What is a Renewable Portfolio Standard?
The concept of a Renewable Portfolio Standard (or RPS) is a relatively new one, but it has quickly become pervasive in the U.S.
In fact, the majority of states have implemented either a Renewable Portfolio Standard or an Alternative Energy Portfolio Standards, which both essentially amount to the same thing: a commitment to source an amount of the region’s total energy production from renewable or alternative energy sources.
California, for example, has one of the more ambitious Renewable Portfolio Standards. The state aggressively ramped up its energy production from renewable resources to 20% of the total by 2010 and has mandated that 33% of its power must come from renewable sources 2020. These sources include wind, solar, and geothermal energy.
The Trend Toward Renewable Energy Mandates
Facing an unreliable dependence on foreign oil, depletion of our finite fossil fuel supplies, and potentially catastrophic climate change has presented a new ethos around energy production and consumption. Demand for sustainable, renewable sources of energy has never been more pronounced and the concept of a market mandate has never been more agreeable.
While market mandates are often widely opposed by interests in the private sector, Renewable Portfolio Standards have proven wildly popular as a result. RPS regulations are currently in place in 30 of 50 states, a number of European countries, and Chile. Supporters believe that these mandates encourage competition and innovation, delivering renewable energy to consumers at the lowest possible cost and making it competitive with fossil fuel produced energy. However, there is no federal Renewable Portfolio Standard in the U.S.
Design of Renewable Portfolio Standards Varies
The design of Renewable Portfolio Standards varies from state to state, targeting utilities and prioritizing renewable resources differently. Policies vary in terms of what energy sources are eligible for being considered renewable sources. One of the biggest areas of contention is the inclusion or exclusion of hydroelectric power, which is a major energy supplier of renewable energy in many areas. Those arguing for its exclusion cite the intention of RPS-type policies is to encourage the development of new renewable energy resources and not to reward existing power producers. Some also implement non-binding goals in addition to the enforceable mandates.
Regardless of specifics, the trend toward mandating renewable energy production is a hopeful one for many environmentalists as well as the renewable energy industry. Prioritizing renewable energy with mandates on such a widespread basis is a surefire way to help secure the nation–and the world’s–energy future.[photocredit: GetGreenLiving; CNT]