RPS: States Can, Should, Go Farther

Last week, James Newcomb and Mathias Bell gave a presentation to the California Energy Commission describing different ways California could go beyond their current renewable portfolio standard and achieve a 50 percent renewable electricity system by 2030—cost effectively. But why would a state with the most aggressive goal for renewables go even farther? I sat down with both of them to find out.

Vaughn: 

How many states have renewable portfolio standards and how have these goals driven renewable development?

Bell:

Today, 30 states have an RPS in some form. Nevada and Texas were the first states to enact them, and it is no coincidence that they are now the U.S. leader in installed wind capacity. California leads with the most ambitious standards for 2020, followed by Colorado and Hawaii.

Renewable portfolio standards have done a great deal to drive renewable development by creating markets for renewable technologies that have been able to grow over time. As the number of installations increases, the cost for wind and solar have dropped accordingly. As a result, states are setting new goals as costs continue to decrease and states witness other significant economic benefits such as job creation.

More importantly, these goals have given states more confidence in renewable as a resource. Renewables at one time were considered a pie-in-the-sky option, and states were talking about putting 1 percent or 2 percent on the system. But, as we’ve seen with Xcel Energy in Colorado and Minnesota, as utilities put higher levels of renewables on their systems they gain confidence that they can do successfully and reliably, and have become much more open to looking beyond the RPS.

Vaughn:

What kind of effect does an RPS have on not just state, but regional renewable growth?

Bell:

Because a lot of states are linked by regional planning bodies, when one state puts an RPS forward, the regional coordinating party has to start planning for higher level of renewables as well. With this infrastructure in place, it becomes easier for other neighboring states to play follow the leader.

Vaughn:

Why would a state look beyond their established RPS?

Bell:

It’s been surprising that many states have been able to meet or exceed their RPS without much difficulty. Colorado and California are both on-track to meet their ambitious 2020 goals, and many other states have surpassed their goals. Now the question is: Can we go further? And, how much further can we go?

Today, 2020 goals are less than 8 years away. What investors, planners, and utilities are all looking for is certainty. If California waits until 2018 to set a new goal, it could introduce uncertainty in the market, delaying investments and holding back progress. Looking further ahead sends a clear message to the market, and can help keep costs down.

The good news is renewables are quick to deploy. You can install a solar or wind farm in 2-3 years, while a nuclear plant takes significantly longer.

Newcomb:

Looking ahead, policymakers may want to construct RPS goals with explicit targets for distributed renewable deployment given the local economic development benefits that these types of resources bring at the community level. Technologically, the state-of-the-art is advancing rapidly for distributed resource development and integration. There will be increased opportunities for these resources to compete economically with larger-scale renewables, but it will take shifts in policy and regulation to get the best value of out targeted deployment of these resources instead of creating set-asides.

Vaughn:

What are the major challenges to looking ahead?

Bell:

Many of the most significant challenges are coming to light in California for example as they start the conversation about going beyond 33 percent.

Newcomb:

At all levels of the system, integration and flexibility will be essential to adapting to a high renewable future. New technologies and business models are emerging to achieve this flexibility and to create a system that could actually be more resilient and self-healing than today’s grid. But, we can only get there if we can create the right incentives for stakeholders throughout the system.

Vaughn:

How is RMI helping stakeholders take a long-term view?

Bell:

In our upcoming resource study, RMI looks at the potential for California to achieve a 50 percent renewables target by 2030. We help to frame all of the great work that has been done already, but shift the focus away from the short-term horizon—to long-term goals that ensure a clean, reliable, and cost-effective system.

Getting to 2020 is a very important milestone, but the state has to continue to look out to 2050 and make sure they’re still making progress. RMI is helping to keep the train on the track and to tackle economic uncertainty.

Looking out to 2030, our report finds that meeting a 50 percent renewable target isn’t going to be economically burdensome to California. The costs, in fact, will be much lower than we expected. We map out several different pathways to get to a 50 percent target, doing our best to ensure that the system will still be reliable.

Vaughn:

What else is important for California and other states to consider?

Bell:

As states move towards low carbon systems, it is really important to keep energy efficiency as a priority. Programs that aim to increase efficiency and goals that support renewables are related, but separate. States can go much farther with renewables if they compliment these efforts with efficiency.