Abstract
The Renewable Portfolio Standard (RPS) of the State of Illinois specifies a schedule for the fraction of electricity produced from wind to be phased in through 2025. The price of electricity due to implementation of RPS in order to achieve a six-year payback on investment on new wind farms was estimated for six scenarios that examined the effect of electricity consumption growth rate, production tax credit of $0.022/kW. h or unrestricted investment tax credit of 30%, and projected changes in installed project costs. In all cases, the electricity price was found to be dominated by the installed project cost (capital cost). Thus, any policy that affects the capital cost directly or indirectly would have a significant effect on the electricity price. Whereas investment tax credit has a direct effect, policies that encourage technology improvement and improve transmission lines would have a similar effect of lowering the capital cost. Carbon tax, on the other hand, would increase the electricity price to the consumers, although it offers other benefits.
| Original language | English |
|---|---|
| Pages (from-to) | 425-430 |
| Number of pages | 6 |
| Journal | Energy Policy |
| Volume | 44 |
| DOIs | |
| Publication status | Published - May 2012 |
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Keywords
- Renewable portfolio standard
- Tax incentive
- Wind electricity
ASJC Scopus subject areas
- Energy(all)
- Management, Monitoring, Policy and Law
Cite this
Impact of deployment of renewable portfolio standard on the electricity price in the State of Illinois and implications on policies. / Kung, Harold H.
In: Energy Policy, Vol. 44, 05.2012, p. 425-430.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Impact of deployment of renewable portfolio standard on the electricity price in the State of Illinois and implications on policies
AU - Kung, Harold H
PY - 2012/5
Y1 - 2012/5
N2 - The Renewable Portfolio Standard (RPS) of the State of Illinois specifies a schedule for the fraction of electricity produced from wind to be phased in through 2025. The price of electricity due to implementation of RPS in order to achieve a six-year payback on investment on new wind farms was estimated for six scenarios that examined the effect of electricity consumption growth rate, production tax credit of $0.022/kW. h or unrestricted investment tax credit of 30%, and projected changes in installed project costs. In all cases, the electricity price was found to be dominated by the installed project cost (capital cost). Thus, any policy that affects the capital cost directly or indirectly would have a significant effect on the electricity price. Whereas investment tax credit has a direct effect, policies that encourage technology improvement and improve transmission lines would have a similar effect of lowering the capital cost. Carbon tax, on the other hand, would increase the electricity price to the consumers, although it offers other benefits.
AB - The Renewable Portfolio Standard (RPS) of the State of Illinois specifies a schedule for the fraction of electricity produced from wind to be phased in through 2025. The price of electricity due to implementation of RPS in order to achieve a six-year payback on investment on new wind farms was estimated for six scenarios that examined the effect of electricity consumption growth rate, production tax credit of $0.022/kW. h or unrestricted investment tax credit of 30%, and projected changes in installed project costs. In all cases, the electricity price was found to be dominated by the installed project cost (capital cost). Thus, any policy that affects the capital cost directly or indirectly would have a significant effect on the electricity price. Whereas investment tax credit has a direct effect, policies that encourage technology improvement and improve transmission lines would have a similar effect of lowering the capital cost. Carbon tax, on the other hand, would increase the electricity price to the consumers, although it offers other benefits.
KW - Renewable portfolio standard
KW - Tax incentive
KW - Wind electricity
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U2 - 10.1016/j.enpol.2012.02.013
DO - 10.1016/j.enpol.2012.02.013
M3 - Article
VL - 44
SP - 425
EP - 430
JO - Energy Policy
JF - Energy Policy
SN - 0301-4215
ER -