Tuesday, November 27, 2012

Renewable Portfolio Standards, RICL, & the Price of Energy

A few years ago Springfield passed a law and created a Renewable Portfolio Standard (RPS).  Several states have an RPS.  Illinois mandates by 2025 the state will have 25% of its energy consumed originate from a form of renewable energy.  Large wind farms and large solar farms qualify for the RPS.  Hydroelectric dams such as Starved Rock do not count towards the RPS.  Small wind generations such as a wind turbine at homes or solar panels on a machine shed roof do not count towards the Illinois' Renewable Portfolio Standard.

Part marketing and part politics, Illinois' RPS has nothing to do with "clean energy".  Renewable Portfolio Standards are about large scale wind and solar energy investments.  Unfortunately, the losers to RPS's are the consumers.  Wind Energy companies like Horizon Wind Energy know the day will come when Illinois residents will be required to pay for their energy regardless the price.

Rock Island Clean line also understands the advantage of RPS's.  Should the RPS for Illinois and other states in the PJM region be allowed to continue, the high priced energy from RICL and northwestern Iowa will exist.

PJM also has a system designed to track renewable energy.  In theory, if a state doesn't have enough renewable energy to meet their RPS, credits can be purchased from states that have excess renewable energy.  Credits can be bought from wind energy companiesUnfortunately, the consumer does not win and profit from this artificially created market. Energy prices will rise beyond the economically competitive price of the marketplace

http://www.pjm-eis.com/

What about economically priced energy?  What about a competitive market where consumers pay the lowest priced possible?  Renewable energy is a good.  It is a good idea for a state to have a portfolio of several different types of energy.  Sure there is a place for wind energy, but it should compete with coal, natural gas, and nuclear.  Illinois cannot lose the priority of Competitively Priced Energy.  If Renewable Portfolio Standards mean Illinois residents are forced to pay more for electricity, then we will lose our competitiveness in manufacturing, industry, and even the service industries.   Cost of doing business in Illinois will rise.

Energy costs for Illinois' poorest residents will increase.

The American Wind Energy Association will boast that jobs will be created with "clean energy", but the true costs and the net losses will not be shown. 

Renewable Portfolio Standards are failed misguided policies from Springfield.  

1 comment:

  1. Hi there! great stuff here, I'm glad that I drop by your page and found this very interesting. Thanks for posting. Hoping to read something like this in the future! Keep it up!

    Despite this growing demand and support for renewable energy, a fragile economy, volatile commodity pricing, and the lack of national energy policy have combined to pave a challenging road for renewable energy advocates and stakeholders. Economies of scale and new manufacturing processes are making alternative energy production more competitive, but until it achieves parity through innovation or regulatory policy, the success of green energy companies may largely depend on their ability to optimize Green Energy and Cleantech tax incentives to attract investors and maintain sustainable balance sheets.

    Renewable Energy Credits

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