With New Federal Administration, States Betting Bigger on Renewables

Nearly 1 in 10 States have launched proposals directing utilities to procure anywhere from 50% to 100% of their power from renewable energy resources by mid-century. Currently 29 states and the District of Columbia have renewable portfolio standards (RPS) in place.  Several states, however, have introduced even more aggressive proposals likely in reaction to the fact that new federal requirements are not likely to be promulgated (e.g., the Clean Power Plan).

Some States Move All In For 100% Renewables

In 2015, Hawaii became the first state to adopt a 100% RPS designed to completely decarbonize its power portfolio. Over the next thirty years Hawaii’s RPS will ramp up with incremental requirements starting with 30% renewable generation by 2020 and ultimately achieving 100% renewable generation by 2045.

In recent weeks, state law makers in Massachusetts and California have introduced legislation to require 100% renewable energy output. In Massachusetts, a bill would require the state to get all of its electricity from renewable sources by 2035, and ultimately meet all of its heating, cooling and transportation needs through renewable sources by 2050. California legislators have introduced similar legislation that would accelerate and increase the current RPS goals. Currently, the state receives about 27% of its electricity from renewable sources and is on track to achieve the current RPS benchmark goal of 30% by 2020, and 50% renewable generation by 2030. This proposed amendment to the RPS would accelerate the current requirements, having the state achieve the 50% goal by 2025, and ultimately achieve a goal of 100% by 2045.

Similarly, New York Governor Andrew Cuomo has endorsed a 100% RPS for New York and has ordered a study to explore how the state can cost-effectively achieve this goal. For now, Hawaii remains the only state with a 100% RPS on its books, but we except to see more states increasing their RPS’ and further incentivizing renewables.

Other States Raise the Stakes

Legislators in Connecticut, New Mexico, Minnesota, New Jersey, Nevada and Vermont are also considering an increase to existing RPS goals. Vermont is discussing a change to their current RPS by making their 90% RPS by 2050 a requirement, not an aspirational goal as currently written.

New Jersey, Nevada and New Mexico are all debating an 80% RPS’ with Nevada and New Mexican law makers introducing legislation that would have each State achieve the 80% goal by 2040. New Jersey’s current proposal would have the state achieve the 80% goal by 2050. Connecticut and Minnesota are both considering proposals to achieve a 50% RPS by 2030.

Ohio Lawmakers Attempt to Pull Back on Renewables

Not all state legislators are pushing to expand RPS goals and requirements. In 2014, Governor Kasich approved a law that put a two-year freeze on Ohio’s RPS. Recently, Ohio law makers introduced a bill that would further roll back the state’s RPS. Currently, the Ohio RPS requires utilities to derive 12.5% of their retail electricity from renewable generation by 2027. The proposed legislation would make the 12.5% target voluntary and would allow customers to opt out of paying any riders or cost recovery mechanisms for a utility’s renewable procurements. However, in December of 2016, Governor Kasich vetoed similar legislation citing the need to create new jobs and attract new business. Most commentators expect that Governor Kasich to veto this legislation if it comes to his desk.

Technical Feasibility

These ambitious proposals will certainly face intense scrutiny throughout the legislative session as lawmakers debate the feasibility and cost of such goals. Recognizing that current technology is unable to support such high renewable generation requirements, these States are betting that their commitment to renewables will further incentivize research and development. Additionally, many of these Renewable Portfolio Standards define “renewables” to include generation techniques beyond traditional wind and solar. The current definition of a “Class I Renewable Energy Source” in Connecticut includes: solar, wind, fuel cells, geothermal, methane, hydropower, biomass, ocean thermal power and wave or tidal power. So, the future feasibility of “100% renewable” could become a definitional issue as much as a technical issue.

While the feasibility of achieving 100% RPS remains potentially infeasible for now, it is clear that a large percentage of states will continue to push the industry forward in the coming years.