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Can Renewable Portfolio Standards make RE Work?

May 12, 2019

Can Renewable Portfolio Standards make RE Work?

Guest post by Geo who is a geologist working in Alaska

People want energy to be cleaner (i.e. emit less carbon dioxide). One way to do this is to use regulations to force either greater efficiency, or a switch to cleaner fuels.

A good example would be Corporate Average Fuel Economy (CAFE) standards in the United States. They were first enacted by the United States Congress in 1975, after the 1973–74 Arab Oil Embargo, to improve the average fuel economy of cars and light trucks (trucks, vans and sport utility vehicles) produced for sale in the United States. The idea was that slowly, across the board, the mileage of all cars and trucks produced in the U.S. would gradually increase. Over time this would result in cleaner air, and reduced oil usage. And perhaps save consumers money…

And it more or less worked as advertised. Standards were raised, and efficiency increased, largely without additional cost. U.S. cars are twice as fuel-efficient today as they were 40 years ago, saving car owners millions of dollars, and reducing air pollution. Arguably a win-win.

Figure 1: EPA “Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2017,” EPA-420-S-18-001, January 2018.

A slight nuance was added in some markets. Certificates for high mileage vehicles could be traded, so that some manufacturers could continue producing low mileage vehicles. For example, under California’s Zero-Emission Vehicle (ZEV) Regulation and those of states that have adopted California’s standard, vehicle manufacturers are required to earn or purchase credits for compliance with their annual regulatory requirements. This means that a certain number of electric cars must be sold to balance any low mileage vehicles.

 …click on the above link to read the rest of the article…

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