A National RPS For A National Market
When Congress returns to Capitol Hill from its two week recess next week, it’s expected to tackle the energy bill in earnest. A major provision in the bill that could drastically increase growth in the renewable energy sector is the concept of a national renewable portfolio standard, or RPS. The RPS tactic has been successful in 28 states in creating a market for renewable energy, and if the U.S. is serious about building a carbon neutral economy and reducing global warming, a national RPS is not only necessary, it is vital.
Essentially, an RPS requires utilities to purchase a percentage of the energy they provide to customers from renewable sources. The current energy bill making its way through Congress eases into the process by starting the renewable energy requirement at 6% in 2012 and increasing it steadily over the next decade. The schedule is as follows:
More than half of U.S. states already have RPS requirements of their own and this national schedule would not override those state provisions. In fact, many states today are already meeting the 6% standard proposed for 2012, and in some cases, far exceeding it. What may rustle some feathers among utilities in states without current RPS mandates is the swift progression of the proposed schedule. Moving from 6% to 11% in four years might be tough for states not already in the renewable energy game, especially in the midst of a major economic downturn.
Despite the growing pains associated with a national RPS, it is a requirement for a healthy renewable energy market in the U.S. Across all sectors, from solar to wind to biomass, the renewable energy industry has gained significant market traction, despite inconsistent federal support. But with a national RPS in place the U.S. government can provide the stability the industry needs to achieve economies of scale and mass adoption, which are critical to bringing the costs of renewable energy down and achieving grid parity, the point at which the price of electricity generated by renewable sources is equal to or cheaper than grid power.
The renewable energy industry will still experience growth without a national RPS, but it will be slower. If America is serious about reducing its use of fossil fuels, it should set benchmarks to meet its goals.
Tags: Cleantech, gird parity, national RPS, renewable energy, renewable energy market, renewable portfolio standard
June 3rd, 2009 at 12:58 am
We in Europe have come to learn over the last few decades that renewables are, without question, the way forward. America, in general, needs to develop a more green attitude and policy making isn’t the real way for ward….as with any true move forward…education is required.