Renewable energy derives power from naturally and consistently occurring resources such as sunlight, wind, waves, and tides, the running water of a river, or the natural heat of the earth.
Electricity or heat energy generated from renewable resources is more sustainable because it does not rely on a finite supply of fossil fuel such as coal and natural gas, or uranium that feeds nuclear plants. Renewable energy resources are a viable alternative to fossil fuels and the transition to more renewable power has already begun in Ohio and across the globe.
Currently, Ohioans get about 1% of their electricity from renewable resources, but that percentage is growing. Much of the growth in renewable energy development has been driven by the bipartisan leadership of state policymakers, as they set the bar for Ohio utilities to not only develop renewable resources but to develop renewable energy projects in Ohio.
In 2008, the Ohio General Assembly established the Renewable Portfolio Standard (RPS) for Ohio’s investor-owned, electric generation utilities, and as recently as 2012, amended this standard to include additional technologies.
Commonly referred to as Ohio Senate Bill 221, the RPS requires electric utilities to generate 12.5% of it’s electric supply from renewable resources by the year 2025. A separate set of benchmarks were established for solar power, given its unique marketplace and range of applications.
And the law’s “in-state” requirement stipulates that one-half of the overall 12.5% goal be generated from facilities located within the State of Ohio.
Between the first year of this requirement and 2025, annual goals, or “benchmarks,” were established to gradually increase the renewable energy goal, and to ensure that utilities keep up the pace in order to meet the 12.5% by 2025 goal.
And while an overwhelming majority – about 86% – of our electricity comes from coal-fired power plants, by the time the Renewable Portfolio Standard is fully implemented, Ohioans will still be getting about 75% of their power from coal-fired plants.
*Added per Ohio Senate Bill 315 (Effective September 2012)
First, Ohio’s Renewable Portfolio Standard applies only to the electric generation utilities that are investor-owned; municipal utilities and cooperative utilities do not need to comply with the RPS.
Currently in Ohio, these utilities are American Electric Power, FirstEnergy Solutions, Duke Energy, and Dayton Power & Light.
One option for achieving the standard is by building a renewable energy project, such as a solar array, utility-scale wind farm or converting a facility already owned by the utility to run on a renewable resource.
A second option for Ohio utilities is to purchase Renewable Energy Credits or Certificates, often referred to as RECs. One REC is equivalent to One megawatt hour of electricity generated from a renewable resource.
In Ohio, the Public Utilities Commission certifies RECs for renewable energy generated in Ohio and similar certification mechanisms exist in other states. RECs represent a megawatt of renewable energy being fed into our transmission system, and reduce the demand on fossil-fuel fired generation facilities.
Each investor-owned utility must file an annual report to the Public Utilities Commission of Ohio (PUCO) to demonstrate their compliance with the RPS. As of 2012, all four utilities were meeting their annual benchmark.
The PUCO supports a mix of generation resources in order to minimize the risks, including price spikes, associated with an exclusive reliance on any one type of electric generation. These standards have put Ohio on the right path to economic recovery and development and our clean energy potential.
The Ohio Environmental Council’s policy experts and attorneys work tirelessly at the PUCO and other regulatory agencies to ensure that Ohio’s utilities give individuals and communities all the tools they need to be as energy efficient as possible.