A successful initiative should reduce state dependence on volatile supplies.
Brandon Owens is director of renewable power analysis at Platts Research & Consulting. Jack Ihle is senior associate at Platts Research & Consulting.
California's Renewables Portfolio Standard (RPS) requires retail sellers of electricity to increase the relative percentage share of all such sales represented by renewable electricity by an absolute increment of at least 1 percent of additional share per year, thus achieving a releative share of at least 20 percent of all power sales by 2017. This will be a formidable task, even in resource rich California, where renewable energy sales already account for 11 percent of all utility sales today. This requirement raises interesting questions:
- How will the RPS affect generation and capacity from all power sources moving forward?
- How will that development affect electric secto natural gas use?
- What will happen to the market price of power?
To answer these questions, we conducted an hourly unit-level simulation of California's power market through 2015. We constructed a "No RPS" case that assumes only currently planned renewable energy additions are added to California's capacity mix, and a "Full RPS" case that assumes the RPS targets are met fully with in-state resources. In this analysis, we assume that the vast majority of new renewable power capacity will be developed in-state since California possesses very favorable resources.