Evaluating the Policy Implications of Renewable Portfolio Standards on Grid Reliability in the United States: An Instrumental Variable Quantile Analysis

Sanjay B. Singh (), Talal H. Alsabhan and Reem Alshagri
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Sanjay B. Singh: Department of Data Analytics, Harrisburg University of Science and Technology, Harrisburg, PA 17101, USA
Talal H. Alsabhan: Assistant Professor, Department of Economics, King Saud University, Riyad 11451, Saudi Arabia
Reem Alshagri: Assistant Professor, Department of Economics, King Saud University, Riyad 11451, Saudi Arabia

Energies, 2024, vol. 17, issue 23, 1-22

Abstract: This paper investigates the influence of Renewable Portfolio Standards (RPSs) on the reliability of grids while considering key indicators, including the System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), and Customer Average Interruption Duration Index (CAIDI), both without and with the inclusion of Major Event Days (MEDs). The study adopted the instrumental variable quantile regression (IVQR) method for estimation purposes. The first-stage 2SLS results confirm the robustness and validity of the instruments used, including the Democrats’ Participation Rate, Real Average Household Income, and Renewable Energy Capacity, which show strong relevance and satisfy the conditions of homogeneity. Our findings demonstrated that the adoption of RPS policies has significantly decreased the interruption of power in all of the considered quantiles. The impact is more potent in states facing more severe reliability challenges. The results proved the important role of the policies of RPSs in improving the stability of grids in the context of states having relatively poor reliability. In summary, the obtained findings demonstrate significant insights related to the policies of renewable energy in the resilience of infrastructure. Finally, the findings suggest that the government authorities should promote the RPS as a tool for enhancing the performance of grids in different states.

Keywords: instrumental variable quantile regression (IVQR); renewable portfolio standards (RPSs); grid reliability; energy policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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