What’s the future for the Midwest in a post-mandate world?
by Jeffrey Tomich
An energy policy wave swept across the Midwest a decade ago as seven states adopted laws from 2006 to 2009 requiring utilities to add increasing amounts of wind and solar energy.
The aim of the clean energy mandates was clear — to slash greenhouse gases and other power plant emissions and generate new jobs and investment.
A decade later, most utilities in states with renewable portfolio standards are either meeting or on track to meet the targets. And some of them, like Minnesota-based Xcel Energy Inc., are announcing plans to blow past clean energy goals, often literally, by adding hundreds of megawatts of new wind capacity.
If there’s an exception, it’s Illinois, which is lagging its 25 percent RPS adopted a decade ago because of an unintended conflict with the state’s retail choice law that restricted funding for renewable energy procurement. But that’s changing quickly with adoption of the 2016 Future Energy Jobs Act, which revamped the RPS and specifically requires 4,300 megawatts of new solar and wind power.
Backers of the renewable energy laws — even some of the utilities subject to them — agree RPS policies played an important role in helping jump-start clean energy transitions in states that adopted them. And in the process, the blossoming of wind and solar energy, along with cheap natural gas and erosion in energy demand, has hastened the retirement of coal plants.
Nationally, about half of all growth in U.S. renewable electricity generation and capacity from 2000 to 2016 was tied to state RPS requirements in the 29 states that have them, according to the most recent annual report from Lawrence Berkeley National Laboratory. And compliance costs nationally have been modest, averaging 1.6 percent of retail electricity bills through 2015.
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Renewable energy advocates are reluctant to say RPS laws are no longer beneficial. The mandates provide policy certainty to developers and utilities alike. But in some markets especially, the presence of a renewable mandate isn’t the death knell for clean energy.
“Renewable portfolio standards in Illinois, Michigan and Minnesota are successful policies that have helped drive wind and solar energy investments in those markets,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center.
“But wind power is taking off in several states without an RPS,” such as Iowa, the Dakotas and Indiana, he said.