NREL's policy analysis evaluates policies that can advance—or provide alternatives to—renewable energy technologies in meeting national goals.
NREL's federal policy team analyzes existing and proposed legislation and policy related to clean energy on a federal level. The team focuses much of its effort on pro-active analysis that is under consideration by Congress or the administration. The team provides objective information that may be helpful for policymakers and inform decision making.
SEAC analysts Trieu Mai, Wesley Cole, Eric Lantz, Cara Marcy, and Benjamin Sigrin published the report Impacts of Federal Tax Credit Extensions on Renewable Deployment and Power Sector Emissions. Federal tax credits for renewable energy (RE) have served as one of the primary financial incentives for RE deployment over the last two decades in the United States. In December 2015, the wind power production tax credit and solar investment tax credits were extended for five years as part of the Consolidated Appropriations Act of 2016. This report explores the impact that these tax credit extensions might have on future RE capacity deployment and power sector carbon dioxide (CO2) emissions. The analysis examines the impacts of the tax credit extensions under two distinct natural gas price futures as natural gas prices have been key factors in influencing the economic competitiveness of new RE development.
SEAC analysts Patrick Sullivan, Wesley Cole, Nate Blair, Eric Lantz, Venkat Krishnan, Trieu Mai, David Mulcahy, and Gian Porro published the report 2015 Standard Scenarios Annual Report: U.S. Electric Sector Scenario Explorations. This report is a description of 19 standard scenarios along with the base structure and assumptions for the Regional Energy Deployment System (ReEDS) model v.2015.1, which is the tool currently used for running the scenarios that simulates the least-cost expansion of electricity generation capacity and transmission in the United States. The primary purpose of the report is to describe the Standard Scenarios and the solution space of those scenarios using a consistent set of data and assumptions. Together, they establish a baseline understanding of the electric sector today and a range of projected pathways to form the basis for new studies and analysis that map out likely trajectories within which the actual pathway may occur.
SEAC analysts Eric Lantz, Daniel Steinberg, Michael Mendelsohn, Owen Zinaman, Ted James, Gian Porro, Maureen Hand, Trieu Mai, Jeff Logan, Jenny Heeter, and Lori Bird published the report Implications of a PTC Extension on U.S. Wind Deployment. This analysis explores the potential effects of wind production tax credit (PTC) expiration and various extension scenarios on future wind deployment with the ReEDS model.
State and Local Policy
NREL's state and local policy team examines the effects of policy on renewable energy development and deployment at the local, state, and regional levels.
One of NREL's key state and local policy initiatives is the Clean Energy Policy Basics project. Through this project, NREL analysts seek to quantify the connection between state and local policies and clean energy market development and identify the impact of state policy on decision makers. Learn more about clean energy policy on the NREL State and Local Activities website.
A new study by researchers from the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (Berkeley Lab) estimates that $2.2 billion in benefits came from reduced greenhouse gas emissions and $5.2 billion from reductions in other air pollution, in mid-range estimates, for state renewable portfolio standard (RPS) policies operating in 2013. RPS policies require utilities or other electricity providers to meet a minimum portion of their load with eligible forms of renewable electricity.
A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards also shows national water withdrawals and water consumption by fossil-fuel plants were reduced by 830 billion gallons and 27 billion gallons in 2013, respectively.
In addition to environmental benefits, the study estimates that RPS policies supported 200,000 renewable energy-related jobs in 2013. Renewable energy jobs from RPS projects were concentrated mostly in California, where large amounts of utility-scale photovoltaic generation was being built in 2013.
This work was a follow-up and complement to an earlier study by the two labs that focused on the costs of state RPS programs to date that noted the need for a full understanding of the potential benefits, impacts, and costs of RPS programs. To that end, the most recent study provides a point of comparison for estimates of RPS program costs. Based on the results of this national study, benefits resulting from reduced greenhouse gas emissions equate to 0.7 to 6.4 cents per kilowatt-hour (kWh) of renewable energy, while benefits from reduced emissions of criteria air pollutants amount to 2.6 to 10.1 cents per kWh. Consumer savings from wholesale electricity market and natural gas price reductions represent another 0 to 1.2 cents per kWh and 1.3 to 3.7 cents per kWh, respectively. Ranges are presented as the models and methodologies used are sensitive to multiple parameters.
- Renewable Energy used in State Renewable Portfolio Standards Yielded Sizable Benefits and Other Impacts in 2013 (Press Release)
- Multi-Year Analysis Examines Costs, Benefits, and Impacts of Renewable Portfolio Standards (Factsheet)
- A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards (Presentation)
A new NREL presentation and visualization document and display data collected from renewable energy certificate (REC) tracking systems and other public sources to help improve the understanding of the extent to which states are using renewable energy from outside their borders to comply with renewable portfolio standards (RPSs). This first-ever assessment employed two methods:
- Data were gathered from regional REC tracking systems, state agencies, and utility
compliance reports to identify cross-state transactions that were used to meet RPS
compliance requirements in 2012 and 2013. States on average sourced 61% of 2012 RPS
requirements from in-state resources (65% on weighted average basis).
- Generator-specific information, including data on power purchase agreements (PPAs), gathered from several sources was used to estimate regional renewable energy flows. Due to data limitations, only a subset of PPA counterparties could be matched with power plants; as a consequence, only 43% of the total net generation from power plants with a PPA in place are reflected in the analysis.
These two approaches are complementary but address different aspects of cross-state interactions, as power generated in a given year may not be used for RPS compliance in that same year.
The REC data set indicates that states in New England and the mid-Atlantic are using greater percentages of out-of-state renewable energy certificates (RECs) than states in the Midwest and West. RPS requirements typically restrict eligible RECs to a state's region.
This first-time assessment was greatly improved through input from renewable energy certificate tracking system administrators and state RPS administrators.
Authors: Jenny Heeter, Francisco Flores-Espino, Ksenia Kuskova-Burns, Lori Bird of NREL and G. Barbose, S. Weaver, and R. Wiser
Based on an analysis of data from state compliance filings and other sources, a new joint NREL/LBNL report finds that the estimated incremental RPS cost over a period from 2010-2012the cost above and beyond what would have been incurred absent the RPSwas less than 1% of retail electricity rates on average. This is well below the cost caps that most state legislatures have adopted as part of their RPS.
The report, A Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards, reviews estimates of the costs and benefits of compliance with RPS in the United States and explores how costs and benefits may evolve over time.
The authors find that a lack of benefits estimates and methodological differences limit the ability to directly compare benefits and costs. Such estimates can inform policymaker assessments of existing RPS policies, modifications to existing policies, and potential new policies.
The report also includes a review of the limited number of published quantitative assessments of RPS benefitswhich vary widely in both methodology and magnitude.
NREL's financial policy team examines the effects that policy has on renewable energy project financing and development. They look at how policies such as feed-in tariffs, clean renewable energy bonds, and power purchase agreements can shape the pace and structure of financing. For more on NREL's analysis of these policies, access the NREL Renewable Energy Project Finance website.
A number of policies have been used historically in order to stimulate the growth of the renewable electricity sector. This paper Next Generation of Renewable Electricity Policy: How Rapid Change is Breaking Down Conventional Policy Categories examines four of these policy instruments: competitive tendering, sometimes called renewable electricity auctions, feed-in tariffs, net metering and net billing, and tradable renewable energy certificates. In recent years, however, a number of changes to both market circumstances and to policy priorities have resulted in numerous policy innovations, including the emergence of policy hybrids. With no common language for these evolving policy mechanisms, policymakers have generally continued to use the same traditional policy labels, occasionally generating confusion as many of these new policies no longer look, or act, like their traditional predecessors. In reviewing these changes, this paper makes two separate but related claims: first, policy labels themselves are breaking down and evolving. As a result, policy comparisons that rely on the conventional labels may no longer be appropriate, or advisable. Second, as policymakers continue to adapt, we are in effect witnessing the emergence of the next generation of renewable electricity policies, a change that could have significant impacts on investment, as well as on market growth in both developed and developing countries.