The government has formalized its plan to abolish the Renewable Portfolio Standard (RPS) and replace it with a new auction-centered renewable energy deployment regime, and a proposed amendment to the Renewable Energy Act has been introduced to provide the legal basis for that transition. The government has presented the reform as a way to expand deployment by shifting to capacity-based portfolio management, lower generation costs through competition, encourage self-build and equity investment by state-owned generation companies, address the overconcentration of deployment in certain technologies, and remove the structure in which prices in the mandatory market serve as a price floor for prices in the voluntary private market.

This issue brief examines how the latest amendment to the Renewable Energy Act (Bill No. 15929) would reform the RPS and evaluates whether that design is consistent with the government’s stated policy objectives. It finds that, despite the government’s stated intention to abolish the RPS, the regime proposed in the Amendment largely preserves the structure of the current system, including deployment obligations imposed on generators, reimbursement of compliance costs, and administrative surcharges for non-compliance. As a result, the RPS’s central structural weakness—the lack of incentives for generators to minimize costs—would largely remain in place.

Since the Amendment does not clearly specify how obligated entities would be allowed to comply, the analysis examines two scenarios: one in which compliance is met only through the contract market set out in the Amendment, and another in which self-build is also allowed, as the government has recently indicated. Under both scenarios, most of the government’s stated policy objectives are either unlikely to be achieved or only partially achieved. In particular, the government’s core objective of lowering renewable energy prices appears difficult to achieve except under limited conditions, while the existing concentration of deployment in specific technologies could become even more pronounced.

The structural weaknesses of the RPS stem from the generator-based obligation structure itself and are therefore difficult to address through incremental adjustments within the existing system. In that sense, there is a strong case for moving beyond the RPS. The more important question, however, is what should replace it. At this stage, the government’s first task is to define clearly what it is trying to achieve, by when, and in what order of priority. Only on that basis can a system be designed in which those objectives can be pursued consistently. No single policy instrument can deliver every policy objective at once. What matters is to build a policy portfolio whose elements reinforce one another rather than conflict. Reform of the RPS should proceed only after that groundwork has been laid, and the Renewable Energy Act should be amended accordingly.