A Cost Impact Analysis of the Renewable Energy and Energy Efficiency Portfolio Standard for Investor-Owned Utilities in North Carolina
Abstract
A Renewable Portfolio Standard (RPS) is a policy tool that sets a requirement for
retail sellers of electricity to provide a minimum portion of their electricity sales
from renewable resources. The RPS at state levels has become one of the most important
policy incentives for stimulating clean energy expansion in electricity utilities
in the United States. In 2007, North Carolina promulgated a Renewable Energy and Energy
Efficiency Portfolio Standard (REPS), requiring the investor-owned utilities (IOUs)
to meet up to 12.5% of their energy needs through renewable energy resources by 2021.
This Master’s Project is designed to evaluate the cost and rate impacts of REPS on
three IOUs in North Carolina from the perspective of retail market. Referring to the
core modeling approaches and assumptions in the former technical report for North
Carolina, this project establishes a cost impact model to compare the total annual
cost of the Utilities’ Portfolio and Alternative REPS Portfolio from 2011 to 2030.
The project also analyzes the impacts of different sensitivities. The results suggest
that the REPS policy exerts no cost impact on IOUs until 2017 and a 0.54 cents/kWh
increase of retail electricity rate will be reached in 2030 under the REPS obligation.
According to sensitivity analysis, the extended availability of Production Tax Credit
(PTC), high fuel price of coal and natural gas, as well as high construction cost
of nuclear plant will reduce the total incremental cost of the REPS policy over 20
years. It is noted that the design of the alternative REPS Portfolio in this project
introduces major differences in model results compared to the former technical report.
Levelized cost assumptions and forecasts of future fossil fuel prices would bring
other uncertainties to this Master’s Project.
Type
Master's projectSubject
Renewable Portfolio Standards, Investor-owned utilities, cost impact, retail electricity
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https://hdl.handle.net/10161/3604Citation
Lei, Ting (2011). A Cost Impact Analysis of the Renewable Energy and Energy Efficiency Portfolio Standard
for Investor-Owned Utilities in North Carolina. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/3604.Collections
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