The global energy sector is in the midst of a transformation driven by concerns about the environment, fuel prices and energy security. Renewable energy sources like solar, wind, geothermal, biomass, and hydroelectric are some of the technologies that are leading the change. While renewables still account for a small proportion of the world’s energy supply, the industry is expanding at an unprecedented rate as innovation and economies of scale drive down costs, making renewable power plants more competitive with fossil fuel counterparts.
Renewable Portfolio Standards (RPS) are a market-based approach that seeks to increase the use of renewable energy sources in the electric power sector by requiring a certain percentage of a utility’s electricity to come from renewable resources. The RPS mandates differ from state to state, with the requirement ranging from a few percent to almost 100%.
This market-based approach presents an excellent opportunity for states to revolutionize their energy sectors and reduce greenhouse gas (GHG) emissions. One study by the National Renewable Energy Laboratory estimated that an RPS at a national level of 30% by 2030 could reduce carbon dioxide emissions by 3,000 million metric tons, equivalent to taking almost 650 million cars off the road.
As the world seeks to transition from dirty, carbon-heavy fuels to cleaner, renewable energy sources, the application of RPS is critical because it makes investment in renewable energy less risky and more predictable. This allows renewable energy developers to access capital more easily and reduce the cost of capital, thus lowering the cost of renewable energy projects.
Moreover, the use of renewable energy sources like solar and wind, which are intermittent, requires storage to provide a constant supply of energy. With the RPS in place, regulatory bodies can incent developers and equipment manufacturers to innovate and bring down energy storage costs while increasing their affordability and reliability.
States that have implemented RPS are already seeing major benefits. For example, California’s ambitious RPS enacted in 2018 includes a requirement of 60% renewable electricity by 2030, with the eventual goal of 100% renewable energy. This mandate has been a significant driver for the state’s booming solar industry, creating jobs and cutting GHG emissions.
Another state that has successfully implemented RPS is Texas, which has led the nation in wind energy production since 2006. Texas’ RPS mandates that 10,000 megawatts (MW) of renewable energy capacity should be installed by 2025, and they are well on their way towards meeting this target.
The progress of transitioning to renewable energy sources is vital for the world’s well-being and the RPS plays a critical role in this process. The application of RPS has demonstrated that it makes investment within renewable energy not only less risky but also more accessible, consequently reducing the cost of renewable energy projects. This is resulting in more energy generation from renewable sources and subsequently a reduction in the world average carbon footprint.
In conclusion, the impact of renewable energy on the world can not be underestimated. Thanks to renewable portfolio standards, renewable energy is accessible for many households by making renewable energy projects more affordable, and as the industry expands, energy generation from renewable sources is significantly contributing to reducing the world’s carbon footprints. With the implementation of more RPS in additional states, we are taking a significant step towards a cleaner, greener world.