RENEWABLE PORTFOLIO STANDARD
A renewable portfolio standard (RPS) is a state policy that requires electric companies to produce a certain percentage of their power from renewable sources by a certain date. As of June 2007, 24 states and the District of Columbia have required renewable portfolio standards that vary in their requirements, and four states have set voluntary goals. The highest percentage based goal is an ultimate 25% of renewable energy by 2025 (Minnesota & Oregon) and the lowest is 4% by 2009 (Massachusetts-unless it increases by 1% per year after 2009).
Massachusetts' RPS was adopted in 2002 as part of the 1997 deregulation of the electricity industry; below is a summary of the requirements. Eligible renewables include post-1997 solar, wind, ocean thermal, wave, tidal, fuel cells using renewables, landfill gas, and low emission, advanced technology biomass. If electricity suppliers are not able to produce the required amount of renewable energy, they can make an Alternative Compliance Payment to the Massachusetts Technology Collaborative for the Massachusetts Renewable Trust fund. This fund gives out rebates and grants for new renewable energy projects. The RPS is market driven and rates vary by state, due to supply and demand. The 2007 adjusted rate in Massachusetts is $57.12/MWh- this equates to about 50 cents a month for an average residential electricity user.
As a wholesale electricity distributor, Harvard is required to comply with the RPS standard and does so by buying RECs from local renewable energy sources, such as the Hull Wind Turbine. Harvard Business School's Shad Hall PV sells its RECs in the RPS market.
Year |
% Required Renewables |
2003 |
1% |
2004 |
1.5% |
2005 |
2% |
2006 |
2.5% |
2007 |
3% |
2008 |
3.5% |
2009 |
4% |
Future years |
additional 1% per year until rule changed |
Hull Wind Turbine, Photo from hullwind.org
Sources/More Information
States with Renewable Portfolio Standards
Union of Concerned Scientists: Renewable Electricity Standards Toolkit