For the past decade, the renewable energy industry and various branches of the federal government have engaged in an ungainly, enormously unproductive two-step on production tax credits (PTC) for...
How Do You Get To Green?
And what’s the goal: a share of load or a cut in carbon?
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.
1. “ What Do You Mean by Green? ” by Michael Strong, Public Utilities Fortnightly , October 1, 2003, pp.39-41.
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.
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.