Renewable portfolio standard

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Many countries (and states in the USA) require utilities to buy a specified amount of their electricity from designated “renewable” sources, such as wind and solar but usually excluding existing hydro. This is called a “renewable portfolio standard” (RPS), “renewable electricity standard”, or “renewables obligation”.

Such a directive has little regard for cost, practicality, or science but is instead primarily an act of political virtue signaling.

Or it is a cynical act of crony capitalism: Besides placing burdens on utilities and ratepayers, an RPS serves to create an obligatory market for energy sources that would otherwise find it difficult to compete with more reliable and cheaper sources. Combined with subsidies, e.g., the PTC, feed-in tariffs, and an extra market for “green tags”, an RPS helps to guarantee attractive returns and tax avoidance for the investors in these “preferred” technologies.

See also: