Allowance structures will influence project economics.
Carbon-reduction policies are being designed and implemented across the country. One common feature of these regulatory programs is a carbon cap-and-trade system—i.e., a carbon emissions market.
Renewables attract utility investment dollars.
New federal policies have opened the gates to utility investments in renewable generating plants. Some states, however, still make it difficult for utilities to put such assets into the rate base. Executives at Duke, OG&E, PG&E and Xcel Energy discuss challenges and opportunities affecting their renewable investment strategies.
As green mandates tighten, utilities scramble to comply.
Mandatory renewable portfolio standards are becoming the norm. But after low-hanging green fruits are harvested, renewable power might get scarce. Many utilities will struggle to meet RPS requirements until lawmakers create stable federal policies and a national market for green credits.
The complex financial analysis that has driven renewable energy investment has become the standard for assessing all potential electric generation investments.
Tax incentives, renewable portfolio standards, and the creation of renewable-energy credits and carbon constraints are no longer separate considerations when assessing renewable-energy projects. The convergence of these economic considerations will affect the value proposition for every potential generation investment in the United States.
The risks in renewable portfolio standards.
State-mandated renewable portfolio standards are being adopted across the country to facilitate the development of renewable energy projects. Nineteen states have enacted renewable portfolio standards, but significant barriers remain to fulfill the potential of RPS. Will RPS actually result in a substantial amount of new project construction?