State Requirements and Green Power Markets: Both Yield More Renewables

July 28, 2004

Two policy approaches are currently proving popular for developing renewable energy supplies in the United States: green power markets, which use a free-market approach to allow consumers and businesses to buy renewable energy; and state renewable energy requirements and goals, which set specific amounts of renewable energy per year, usually imposed upon utilities within each state. According to recent reports, as of the end of 2003, the two policy options have resulted in about 3,650 megawatts of new renewable energy capacity.

In a June memo titled "Estimate of New Renewable Energy Capacity Serving U.S. Green Power Markets (2003)," analysts at DOE's National Renewable Energy Laboratory (NREL) report that nearly 1,650 megawatts of new renewable energy capacity was supplying green power customers at the end of 2003, with another 390 megawatts either under construction or formally announced. According to the NREL memo, wind power provided nearly 94 percent of that new capacity. Competitive power markets and renewable energy credits produced about twice as much new capacity as voluntary "green pricing" programs offered by utilities. See the memo, posted on the newly redesigned Green Power Network Web site.

Photo of a man in a cowboy hat looking at a line of wind turbines in the sunset.

The King Mountain Wind Ranch in Texas is one result of that state's renewable energy mandate.
Credit: Cielo Wind Power

State renewable energy requirements and goals have been slightly more successful than green power programs, resulting in 2,004 megawatts of new renewable energy capacity as of the end of 2003, according to a new analysis by DOE's Energy Information Administration (EIA). Fifteen states now have some form of renewable energy requirement or goal, according to the EIA. Nine have renewable portfolio standards (RPS), which require renewable energy to supply a percentage of the state's electricity, and four states have mandates that specify how much new capacity should be built. Since most RPS requirements are just beginning to take effect, they have resulted in only 321 megawatts of new renewable capacity, but the EIA credits state mandates with 2,335 megawatts of new capacity, about half of which is in Texas. Similar to the green power markets, 93 percent of the new capacity was provided by wind power. See the EIA report.