The New RPS: Reliable Portfolio Standard
“Would you get on an airplane that is 100% unreliable?” Of course not.
That was a serious question a former Utilities Commission staffer asked me after I shared this confession Carolina Journal uncovered in a 2018 N.C. solar power application: “Solar is an intermittent energy source, and therefore the maximum dependable capacity is 0 MW.”
In other words, because solar is weather-dependent, it is 100% unreliable. The same is true for wind. They may be available when we need power, or they may not. It’s a crapshoot. That’s why they are considered “nondispatchable” energy sources. They cannot be relied upon whenever customers want to turn on a light or heat their homes.
Unless someone has a death wish, most of us wouldn’t buy a ticket on an airplane that is 100% unreliable. So why would we as ratepayers pay for a grid that relies on power from a source that is 100% unreliable? Investment in unreliable sources takes away much-needed capital to invest in reliable, dispatchable, and clean baseload sources like nuclear, natural gas, and coal with carbon sequestration.
Despite the lack of reliability of renewable sources, 29 states and the District of Columbia have a Renewable Portfolio Standard in statute, meaning utilities must provide a certain percentage of power from unreliable renewable energy sources. In 2007, North Carolina proudly boasted its 12.5% RPS, the first in the Southeast. It also came with a generous package of financial incentives, including a 35% state income tax credit in addition to a 30% federal tax credit. The state tax credit has since expired.
Why invest in an unreliable power-generating source? Because they reliably generate revenue for owners. They are money makers through the federal production tax credit. Investors can also make money by selling renewable energy credits to virtue-signaling companies like Bank of America so they can market their claims of “carbon neutrality” to gullible consumers.
With all the subsidies and mandates, it’s no wonder the number of solar installations in North Carolina has skyrocketed. North Carolina is fourth nationally in installed solar capacity, according to the Solar Energy Industries Association, with 8,147 megawatts. The industry group also claims N.C. solar can power 955,987 homes. So why doesn’t it? Because 8,147 MW of installed solar can’t power that many homes. Remember the confession: Solar is intermittent. The maximum “dependable” capacity is zero.
Solar works in small scale — homes, flat-topped roofs where the investment is private and the consequences more limited. Unreliable, nondispatchable generation is no way to power our grid — the nation’s largest, and arguably most important machine — or grow an economy like North Carolina’s.
I propose a new RPS we should adopt. Instead of a Renewable Portfolio Standard, modernize the definition of RPS to mean Reliable Portfolio Standard. Full credit for the new term goes to Jason Hayes at the Mackinac Center for Public Policy in Michigan. He threw out the name change during a phone conversation after I shared the above solar confession. (Yes, we’re a hit at cocktail parties.)
The Reliable Portfolio Standard should be simple and easy to understand. How many megawatts of reliable, dispatchable power does that state have as a percentage of peak demand? If North Carolina’s peak demand is 30,000 megawatts and our reliable, dispatchable generation capacity is 15,000 megawatts, then the RPS would be 50%. It’s actually a little more complicated than that. We’d have to get into capacity factors and dispatchability for individual power generators. But you get the gist. The higher the percentage, the better. The lower the percentage, the more unstable the grid and the higher the risk for rolling blackouts.
Back to our confession: “Solar is an intermittent energy source, and therefore the maximum dependable capacity is 0 MW.” Intermittent energy sources like wind and solar would dramatically lower the new reliability focused RPS. Any project that lowers our RPS should be met with a healthy dose of skepticism and thorough scrutiny before forcing ratepayers to invest or taxpayers to subsidize.
It would be understood under our new RPS that mandated retirements of reliable, dispatchable baseload generation must be replaced with new reliable, dispatchable baseload generation to maintain a high RPS.
States with a high RPS could use it as a tool for economic development. A reliable power supply is a major factor for companies to invest in a state.
Let’s retire the old Renewable Portfolio Standard and replace it with the Reliable Portfolio Standard, a far more meaningful metric that shows the state’s commitment to ratepayers and a thriving economy.