Have State Renewable Portfolio Standards Really Worked? Synthesizing Past Policy Assessments to Build an Integrated Econometric Analysis of RPS effectiveness in the U.S.

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. CA 93940, gshrimali@miis.edu, Tübingen Univ., Melanchthonstr. 36, 72076 Tübingen, Germany, steffen.jenner@uni-tuebingen.de, Tel.: +49-7071-29-72927. c German Institute of Economic Research, Mohrenstr. 58, 10117 Berlin, Germany, fgroba@diw.de, Tel.: +49-30-89789-681. d Harvard University, 79 JFK Street, Cambridge, MA 02138, gabe_chan@hksphd.harvard.edu, Tel.: +1-415-533-6103. e ICF International, 1725 I Street N.W., Washington, D.C. 20006, joe.indvik@gmail.com, Tel.: +1-515-230-4665. Abstract: Renewable portfolio standards (RPS) are the most popular U.S. state-level policies for promoting deployment of renewable electricity (RES-E). While several econometric studies have estimated the effect of RPS on in-state RES-E deployment, results are contradictory. We reconcile these studies and move toward a definitive answer to the question of RPS effectiveness. We conduct an analysis using time series cross sectional regressions -including the most nuanced controls for policy design features to date -and nonparametric matching analysis. We find that higher RPS stringency does not necessarily drive more RES-E deployment. We examine several RPS design features and market characteristics (including REC unbundling, RPS in neighboring states, out-of-state renewable energy purchases) that may explain the gap between effective and ineffective policies. We also investigate other RES-E policies and technology-specific effects. Ultimately, we show that RPS effectiveness is largely explained by a combination of policy design, market context, and inter-state trading effects. Terms of use: Documents in

External Impacts of Local Energy Policy: The Case of Renewable Portfolio Standards

“…have solely focused on the effects of RPSs of bordering states (Yin and Powers, 2010;Shrimali et al, 2012;Fremeth and Shaver, 2014). 6 Sharing a border is neither a necessary nor sufficient condition for two states to be able to trade RECs.…”

Spatial Dependence in State Renewable Policy: Effects of Renewable Portfolio Standards on Renewable Generation within NERC Regions

“…Wiser, Barbose, and Holt (2011), found that RPS standards have been important drivers of investment in solar technologies. However, Shrimali et al (2012) found that the Yin and Powers study suffered from data errors, and concluded that after accounting for these problems RPS policies had little effect on renewable capacity.…”

Three Essays on Renewable Energy Policy and its Effects on Fossil Fuel Generation in Electricity Markets

“…Because of this interconnected structure of the electric grid, it is likely that electricity markets exhibit spatial dependence. Both Shrimali (2012) and Yin and Powers (2010) attempted to address effects of contiguous states' RPS standards, but neither specify a spatial econometric model. However, other studies have found significant spatial dependence in electricity markets.…”

“…I take an average of all legislators in a state to derive the average state score. The use of LCV scores as a measure of environmentalism is common in the RPS literature (for example Carley 2009, Yin and Powers 2010, Shrimali et al 2012. I would expect there is a positive relationship between a state's environmental score and that state's share of renewable generation.…”