Enacting a Federal Renewable Energy Standard: ACORE and Wilson Sonsini Dive Deep

  • Tyler Stoff

October 16, 2019
Tyler Stoff

In advance of the 2019 Renewable Energy Grid Forum in San Francisco, ACORE and ACORE member firm Wilson Sonsini Goodrich & Rosati are releasing a white paper entitled Enacting a Federal High-Penetration Renewable Energy Standard: Building on Proposals to Date and Addressing Important Additional Considerations. Today’s launch event highlights the paper’s themes in a robust discussion about the federal climate policy agenda, and is the first in a series of ACORE analyses teeing up the next phase of federal policy levers to continue market expansion and mitigate climate change.

By reviewing previous RES legislative efforts and examining additional policy considerations, the white paper provides concrete policymaker options and recommendations for developing a federal high-penetration RES.


Why A Federal High-Penetration RES?

Following the recent enactment of multiple state-level 100% clean energy standards and fueled by debate regarding a Green New Deal and other recently introduced federal legislation, policymakers and the public are increasingly interested in national initiatives to accelerate the transition to a renewable energy economy. Participants in this conversation cite not only the need for action to avoid increasingly severe impacts from climate change, but also the opportunity for America to increase its 21st century global economic competitiveness, while generating good-paying jobs at home and providing reliable, resilient, and affordable power.

While there are many potential legislative pathways to expand the growth of renewable energy, a federal high-penetration RES presents a straightforward and tested policy option. Our white paper defines a federal high-penetration RES as a federal law that requires a high percentage of renewable energy (generally, over 50%) in electricity supply companies’ electricity sales, generating capacity or electricity purchases.

Compared to other policies that aim to replace fossil fuel generation, the RES approach directly increases demand for renewable energy; provides investment certainty for renewable projects; drives forward commercialization, cost reductions, and innovation for renewable technologies; and ensures that customers receive clean electricity. An RES has these effects without favoring specific renewable energy technologies and without dictating prices or specific technological use cases – thereby encouraging innovation and competition in the electric power industry. An RES approach also has the benefit of having been proven effective at the state level and subject to serious study and debate at the federal level.


Key Features from Past Legislative Efforts

A review of past legislative efforts reveals a number of key features that policymakers should include in any future federal high-penetration RES proposal. Among the most important: allowing for participation by a broad range of renewable energy technologies; incorporating generation and timeline requirements consistent with climate commitments and other policy goals; including meaningful alternative compliance mechanisms and penalties to achieve desired objectives; and ensuring effective interaction with existing state policies.


Additional Policy Considerations for a Federal High-Penetration RES

Additional issues that policymakers should consider when crafting federal high-penetration RES legislation include the disposition of stranded asset costs; efforts to minimize creation of new stranded assets; the need for expanded transmission and energy storage; the importance of a fair transition so all Americans benefit from America’s renewable energy economy; and the value of complementary measures like appropriate carbon pricing and a technology-neutral tax credit to lower costs and further accelerate the transition to a renewable energy economy.

Our white paper documents how renewable energy generation facilities have important characteristics that inherently boost grid reliability, such as zero reliance on global fuel supply lines or volatile global fuel markets, free and inexhaustible fuel, greater decentralization, relative fuel proximity to generation (as compared to generators dependent on distant fuel sources), and the ability to deploy rapidly.

It also describes how increased deployment of energy storage technologies alongside a federal high-penetration RES can help balance a strong transmission system by allowing electrons to flow where they are needed. Specifically, energy storage can help facilitate high renewable penetrations by increasing system flexibility to respond to increased variability and uncertainty, reducing the need for expensive and polluting “peaker” power plants by replacing the role those resources play at times of high electric demand, and elevating resilience by allowing the grid to better weather storms.


Complementary Policies

As reported to ACORE by leading financial institutions, adequate private capital exists to finance the new clean energy projects that will power the transition to an emission-free electricity sector. By putting an appropriate price on carbon in combination with a federal high-penetration RES, policymakers can internalize the external costs of carbon pollution and further catalyze market forces to deploy carbon-free electricity at the lowest possible cost. A technology-neutral tax credit based on carbon emissions could also attract more capital to renewable energy investment, lower project costs, and help the U.S. meet its climate goals.

We invite all policymakers and the public alike to read Enacting a Federal High-Penetration Renewable Energy Standard: Building on Proposals to Date and Addressing Important Additional Considerations to learn how a federal high-penetration RES can effectively deliver clean energy to American consumers, while enhancing the reliability and resilience of the nation’s power grid, creating jobs domestically, and increasing American economic competitiveness globally.