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How Do You Get To Green?

And what’s the goal: a share of load or a cut in carbon?

Fortnightly Magazine - July 2013
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use will be provided with a competitive advantage. In turn, the market should gain more generation options that produce environmentally preferable results. Also, because results-based incentives will likely value on-peak generation over off-peak generation, energy storage or other improvements in renewable dispatchabily would have a new potential revenue stream when used in conjunction with primarily off-peak generation. 17 Those results have the potential to help Illinois and the rest of the country get to green.

Endnotes:

1. “ What Do You Mean by Green? ” by Michael Strong, Public Utilities Fortnightly , October 1, 2003, pp.39-41.

2. Although not currently regulated, given U.S. EPA’s recent Endangerment finding under the Clean Air Act, this is intended to include carbon dioxide and other greenhouse gases.

3. This definition is designed to accommodate geothermal and hydroelectric dam technologies, while acknowledging the debate about environmental effects of both.

4. Arguably hydroelectric energy is dispatchable; however, given the environmental effects of dams, it’s probably safe to say that new hydro build is no longer considered environmentally preferable.

5. 20 ILCS 3855/1-75(c)(1).

6. 220 ILCS 5/111.5(l) (pass through) and 20 ILCS 3855/1-75(c)(2) (per kWh cap).

7. See 220 ILCS 5/16-115D(d).

8. See 220 ILCS 5/16-115D(a)(3)-(4).

9. See 20 ILCS 3855/1-75(c)(5).

10. See “ Wind energy top source for new generation in 2012; American wind power installed new record of 13,124 MW ,” American Wind Energy Association Press Release, Jan. 30, 2013.

11. “ Illinois Approves Results of Renewable Energy RFP ,” Illinois Commerce Commission Press Release, Dec. 15, 2010. 

12. See 20 ILCS 3855/1-56(a) and (c).

13. See energy.gov/savings/renewable-electricity-production-tax-credit-ptc. Note that the Illinois RPS wasn’t in effect in 2005 when solar was incentivized by the production tax credit.

14. Illinois Power Agency, Annual Report The Costs and Benefits of Renewable Resource Procurement in Illinois Under the Illinois Power Agency and Illinois Public Utilities Acts (April 2013) at 9-10 (available at http://www2.illinois.gov/ipa/Documents/201304-IPA-Renewables-Report.pdf).

15. See, e.g., Negative Electricity Prices and the Production Tax Credit , Northbridge Group, Sept. 14, 2012.

16. Regardless of whether results-based incentives come at the federal, RTO, or state level, it’s unlikely that (absent a breakthrough storage technology) any results-based incentive would allow green generation to compete across the board with non-green generation. As imagined in the example above, there will still be place for the REC system to pay the premium above market for renewable generation.

17. Effective energy storage would allow renewable energy to dispatch at the time of day with the maximum results-based impact, whether on-peak or off-peak.

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