What is a A renewables portfolio standard (RPS) ?

A renewables portfolio standard (RPS) is a regulation that requires the increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal. Another common name for the same concept is renewable electricity standard (RES).

The RPS mechanism generally places an obligation on electricity supply companies to produce a specified fraction of their electricity from renewable energy sources.

• Certified renewable energy generators earn certificates for every unit of electricity they produce 
• They can sell these along with their electricity to supply companies.
• Supply companies then pass the certificates to some form of regulatory body to demonstrate their compliance with their regulatory obligations.

Because it is a market mandate, the RPS relies almost entirely on the private market for its implementation.

Those supporting the adoption of RPS mechanisms claim that market implementation will result in competition, efficiency and innovation that will deliver renewable energy at the lowest possible cost, allowing renewable energy to compete with cheaper fossil fuel energy sources.[1].

RPS-type mechanisms have been adopted in Britain, Italy and Belgium, as well as in 27 U.S. states and the District of Columbia.

Regulations vary from state to state, and there is no federal policy. Four of the 29 states have voluntary rather than mandatory goals. Together these 27 states account for more than 42 percent of the electricity sales in the United States.[2]

It is worth noting that RPS mechanisms have tended to be most successful in stimulating new renewable energy capacity in the United States where they have been used in combination with federal Production Tax Credits (PTC).

In periods, where PTC have been withdrawn the RPS alone has often proven to be insufficient stimulus to incentivise large volumes of capacity.[citation needed]

The Edison Electric Institute, a trade association for America’s investor-owned utilities, has taken a stand against a nationwide RPS, saying it would “raise consumers’ electricity prices and create inequities among states.”[3]

In 2009, the US Congress has been considering Federal level RPS requirements. The "American Clean Energy Leadership Act" reported out of committee in July by the Senate Committee on Energy ; Natural Resources includes a Renewable Electricity Standard that calls for 3% of U.S. electrical generation to come from non-hydro renewables by 2011-2013.[4]

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