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Renewable Electricity Supply Procurement Options

February 1, 2012

Title: Procurement Options for New Renewable Electricity Supply
Authors: Claire E. Kreycik, NREL, Toby D. Couture, E3 Analytics, Karlynn S. Cory, NREL

State renewable portfolio standard (RPS) policies require utilities and load-serving entities (LSEs) to procure renewable energy generation. Utilities and LSEs commonly use competitive solicitations or bilateral contracting to procure renewable energy supply to meet RPS mandates. However, policymakers and regulators in several states are beginning to explore alternative renewable energy supply options, including both feed-in tariffs (FITs) and auctions. This report evaluates four procurement strategies (competitive solicitations, bilateral contracting, FITs, and auctions) against four main criteria: (1) pricing; (2) complexity and efficiency of the procurement process; (3) impacts on developers' access to markets; and (4) ability to complement utility decision-making processes. These criteria were chosen because they take into account the perspective of each group of stakeholders: ratepayers, regulators, utilities, investors, and developers.

—Jim Leyshon