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United States

Tipping point for state leadership -- Mandating renewables

Half of all US states now have laws requiring the inclusion of a rising percentage of renewable energy in their electricity supply portfolios. Illinois and North Carolina recently joined 23 states in enacting what are commonly referred to as renewables portfolio standard (RPS) policies, or renewable energy standards (RES). Delaware also doubled its existing standard last month while Missouri adopted a non-binding renewable energy goal. The enthusiasm of state governments for setting standards for renewables contrasts starkly with the failure of the US Congress to agree on a national policy (page 33)

Illinois utilities are now to supply 2% of their power from renewables by 2008, 10% by 2015, and 25% by 2025. The law favours that in-state generation meet the requirement. Illinois already has three large wind stations in operation and a further 200 MW under construction. Energy demand and the state's location make it a hub for transmission lines, which has helped make wind projects more affordable than in some other states, says the Illinois-based Environmental Law & Policy Center. It says 5500 MW of wind power is in the pipeline for the state.

The Illinois RES, however, is not perfect. The American Wind Energy Association (AWEA) points out that "alternative retail electricity suppliers," which supply more than half of Illinois customers, are not covered by the law, though two of them, Constellation Energy and Midwest Generation, have made sizeable green power commitments.

In nearby Missouri, a Midwest farm state, a comparatively weaker measure was signed into law requiring utilities to supply 4% renewable energy by 2012, 8% by 2015 and 11% by 2020. Investor-owned utilities must make a "good-faith effort" to generate or procure electricity from eligible renewable energy resources to meet the goals. How that is to be measured will be known by July 1 next year, the deadline for when the state's Public Service Commission (PSC) must adopt rules and criteria to measure "good faith effort."

Each utility must submit to the PSC a biennial report by December 31, beginning in 2009, on its plans, activities and progress with regard to the green targets, demonstrating that it is making the required effort. Consequences for non-compliance remain unclear. No projects are officially operational yet in Missouri but three 50 MW-plus projects developed by John Deere & Company are in various levels of construction -- with one expected online shortly.

Eastward to the coast, Delaware passed a law doubling the state's green power mandate from 10% renewables by 2019 to 20%, starting at 2% this year and increasing annually through 2019. The increase will bring Delaware's standard closer to those in nearby states, including New Jersey (22.5% by 2021) and New York (24% by 2013). Bringing the policies into line with one another has created a regional policy-driven market for wind larger than that of California, says John Byrne of the Center for Energy & Environmental Policy at the University of Delaware.

Delaware doubles

With average winds of just 5-7 m/s, Delaware has no wind generation as yet. But with commercial wind developers busy in windier states, the way is open for local communities to develop their wind resources. Bryne -- who helped write the state's revised renewables legislation -- says the policy will foster small projects through a variety of means.

One is a measure that puts a greater value of renewable energy in-state, discouraging utilities from meeting the mandate with purchases of out-of-state renewable energy credits. Another is a net-metering arrangement for projects up to 2 MW, allowing owners to offset electricity consumed from the network with their own generation flowing into it. At current market prices, owners can sell excess power to the local grid at between $0.12 -- 0.15/kWh.

Furthermore, the creation of a well-funded public and private partnership to promote renewable energy use, called the Sustainable Energy Utility, will provide grants of up to 50% on projects. Since the standard applies exclusively to investor owned utilities, Delmarva Power & Light is the only utility affected. It is in power contract negotiations with Bluewater Wind, which is proposing an offshore project of up to 400 MW. "I think the RPS will give a boost to the pursuit of wind by Delmarva Power," says Bryne. "The question will be whether it will be onshore or offshore."

Lastly, in a policy first for a Southeast state, North Carolina lawmakers passed a renewables and energy efficiency measure that will require public utilities in North Carolina to obtain 3% of their electric power from renewables by 2012, 6% by 2015, 10% by 2018 and 12.5% by 2021. Electric membership corporations or municipalities must meet the 2012, 2015 and 2018 requirements, but are exempt from the 2021 requirement. The RES is the first green mandate for a Southeastern state, a region lacking in strong wind resources and prone to political resistance to such measures. There are no current commercial wind projects in the state, either in operation or under active development.

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