State mandates have ‘diminished’ in importance — report

Source: Christa Marshall, E&E News reporter • Posted: Tuesday, August 1, 2017

State mandates have driven half of U.S. growth in renewables since 2000, although declining costs have made such standards less important than they used to be, said a new report from Lawrence Berkeley National Laboratory.

The lab concluded that 44 percent of renewable capacity additions last year resulted from state renewable standards, down from about 60 to 70 percent before 2014.

“Nationally, the role of [renewable portfolio standards] has diminished over time,” said the report, which was released today.

Corporate purchases of renewable energy production systems, along with declining costs for wind and solar generally, are contributing to the diminished role of RPSs in relative terms, said report lead author Galen Barbose, a research scientist at Lawrence Berkeley. Utility-scale solar has also grown in non-RPS markets, the report said.

The study results don’t mean RPSs are leading to fewer megawatts, Barbose cautioned, but that other factors are growing in importance.

The trends differ dramatically by region. In areas outside the wind hubs of the Midwest and Texas, RPS standards may still be driving as much as 70 to 90 percent of new capacity because of higher costs in those areas, researchers said.

The importance of RPSs for wind in particular has declined. Historically, wind was the “dominant” generation source tied to state standards, but in 2016, only 21 percent of wind additions resulted from RPSs. That compares with 59 percent for solar, which benefited from new state carve-outs.

Wind is benefiting from “a combination of growing demand from corporate procurement and relatively attractive economics” outside of RPSs, said Barbose.

Currently, RPS standards exist in 29 states and Washington, D.C., and cover about 56 percent of electricity sales. They generally exclude large-scale hydropower and require states to meet a percentage of electricity with alternative energy.

There have been attempts in some states to roll back or freeze the mandates, including a failed push in Ohio last year to make them optional (Greenwire, Dec. 27, 2016).

In all, state lawmakers around the country introduced 41 bills in 2016 and 2017 to weaken standards, according to the report.

However, there were about 85 introduced bills — twice the amount — in the same time frame to strengthen standards. That’s a marked shift from earlier years, when the balance between pro- and anti- bills was about even, said Barbose. And the report noted that bills that actually passed since 2016 all expanded or strengthened standards.

“Part of that is motivated by the fact that many of these states were starting to approach their final RPS target year,” Barbose said. That prompted states to expand requirements.

Michigan, for example, increased its RPS to 15 percent by 2021, and Maryland expanded requirements to 25 percent renewable energy by 2020. Massachusetts created a new carve-out for offshore wind.

Overall, lab researchers estimated that RPS standards around the country will drive about a 50 percent increase in renewable generation by 2030.

“To meet future RPS demand, total U.S. renewable generation will need to reach 13 percent of electricity sales by 2030,” the report said.