Investing in Renewable Energy: Reconciling Regional Policy with Renewable Energy Growth
To address the effects of climate change, it is imperative for economies to proactively invest in, and deploy, low carbon energy technologies to meet current energy demands. To this effect, several states in the U.S. have implemented policies to incentivize the growth of renewable energy technologies. One of these policies is the renewable portfolio standards (RPS) which mandates that a certain percentage of the total electricity sales of utilities be sourced from renewable energy sources. This paper examines the effectiveness of these policies in driving the growth of specific renewable technologies across different regional transmission organizations (RTOs). It evaluates the adoption of renewable energy technologies across these RTOs to provide insights on the varying successes of these policies. The paper develops a ranking system for the correlations between the strength of RPS and renewable energy capacity growth across the RTOs. Two central observations emerge. First, despite the presence of positive correlations between RPS and renewable energy capacity additions, the capacity growth of renewable energy is not monotonic in time as technological differences characterize regional attributes. Second, the technology returns on RPS mandates are location-specific.
Ogunrinde, O., Shittu, E., & Dhanda, K. K. (2018). Investing in renewable energy: Reconciling regional policy with renewable energy growth. IEEE Engineering Management Review. Early access. Doi:10.1109/EMR.2018.2880445