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Today in Energy

August 29, 2016

District of Columbia raises renewable portfolio standard target to 50% by 2032

graph of District of Columbia renewable portfolio standards target, as explained in the article text
Source: U.S. Energy Information Administration, based on the District of Columbia's Renewable Portfolio Standard Expansion Amendment Act of 2016 (DC Act 21-466)

The District of Columbia (DC) increased and extended its renewable portfolio standard (RPS) target from 20% by 2020 to 50% by 2032. The target includes a separate solar-specific target of 5% by 2032, an increase and extension from 2.5% by 2023. Technologies eligible to meet DC's RPS overall target include geothermal, solar (both thermal and electric), wind, biomass, landfill gas, marine/hydrokinetic technologies, fuel cells using renewable fuels, and, to a limited extent, conventional hydroelectric power.

In 2015, electricity sales in the District of Columbia totaled 11.3 billion kilowatthours (kWh) with an RPS requirement of 12%. Because DC has limited renewable capacity, almost all of the RPS compliance targets were met by generation outside of the District through the purchase of renewable energy credits (RECs). RECs are tradeable certificates that certify that one megawatthour of electricity was generated from eligible renewable energy sources. In 2015, DC's target required nearly 1.4 million renewable energy credits.

graph of renewable energy credits submitted for compliance with DC's RPS, as explained in the article text
Source: U.S. Energy Information Administration, based on District of Columbia Public Service Commission Report on the Renewable Energy Portfolio Standard, 2007-15
Note: A renewable energy credit (REC) represents one megawatthour of electricity generation attributed to a particular energy source.

Of the credits submitted for compliance in 2015, most were from biomass generation, including both wood waste and black liquor, representing 39% and 27% of the overall requirement, respectively. Wind and solar generation represented 20% and 3% of the overall requirement, respectively. Because DC has no utility-scale renewable electricity generators, the only in-district generation qualifying for the RPS came from distributed solar systems (such as rooftop panels) installed in the District.

Power plant operators in other states can apply to be eligible for DC's RPS, as long as they're part of or adjacent to the PJM region. A total of 19 states outside of DC have approved capacity that can count toward DC's RPS. Because some of these states may have their own renewable portfolio standards, the eligible generating capacity may not necessarily be fully available to meet the District's RPS requirement. About half of the approved capacity is in Illinois, Indiana, and Pennsylvania. The 22 megawatts (MW) of solar capacity in DC represented only 0.3% of total eligible capacity as of July 2016.

graph of renewable electricity capacity eligible for DC's renewable portfolio standard, as explained in the article text
Source: U.S. Energy Information Administration, based on District of Columbia Public Service Commission, Report on the Renewable Energy Portfolio Standard for Compliance Year 2015

Additional limitations are placed on which solar facilities can be used to meet the solar-specific target of DC's RPS. The Distributed Generation Amendment Act (DGAA) of 2011 requires all qualifying solar generators to be located in DC or on a distribution feeder serving DC to qualify. Outside of DC itself, Pennsylvania contains the largest amount of solar capacity eligible to be applied to DC's solar-specific target.

graph of solar renewable energy credits submitted for compliance with DC's RPS, as explained in the article text
Source: U.S. Energy Information Administration, based on EIA's Electricity Data Browser; PJM Environmental Information Services, Generation Attribute Tracking System; Lawrence Berkeley National Laboratory, RPS Compliance Data
Note: The solar-specific target for 2015 is estimated based on EIA sales information and the 2015 DC Public Service Commission's Report on the Renewable Energy Portfolio Standard.

Although DC has met its overall target each year since 2009, it has often fallen short of the solar-specific target. The DC Public Service Commission expects that approximately 70 MW of solar capacity will be required to meet the solar-specific target in 2016. As of July, only 43 MW of eligible solar capacity was available.

Electric service providers that cannot meet DC's RPS targets must make alternative compliance payments. In 2015, these providers collectively paid nearly $20 million in alternative compliance payments, mostly as a result of not meeting the solar-specific targets. Currently, the alternative compliance payment for solar is set at $500 per REC, but is set to decline after 2023 to $50 per REC by 2033.

Principal contributor: Cara Marcy