DOE finds renewable standards reaped billions in benefits

Source: Daniel Cusick, E&E reporter • Posted: Friday, January 8, 2016

State renewable energy standards netted $7.4 billion in environmental benefits in 2013 while spurring the creation of roughly 200,000 new energy-sector jobs, a new analysis from the Energy Department finds.

Among other things, the joint study released yesterday by the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory found that renewable portfolio standards (RPSes) have spurred $2.2 billion in benefits through reduced greenhouse gas emissions alone and reduced water withdrawals by 830 billion gallons in 2013.

“Our goal was to estimate the magnitude of RPS benefits and impacts at a national level using established methodologies, while recognizing that individual states can perform their own, more detailed assessments,” NREL’s Jenny Heeter, one of the report’s authors, said in a statement announcing the findings.

RPS policies, currently enacted in 29 states and the District of Columbia, require that rate-based utilities and other electricity providers meet a minimum portion of their load using renewable energy sources like solar, wind, biomass or geothermal. Most RPSes are expressed as a percentage of generation that must come from renewable resources by a specific date, say 25 percent by 2025.

But RPSes vary. Some states, such as South Carolina and Indiana, require utilities to meet relatively modest clean energy goals — 10 percent or less over the next five to 10 years, for example. Others have adopted aggressive targets, such as Vermont’s 75 percent by 2032 requirement and California’s 50 percent by 2030 RPS.

While such policies have shifted U.S. power generation profiles, they have also been a source of deep political division. Environmentalists and clean energy advocates generally cheer the programs while backers of traditional energy resources say they distort energy markets and drive up costs for utilities and ratepayers.

The DOE analysis notes that many states are currently considering whether to extend, eliminate or otherwise revise existing RPS policies. As such, it “is intended to inform these ongoing discussions by helping states evaluate RPS programs,” said Ryan Wiser, a senior scientist and deputy group leader for LBNL’s Electricity Markets and Policy Group.

Savings from electricity, natural gas

In addition to evaluating environmental benefits, the study also assessed other economic impacts of clean energy laws.

For example, the research estimates that RPS policies saved consumers up to $1.2 billion from reduced wholesale electricity prices and $1.3 billion to $3.7 billion from reduced natural gas prices in 2013. Such savings occur because renewable electricity displaces other electricity generation with higher operating costs, the researchers said.

The authors also noted that while the study is national in scope, many of the associated benefits and impacts were regional and even state specific.

For example, the economic benefits from air pollution reductions are associated mostly with reduced sulfur dioxide (SO2) emissions from coal-fired power plants and are concentrated in the Mid-Atlantic, Great Lakes, Northeast and Texas, according to the report. Similarly, reductions in water withdrawal and consumption were largest in California and Texas, both of which experience intermittent drought conditions.

Renewable energy industry officials welcomed DOE’s latest study, saying it bolsters the notion that the United States can transition away from more polluting forms of energy without compromising electricity security and reliability.

“It is widely appreciated that wind energy protects the environment by directly displacing the burning of fossil fuels at power plants,” Michael Goggin, senior research director at the American Wind Energy Association, wrote in a blog post. “Today’s study confirms that wind energy also benefits consumers by keeping electricity and natural gas prices low and protecting against energy price spikes.”