Regional markets help US get 44 GW of beyond-RPS renewables

About 50% to 60% of non-hydro renewable energy investments since 2000 have been in excess of state renewable portfolio standards (RPS) and targets, with regional markets playing a key role.

The Brattle Group says there have been roughly 44 GW of non-RPS renewable capacity additions in the country since 2000. It found that most of that beyond-RPS activity is contained to regional transmission operators and independent system operators (RTO/ISO) markets, while there is little activity in non-market regions, even if the quality of renewable resources is good.

Around 30 GW of wind capacity beyond RPS has been installed in Texas and the Midwest, where the ERCOT, SPP, and western MISO operate.

The effectiveness of regional markets in facilitating the expansion of renewables beyond regulatory mandates is expected to be a major driver of future emission reductions in the US power sector, say the study’s authors. "The opportunity for forming or joining regional RTO/ISO markets [..] needs to be considered, particularly now that western states actively contemplate how they can cost-effectively reduce the environmental footprint of the electricity industry and their economies," said Johannes Pfeifenberger.

According to the study, renewables investments beyond RPS are already offsetting annual carbon dioxide (CO2) emissions of roughly 100 million tonnes per year across the USA.

Beyond-RPS activity is driven by voluntary purchases by utilities, public power entities, commercial and industrial customers, and by merchant renewable developments with spot sales and financial hedges, The Brattle Group says. The popularity of power purchase arrangements (PPAs) and "green tariffs" with commercial and industrial customers is expected to expand rapidly.

In 2015 renewables developed to meet RPS represented less than 50% of the total deployment.

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