The state plays such an important role in this industry and in particular with environmental policy. Let's start with something called Renewable Portfolio Standard or RPS for short. Basically what an RPS does is it requires that a certain percentage of electricity that is sold to customers has to come
from approved renewable energy sources. These differ by state as you would have imagined. The state has different overall goals with some being mandatory and others being voluntary. Within states themselves, some different goals are applied based on the size of the utilities, whether or not they're an IOU versus corp or annuity. Often times the coops and the immunities have lower targets than the IOUs. But some common themes exist.
Most have some type of penalty if the utilities don't make the goal. They often have the option for the utilities to use renewable energy certificates or RECs to meet that goal. Let's hear more about RECs
from one of our experts.
So in terms of where we stand in the world, Colorado is a real leader. We have the National Renewable Energy Lab for the United States. They host hundreds of delegations from all over the world to go there and take a look at energy. In Colorado, we've also been a leader in terms of policy. In 2004, we're the first state in the United States to actually have the citizens vote upon an initiative to have 10% of our electric generated by renewable energy. So, we're a leader in terms of the renewable portfolio standards. Other states have followed, other states had renewable portfolio standards but didn't have it come from the voters. So it was a real Interesting to have a groundswell to earn a 52% vote to get that started. But again it comes back to Colorado has so many of all renewable resources and also a balance of fossil fuels. That we are, we're like a global petri dish. >> The Berkeley Lab publishes an annual report that details where states are with respect to having and meeting their RPS.
As a national lab this is a really good source of information. As you can see from this map, as of the time of this report 29 states have RPS policies in place. Most are well on their way to meeting them. In looking at this map you may think you can easily eyeball it to see which states are more aggressive than others but that's not really the case at a glance at least. You aren't really comparing apples to apples. More like comparing a combo platter to another combo platter. The requirements are so
different from one another. And this map doesn't necessarily, immediately lend itself to the discussion of what the incremental change would be for the states. Some states have more renewable or
other types of generation than others due to the problems of that resource located within the state boundaries. For example, Washington state has lots of water and, therefore, hydro.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
Learn Arduino UNO
Learn Fatek PLC Programming
For those not intimately familiar with utilities, one of the tidbits of information I get about utilities is something that many states have called a Renewable Portfolio Standard. And that tends to increase over time and it defines an amount of renewable power that has to be part of their overall mix or
portfolio of power. That little bit of information can be misleading. For example, the state of Washington has a renewable portfolio standard says we have to get 9% of our power from renewable resources today. In 2020 that would grow to 15%. California will be at 33% in 2020. So you might expect that wow, California is much more renewable than the state of Washington. It's misleading though because the standard, at least in Washington and Oregon, and I know other states, does not include existing or older renewable resources. And so the state of Washington, based on reports to the state, something like 67% of the energy is renewable. But we're only 9% new renewable. And so it's a little misleading and a little confusing. So, we're actually more renewable, more sustainable power supply than California, but you wouldn't know that by just looking at the Renewable Portfolio Standard numbers.
We're focusing on the US but the RPS type approach is also found globally. Countries in Europe, Asia, and South America do something pretty similar. Now is a pretty logical time to talk about what a feed-in tariff is, which is also an approach found frequently abroad. A feed-in tariff guarantees
the purchase of all renewable energy, regardless of what it costs. The reason many people prefer the RPS approach over feed-in tariffs, as you can imagine, is because the RPS depends on the private market to make it work and supporters like the idea of this spurring competition and innovation. While the overall goal of the states is to protect the environment, how it's done is beyond
just the goal setting. States will have a different focus on carve-outs, multipliers, or some combination of the two. To keep it simple, a carve-out means that the state has specific requirements about the renewable energy source.
For example, there may be a solar carve out. This means that there is a specific goal for electricity generation coming from solar panels. Distributed generation is also a focus area of a number of carve-outs. You can see that carve-outs, either with or without a multiplier, are the most prevalent. A multiplier might exist to give more credit, and therefore, more attention, to certain ways of meeting the goals. For example, one might encourage early installation of renewable energy or in-state manufactured components. Another multiplier may assign a higher value, say, to solar or distributed generation, or maybe even wind. Critics of the multiplier say that this can cause an imbalance in the portfolio mix which, as you know, is not something that this market benefits from.
from approved renewable energy sources. These differ by state as you would have imagined. The state has different overall goals with some being mandatory and others being voluntary. Within states themselves, some different goals are applied based on the size of the utilities, whether or not they're an IOU versus corp or annuity. Often times the coops and the immunities have lower targets than the IOUs. But some common themes exist.
Most have some type of penalty if the utilities don't make the goal. They often have the option for the utilities to use renewable energy certificates or RECs to meet that goal. Let's hear more about RECs
from one of our experts.
So in terms of where we stand in the world, Colorado is a real leader. We have the National Renewable Energy Lab for the United States. They host hundreds of delegations from all over the world to go there and take a look at energy. In Colorado, we've also been a leader in terms of policy. In 2004, we're the first state in the United States to actually have the citizens vote upon an initiative to have 10% of our electric generated by renewable energy. So, we're a leader in terms of the renewable portfolio standards. Other states have followed, other states had renewable portfolio standards but didn't have it come from the voters. So it was a real Interesting to have a groundswell to earn a 52% vote to get that started. But again it comes back to Colorado has so many of all renewable resources and also a balance of fossil fuels. That we are, we're like a global petri dish. >> The Berkeley Lab publishes an annual report that details where states are with respect to having and meeting their RPS.
As a national lab this is a really good source of information. As you can see from this map, as of the time of this report 29 states have RPS policies in place. Most are well on their way to meeting them. In looking at this map you may think you can easily eyeball it to see which states are more aggressive than others but that's not really the case at a glance at least. You aren't really comparing apples to apples. More like comparing a combo platter to another combo platter. The requirements are so
different from one another. And this map doesn't necessarily, immediately lend itself to the discussion of what the incremental change would be for the states. Some states have more renewable or
other types of generation than others due to the problems of that resource located within the state boundaries. For example, Washington state has lots of water and, therefore, hydro.
Read also,
Learn Siemens PLC Programming (TIA Portal v13)
Learn Arduino UNO
Learn Fatek PLC Programming
For those not intimately familiar with utilities, one of the tidbits of information I get about utilities is something that many states have called a Renewable Portfolio Standard. And that tends to increase over time and it defines an amount of renewable power that has to be part of their overall mix or
portfolio of power. That little bit of information can be misleading. For example, the state of Washington has a renewable portfolio standard says we have to get 9% of our power from renewable resources today. In 2020 that would grow to 15%. California will be at 33% in 2020. So you might expect that wow, California is much more renewable than the state of Washington. It's misleading though because the standard, at least in Washington and Oregon, and I know other states, does not include existing or older renewable resources. And so the state of Washington, based on reports to the state, something like 67% of the energy is renewable. But we're only 9% new renewable. And so it's a little misleading and a little confusing. So, we're actually more renewable, more sustainable power supply than California, but you wouldn't know that by just looking at the Renewable Portfolio Standard numbers.
We're focusing on the US but the RPS type approach is also found globally. Countries in Europe, Asia, and South America do something pretty similar. Now is a pretty logical time to talk about what a feed-in tariff is, which is also an approach found frequently abroad. A feed-in tariff guarantees
the purchase of all renewable energy, regardless of what it costs. The reason many people prefer the RPS approach over feed-in tariffs, as you can imagine, is because the RPS depends on the private market to make it work and supporters like the idea of this spurring competition and innovation. While the overall goal of the states is to protect the environment, how it's done is beyond
just the goal setting. States will have a different focus on carve-outs, multipliers, or some combination of the two. To keep it simple, a carve-out means that the state has specific requirements about the renewable energy source.
For example, there may be a solar carve out. This means that there is a specific goal for electricity generation coming from solar panels. Distributed generation is also a focus area of a number of carve-outs. You can see that carve-outs, either with or without a multiplier, are the most prevalent. A multiplier might exist to give more credit, and therefore, more attention, to certain ways of meeting the goals. For example, one might encourage early installation of renewable energy or in-state manufactured components. Another multiplier may assign a higher value, say, to solar or distributed generation, or maybe even wind. Critics of the multiplier say that this can cause an imbalance in the portfolio mix which, as you know, is not something that this market benefits from.
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