Texas leads the way with renewables – well ahead of target

According to The Renewables Portfolio Standard in Texas: An Early Assessment, from the US Department of Energy’s Lawrence Berkeley National Laboratory (LBNL), Texas’ Renewable Portfolio Standard (RPS) is one of the most effective state policies for promoting renewable energy generation, but, in order to be successful in other states, there needs to be attention to detail.

“Other states would be well served to carefully study the successful efforts of RPS design in Texas,” said Wieser. “Emerging experience from Texas shows that a well-crafted and implemented RPS can deliver on its promise of strong and cost-effective support for renewable energy.”

The Texas RPS, which requires electricity suppliers to source a minimum percentage of electricity from renewable sources with the aim of generating 2,000 MW of new renewable energy by 2009, with intermediate targets, is successful for a number of reasons. These include:

• strong political support and regulatory commitment to the scheme,
• predictable long-term purchase obligations that drive new development and economies of scale,
• credible and automatic enforcement of non-compliance, and
• certificate trading for tracking and verifying compliance with the RPS.

“The Texas RPS is exceeding even optimistic projections,” said Ryan Wieser of LBNL, co-author of the study. “Under the RPS, 900 MW of new wind power capacity is slated for construction in Texas this year, easily exceeding the 400 MW target for 2003. Texas has rapidly emerged as one [of] the leading wind power market in the United States. With the federal production tax credit for wind, much of this wind generation is reportedly coming in at costs of less than three cents per kilowatt hour.”

“Only the Texas RPS is already driving significant additions of renewable energy supply,” added Wieser. “State RPS policies have substantial potential, but no other state yet has the same combination of an aggressive renewable energy target, an effectively implemented policy, and an outstanding wind power resource.”

However, it should be noted that the report admits that Texas’ success is not solely down to an effective RPS policy. The state also has a developing customer-driven market for green power (see related story and related story), and there are utilities that are not subject to the RPS policy that nevertheless have wind power plans. The latter may be explained by the fact that the state also has an outstanding wind resource, favourable transmission rules, and – like other states – is subject to the federal production tax credit (PTC). However, says the report, the RPS is still the major driver in the resurgence of wind energy development, and other states would be well-served to study the state’s policy.