New green mandates force portfolio planners to re-think their models.
In the past year, six states either have passed mandatory renewable portfolio standards (RPS) or added RPS through voluntary utility commitments, bringing the total number of states with RPS to 33—or two-thirds of all states. The U.S. Senate and House have introduced legislation to create a national RPS, although to date nothing has materialized. These initiatives, combined with a general evolution towards a “green” society, are having a significant impact on energy companies and their resource-planning processes.
Quantifying the impacts of RPS on utility integrated resource plans (IRP) sounds straight forward—just add more wind, solar, hydro, biomass, etc., to the plan and everything should be good to go. The reality is not quite so simple.
To understand the impacts of RPS on a utility’s IRP process, resource planners need to go back to the basics and make sure they understand the IRP process itself.
IRP came into vogue in the 1980s, went out of fashion in the late 1990s (market competition was supposed to take care of all of the industry’s capacity needs), and now is back again with several states requiring their utilities to file IRPs. Some states never abandoned the requirement.