The environmental and cost implications of solar energy preferences in Renewable Portfolio Standards

Many state-level Renewable Portfolio Standards (RPS) include preferences for solar generation, with goals of increasing the generation diversity, reducing solar costs, and encouraging local solar industries. Depending on their policy design, these preferences can impact the RPS program costs and emissions reduction. This study evaluates the impact of these policies on costs and emissions, coupling an economic dispatch model with optimized renewable site selection. Three policy designs of an increased RPS in Michigan are investigated: (1) 20% Solar Carve-Out, (2) 5% Distributed Generation Solar Carve-Out, and (3) 3× Solar Multiplier. The 20% Solar Carve-Out scenario was found to increase RPS costs 28%, while the 5% Distributed Generation Solar Carve-Out increased costs by 34%. Both of these solar preferences had minimal impact on total emissions. The 3× Solar Multiplier decreases total RPS program costs by 39%, but adds less than half of the total renewable generation of the other cases, significantly increasing emissions of CO₂, NO_x, and SO₂ relative to an RPS without the solar credit multiplier. Sensitivity analysis of the installed cost of solar and the natural gas price finds small changes in the results of the Carve-Out cases, with a larger impact on the 3× Solar Multiplier.     

Spatial variation of emissions impacts due to renewable energy siting decisions in the Western U.S. under high-renewable penetration scenarios

One of the policy goals motivating programs to increase renewable energy investment is that renewable electric generation will help reduce emissions of CO₂ as well as emissions of conventional pollutants (e.g., SO₂ and NO_x). As a policy instrument, Renewable Portfolio Standards (RPS) encourage investments in wind, solar and other generation sources with the goal of reducing air emissions from electricity production. Increased electricity production from wind turbines is expected to displace electricity production from fossil-fired plants, thus reducing overall system emissions. We analyze the emissions impacts of incremental investments in utility-scale wind power, on the order of 1 GW beyond RPS goals, in the Western United States using a utility-scale generation dispatch model that incorporates the impacts of transmission constraints. We find that wind investment in some locations leads to slight increases in overall emissions of CO₂, SO₂ and NO_x. The location of wind farms influences the environmental impact by changing the utilization of transmission assets, which affects the overall utilization of power generation sources and thus system-level emissions. Our results suggest that renewable energy policy beyond RPS targets should be carefully crafted to ensure consistency with environmental goals.     

Cost-effectiveness of renewable electricity policies

We analyze policies to promote renewable sources of electricity. A portfolio standard (RPS) raises electricity prices and primarily reduces gas-fired generation. A knee of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity price at the expense of taxpayers, which limits its effectiveness in reducing carbon emissions, and it is less cost-effective at increasing renewables than a portfolio standard. Neither policy is as cost-effective as a cap-and-trade policy for achieving carbon emission reductions.     

Renewable energy and policy options in an integrated ASEAN electricity market: Quantitative assessments and policy implications

Energy market integration (EMI) in the ASEAN region is a promising solution to relieve the current immobilization of its renewable energy resources and would serve the fast increasing demand for electricity in the region. EMI could be further extended with coordinated policies in carbon pricing, renewable energy portfolio standards (RPS), and feed-in-tariffs (FIT) in the ASEAN countries. Using a linear dynamic programming model, this study quantitatively assesses the impacts of EMI and the above-mentioned policies on the development of renewable energy in the power generation sector of the region, and the carbon emissions reduction achievable with these policies. According to our results, EMI is expected to significantly promote the adoption of renewable energy. Along with EMI, FIT appears to be more cost-effective than RPS and is recommended for the ASEAN region, albeit political barriers for policy coordination among the countries might be a practical concern. In addition, an RPS of 30% electricity from renewable sources by 2030, which is considered politically a “low-hanging fruit”, would achieve moderate improvements in carbon emissions reductions and renewable energy development, while incurring negligible increases in the total cost of electricity.     

A retrospective analysis of benefits and impacts of U.S. renewable portfolio standards

As states consider revising or developing renewable portfolio standards (RPS), they are evaluating policy costs, benefits, and other impacts. We present the first U. S. national-level assessment of state RPS program benefits and impacts, focusing on new renewable electricity resources used to meet RPS compliance obligations in 2013. In our central-case scenario, reductions in life-cycle greenhouse gas emissions from displaced fossil fuel-generated electricity resulted in $2.2 billion of global benefits. Health and environmental benefits from reductions in criteria air pollutants (sulfur dioxide, nitrogen oxides, and particulate matter 2.5) were even greater, estimated at $5.2 billion in the central case. Further benefits accrued in the form of reductions in water withdrawals and consumption for power generation. Finally, although best considered resource transfers rather than net societal benefits, new renewable electricity generation used for RPS compliance in 2013 also supported nearly 200,000 U. S.-based gross jobs and reduced wholesale electricity prices and natural gas prices, saving consumers a combined $1.3–$4.9 billion. In total, the estimated benefits and impacts well-exceed previous estimates of RPS compliance costs.     

The forest products industry at an energy/climate crossroads

Transformational energy and climate policies are being debated worldwide that could have significant impact upon the future of the forest products industry. Because woody biomass can produce alternative transportation fuels, low-carbon electricity, and numerous other “green” products in addition to traditional paper and lumber commodities, the future use of forest resources is highly uncertain. Using the National Energy Modeling System (NEMS), this paper assesses the future of the forest products industry under three possible U.S. policy scenarios: (1) a national renewable electricity standard, (2) a national policy of carbon constraints, and (3) incentives for industrial energy efficiency. In addition, we discuss how these policy scenarios might interface with the recently strengthened U.S. renewable fuels standards. The principal focus is on how forest products including residues might be utilized under different policy scenarios, and what such market shifts might mean for electricity and biomass prices, as well as energy consumption and carbon emissions. The results underscore the value of incentivizing energy efficiency in a portfolio of energy and climate policies in order to moderate electricity and biomass price escalation while strengthening energy security and reducing CO₂ emissions.     

Evaluating renewable portfolio standards and carbon cap scenarios in the U.S. electric sector

This report examines the impact of renewable portfolio standards (RPS) and cap-and-trade policy options on the U.S. electricity sector. The analysis uses the National Renewable Energy Laboratory's Regional Energy Deployment System (ReEDS) model that simulates the least-cost expansion of electricity generation capacity and transmission in the U.S. to examine the impact of a variety of emissions caps—and RPS scenarios both individually and combined. The generation mix, carbon emissions, and electricity price are examined for various policy combinations simulated in the modeling.     

Electricity sector reforms in four Latin-American countries and their impact on carbon dioxide emissions and renewable energy

This paper analyzes carbon dioxide (CO₂) emissions related to energy consumption for electricity generation in four Latin-American countries in the context of the liberalization process. From 1990 to 2006, power plants based on renewable energy sources decreased its share in power installed capacity, and the carbon index defined as CO₂ emission by unit of energy for electricity production stayed almost constant for all countries with the exception of Colombia, where the index reduced due to increase in hydroelectricity generation in the last years. The paper also presents a new set of policies to promote renewable energy sources that have been developed in the four countries. The paper concludes that restructuring did not bring about environmental benefits related to a decrease in CO₂ emissions because this depend on the existence of committed policies, and dedicated institutional and regulatory frameworks.     

Comparative assessment of greenhouse gas mitigation of hydrogen passenger trains

This paper examines a comparative assessment in terms of CO₂ emissions from a hydrogen passenger train in Ontario, Canada, particularly comparing four specific propulsion technologies: (1) conventional diesel internal combustion engine (ICE), (2) electrified train, (3) hydrogen ICE, and (4) hydrogen PEM fuel cell (PEMFC) train. For the electrified train, greenhouse gases from electricity generation by natural gas and coal-burning power plants are taken into consideration. Several hydrogen production methods are also considered in this analysis, i.e., (1) steam methane reforming (SMR), (2) thermochemical copper–chlorine (Cu–Cl) cycle supplied partly by waste heat from a nuclear plant, (3) renewable energies (solar and wind power) and (4) a combined renewable energy and copper–chlorine cycle. The results show that a PEMFC powertrain fueled by hydrogen produced from combined wind energy and a copper–chlorine plant is the most environmentally friendly method, with CO₂ emissions of about 9% of a conventional diesel train or electrified train that uses a coal-burning power plant to generate electricity. Hydrogen produced with a thermochemical cycle is a promising alternative to further reduce the greenhouse gas emissions. By replacing a conventional diesel train with hydrogen ICE or PEMFC trains fueled by Cu-Cl based-hydrogen, the annual CO₂ emissions are reduced by 2260 and 3318 tonnes, respectively. A comparison with different types of automobile commuting scenarios to carry an equivalent number of people as a train is also conducted. On an average basis, only an electric car using renewable energy-based electricity that carries more than three people may be competitive with hydrogen trains.     

The role of public policy in optimizing renewable energy development in the greater southern Appalachian mountains

This research presents a third component of a comprehensive decision support system for energy planning that allows for combining existing electricity generating capabilities with increased use of renewable energy sources. It focuses on energy planning at the regional level, and concentrates specifically on the greater southern Appalachian mountains of the eastern United States: a region that was chosen for analysis not only due to its heavy dependence on coal for electricity, but also because of its potential for increased use of wind and solar power. Previous research used a geographic information system (GIS) model for identifying renewable energy potential to provide input data for a multi-objective linear programming (MOLP) model to determine the optimal constrained mix of renewable energy sources and existing fossil fuel facilities by balancing annual generation costs against the corresponding greenhouse gas emissions. This new component of the system analyzes three potential public policies—renewable portfolio standard, carbon tax, and renewable energy production tax credit—that have been used to foster increased renewable energy usage. These policies require minor modifications to the MOLP model for implementation. The results of these policy cases were then analyzed to determine the impact that these policies have on generation cost and pollution emissions within the region.     

Multi-objective optimization model for sustainable Indonesian electricity system: Analysis of economic,environment, and adequacy of energy sources

This paper presents a multi-objective optimization model for a long-term generation mix in Indonesia. The objective of this work is to assess the economic, environment, and adequacy of local energy sources. The model includes two competing objective functions to seek the lowest cost of generation and the lowest CO₂ emissions while considering technology diffusion. The scenarios include the use of fossil reserves with or without the constraints of the reserve to production ratio and exports. The results indicate that Indonesia should develop all renewable energy and requires imported coal and natural gas. If all fossil resources were upgraded to reserves, electricity demand in 2050 could be met by domestic energy sources. The maximum share of renewable energy that can be achieved in 2050 is 33% with and 80% without technology diffusion. The least cost optimization produces lower generation costs than the least CO₂ emissions, as well as the combined scenario. Total CO₂ emissions in 2050 are five to six times as large as current emissions. The least CO₂ emissions scenario can reduce almost half of the CO₂ emissions of the least cost scenario by 2050. The proposed multi-objective optimization model leads some optimal solutions for a more sustainable electricity system.     

When renewable portfolio standards meet cap-and-trade regulations in the electricity sector: Market interactions,profits implications,and policy redundancy

Emission trading programs (C&T) and renewable portfolio standards (RPS) are two common tools used by policymakers to control GHG emissions in the energy and other energy-intensive sectors. Little is known, however, as to the policy implications resulting from these concurrent regulations, especially given that their underlying policy goals and regulatory schemes are distinct. This paper applies both an analytical model and a computational model to examine the short-run implications of market interactions and policy redundancy. The analytical model is used to generate contestable hypotheses, while the numerical model is applied to consider more realistic market conditions. We have two central findings. First, lowering the CO₂ C&T cap might penalize renewable units, and increasing the RPS level could sometimes benefit coal and oil and make natural gas units worse off. Second, making one policy more stringent would weaken the market incentive, which the other policy relies upon to attain its intended policy target.     

Do state renewable portfolio standards promote in-state renewable generation?

Several US states have passed renewable portfolio standard (RPS) policies in order to encourage investment in renewable energy technologies. Existing research on their effectiveness has either employed a cross-sectional approach or has ignored heterogeneity among RPS policies. In this paper, we introduce a new measure for the stringency of an RPS that explicitly accounts for some RPS design features that may have a significant impact on the strength of an RPS. We also investigate the impacts of renewable portfolio standards on in-state renewable electricity development using panel data and our new measure of RPS stringency, and compare the results with those when alternative measures are used. Using our new measure, the results suggest that RPS policies have had a significant and positive effect on in-state renewable energy development, a finding which is masked when design differences among RPS policies are ignored. We also find that another important design feature – allowing “free trade” of REC’s – can significantly weaken the impact of an RPS. These results should prove instructive to policy makers, whether considering the development of a federal-level RPS or the development or redesign of a state-level RPS.     

Decarbonization synergies from joint planning of electricity and hydrogen production: A Texas case study

Hydrogen (H₂) shows promise as an energy carrier in contributing to emissions reductions from sectors which have been difficult to decarbonize, like industry and transportation. At the same time, flexible H₂ production via electrolysis can also support cost-effective integration of high shares of variable renewable energy (VRE) in the power system. In this work, we develop a least-cost investment planning model to co-optimize investments in electricity and H₂ infrastructure to serve electricity and H₂ demands under various low-carbon scenarios. Applying the model to a case study of Texas in 2050, we find that H₂ is produced in approximately equal amounts from electricity and natural gas under the least-cost expansion plan with a CO₂ price of $30–60/tonne. An increasing CO₂ price favors electrolysis, while increasing H₂ demand favors H₂ production from Steam Methane Reforming (SMR) of natural gas. H₂ production is found to be a cost effective solution to reduce emissions in the electric power system as it provides flexibility otherwise provided by natural gas power plants and enables high shares of VRE with less battery storage. Additionally, the availability of flexible electricity demand via electrolysis makes carbon capture and storage (CCS) deployment for SMR cost-effective at lower CO₂ prices ($90/tonne CO₂) than for power generation ($180/tonne CO₂). The total emissions attributable to H₂ production is found to be dependent on the H₂ demand. The marginal emissions from H₂ production increase with the H₂ demand for CO₂ prices less than $90/tonne CO₂, due to shift in supply from electrolysis to SMR. For a CO₂ price of $60/tonne we estimate the production weighted-average H₂ price to be between $1.30–1.66/kg across three H₂ demand scenarios. These findings indicate the importance of joint planning of electricity and H₂ infrastructure for cost-effective energy system decarbonization.     

State renewable energy electricity policies: An empirical evaluation of effectiveness

Over the past decade, state governments have emerged as US energy policy leaders. Across the country, states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment. One of the most prevalent and innovative policy instruments is a renewable portfolio standard (RPS), which seeks to increase the share of renewable energy electrification in the electricity market. This analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state RPS policy implementation and the percentage of renewable energy electricity generation across states. We use a variant of a standard fixed effects model, referred to as a fixed effects vector decomposition, with state-level data from 1998 to 2006. Results indicate that RPS implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix, yet for each additional year that a state has an RPS policy, they are found to increase the total amount of renewable energy generation. These findings reveal a potentially significant shortcoming of RPS policies. Political institutions, natural resource endowments, deregulation, gross state product per capita, electricity use per person, electricity price, and the presence of regional RPS policies are also found to be significantly related to renewable energy deployment.     

Three options to calculate the percentage renewable energy: An example for a EU policy debate

The European Commission proposed a renewable energy directive with binding targets for the percentage renewable energy, usually calculated with the primary energy method. This method has the disadvantage that for hydro and wind electricity production is counted, whereas for thermal electricity the higher input to power plants is counted. Therefore, the Commission looked for an alternative: the final energy method. Also this method has disadvantages. Firstly, electricity consumption is weighed equally to fuel consumption for heat and transport, neglecting higher primary energy demand for electricity. Secondly, non-energy consumption of energy commodities is neglected, artificially raising the percentage renewable energy. Therefore, I introduce a simple substitution method, which measures renewable energy by comparison with hypothetical equivalent conventional energy. Calculations for EU-27 show that the method strongly affects the contributions of different sectors (electricity, heat and transport), sources and countries. Concluding, any credible calculation method should reflect the trade off between conventional and renewable primary energy. A simple substitution method fulfills this condition, contrary to the primary and final energy method. Using these biased methods may result in policies that are inefficient in terms of saving conventional fuels and avoiding CO₂ emissions, the main underlying goals of the proposed directive.     

Lessons for effective renewable electricity policy from Denmark,Germany and the United Kingdom

Renewable electricity development has taken different paths across countries, underpinned by different policy frameworks. Although there has been a convergence to two main mechanisms, the feed-in tariff (FIT) and the renewable portfolio standard (RPS), much debate remains focused on the effectiveness of each for meeting multiple objectives, especially energy security, CO₂ reduction and economic development. Although most countries share these objectives, their choice of policy varies, explained largely by national context. Denmark, Germany and the United Kingdom stand out as lead countries based on their experiences with the FIT and RPS and provide important lessons for other nations. The evidence from these three, as examined in this paper, suggests that policy design and commitment are key factors for success. Denmark and Germany have 10 years of experience with FITs and are world leaders in the field of renewable energy (RE) development. They are closest to meeting their RE targets and have been able to achieve several other objectives, especially industrial development and job creation, and in the case of Germany, CO₂ emission reductions. Although other factors have been important in determining policy choice and implementation in these countries, the particular design features of the FIT allow it to address the needs of the sector.     

The economic costs of reducing greenhouse gas emissions under a U.S. national renewable electricity mandate

The electricity sector is the largest source of greenhouse gas emissions (GHGs) in the U.S. Many states have passed and Congress has considered Renewable Portfolio Standards (RPS), mandates that specific percentages of electricity be generated from renewable resources. We perform a technical and economic assessment and estimate the economic costs and net GHG reductions from a national 25 percent RPS by 2025 relative to coal-based electricity. This policy would reduce GHG emissions by about 670 million metric tons per year, 11 percent of 2008 U.S. emissions. The first 100 million metric tons could be abated for less than $36/metric ton. However, marginal costs climb to $50 for 300 million metric tons and to as much as $70/metric ton to fulfill the RPS. The total economic costs of such a policy are about $35 billion annually. We also examine the cost sensitivity to favorable and unfavorable technology development assumptions. We find that a 25 percent RPS would likely be an economically efficient method for utilities to substantially reduce GHG emissions only under the favorable scenario. These estimates can be compared with other approaches, including increased R&D funding for renewables or deployment of efficiency and/or other low-carbon generation technologies.     

Recognizing the role of uncertainties in the transition to renewable hydrogen

Achieving the goal of net zero emissions targeted by many governments and businesses around the world will require an economical zero-emissions fuel, such as hydrogen. Currently, the high production cost of zero emission ‘renewable’ hydrogen, produced from electrolysis powered by renewable electricity, is hindering its adoption. In this paper, we examine the role of uncertainties in projections of techno-economic factors on the transition from hydrogen produced from fossil fuels to renewable hydrogen. We propose an integrated framework, linking techno-economic and Monte-Carlo based uncertainty analysis with quantitative hydrogen supply-demand modelling, to examine hydrogen production by different technologies, and the associated greenhouse gas (GHG) emissions from both the feedstock supply and the production process. The results show that the uncertainty around the cost of electrolyser systems, the capacity factor, and the gas price are the most critical factors affecting the timing of the transition to renewable H₂. We find that hydrogen production will likely be dominated by fossil fuels for the next few decades if the cost of carbon emissions are not accounted for, resulting in cumulative emissions from hydrogen production of 650 Mt CO₂-e by 2050. However, implementing a price on carbon emissions can significantly expedite the transition to renewable hydrogen and cut the cumulative emissions significantly.     

Analysing the interactions between renewable energy promotion and energy efficiency support schemes: The impact of different instruments and design elements

CO₂ emissions reduction, renewable energy deployment and energy efficiency are three main energy/environmental goals, particularly in Europe. Their relevance has led to the implementation of support schemes in these realms. Their coexistence may lead to overlaps, synergies and conflicts between them. The aim of this paper is to analyse the interactions between energy efficiency measures and renewable energy promotion, whereas previous analyses have focused on the interactions between emissions trading schemes (ETS) and energy efficiency measures and ETS and renewable energy promotion schemes. Furthermore, the analysis in this paper transcends the “certificate” debate (i.e., tradable green and white certificates) and considers other instruments, particularly feed-in tariffs for renewable electricity. The goal is to identify positive and negative interactions between energy efficiency and renewable electricity promotion and to assess whether the choice of specific instruments and design elements within those instruments affects the results of the interactions.