Additionality of wind energy investments in the U.S. voluntary green power market |
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| Affiliation: | 1. Science, Technology and Environmental Policy Program, Woodrow Wilson School of Public and International Affairs, Robertson Hall, Princeton University, Princeton, NJ 08540, USA;2. Greenhouse Gas Management Institute, Seattle, WA, USA;3. School of Engineering and Applied Sciences, Harvard University, Cambridge, MA, USA;4. Institute of the Environment and Sustainability, University of California Los Angeles, Los Angeles, CA, USA;1. Kenya Forestry Research Institute, Migori Sub-Regional Research Centre, PO Box 464, 40400 Suna-Migori, Kenya;2. Jaramogi Oginga Odinga University of Science and Technology, PO Box 210, 40601 Bondo, Kenya;3. Maseno University, Private Bag, Maseno, Kenya;4. Kenya Forestry Research Institute, PO Box 20412, 00200 Nairobi, Kenya;1. Paris School of Economics (PSE) - University Paris 1 Panthéon-Sorbonne, PjSE, 48 bd Jourdan, 75014 Paris, France;2. Economie Publique, INRA, AgroParisTech, Université Paris-Saclay, 78850 Thiverval-Grignon, France;3. MRE, Univ. Montpellier, Montpellier, France;4. CEE-M, Univ. Montpellier, CNRS, INRA, SupAgro, Univ. Paul Valéry Montpellier 3, Montpellier, France;1. College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing, 211106, China;2. Research Centre for Soft Energy Science, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Avenue, Nanjing, 211106, China;3. Department of Information Management, Chang Gung University, 259 Wen-Hwa 1st Road, Kwei-Shan, Tao-Yuan, 333, Taiwan, ROC;4. Clinical Trial Center, Chang Gung Memorial Hospital, Linkou, Taoyuan, Taiwan, ROC;5. Department of Industrial Engineering and Management, Ming Chi University of Technology, Taiwan;6. School of Economics, Fujian Normal University, Fuzhou, 350117, China;1. Department of Industrial Economics and Management, Royal Institute of Technology, 100 44 Stockholm, Sweden;2. Department of Business Administration, Universidad Politécnica de Madrid, 28006 Madrid, Spain |
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| Abstract: | In the United States, electricity consumers are told that they can “buy” electricity from renewable energy projects, versus fossil fuel-fired facilities, through participation in voluntary green power markets. The marketing messages communicate to consumers that they are causing additional renewable energy generation and reducing emissions through their participation and premium payments for a green label. Using a spatial financial model and a database of registered Green-e wind power facilities, the analysis in this paper shows that the voluntary Renewable Energy Certificate (REC) market has a negligible influence on the economic feasibility of these facilities. Nevertheless, voluntary green power marketers at least implicitly claim that buying their products creates additional renewable energy. This study indicates the contrary. Participants in U.S. voluntary green power markets associated with wind power, therefore, appear to be receiving misleading marketing messages regarding the effect of their participation. In the process of completing this analysis, a potentially relevant factor in explaining investor behavior was identified: the potential for the overlap of voluntary REC markets with compliance REC markets that supply utilities need to meet their obligations of Renewable Energy Portfolio Standard (RPS). The majority of state RPS rules allow for regional or even national sourcing of RECs, meaning that projects are generally eligible to provide compliance RECs to utilities not only in their home states, but in several other states. |
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| Keywords: | Green power Renewable energy certificates Wind power Renewable portfolio standard |
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