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 fuels 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.
In 2008, the Ohio General Assembly established the Renewable Portfolio Standard (RPS) for Ohio’s investor-owned distribution utilities and any competitive electric supplier in the state. The standard requires these sellers of electricity to ensure that 12.5% of their portfolio to be sourced from renewable resources. In 2012, the RPS was amended to include additional technologies. And despite being temporarily “frozen” for two years (2014-2016), Ohio’s RPS resumed functioning in 2017. The RPS includes a separate set of benchmarks were established for solar power, called the “solar carve out,” given its unique marketplace and range of applications.
WHAT IS A RENEWABLE RESOURCE?
*Added per Ohio Senate Bill 315 (Effective September 2012)
Ohio’s RPS applies to investor-owned electric distribution utilities:AEP-Ohio (Ohio Power Company), FirstEnergy (Cleveland Electric Illuminating, Toledo Edison, Ohio Edison), AES/Dayton Power & Light, and Duke Energy. The standard also applies to any certified competitive retail electric service providers. These are the companies that can sell power supply to customers within the regulated territories of the investor-owned electric distribution utilities. Municipal utilities and rural electric cooperative utilities do not need to comply with the RPS.
One option for achieving the annual RPS benchmark would be to directly purchase renewable energy from a renewable energy system located in the region, such as a solar array, utility-scale wind farm, or hydro-electric facility.
A second option for Ohio utilities is to purchase Renewable Energy Credits often referred to as RECs through the regional REC market. One REC is equivalent to one megawatt hour of electricity generated from a renewable resource.
In Ohio, the Public Utilities Commission of Ohio (PUCO) 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 regional transmission system, and reduce the demand on fossil-fuel fired generation facilities.