CONTACTS

Elizabeth Brown, Karlynn Cory, John Brown, Lori Bird, 

and Blair Swezey

National Renewable Energy Laboratory (NREL)

1617 Cole Blvd.

Golden, CO 80401-3393

Elizabeth_Brown@nrel.gov, Karlynn_Cory@nrel.gov, 

John_Brown@nrel.gov, Lori_Bird@nrel.gov, 

Blair_Swezey@nrel.gov

Strategic E nergy

SEAC Analysis C enter

Impacts of Renewable Fuel and Electricity

Standards on State Economies

BACKGROUND

Markets for renewable electricity 

and renewable transportation 

fuels are expanding rapidly due 

to a number of state-level 

initiatives, including RPS and RFS 

policies. NREL has led efforts 

supported by the Department of 

Energy (DOE), the Environmental 

Protection Agency (EPA), and the 

United State Department of 

Agriculture (USDA) in helping 

states understand renewable 

policy design and implementation issues. The number of 

states with RPS policies reached 

20 (plus the District of Columbia) 

in 2006; an additional three 

states had renewable 

electricity goals (Figure 1). On 

the renewable fuels side, RFS 

policies are being adopted 

and/or considered across the 

United States. While only two 

states had RFS policies in 2004, 

five additional states enacted 

policies and another 14 proposed 

RFS legislation in 2006 (Figure 2). 

Lessons learned from RPS design 

and implementation will help 

streamline, strengthen, and inform 

RFS policy design and implementation. 

Markets for renewable electricity 

and renewable transportation 

fuels are expanding rapidly due 

to a number of state-level 

initiatives, including RPS and RFS 

policies. NREL has led efforts 

supported by the Department of 

Energy (DOE), the Environmental 

Protection Agency (EPA), and the 

United State Department of 

Agriculture (USDA) in helping 

states understand renewable 

policy design and implementation issues. The number of 

states with RPS policies reached 

20 (plus the District of Columbia) 

in 2006; an additional three 

states had renewable 

electricity goals (Figure 1). On 

the renewable fuels side, RFS 

policies are being adopted 

and/or considered across the 

United States. While only two 

states had RFS policies in 2004, 

five additional states enacted 

policies and another 14 proposed 

RFS legislation in 2006 (Figure 2). 

Lessons learned from RPS design 

and implementation will help 

streamline, strengthen, and inform 

RFS policy design and implementation. 

Figure 1: Status of RPS policies as of 2006, Source: Ryan Wiser, LBNL

Figure 3: Energy use by U.S. sector 

Source: EIA-Annual Energy Review 2004

Commercial

18%

Residential 

Transport 22%

27%

Industrial

33%

0

5

10

15

20

25

30

35

1970 1980 1990 2000 2010 2020

Auto

Light Trucks

Heavy 

Trucks

Buses

Historical Projection

Figure 4: Highway transportation energy allocation by mode,

Sources: DOE-EIA. Historical – Annual Energy Review 2003, 

Projection – AEO 2004

UNDERSTANDING THE TRANSPORTATION MARKET

NREL also has extensive understanding of the transportation and fuels market. 

Twenty-seven percent of energy used in the United States is used in the 

transportation sector (Figure 3) and of that, cars and light trucks – the 

primary targets of current RFS policies – are the primary uses of energy in 

the sector (Figure 4).

POTENTIAL FOR RFS POLICY DEVELOPMENT

NREL has completed an initial study to 

understand and determine best 

practices for designing RFS policies. In 

May of 2006, NREL completed a 

preliminary study of 10 existing 

and planned policies to determine 

possible oil avoidance impacts of RFS 

policies, with the result of more than 

70 million barrels of oil being avoided 

cumulatively as a result of those 

policies (Figure 5). Further research is 

necessary to understand the potential benefits and impacts of these policies and 

to examine design and implementation issues. 

Figure 5: Projected million barrels of oil avoided from RFS 

policies in place and planned as of May 2006

0

20

40

60

80

2010 2015

Planned

Current

RPS AND RFS POLICIES FACE SIMILAR 

POLICY CONSIDERATIONS

The considerations involved in designing and implementing 

successful energy-related state policy are similar in both the 

electricity and fuels sectors:

1. Are policies binding with clear enforcement mechanisms? 

2. How much renewable energy generation or production 

 capacity will result? 

3. Can infrastructure challenges (e.g., siting, distribution, and 

 transmission) be overcome to meet the standards? 

4. Will these policies provide sufficient support to help 

 facilities secure financing?

KEY ANALYSIS QUESTIONS

1. How effective have RPS policies been to date? What 

 challenges are states facing in implementing RPS 

 requirements?

2. Are there lessons learned from RPS policies that 

 could inform best design and implementation 

 practices of RFS policies?

3. Will 2% biodiesel fuel standard have any impact, 

 considering current ultra-low sulfur diesel 

 requirements? 

4. What are the potential emission impacts of RFS 

 standards, and is more testing on biofuel emissions 

 needed? 

5. Will RFS standards create market activity without 

 including penalty provisions?

GOAL

Explore market, policy, and economic analysis issues surrounding state renewable portfolio standard (RPS) and renewable fuel standards (RFS). Quadrillion Btu Millions of Barrels Oil Avoided

Figure 2: Status of RFS policies as of May 2006

The information contained in this poster 

is subject to a government license.

CU Energy Initiative/NREL Symposium

University of Colorado, Boulder

October 3, 2006

NREL/PO-640-40670