The following is a contributed article by Ronald DiFelice, managing partner at Energy Intelligence Partners.
In many electric utility markets, policymakers are exploring the next generation of renewable energy policies that will deliver the most value given the new reality of low-cost solar PV, wind and energy storage. Policies that encourage energy storage to be paired with solar or wind generation can have an outsized impact because these grid assets can together deliver firm capacity into peak periods when customer costs are the highest. If implemented effectively, the results are lower costs for ratepayers, increased resiliency and reduced emissions.
A Clean Peak Standard (CPS) is a relatively new policy tool that can increase the share of renewable energy resources used to meet peak demand. Now is the ideal time to implement Clean Peak Standards in the U.S. because there is a significant amount of peaking capacity that is over 40 years old, as shown in Figure 1. Over the next 20 years, about 152 GW of peaking capacity is expected to retire. For example, in North and South Carolina, 1.61 GW of winter peaking capacity is scheduled to retire by 2028 according to Duke Energy Carolinas and Duke Energy Progress.
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