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Solutions Center Report Reviews International Experiences in Wheeling and Banking Strategies

Report offers insights for regulators and policy makers working to achieve renewable energy goals

Tuesday, March 15, 2016

Solutions Center Report Reviews International Experiences in Wheeling and Banking Strategies

The Clean Energy Solutions Center’s new report reviews the role of wheeling and banking in renewable energy deployment, analyzing recent experiences in India, Mexico, and the United States.

The Clean Energy Regulators Initiative (CERI) has released a new report, Wheeling and Banking Strategies for Optimal Renewable Energy Deployment: International Experiences. CERI is a partnership between two Clean Energy Ministerial (CEM) initiatives, the Clean Energy Solutions Center and 21st Century Power Partnership, and Leonardo Energy. As variable renewable generation increases worldwide, policy makers and regulators are adopting new or revised wheeling and banking policies that could effectively support renewable development. The report defines the principles of wheeling (transmission) tariffs and renewable energy banking provisions and their role in renewable energy deployment in countries with plans for large-scale renewable energy.

The report reviews experiences to date in India, Mexico, and the United States, discussing key policy and regulatory considerations for devising more effective wheeling and/or banking provisions for countries with ambitious renewable energy deployment targets. Included in the discussion are challenges of the competing needs of stakeholders, especially those of renewable energy generators, distribution utilities, and transmission network owners and operators. The importance of wheeling and banking and their effectiveness for the financial viability of renewable energy deployment are also explored.

Key lessons for regulators include creating long-term wheeling and banking policy certainty, considering incentivizing renewable energy through discounted transmission access, and assessing the cost implications of such discounts, as well as expanding access to renewable energy customers.