Possible RPS Revisions In Connecticut Could Threaten State’s Solar Market

Posted by SI Staff on March 21, 2013 No Comments
Categories : Policy Watch

The Connecticut Department of Energy and Environmental Protection (DEEP) is recommending that the state restructure its renewable portfolio standard (RPS).

Connecticut's RPS requires 27% of utilities' sales to come from renewable energy resources by 2020, with a Class I requirement of 20% by 2020. Under the state's current RPS, Class I resources include energy derived from solar power, wind energy, fuel cells, methane gas from landfills and anaerobic digestion, ocean thermal power, wave or tidal power, low-emission advanced renewable energy conversion technologies, certain newer run-of-the-river hydropower facilities not exceeding 5 MW in capacity, and sustainable biomass facilities.

The DEEP recommends changing the state's RPS to increase the Class I target from 20% by 2020 to 25% by 2025 and allow the state to run a competitive bid process to buy a portion – 7.5% by 2025 – of the energy needed to meet this target. According to the DEEP, this change is designed to bring down the overall ratepayer cost of the RPS while preserving support for renewable energy development in Connecticut.

However, the DEEP is also proposing to allow large-scale hydropower projects to qualify as a Class I resource. Under the DEEP's draft proposal, all Class I renewables could compete for power contracts, based on price, in the"contracted tier." That means large-scale hydropower could fulfill the requirement currently reserved for renewable energy resources like wind and solar.

The New England Clean Energy Council warns such a move could hurt the state's market for solar and other renewable energy resources counted under the existing RPS. The group says it supports the utilization of large hydropower from Canada but does not believe large hydro should be part of the RPS.

‘We strongly believe that inclusion of large hydropower in the RPS will undermine achievement of its objectives,’ the group writes in a recent letter. ‘Instead, it would discourage deployment of new renewable energy technologies using market mechanisms that continue to increase competition and bring about price declines, along with local economic development benefits.’

According to New England Clean Energy Council, because large hydro is a mature technology, it should not be eligible for the financial support that renewable energy credits (RECs) provide under the regular RPS. Instead, a clean energy standard or a separate RPS could allow large hydro to be incorporated into Connecticut's energy portfolio.

‘If counted toward RPS targets, large hydro will meet a large portion of the demand created by those targets, reducing demand for smaller, local and regional renewables, lowering REC prices and thereby revenues to support new renewable projects,’ the group warns.

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