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REN21 - Utility Quota Obligation

Utility Quota Obligation

Generally called Renewable Portfolio Standard (RPS), renewables obligations or quota policies. A standard requiring that a minimum percentage of generation sold or capacity installed is provided by renewable energy. Obligated utilities are required to ensure that the target is met.  

There are 9 countries, which implemented a quota policy on national level and 4 countries on state/provincial level, among  which are: Australia, Italy, Japan, Poland, Romania, Sweden, United Kingdom.  A detailed list of countries can be found here.

Success Story

Japan’s Renewable Portfolio Standard Law was enacted in 2003 with the goal of raising the share of the nation’s electricity supply generated by renewable energy by placing regulations on energy supply corporations.  These companies can reach their imposed quota in three different methods:

  1. By generating their own renewable energy generated electricity
  2. By purchasing renewable energy generated electricity from another party
  3. By purchasing  “New Energy Certificates”

The goal of the program is to achieve a target of 16.0 TWh/fiscal year of new energy generation by electric retailers by 2014, up from 7.32 TWh/fiscal year at the introduction of the program in 2003.  By mandating the purchase of renewables Japan has been successful in increasing the share of renewable energy in their total electricity supply.  In 2006 18 of the 39 electricity suppliers under the obligations of the law surpassed their legally mandated shares of renewables in electricity supplied.

Source: RPS Japan; Japan for Sustainability

Further Reading: 

Feed-in Tariff Policy: Design, Implementation, and RPS Policy Interactions (NREL)