World Resources Institute WRI

The bottom line on renewable electricity standards


Courtesy of World Resources Institute WRI

What is a Renewable Electricity Standard (RES)?

A RES requires that a minimum percentage or amount of electric power generation come from eligible renewable energy sources by a specified date. Retail electric power suppliers (also known as load-serving entities) must purchase power directly from renewable electricity generators, or in some cases, are allowed to purchase renewable energy credits (RECs) created by eligible renewable power projects.

RES policies provide a market demand for renewable electricity and can help accelerate the development and deployment of clean, renewable energy technologies.

What is the difference between a RES and a RPS?

A RES and a RPS (Renewable Portfolio Standard) are simply different names for the same policy mechanism. Other variations also include Clean Energy Portfolio Standards and Alternative Energy Portfolio Standards. Although the policy mechanisms are the same, RES policies may differ in terms of the types of power resources that are eligible.

How do RES policies affect energy prices?

Energy cost impacts related to a RES will depend on a number of factors, such as specific policy design features and geographic location. Impacts are generally modest and can include both costs and savings. For example, a RES may result in slightly higher electricity rates due to the cost of new renewable power sources, as well as slightly lower natural gas prices due to decreased demand for gas-fired electricity. For detailed analysis of state and federal RES costs, refer to the U.S. Energy Information Administration and the Lawrence Berkeley National Laboratory resources listed in the “Additional References” section.

Can RES policies create opport unities for the broader business community?

RES policies sometimes allow electric power suppliers to secure renewable energy from a variety of sources, including commercial, industrial, and residential generators. Electric power suppliers can purchase electricity or RECs from businesses or homeowners that have installed qualifying renewable power, such as solar photovoltaic systems or wind turbines, creating an attractive revenue stream for onsite renewable energy technologies. For example, see the New Jersey Clean Energy Program fact sheet listed in the “Additional References” section.

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