Berkeley Lab: RPS-Driven Demand For Renewables Could Double In 15 Years


State renewable portfolio standards (RPS) have contributed to more than half of all renewable electricity growth in the U.S. since 2000, according to a new status report on state RPS polices from the Lawrence Berkeley National Laboratory.

Most state RPS requirements will continue to rise through at least 2020, if not beyond; collectively, these policies will require substantial further growth in U.S. renewable electricity supplies, the report says.

The status report – published in slide-deck form and entitled “U.S. Renewables Portfolio Standards: 2016 Annual Status Report” – provides a data-intensive review of state RPS policies by highlighting recent legislative revisions, key policy design features, past and projected impacts on renewables development, compliance trends, and costs.

“This document is intended as a progress report to help policymakers and other electricity industry participants understand the past and future role of state RPS programs – recognizing that they are but one of a number of key drivers affecting renewable energy development in the United States,” says Berkeley Lab’s Galen Barbose, the report’s author.

Mandatory RPS policies currently exist in 29 U.S. states, plus Washington, D.C., and have been a cornerstone of renewable electricity policy in the U.S. over the past decade, explains Berkeley Lab. Additional states have voluntary renewable electricity goals.

Trends highlighted in the report include the following:

-In total, almost 150 RPS-related bills have been introduced since the beginning of 2015 – split roughly evenly between those that would strengthen, weaken or have a neutral impact on RPS requirements. Significant legislation enacted in the past year includes new or expanded RPS policies in California, Hawaii, Oregon and Vermont, while Kansas replaced its RPS with a voluntary goal. Regulators in New York are also in the process of expanding the state’s RPS.

-More than half of all growth in U.S. renewable electricity generation (60%) and capacity (57%) since 2000 can be associated with state RPS requirements, though other drivers also undoubtedly contributed to this growth. The relative contribution of RPS programs to overall renewable energy growth has declined in recent years while other drivers – such as corporate procurement and projects developed for merchant power sales – have become more significant. Although wind energy has been the predominant share (64%) of all RPS-driven capacity growth to-date, solar energy was by far the largest source (69%) of new RPS builds in 2015.

-Five states reached the terminal year of their RPS in 2015, and most others will do so by 2025. Nevertheless, total RPS-driven demand for renewable energy will double from 215 TWh in 2015 to 431 TWh in 2030. To match this growth, total non-hydroelectric renewables in the U.S. would need to reach 12.1% of electricity sales by 2030 – up from roughly 8% today – though actual growth may be greater or less than this amount.

-Relative to currently available renewable energy supply, increasing RPS demand could require an additional 60 GW of primarily non-hydroelectric renewables capacity by 2030 – beyond the 114 GW of capacity installed as of year-end 2015. Current build rates are on pace to meet those requirements, with roughly 6 GW of non-hydroelectric renewable generation capacity added for RPS requirements in 2015.

-RPS requirements have thus far largely been met fully with renewable energy purchases, with states collectively meeting roughly 95% of their interim RPS targets in recent years. Achievement of solar and distributed generation carve-outs has been somewhat lower, though still relatively high, with states meeting 87% of recent interim targets, on average.

-RPS compliance costs totaled roughly $2.6 billion in 2014 (the most recent year with available data), averaging $12/MWh of renewable electricity. These costs equate to 1.3% of average consumer electricity bills in 2014 – up from 1.0% of average electricity bills in 2013. Growth in compliance costs going forward will be capped in most RPS states by cost-containment mechanisms of various types. A separate Berkeley Lab study released earlier this year quantified benefits associated with state RPS policies.

The status report draws on regulatory filings and other public data sources and is an extension of Berkeley Lab’s ongoing efforts to track and analyze state RPS policies.

This publication and other related resources can be found here.

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