Utility Mandates and Standards for Geothermal Electricity Generation
States can stimulate the demand for geothermal electricity generation through utility mandates and standards, which can include interconnection standards and renewables portfolio standards.
Interconnection standards govern the technical and procedural process of how an electric customer connects an electric-generating system to the grid. The standards specify the technical, contractual, metering, and rate rules that system owners and utilities must abide. In states without comprehensive interconnection standards in place it is often more difficult, more burdensome, and more expensive for customers to connect a system to the distribution grid.
In 2009, the Interstate Renewable Energy Council identified the following best practices for interconnection standards:
- Set fair fees that are proportional to a project's size
- Cover all generators to close any state-federal jurisdictional gaps in standards
- Screen applications by degree of complexity and adopt plug-and-play rules for residential-scale systems and expedited procedures for other systems
- Ensure that policies are transparent, uniform, detailed, and public
- Prohibit extraneous devices, such as redundant disconnect switches, and do not require additional insurance
- Apply existing standards
- Process applications quickly (determination should occur within a few days)
- Standardize and simplify forms
State public utility commissions typically adopt standards for systems interconnected at the distribution, or consumer, level, while the Federal Energy Regulatory Commission has adopted standards for systems interconnected at the transmission, or wholesale power market, level.
Renewables Portfolio Standards
Renewables portfolio standards (RPS) require that a certain percentage of a retail electricity supplier's sales or new generating capacity be derived from renewable resources by a specified date (for example, 20% of electric sales must be from renewable energy by 2020). Power producers and retailers operating under an RPS are required to obtain sufficient renewable energy certificates (REC) to meet statutory mandates and for use as compliance monitoring.
While RPS in its most basic form supports all renewable energy technologies, additional incentives for geothermal power may be implemented by requiring a geothermal "set-aside" or a specific portion of the RPS be met by geothermal power. Alternatively, geothermal RECs could be given greater value than RECs from other renewable power producers.
More than half of all U.S. states have established an RPS program, resulting in increased growth of renewable energy in recent years. However, electricity produced from geothermal resources qualifies for RPS compliance only in Connecticut, Illinois, Minnesota, Missouri, and New York.
Check out a map showing states with RPS from the U.S. Department of Energy's Energy Efficiency and Renewable Energy office.
Learn more about other policy options to consider.