State RPS Policies Will Drive 250% Increase in Renewable Energy Generation by 2025
Wednesday, June 30, 2010
Cambridge, Mass. (June 30, 2010 ) State renewable portfolio standards (RPS) will be the most critical driver determining the pace of U.S. renewables growth going forward, according to a new IHS Emerging Energy Research market study. IHS estimates that cumulative renewables demand across all states with binding RPS policies will grow from an expected 137 TWh (terawatt-hours) in 2010 to 479 TWh by 2025--an increase of approximately 250 percent. As of June 2010, mandatory RPS policies, requiring states to procure a percentage of generation from renewable energy, have been passed in 31 U.S. states and the District of Columbia, with six additional states approving conditional or non-mandatory renewables goals. While utilities in a few states, led by Washington, Maine, Colorado and New Hampshire, are already well on their way toward meeting their 2015 RPS targets, the majority of states will require rapid renewables growth if they are to meet near-term objectives. The U.S. renewables market has experienced explosive growth since 2005, expanding from a total installed base of 30 GW to over 60 GW at the end of 2009. "With increasing challenges including low power pricing and uncertain federal policies, escalating RPS demand will define the timing and location of renewables growth across the U.S. over the next few years," says IHS Renewable Power Research Director Alex Klein. RPS policies are estimated to require more than 1,000 investor-owned utilities (IOUs), load-serving entities (LSEs) and competitive retail suppliers to procure renewable power over the next decade, according to the study. Beginning in 2010, significantly escalating RPS demand will create gradually intensifying compliance pressure across the U.S. "The next five years will be especially critical as the industry faces its first real test of a significant ramp-up in RPS demand. Before the industry can attempt to reach already lofty longer-term renewable energy goals, utilities and regulators must prove in the next few years that they can reach initial compliance with the RPS targets coming due in many US states," added Klein. Exhibit: US State RPS Policies and Regional RPS Demand: 2008-2025 (TWh)
Utilities' strategies are rapidly evolving in response to
RPSs, as they weigh compliance-driven mandates in the broader
context of their regional strategies, competitive positioning,
and longer-term generation mix objectives. Signing power
purchase agreements will remain the predominant mechanism for
utility RPS compliance, expected to account for approximately 70
percent of total renewables added to the U.S. supply mix over
the next three years, according to the study. Spurred on by
long-term transparent state mandates, utilities are increasingly
moving toward development and ownership of renewable assets in
several key renewable markets such as the Midwest, Northwest and
California. About US RPS Markets and Utility Strategies: 2010-2025 About IHS (www.ihs.com) IHS (NYSE: IHS) is a leading source of information and insight in pivotal areas that shape today's business landscape: energy, economics, geopolitical risk, sustainability and supply chain management. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 4,200 people in more than 30 countries around the world. © Copyright http://www.emerging-energy.com Emerging Energy Research. All Rights Reserved. To subscribe or visit go to: |