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Limiting the Cost of Renewables – Lessons for California

Limiting the Cost of Renewables – Lessons for California

June 4, 2012

Limiting the Cost of Renewables-Lessons for California(564.16kb)

Many US states use Renewable Portfolio Standards (RPS) to drive deployment of renewable energy. These policies use market-based mechanisms to encourage cost-effective deployment. Many RPSs also include additional measures to limit policy costs; these are intended to mitigate the risk that the RPS will impose higher costs than originally anticipated.

As part of California’s 33 percent RPS, state elec­tricity regulators at the California Public Utilities Commission (CPUC) are required to develop a mechanism to limit the cost of the policy. To support CPUC in this task, Climate Policy Initiative reviewed experience in a number of states with costs limits in renewable energy policies.

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