State clean electricity standards spur clean technology investments and reduce emissions 

State-level action has played a crucial role in the development of the nation’s clean energy economy, and states show no signs of slowing down. One way states are leading is by enacting technology-neutral clean electricity standards (CES). These policies advance a variety of goals, including reducing emissions, improving air quality, advancing a clean technology economy, leveraging clean energy funding and financing, and responding to consumers and businesses who want reliable and clean energy. States are enacting CES policies, in part, because they can be tailored to meet each state’s needs while deploying cleaner and more diverse sources of electricity.   

A CES builds on existing state and federal clean energy policies, including renewable portfolio standards, cap-and-invest, and Clean Air Act regulations, by establishing ambitious requirements for the electric power sector to provide clean electricity to customers while generating both economic and environmental benefits. In addition, federal funding opportunities through the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) can help states support deployment of a wide array of clean electricity resources. These funding streams provide opportunities to accelerate adoption and implementation of state clean electricity standards across the U.S.  

CATF has developed in-depth resources to help states and other stakeholders understand how a CES can help achieve their clean energy goals. The first is a report outlining how the policy functions, key design elements, and potential benefits of implementing a CES. The second is an interactive map that allows users to explore how each state has customized its CES according to the needs of the individual state.  

What is a CES and what benefits can it deliver? 

Historically, state policies prioritized renewable energy targets through “renewable portfolio standards” (RPS), which typically focus exclusively on renewable energy resources, specifically requiring electric retail suppliers to deploy more wind, solar, and other renewables. Now, states are building on those policies by adopting technology-inclusive clean electricity standards that unlock a fuller suite of technologies, including nuclear, clean hydrogen, and fossil with carbon capture, to help drive clean energy investment. A state CES provides the framework for utilities and other power providers to make long-term investment and resource planning decisions while reducing air pollution and creating jobs. Around a dozen states have enacted CESs designed to reduce emissions and ensure that electricity remains reliable and affordable. 

There are a variety of ways to design a state CES, with the common underlying principle that an increasing share of electricity must come from sources with zero or near-zero carbon emissions. An effective CES includes three key features: 1) the CES sets an enforceable requirement to transition to clean electricity; 2) the policy includes a broad range of clean electricity technologies, not exclusively renewable energy; and 3) the CES establishes ambitious targets, either for clean electricity or carbon emission reductions.  

By enabling a diverse set of clean energy resources, states have the flexibility to achieve their clean energy objectives according to their own distinct resources, market conditions, and political considerations. 

Los Estados que adoptan un CES pueden esperar una serie de beneficios. 

1. Certidumbre para las inversiones: Las CES orientan la planificación de recursos a largo plazo y las decisiones de inversión, fomentando mayores inversiones en recursos de electricidad limpia.  

2. Ahorro para el consumidor: Las CES pueden reducir la exposición de los consumidores a la volatilidad de los precios de los combustibles fósiles, disminuir los costes de explotación y atraer financiación federal que mitigue los costes de los contribuyentes.  

3. Crecimiento económico: Las CES pueden atraer inversiones en proyectos de energía limpia, crear puestos de trabajo asociados y aumentar el flujo de financiación federal al Estado.  

4. Mejoras sanitarias y medioambientales: Las CES pueden mejorar significativamente la calidad del aire y la salud pública, incluso para las comunidades desproporcionadamente afectadas por la contaminación atmosférica.  

5. Acceso a financiación federal: Los CES se alinean con considerables fuentes de financiación federal, lo que permite a los Estados maximizar la financiación y reducir el coste de perseguir un CES.  

Key policy design considerations for a CES 

Aunque las diferencias en la estructura del mercado, la generación existente y la idoneidad natural para determinados recursos energéticos limpios darán lugar a variaciones en las políticas CES de cada Estado, los legisladores pueden tener en cuenta elementos de diseño comunes a la hora de elaborar una CES.  

1. Forma de la norma: Una CES puede basarse en la cantidad de electricidad limpia suministrada a los clientes o expresarse como un porcentaje de reducción de las emisiones de gases de efecto invernadero.  

2. Fuentes de electricidad limpia elegibles: Permitir que todas las fuentes de electricidad limpia, no sólo las renovables, contribuyan a alcanzar la norma fomenta la fiabilidad y la asequibilidad, y deja margen para que las nuevas tecnologías contribuyan una vez que alcancen la disponibilidad comercial.  

3. Rigurosidad: Los responsables políticos deben determinar el rigor y el calendario de la norma, equilibrando las oportunidades actuales con los futuros avances tecnológicos.  

4. Punto de regulación: La entidad con la obligación de cumplimiento viene determinada por el punto de regulación. En los Estados integrados verticalmente, por ejemplo, la empresa de servicios públicos tiene la obligación de cumplir los requisitos de la CES.  

5. Compliance: Typically, the state public utilities commission or the state environmental regulator is responsible for ensuring compliance and enforcement.  

6. Seguimiento: Un sistema sólido de seguimiento de la generación y el consumo de electricidad limpia o de las reducciones de emisiones exigidas facilita el cumplimiento y garantiza la integridad del programa, aunque no todos los estados lo utilizan actualmente.  

7. Requirements for In-State Generation: Policymakers must weigh local economic benefits, job creation, legal limitations, and regulatory authorities while ensuring the free flow of power across an interconnected grid when determining whether to favor in-state generation.  

8. Flexibility for Different Types of Providers: Tailoring the stringency and/or timing of the standards for different types of power providers (e.g., electric cooperatives and investor-owned utilities) may result in greater support while encouraging these entities to take advantage of federal incentives.  

9. Contención de costes y flexibilidad de cumplimiento: Una CES tecnológicamente neutra ofrece múltiples vías de cumplimiento. Las cláusulas de reducción de costes y fiabilidad ayudan a evitar consecuencias no deseadas, al tiempo que garantizan que las empresas de servicios públicos y otros desplieguen nuevas fuentes limpias.   

10. Aligned Renewable Energy Standards: A CES can integrate a new or existing Renewable Portfolio Standard or operate in parallel to an RPS to help advance a state’s clean and renewable electricity objectives.    

11. Carveouts and Other Incentives: Carveouts and incentives may be included in a CES to boost deployment of resources—such as distributed generation, battery storage, offshore wind, hydrogen, or geothermal—but they bring tradeoffs.  

12. Características de diseño avanzadas: Las características avanzadas de diseño de las CES, como un estándar de capacidad limpia o un requisito de ventas minoristas por hora, incentivan el despliegue de tecnologías limpias firmes y de almacenamiento de larga duración antes que una CES típica y aceleran la reducción de emisiones.    

CATF’s interactive map allows users to see which states have adopted a CES or an RPS, explore the policy design elements each state has selected, and compare various states’ standards. Searchable design elements within the map include, among others, stringency of the standard, form of the standard, point of regulation, eligible technologies, and compliance tracking. The map provides a dynamic and visual tool to evaluate CES policies and determine which ones might be best for a specific state. 

There is public support for clean energy, and states are in the driver’s seat. Implementing a clean energy standard makes sense from economic, health, and environmental standpoints, while providing needed flexibility for each state and the private sector to determine what works best within their jurisdictions. There are well-trodden paths of adopting and implementing CES policies, and CATF resources can help states identify the specific policy design elements, timelines, and paths that work best for them.