For those who have not yet heard of it, the Renewable Portfolio Standard is simply a series of mandates that obligate utilities to produce a certain amount if their energy from renewable sources such as solar, geothermal, biomass, wind or tides. This standard is in place in thirty states, including the District of Colombia, and six other countries in Europe and South America. In the U.S., commercial electricity from utilities in compliance with the Renewable Portfolio Standard makes up about forty-two percent of energy sales.
The logic behind the Renewable Portfolio Standard is to allow the “invisible hand of the marketplace” to operate freely. By allowing unregulated competition with fossil fuels, it was believed that market forces would eventually lower the costs of renewable energy, encouraging more in the way of private investment in these new technologies. However, as has often been the case when unregulated markets are allowed to operate without constraints, what happens more frequently is rising utility rates and “captive markets” in which consumers are faced with little or no choices.
Another problem is that not all regions have been equally endowed with renewable resources. Areas such as the Pacific Northwest have been blessed with abundant wind, hydro and geothermal sources; similarly, Arizona and Southern California get sunlight more than 300 days out of the year, making solar quite feasible. On the other hand, the New England states have fewer renewable resources that can be readily developed. This has not prevented the Maine legislature from setting an ambition goal, however; by 2017, the Pine Tree State plans to generate 40% of its power from renewable sources.
This points up another problem with the Renewable Portfolio Standard; it tends to be a “one-size-fits-all” proposition that fails to take into account regional differences and the fact that what may work quite well in Arizona may not be appropriate for North Dakota. In addition, renewable energy does not fit into the current model of centralized energy production from a single large facility. In a renewable energy future, production is likely to be highly localized, depending on a variety of local resources.
Post a Comment