Researchers Marilyn Brown, Regents' and Brook Byers Professor of Sustainable Systems at Georgia Tech's School of Public Policy; Shan Zhou, an assistant professor at Purdue University and Georgia Tech Ph.D. alumna; and Barry Solomon, professor emeritus of environmental policy at Michigan Technological University, explored how state-level clean electricity policies affect not only the states that adopt them but also neighboring states. Their data-driven analysis revealed that the effects of these state policies are more significant and complex than previously understood.
Their findings were recently published in the 'Proceedings of the National Academy of Sciences'.
"Analysts are asking if the U.S. should have a federal renewable mandate to put the whole country on the same page, or if individual state policies are sufficient," Brown said. "To answer that question, it is useful to know if states with renewable energy policies are influencing those without them."
The researchers focused on the Renewable Portfolio Standard (RPS), a policy tool adopted by more than half of U.S. states. RPSs require utility providers to generate a specific percentage of their electricity from renewable sources, such as wind or solar, with many of these standards being mandatory. Utilities that fail to meet these targets within the specified timeframes may face penalties.
To examine the cross-border effects of these policies, the team compiled a dataset covering 31 years (1991-2021) of annual renewable electricity generation for 48 U.S. states and the District of Columbia. This dataset allowed them to create 1,519 pairs of states, linking each state to its geographical neighbors or electricity trading partners. This pairing enabled the researchers to investigate how the RPS policy in one state influenced renewable energy generation in the other state.
"By only looking at the pairs, we can see if an RPS in one state directly affects renewable electricity generation in another state, and, if that's the case, whether it is because they are geographic neighbors or if it's because they are participating in the same wholesale electricity market," Zhou said.
The researchers emphasized the importance of examining electricity markets because states often purchase power from other states through these markets. The purchased electricity may come from renewable sources, allowing utilities in one state to meet their RPS requirements by buying renewable energy credits from another state.
The analysis also incorporated the concept of "policy stringency," which measures a state's renewable electricity targets relative to its current production levels. For instance, a state with a target of 30% renewable energy by 2030 that already produces 25% renewable electricity has a less stringent policy than a state with the same target but only 10% renewable production. The research team enhanced this metric by including interim targets and the current share of renewable energy in their analysis.
"Our stringency variable includes interim targets as well as the existing share of renewable energy generation," Solomon said.
The findings indicated that a state's renewable electricity generation is influenced not only by its own RPS but also by the RPS policies of neighboring states.
"We also learned that the stronger a neighboring state's RPS policy is, the more likely a given state is to generate more renewable electricity," Brown said. "It's all a very interactive web with many co-benefits."
Contrary to expectations, the research showed that geographical proximity to RPS states had a greater influence on renewable generation than electricity trading partnerships. This suggests that prior studies focusing on within-state impacts of RPS policies may have underestimated their full influence. The researchers plan to continue investigating the factors driving these spillover effects.
"The spillover effect is very significant and should not be overlooked by future research, especially for states without RPSs," Zhou said. "For states without policies, their renewable electricity generation is very heavily influenced by their neighbors."
Research Report:The spillover effect of mandatory renewable portfolio standards
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Georgia Tech School of Public Policy
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