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Several state legislatures have proposed bills to repeal or shrink state RPS programs within the last couple years. While these efforts have largely been symbolic with little traction,79 future challenges to RPS programs could arise and similarly impair renewable energy industry development. u Complementarity: Given its long history of government support and the established state of the fossil-based economy, natural gas plants do not require major new policy or incentive supports to achieve cost-competitiveness. Long-term investments in natural gas plants do not hinge upon the continuing renewal of local or federal incentives (however, as discussed above, environmental policies introduce significant policy-related investment risks). 3.2.2.3 Resource Variability and Dispatchability Issue: While variable renewable generation, such as wind and solar without energy storage, do not incur fuel supply risks in the way that conventional power plants do, they do experience dynamic resource variability along the minute-to-minute, hour-by-hour, and longer timescales. From the utility and regulator reliability planning perspective, wind and solar only provide low capacity value, which decreases with increasing penetration on the system.80 This capacity can only be dispatched within the limits of resource availability. Complementarity: Natural gas can be dispatched flexibly, which offers more capacity for system reliability. The quick ramping ability of natural gas generators makes them ideal for complementing variable renewable generation. This flexibility may generate additional value as new ancillary service products are designed to accommodate increasing levels of variable generation on the grid (see next section on collaborative market re-design) and new regional capacity or other ancillary services markets are developed to meet future reliability needs. A balanced electricity portfolio of both natural gas and renewable energy assets can adjust generation shares based on continuous optimization of resource availability, fuel costs, and emission requirements. 3.2.2.4 Transmission Planning and Costs Issue: Large investments in transmission will be required to harness areas with the greatest renewable energy potential, such as the high wind potential central regions of the United States, which are mostly far from load centers. Despite widespread acknowledgment of the general need for an expanded and more reliable U.S. electricity grid, even without large amounts of variable renewable energy generation, transmission remains a contentious issue with slow-moving progress on resolving planning, permitting, and cost allocation concerns. Complementarity: Notable overlaps between natural gas production regions and high wind energy potential regions suggest the possibility of new transmission projects jointly proposed and supported by new wind and natural gas projects to be sited close to each other. This pooling of efforts can accelerate implementation of proposed transmission investments and can also help ensure that new transmission is planned to optimize both natural gas and renewable energy assets. u Domestic oil and gas industries have received tax incentives since the early 1900s and continue to today. For a historical review of U.S. energy tax policies, see Sherlock, M.F. (2011). Energy Tax Policy: Historical Perspectives on and Current Status of Energy Tax Expenditures. Washington, DC: Congressional Research Service. 22PDF Image | Opportunities Synergy Natural Gas and Renewable Energy
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