German economists review effectiveness of RPS policies

In a 40-page paper released this month, a group of researchers at DIW take a look at how well Renewable Portfolio Standards have worked in the US. The authors say that previous studies have come to contradictory results.

When we look at policies to promote renewable energy in the United States, the most salient feature is the lack of policy at the federal level and the wide variety (some would say "chaos") at the state level. Unsurprisingly, the DIW says (PDF) "there is a lack of coordinated and comprehensive action by the federal government," including a failure to implement an emissions trading platform and a clean energy standard.

At present, the DSIRE website finds that 21 of the 50 states in the US have a mandatory RPS along with the District of Columbia, and another 10 have already adopted an RPS that will soon begin. A total of 42 states also have net-metering, generally for photovoltaics. The two policies are not necessarily always related.

The German researchers say that the contradictory findings from a previous studies are the result of different underlying data, with those based on statistics about generators leading to misleading outcomes because of "a change in classification methodology in the middle of the timeseries." For instance, the EIA change the number of classifications, lumping together plutonium and uranium under nuclear and dividing "wood and wood waste" into solids and liquids; furthermore, methanol was dropped entirely, whereas agricultural byproducts and energy crops were added.

Most importantly, in 2001 the EIA began counting non-utility power generators, leading to a great increase in that year in any study that does not adjust for that one-off effect. In the case of the only study that the researchers say "demonstrated a robust positive impact of RPS policies on non-hydro" renewable deployment, the increase is apparently due to this methodological confusion.

Most states actually build less renewable capacity after an RPS goes into effect than they otherwise might have.

DIW

Studies based on statistics by state revealed that "RPS stringency has no statistically significant effect" on new installations of renewables aside from Maine, which the researchers say is an outlier; years ago, Maine adopted targets that were lower than the amount of renewable energy (especially biomass) the state already had, and DIW points out that the state already had so much renewables that it was mainly adding natural gas in the 1990s, thereby effectively lowering the share of renewables in total installed capacity.

When comparing technologies, the researchers find that wind power benefits the most when there is a mandatory green power option, and a large amount of wind power also generally goes hand-in-hand with weaker net-metering for biomass and solar. The researchers also find that net-metering "appears to have a sizable negative affect" on the deployment of renewables in some respects, but they add that further investigation is simply not possible based on current data; most systems installed under net-metering are smaller than the minimum system size tallied by the EIA – a methodological flaw that also occurs in other international reports.

Most interestingly, the researchers compare the 21 states that have implemented an RPS with the 29 that have not and include a number of variables: solar and wind potential, household income, economic growth, and population growth. Of the 13 states found to be similar along these lines, 11 were found to have had a negative effect from an RPS, with Colorado and New York being the exceptions. In other words, states without an RPS are employing renewables even faster than those with an RPS. (Craig Morris)