Compelling evidence shows that state-level renewable electricity standards (RES) are affordably reducing market barriers and stimulating new, stable, and long-term markets for wind, solar, and other renewable energy technologies throughout the United States. To continue the nation’s clean energy transition in 2013 and beyond, strong leadership in expanding state RES policies is critical. Not surprisingly, fossil-fuel backed special interest groups have geared up to block progress.
Creating a long-term market for renewable energy
This post is part of a series on Ramping Up Renewables: Clean Energy Policies to Watch in 2013.
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Over the last decade, state-level RESs have emerged as one of the most important and successful tools for promoting renewable energy sources. It is a bipartisan, market-based approach that stimulates competition among renewable energy developers, and creates an ongoing incentive to reduce costs.
At its core, the RES requires electric utilities to gradually increase the amount of renewable energy sources in their power supplies over a period of time, usually a decade or more. To date, RES polices have been implemented in 29 states and the District of Columbia (DC), and another eight states have adopted voluntary renewable energy goals (see map). While the renewable energy requirements differ substantially across the country, 17 states and DC have set targets of at least 20 percent.
Source: Union of Concerned Scientists
Proven track record
Collectively, state RESs are working very well. They have already supported the development of at least 33,000 megawatts (MW) of new renewable power through 2011, according to an estimate by researchers at the Lawrence Berkeley National Laboratory (LBNL). And that’s the just the beginning.
By 2025, my projections show that state RESs will support about 103,000 MW of renewable energy capacity, assuming the targets are fully achieved (Figure 2). More than 87,000 MW of this total comes from new development — that’s enough power to meet the annual electricity needs of 50 million typical homes. California, Illinois, Texas, New Jersey, and Minnesota currently represent the five largest U.S.-based markets for new renewable energy development, but California’s 33 percent requirement is by far the most aggressive.
Projected Renewable Energy Development from State Renewable Electricity Standards
Source: UCS
Utilities are demonstrating that they can comply with the annual RES targets at affordable costs to consumers. Evaluating actual compliance data from state and utility reports tracked by LBNL, it is clear that utilities are meeting about 96 percent of their renewable energy requirements overall, with most states reporting full compliance. In fact, many states — including Colorado, Texas, and Minnesota — appear to be several years or more ahead of schedule in terms of meeting future annual targets.
State RES policies are also proving to be consumer friendly, typically resulting in modest costs or savings. For example, LBNL recently evaluated 2009 and 2010 RES cost data available for 14 states and estimated that all but one state experienced cost impacts of about 1.5 percent or less. In Minnesota, Xcel Energy — the state’s largest utility — reported that renewable energy investments actually lowered prices in 2008-2009 by 0.7 percent. In addition, the required investments in renewable energy for Oregon’s second largest utility (PacifiCorp) also helped lower their total costs by $6.6 million in 2011.
Keeping the foot on the accelerator
As state legislatures across the country settle into their 2013 sessions, adopting a new and strengthening an existing RES should be high on the agenda. In fact, it ought to be a no-brainer given the success of state RESs so far and all the economic development, job creation, fuel diversity, and public health benefits that come from increasing our use of clean, homegrown renewable energy. Furthermore, there is strong precedence for doing so. Since 1999, 18 states have increased or accelerated their renewable energy targets, in some cases more than once.
Already this year, perennial renewable energy leader Minnesota appears to be exploring a higher target and heightened support for solar energy, and supporters in California are laying the groundwork for future expansion of their RES as well. In addition, a Pennsylvania law maker has introduced a stronger RES target, and the regulatory agency implementing New York’s RES is evaluating their policy in 2013 for possible future expansion. More states should be following their lead, which would help maintain the strong momentum that the renewable energy industry has gained recently.
Congress should also adopt a national RES, which would level the playing field by setting a minimum target for all states to achieve. A 2009 UCS analysis showed that a 25 percent by 2025 national RES would save consumers money and create nearly 300,000 jobs.
Standing in the way of progress
The significant growth in new renewable energy development spurred by state RESs has caught the attention of the fossil fuel industry. Led by the American Legislative Exchange Council (ALEC), special interest groups with deep-pocketed funders like the Koch brothers, who are heavily vested in coal, have launched a misinformation campaign targeting RESs across the nation. For years, ALEC has misled politicians by denying the role carbon emitted by human activities plays in warming our planet. Now, legislation ALEC is pushing to repeal RESs has been exposed as the handy work of the Heartland Institute, an anti-science group.
Similar efforts to go after RESs have failed in in more than a dozen states. Nevertheless, ALEC and company are unlikely to be deterred, so defending existing state RESs in 2013 will be as critical as expanding them. Fortunately, the real-world evidence about the success of the RES and the benefits of transitioning to a clean energy economy are hard to ignore.