements (see, for example, Holt 2008).
28

Table 17. Business as Usual Case: Renewable Energy Generation Net of Regional RPS Demand and Regional Voluntary 

Renewables Demand (GWh)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 1,478 2,345 1,732 7,773 16,569 20,452 25,599 24,712 23,679 27,742 30,710 24,388

New England -450 -735 -910 -1,184 -1,905 -2,642 -3,637 -4,789 -5,966 -7,120 -8,288 -9,117

New York 190 486 -213 -1,221 -1,467 -2,528 -3,608 -4,748 -5,859 -7,007 -6,830 -6,650

Mid Atlantic 1,980 1,873 1,518 1,630 1,723 727 -2,389 -4,659 -6,888 -9,041 -11,842 -14,790

Heartland 776 2,249 2,246 3,263 4,764 5,101 5,438 5,775 6,112 6,449 6,785 7,122

Southeast 1,459 1,503 1,797 2,093 2,759 3,071 3,435 2,856 2,059 2,408 1,407 429

Florida 332 213 255 297 314 564 630 677 727 779 834 893

Eastern 

Interconnect 5,766 7,933 6,425 12,650 22,758 24,744 25,467 19,824 13,862 14,209 12,777 2,275

California 2,407 2,710 3,623 4,138 3,088 2,989 -8,398 -9,208 -7,456 -6,348 -4,243 -3,053

West 3,052 5,202 4,676 9,721 10,714 12,247 14,066 12,432 12,809 13,564 15,359 9,243

Western 

Interconnect 5,459 7,912 8,300 13,859 13,802 15,236 5,668 3,224 5,353 7,215 11,117 6,190

Texas 1,686 2,151 4,781 6,081 14,021 14,201 18,306 18,463 22,536 22,697 26,774 28,393

Alaska 38 46 73 79 88 95 102 110 118 127 137 147

Hawaii 65 33 225 311 313 324 278 287 296 306 316 248

Sum of 

Regional 

Balances 13,014 18,075 19,803 32,981 50,982 54,601 49,821 41,908 42,166 44,554 51,121 37,253

Voluntary 

Demand for 

Natl RECs 3,321 4,564 6,364 9,576 12,928 15,350 17,773 20,195 22,618 25,040 27,463 29,885

Net 

Generation 

Nationally 9,693 13,511 13,439 23,405 38,054 39,250 32,049 21,712 19,548 19,514 23,658 7,368
29

Table 18. High Wind Case: Renewable Energy Generation Net of Regional RPS Demand and Regional Voluntary 

Renewables Demand (GWh)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Midwest 1,478 2,345 1,732 7,773 16,569 18,636 22,457 22,078 22,164 27,793 32,326 28,283

New England -450 -735 -910 -1,184 -1,905 -2,567 -3,465 -4,429 -5,391 -6,326 -7,275 -7,553

New York 190 486 -213 -1,221 -1,467 -2,368 -3,234 -4,114 -4,916 -5,896 -5,551 -4,996

Mid Atlantic 1,980 1,873 1,518 1,630 1,723 1,025 -1,674 -3,156 -4,457 -5,658 -7,508 -9,447

Heartland 776 2,249 2,246 3,263 4,764 5,491 6,336 8,325 10,538 14,647 18,755 23,981

Southeast 1,459 1,503 1,797 2,093 2,759 3,210 3,734 3,378 2,828 3,614 3,050 2,708

Florida 332 213 255 297 314 564 630 677 727 779 834 893

Eastern 

Interconnect 5,766 7,933 6,425 12,650 22,758 23,991 24,785 22,758 21,493 28,952 34,632 33,869

California 2,407 2,710 3,623 4,138 3,088 6,662 -442 2,190 8,086 12,076 17,352 20,720

West 3,052 5,202 4,676 9,721 10,714 17,092 24,889 29,630 37,373 44,445 52,558 51,871

Western 

Interconnect 5,459 7,912 8,300 13,859 13,802 23,755 24,447 31,820 45,458 56,520 69,910 72,592

Texas 1,686 2,151 4,781 6,081 14,021 12,148 14,582 14,368 18,532 19,722 24,828 26,552

Alaska 38 46 73 79 88 96 105 115 126 138 150 164

Hawaii 65 33 225 311 313 423 492 640 805 978 1,152 1,248

Sum of 

Regional 

Balances 13,014 18,075 19,803 32,981 50,982 60,413 64,411 69,701 86,415 106,311 130,672 134,424

Voluntary 

Demand for 

Natl RECs 3,321 4,564 6,364 9,576 12,928 15,350 17,773 20,195 22,618 25,040 27,463 29,885

Net 

Generation 

Nationally 9,693 13,511 13,439 23,405 38,054 45,062 46,638 49,506 63,797 81,270 103,209 104,538
30

Key Uncertainties

The projections in this report are based on historical trends and current policies; they 

show where a region is likely to end up in the absence of any major policy change, 

market shock, or change in the rate of renewable energy development. However, a

number of factors can alter the future balance between renewable electric supply and 

demand. 

Adoption of Additional State RPS Policies, Federal RPS, or Climate Policies

As of early 2009, 28 states and the District of Columbia have RPS policies. If additional 

states pass RPS laws or increase existing renewable energy targets – or if a federal RPS is 

enacted – compliance demand (and supplies) could increase significantly. However, 

additional policies would not be expected to have a measurable impact until several years 

after they are adopted. Similarly, the adoption of any federal policy to address climate 

change may impact demand for and deployment of renewables. Assuming such policies 

address interconnection, transmission, long-term financing support, and include 

enforcement provisions, the market would likely respond to this higher level of demand 

by developing new supply.

Federal Renewable Energy Tax Credits

Renewable energy development relies on a number of federal tax incentives, including 

the production tax credit (PTC) for wind and other renewables and the solar investment 

tax credit (ITC). Uncertainty surrounding reauthorization of these incentives has 

historically delayed renewable energy project development. The solar ITC was recently 

extended through 2016 and made available to utilities – this provides significantly greater 

certainty to the industry and will likely accelerate the rate of future development. 

In addition, the American Recovery and Reinvestment Act (ARRA), which was signed 

into law by President Obama in February 17, 2009, includes an extension of the PTC 

through 2012 for wind, and 2013 for other renewables. It also includes a number of other 

tax provisions aimed at alleviating the impacts of the financial crisis (discussed in more 

detail below) such as temporary cash grants in lieu of tax credits for projects placed in 

service in 2009 or 2010, a credit for building renewable energy manufacturing facilities, 

and an option to use the ITC in lieu of the PTC. While these incentives were not 

specifically considered in this analysis, they could lead to accelerated renewable energy 

development, increased manufacturing, and supply levels above those assumed in this 

analysis, depending on how the financial crisis plays out.

Financial Crisis

As of March 2009, the global financial crisis is still unfolding and, therefore, it is difficult 

to determine the potential impacts on renewable energy project development during the 

period of the study. In late 2008 and early 2009, the national financial crisis limited the 

ability for most entities to take advantage of renewable energy tax incentives because of a 

lack of tax equity, and project developers were unable to turn to debt financing because 

the credit market appeared to be frozen. Provisions in the ARRA are designed to alleviate 

these concerns; but, because they were just recently adopted, their effectiveness is still 
31

uncertain. In addition, it is still unclear the effectiveness of efforts to stabilize the banking 

industry and increase access to debt. 

While the effects of the financial crisis are still unclear at this time, it is possible that a 

lack of access to project financing in the short term could delay some renewable energy 

project development and shift it to later years. The pace of development in coming years 

will depend on the ability of the federal government and the financial industry to address 

the financial crisis and increase the availability of debt for project financing. Because of 

these significant uncertainties, we have not attempted to account for the potential impacts 

of the crisis in this analysis. 

RPS Compliance

It is possible that some states will not achieve full compliance with their RPS 

requirements using renewable energy generation. If utilities or load-serving entities 

subject to the RPS pay an alternative compliance payment (ACP) instead of using 

renewable energy generation to meet RPS requirements, then the demand estimates here 

will be overstated. Some of the potential reasons that utilities might pay ACPs rather than 

procure renewable generation include: 

• barriers to siting and permitting, 

• inadequate transmission from areas with good renewable resources to areas of 

demand, 

• lack of state provisions to support long-term financing of new renewable projects,

financing challenges described above, and 

• RPS cost caps set too low to provide incentives for new renewable project 

development (see, for example, Cory and Swezey 2007). 

Offshore Wind

This analysis does not assume that offshore wind comes online during the period of the 

analysis. There are efforts underway to try to develop offshore wind along the coasts of 

New England and the Mid-Atlantic (and elsewhere). If those efforts are successful in the 

near term, the shortfalls projected in this analysis for those regions would likely 

disappear.

Transmission Access

The levels of wind energy development in the two scenarios presented here assume 

adequate access to transmission. Development has generally relied on the transmission 

capacity already available. If new transmission is not built to accommodate increased 

supply, the levels of wind energy development assumed here may not be achieved. 

A number of initiatives are under way to address transmission issues. Texas is leading 

these efforts with its Competitive Renewable Energy Zone (CREZ) development. In the 

summer of 2008, the Public Utility Commission of Texas adopted a plan to build highvoltage transmission to the five areas of the state with the best potential for large-scale 

wind development (PUCT 2008). California, Colorado, Arizona, Nevada, New Mexico, 

and Utah are also conducting their own assessments of in-state renewable energy 

potential.
32

In addition, the Western Governors’ Association is conducting a regional initiative to 

identify renewable energy zones throughout the Western Interconnection (WGA 2008). 

The goal of this initiative is to identify high concentrations of low-cost renewable energy 

resources that could be moved regionally across a number of states via new high-voltage 

transmission lines. 

The Midwest Independent System Operator (ISO) has begun its own phased study of 

regional wind development, initially examining scenarios to connect up to 15 GW of 

wind power from the Dakotas, Minnesota, Iowa, Wisconsin, and Illinois (Midwest ISO 

2009). In addition, NREL’s National Wind Technology Center (NWTC) is assisting 

major grid operators throughout the Eastern Interconnection in developing outcomes for 

wind-penetration scenarios of up to 30%.25

 25 The transmission entities include the Midwest Independent System Operator, PJM Interconnection, 

Southwest Power Pool, Tennessee Valley Authority (TVA), New York Independent System Operator, and 

ISO New England. All but TVA are regional transmission organizations.

Banking or Holding RECs

If a significant number of utilities or electricity suppliers in supply-constrained areas

choose to bank RECs for future RPS compliance, excess supplies may not be available. 

This may be the case if supplies are expected to remain constrained in the future. 

Furthermore, if generators choose to hold RECs in anticipation of future regulation, this 

would also reduce total supply in the short term. On the other hand, the availability of 

banking may make it possible for utilities to hold RECs to achieve compliance in future 

years, reducing shortfalls. 

Growth in Voluntary Markets

Recent growth in voluntary market purchases has depended on an adequate supply of 

renewable electricity at a reasonable price. If REC shortages develop, it is likely that 

REC prices will increase. Higher prices would likely dampen voluntary demand. Because 

RPS demand is considerably less price-sensitive, it could outbid some existing voluntary 

demand as state noncompliance penalties and alternative compliance payment levels set 

the market price. 
33

Conclusions

Given current policies and trends, this analysis found an overall national surplus of

renewable energy generation to meet existing RPS policy targets and voluntary market 

demand. However, based on the assumptions in this analysis, some regional shortages are 

projected, while other regions are projected to have excess renewable energy supplies. 

There are a number of key uncertainties in this analysis, including the impact of the 

global financial crisis, as well as changes in incentives or policies.26

 26 This analysis reflects existing policies, except those established very recently under the American 

Recovery and Reinvestment Act, signed into law by President Barack Obama in February 2009.

The effects of the 

financial crisis are still unclear at this time, but it is possible that a lack of access to 

project financing in the short term could delay some project development and shift it to 

later years. While the pace of development in coming years will depend on the ability of 

the federal government and the financial industry to address the financial crisis and 

increase the availability of debt for project financing, the estimates presented here have 

not accounted for potential impacts of the crisis, because they are highly uncertain. 

Based on the assumptions in this analysis, renewable energy deficits are projected for

New England, New York, and the Mid-Atlantic areas, with notable surpluses in the 

Midwest, the Heartland, Texas, and the West. The BAU scenario, which is based on an 

extrapolation of recent development trends, found an internal shortfall for California

starting in 2010; although, under the high wind energy scenario, California had excess 

supplies in every year except 2010. This analysis does not assume trading among the 

regions specified here; although, in some cases, such trading may be feasible to the extent 

that it is not limited by transmission access or state RPS REC trading rules. For example, 

projected shortages in California, which is treated as an independent region in the 

analysis, could possibly be offset by surplus supply projected elsewhere in the West.

Shortfalls could also be addressed through price signals that may accelerate development 

of renewable energy resources that are currently uneconomic. This is particularly true in 

areas that have fewer market barriers. In areas with market barriers, removing barriers to 

development, adding new transmission, and expanding regional trading could alleviate 

potential regional shortfalls. The role of federal government in addressing the financial 

crisis will also be critical, in terms of increasing the availability of debt, increasing 

investor confidence in the market as a whole, and making the renewable tax credits 

usable in the short term.

In regions with projected shortfalls, such as the Northeast, barriers to development have 

impeded siting, permitting, and project financing in recent years. States have begun to 

address these concerns, and the rate of renewable energy development will likely 

accelerate to the extent these policies are successful. Also, if offshore wind can be 

developed over the period of the analysis, this could also address potential shortages 

projected in the East. 
34

Shortfalls could also be eliminated if interregional transfers were facilitated through 

upgrades to the transmission system. At least in the near term, a surplus in one region 

would most likely be large enough to satisfy internal shortages in neighboring regions. 

However, actually moving sufficient quantities interregionally requires bulk transmission 

lines that don’t exist. Expanded transmission capacity would enable excess capacity from 

the Great Plains to meet expected shortfalls in New England and the Mid-Atlantic. While 

this approach has the benefit of reaching low-cost resources, transmission siting and cost 

allocation have their own cost and political challenges. 

Expanding interregional trading of RECs would be a policy-driven solution. Similar to

transmission solutions, this approach may come at the expense of achieving more local 

economic benefits of renewables development, which is often a goal of RPS policies. 

Reliability issues may also place an effective ceiling on the ability of a region to produce 

surplus RECs, if transmission upgrades fail to keep pace. 
35

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and Electricity Preliminary 2007 Statistics,” Table 4, U.S. Electric Net Summer Capacity, 

2003-2007 (Megawatts). Accessed at 

http://www.eia.doe.gov/cneaf/alternate/page/renew_energy_consump/rea_prereport.html

EIA. (2008b). Assumptions to the Annual Energy Outlook 2008. Table 73. Capacity 

Factors for Renewable Energy Generating Technologies in Three Cases. Pg. 149 

http://www.eia.doe.gov/oiaf/aeo/assumption/pdf/0554(2008).pdf
36

Goldstein, R. (2008). U.S. Environmental Protection Agency (EPA), program manager, 

Landfill Methane Outreach Program, e-mail dated August 6, 2008.

Holt, E. (2008), Increasing Coordination and Uniformity Among State Renewable 

Portfolio Standards. Prepared for the Clean Energy States Alliance and the 

Northeast/Mid-Atlantic RPS Collaborative, December 2008. 

http://www.cleanenergystates.org/Publications/CESA_HoltRPS_Policy_Report_Dec2008.pdf

Joint Coordinated System Planning Study (JCSP). (2008). “Conceptual Transmission 

Refinement,” (workshop presentation, Carmel, Indiana), October 2, 2008 

http://www.midwestiso.org/publish/Document/25f0a7_11c1022c619_-

7b1f0a48324a/Wind%20Future.pdf?action=download&_property=Attachment

Midwest ISO. (2009). “Regional Generation Outlet Study Scope Document,” June 18, 

2008; Midwest Independent Transmission System Operator (ISO), “Regional Generation 

Outlet Study Technical Review Group Indicative Scenario Results,” February 17, 2009.

Prometheus Institute and Solar Energy Industries Association (SEIA). (2007). U.S. Solar 

Industry Year in Review,

http://www.seia.org/galleries/pdf/Year_in_Review_2007_sm.pdf 

Public Utility Commission of Texas (PUCT). (2008). Commission Staff’s Petition for 

Designation of Competitive Renewable Energy Zones (Docket Number 33672), Order, 

August 15, 2008.

Sherwood, L. (2008). E-mail containing installed PV capacity by state from Interstate 

Renewable Energy Council, July 8, 2008. 

Slack, K. (2008). U.S. Geothermal Power Production and Development Update,

Geothermal Energy Association, August 2008. http://www.geoenergy.org/publications/reports/Geothermal_Update_August_7_2008_FINAL.pdf

Swezey, B.; Aabakken, J.; and Bird, L. (2007). A Preliminary Examination of the Supply 

and Demand Balance for Renewable Electricity, NREL/TP-670-42266. Golden, CO: 

National Renewable Energy Laboratory, October 2007. 

http://www.eere.energy.gov/greenpower/pdfs/42266.pdf

Western Governors’ Association. (2008). Western Renewable Energy Zones Committee 

Charter (draft), May 21, 2008. http://www.westgov.org/wga/initiatives/wrez/

Wiser, R.; Barbose, G. (2008). Renewables Portfolio Standards in the United States — A 

Status Report with Data Through 2007, Lawrence Berkeley National Laboratory, April

2008. http://eetd.lbl.gov/ea/EMP/reports/lbnl-154e-revised.pdf
37

Wiser, R.; Bolinger, M. (2008) Annual Report on U.S. Wind Power Installation, Cost, 

and Performance Trends: 2007, Lawrence Berkeley National Laboratory, LBNL 275-E, 

May 2008. http://eetd.lbl.gov/ea/EMP/reports/lbnl-275e.pdf

Wiser, R.; Bolinger, M. (2007). Annual Report on U.S. Wind Power Installation, Cost, 

and Performance Trends: 2006, Lawrence Berkeley National Laboratory, May 2007. 

http://eetd.lbl.gov/ea/EMP/reports/ann-rpt-wind-06.pdf
38

Appendix A. Planned Geothermal and CSP Projects

Table A1. Geothermal Developing Projects by Phase

Source: Slack 2008.

Table A2. CSP Developing Projects by Phase

Project Name Project Owner(s)

Capacity

(MW) State

Year in

 Service Status

Beacon Solar Energy Project NextEra Energy 250.00 CA 2012 Announced

Bethel Thermal 1 Bethel Energy LLC 49.40 CA 2010 Advanced Development

Bethel Thermal 2 Bethel Energy LLC 49.40 CA - Advanced Development

Carrizo Energy Solar Farm Ausra CA II 177.00 CA 2010 Advanced Development

Coalinga Solar Martifer Renewables 107.00 CA 2011 Advanced Development

Emcore CPV SunPeak Power 200.00 NM 2010 Planning

Gaskell SunTower Project eSolar 105.00 CA 2011 Advanced Development

Gaskell SunTower Project eSolar 140.00 CA 2013 Advanced Development

Harper Lake Energy Park Solar Harper Lake LLC 100.00 CA - Announced

Harper Lake Energy Park Solar (Expansion) Harper Lake LLC 250.00 CA - Planning

Imperial Valley Solar Project (Solar Two ) Stirling Energy Systems Inc. 300.00 CA 2011 Advanced Development

Imperial Valley Solar Project (Solar Two Expansion) Stirling Energy Systems Inc. 600.00 CA - Announced

Ivanpah 1 BrightSource Energy 100.00 CA 2011 Advanced Development

Ivanpah 2 BrightSource Energy 100.00 CA 2011 Advanced Development

Ivanpah 3 BrightSource Energy 200.00 CA 2012 Announced

Martin Next Generation Solar Energy Center Florida Power & Light Co. 75.00 FL 2010 Construction Begun

Mojave Solar Park 1 Solel Inc 553.00 CA 2011 Advanced Development

Nevada Solar One Acciona 64.00 NV 2007 Operational

Solana Generating Station Arizona Solar One 280.00 AZ 2011 Advanced Development

SolarDunes SkyFuel 100.00 CO - Announced

Solargenix Saguaro APS Plant 1.00 AZ 2007 Operational

Sopogy Demonstration Plant Sopogy 1.00 HI 2009 Under Construction

Southern California Hybrid Solar Victorville, City of 50.00 CA 2010 Announced

Victorville 2 Solar Victorville, City of 50.00 CA 2011 Advanced Development

Victorville Solar Project (Solar One ) Stirling Energy Systems Inc. 500.00 CA 2009 Advanced Development

Victorville Solar Project (Solar One Expansion) Stirling Energy Systems Inc. 350.00 CA 2012 Announced

Source: Prometheus/Chad Bourne & Barke LLP Presentation+ LBNL
39

Appendix B. Regional Balances

The following figures show the relative magnitude of supply and demand projections for 

all regions defined in the analysis (except Hawaii and Alaska). It should be noted that in 

some regions, the BAU supply estimates are higher in some years than the high wind case

because the allocation of the wind energy capacity among regions is done differently for 

the two scenarios. The BAU case is based on historic growth in the region, whereas the 

high wind case uses BTM Consult (2008) market projections for wind energy capacity 

additions nationally, which are then allocated regionally incorporating the constraints 

built into the ReEDS model used for the DOE 20% wind study (DOE 2008). 

In the Midwest, both BAU and high wind scenarios show that renewable energy 

generation would be well in excess of estimated demand in future years (Figure B1). It is 

interesting to note that the BAU supply scenario, while lower overall on a national basis, 

shows a higher level of renewable energy generation in the Midwest than under the high 

wind scenario in some years. The BAU scenario shows significant growth in wind 

capacity in the Midwest region over the study period because of the large amount of wind 

capacity added in the region in recent years. 

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

BAU Supply

High Wind 

Supply

Figure B1. Supply and demand projections for the Midwest, 2004-2015 (MWh)

Figures B2 and B3 show that in New England and New York, demand is projected to 

outstrip supply over the period of the analysis. Similarly, in the Mid-Atlantic region, 

demand for renewable energy surpasses both the BAU and high wind scenario 

projections starting in 2009 (Figure B4).
40

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B2. Supply and demand projections for New England, 2004-2015 (MWh)

0

2,000

4,000

6,000

8,000

10,000

12,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B3. Supply and demand projections in New York, 2004-2015 (MWh)

0

5,000

10,000

15,000

20,000

25,000

30,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B4. Supply and demand projections in the Mid-Atlantic, 2004-2015 (MWh)
41

In the Heartland region, demand is low because Kansas and Oklahoma have no RPS

policies (Figure B5). Historical growth of renewables has been slow in the region, so the 

BAU case shows little growth through 2015. However, due to the quality of the wind 

resources in the region and estimated supplies in the DOE 20% wind study, which are 

used to apportion wind across regions, the high wind case projects that wind development 

will increase sharply between 2010 and 2015. Neither projection accounts for the recent 

decision by three Nebraska utilities to join the Southwest Power Pool (SPP), which would 

expand the RTO’s geographic footprint. 

0

5,000

10,000

15,000

20,000

25,000

30,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B5. Supply and demand projections in the Heartland, 2004-2015 (MWh)

In the Southeast, demand for renewable energy generation is projected to be low through 

2010 and then accelerate as a result of the recently adopted RPS policy in Missouri. 

Renewable energy supply is projected to exceed demand considerably in the near term, 

with the gap decreasing in later years (Figure B6). 

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B6. Supply and demand projections in the Southeast, 2004-2015 (MWh)

Figure B7 compares supply and demand for renewables in Florida. Demand for 

renewable energy generation drops in 2009 because Florida Power and Light terminated 
42

its green power program. The BAU and high wind supply projections are the same (and 

appear as a single line in Figure B7) for Florida because no wind is projected to come 

online in the state under either scenario through 2015. 

0

200

400

600

800

1,000

1,200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

BAU and 

High Wind 

Supply

Figure B7. Supply and demand projections in Florida, 2004-2015 (MWh)

Figure B8 shows supply shortages in California under that BAU scenario, starting in 

2010. On the other hand, the high wind case shows excess supplies for all years except 

for 2010. Renewable energy supply projections in the West exceed projected demand 

through 2015 (Figure B9). It is possible that any shortfalls in California could be met 

through excess generation from the West to the extent that they can meet California’s 

RPS deliverability requirements. However, interregional transfers were not considered in 

the analysis – California was treated as a separate region. 

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B8. Supply and demand projections in California, 2004-2015 (MWh)
43

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B9. Supply and demand projections in the West, 2004-2015 (MWh)

For Texas, both the BAU and high wind supply projections are similar, and significantly 

higher than projected demand. Texas has the most installed wind capacity of any state to 

date; and because of the magnitude of recent wind energy capacity additions, the BAU 

scenario reflects a high level of growth through 2015. In fact, it is interesting to note that 

the BAU supply scenario, while lower overall on a national basis, shows a higher level of 

renewable energy generation in Texas than under the high wind scenario. 

0

10,000

20,000

30,000

40,000

50,000

60,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Generation (MWh)

Demand

High Wind 

Supply

BAU Supply

Figure B10. Supply and demand projections in Texas, 2004-2015 (MWh)
F1147-E(10/2008)

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An Examination of the Regional Supply and Demand Balance for 

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This report examines the balance between the demand and supply of new renewable electricity in the United States 

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NREL; renewable portfolio standard; RPS; supply and demand; renewable energy certificate; REC; electricity; 

regional; installed capacity; wind; geothermal; Lori Bird; David Hurlbut; Pearl Donohoo; Karlynn Cory; Claire Kreycik

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