Renewable portfolio standards – perhaps the most effective driver of clean energy development in the US – could face a stiff new challenge from an unexpected source.
An appeals court decision this month upheld a FERC plan for ratepayers in highly populated areas to help pay for the transmission that brings in renewable energy – particularly wind – from more rural areas. In one way, this is a win for renewables. But as Eli Hinckley points out in the Christian Science Monitor, the court also found that RPS preferences for in-state generation violate the Commerce Clause. Most RPSs have such preferences, and these may now be unenforceable. States will consider adjustments to their programs, introducing uncertainty that will undermine investment. And this comes on top of legislative attempts to roll back RPSs around the US.
This is ominous news for renewables, which have relied greatly on RPSs over the last several decades. In the absence of a nationwide price on carbon, these standards have proven crucial to renewables development. But there are some rays of hope: as Hinckley says, the ruling could lead to a shift from utility-scale to distributed generation. This may make businesses from a variety of sectors – especially those with large-rooftop facilities, such as warehouses and factories – big energy generation players in the future.
Tamar Wilner is Senior Editor at Environmental Leader PRO.
Picture credit: Southern California Edison