Intermittent Currents: The Failure of Renewable Electricity Requirements

Abstract

Concern over emissions and climate change has led over half of the states to enact "renewable portfolio standard" legislation requiring regulated electric utilities to obtain some fraction of their power requirements from sources defined as "renewable." Legislation to institute a federal RPS may follow. In reality RPS is a policy in search of a rationale, at odds with principles of efficient environmental regulation and poorly suited to promote other policies favored by its supporters. The actual record of state implementations has been largely symbolic. Only one state with a binding RPS requirement is currently in compliance with its own program, and a federal RPS will be subject to the same forces that have led to state-level failure. The recent history of renewables leads to a conclusion that existing and proposed mandates are best viewed as special interest legislation for wind-driven generators, rather than rational responses to climate change and fossil-fuel powerplant emissions.

Keywords: renewable electricity generation, environmental regulation, climate policy

JEL Classification: L94, Q28, Q42