A renewable portfolio standard is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal. Other common names for the same concept include Renewable Electricity Standard at the United States federal level and Renewables Obligation in the UK. The RPS mechanism places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources. Certified renewable energy generators earn certificates for every unit of electricity they produce and can sell these along with their electricity to supply companies. Supply companies then pass the certificates to some form of regulatory body to demonstrate their compliance with their regulatory obligations. RPS can rely on the private market for its implementation. In jurisdictions such as California, minimum RPS requirements are legislated. California Senate Bill 350 passed in October 2015 requires retail sellers and publicly owned utilities to procure 50 percent of their electricity from eligible renewable energy resources by 2030. RPS programs tend to allow more pricecompetition between different types of renewable energy, but can be limited in competition through eligibility and multipliers for RPS programs. Those supporting the adoption of RPS mechanisms claim that market implementation will result in competition, efficiency, and innovation that will deliver renewable energy at the lowest possible cost, allowing renewable energy to compete with cheaper fossil fuel energy sources. RPS-type mechanisms have been adopted in several countries, including the United Kingdom, Italy, Poland, Sweden, Belgium, and Chile, as well as in 29 of 50 U.S. states, and the District of Columbia.
The German Renewable Energy Act, since its adoption in 2000, is producing strong growth in renewable power capacity by encouraging private investors through guaranteed Feed-in tariffs. Germany adopted targets more aggressive than the EU mandated targets on September 2010:
Renewable electricity – 35% by 2020 and 80% by 2050
Renewable energy – 18% by 2020, 30% by 2030, and 60% by 2050
Japan
Based on the 1997 Act on the Promotion of New Energy Usage, 118 million KWh was targeted in 2012.
The Renewables Obligation is designed to encourage generation of electricity from eligible renewable sources in the United Kingdom. It was introduced in England and Wales and in a different form in Scotland in April 2002 and in Northern Ireland in April 2005, replacing the Non-Fossil Fuel Obligation which operated from 1990. The RO places an obligation on licensed electricity suppliers in the United Kingdom to source an increasing proportion of electricity from renewable sources, similar to a renewable portfolio standard. In 2010/11 it is 11.1%. This figure was initially set at 3% for the period 2002/03 and under current political commitments will rise to 15.4% by the period 2015/16 and then it runs until 2037. The extension of the scheme from 2027 to 2037 was declared on 1 April 2010 and is detailed in the National Renewable Energy Action Plan. Since its introduction the RO has more than tripled the level of eligible renewable electricity generation.
United States
The Public Utility Regulatory Policies Act is a law, passed in 1978 by the United States Congress as part of the National Energy Act. It was meant to promote greater use of renewable energy. In 2009, the US Congress considered Federal level RPS requirements. The American Clean Energy and Security Act reported out of committee in July by the Senate Committee on Energy & Natural Resources includes a Renewable Electricity Standard that called for 3% of U.S. electrical generation to come from non-hydro renewables by 2013, but the full Senate did not pass the bill. Different state RPS programs issue a different number of Renewable Energy Credits depending on the generation technology; for example, solar generation counts for twice as much as other renewable sources in Michigan and Virginia. The Lawrence Berkeley National Laboratory claims that RPS requirements were responsible for 60% of the total increase in American renewable electricity generation since the year 2000. However, the LBNL also reports that RPSs' role has been declining in recent years from 71% of the annual American renewables builds in the year 2013 to 46% just two years later, in 2015.
