Opponents may complain that state requirements for renewable energy drive up costs for consumers, but a study by two national laboratories says that renewable portfolio standards (RPS) yielded benefits of $7.4 billion in 2013, far outweighing earlier estimates of the cost of complying with the rules.
The study, A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards, was published this month by the National Renewable Energy Laboratory and the Lawrence Berkeley National Laboratory.
In it, researchers estimated benefits of $2.2 billion from lower greenhouse gas emissions and another $5.2 billion from other reductions in air pollutions. Water use was lower as well, with national water withdrawals reduced by 830 billion gallons and water consumption by power plants burning fossil fuels lowered by 27 billion gallons.
Twenty-nine states have RPS programs requiring a certain percentage of the electricity utilities sell to come from renewable sources. Greentech Media reported that an earlier study found that consumers paid an extra $1 billion for electricity between the years 2010 and 2013 because of PRS.
In this new report, researchers said that renewable energy can replace electricity supplied by gas-fired power plans, pushing down the price of natural gas, and lower the wholesale cost of electricity. Taken together, these factors saved consumers a total of between $2.5 billion and $4.9 billion.
In addition, the report says that renewable energy policies supported 200,000 jobs in 2013, concentrated mostly in California where a number of utility-scale photovoltaic installations were going up that year.
Some uncertainties exist
In a press release, the Berkeley Lab said that benefits from greenhouse gas reductions would range from $700 million to $6.3 billion, “reflecting differences in underlying estimates of potential damage caused by climate change.” In the same way, reductions in air pollution were estimated to be worth $2.6 billion to $9.9 billion, due to differences in certain assumptions — in this case, how premature mortality rates should be estimated.
“Our goal was to estimate the magnitude of RPS benefits and impacts at a national level, using established, consistent methodologies, while recognizing that states could perform their own more detailed assessments,” Jenny Heeter of NREL, one of the authors, said.
A 2014 study concentrated on the costs of RPS rules and noted the need for followup work to understand the full benefits, impacts, and costs of renewable portfolio requirements. Based on the new work, reducing greenhouse gas emissions equated to benefits of 0.7 to 6.4 cents per kilowatt hour of renewable energy; benefits of lower air pollution amounted to 2.6 cents to 10.1 cents per kWh.
The consumer savings in wholesale electricity markets was 0 to 1.2 cents per kWh; natural gas price reductions represented another 1.3 to 3.7 cents per kWh, the authors said.
Many benefits, however, are regional. For example, lower air pollution is mainly associated with lower levels of sulfur dioxide emissions from coal-fired plants concentrated mainly in the Mid-Atlantic, Great Lakes, Northeast, and Texas. California and Texas were the biggest beneficiaries of reduced water use.
The labs said that many states adopted their RPS programs in the late 1990s and 2000s. They will expire by the end of this decade. “As states consider revising renewable portfolio standard programs or developing new ones, careful assessments of the costs, benefits, and other impacts of existing policies will be critical,” a joint statement said.