The risks in renewable portfolio standards.
Gary L. Hunt is president of Global Energy Advisors.
State-mandated renewable portfolio standards (RPS)—which set measurable requirements for regulated investor-owned utilities to include renewable energy projects in their portfolio—are being adopted across the country to facilitate the development of renewable energy projects. Nineteen states have enacted renewable portfolio standards (see Figure 1 and Table 1), but significant barriers remain to fulfill the potential of RPS. The U.S. Department of Energy estimates that up to 100,000 MW of wind power—about six percent of the U.S. electricity supply—could be running by 2020.1 Note that FERC Order No. 2003 addresses needed changes in wholesale market rules to accommodate the interconnection needs of wind generation. But will RPS actually result in a substantial amount of new project construction?
Challenges to Realizing RPS Objectives
In its technical conference on impediments to wind development, FERC staff outlined some of the key challenges facing wind development within the context of RPS.