Societal Benefits from State Clean Energy Standards Outweigh Costs, Federal Report Says

State renewable portfolio standards (RPS) led to $7.4 billion in societal benefits in 2013, largely by reducing emissions of harmful air pollutants that cause significant public health impacts, said researchers at the Lawrence Berkeley National Laboratory in a new report.

Those benefits significantly outweighed annual state-level compliance costs for the programs, which were estimated at around $1 billion.

Currently, 29 states and Washington, D.C. have renewable portfolio standards, which require that energy suppliers in a state derive an increasing portion of their electricity from renewable sources over time. The bulk of the standards were enacted in the late 1990s and early 2000s.

The report focused solely on new renewable-electricity generation constructed after an RPS was enacted in a state. Researchers calculated the potential air-emission reductions, along with the associated public health and environmental advantages.

Their analysis revealed that the lion’s share of benefits flowed from reductions in sulfur dioxide emissions and in particular, a drop in premature mortality associated with fine sulfate particle pollution, said Ryan Wiser of the Lawrence Berkeley National Laboratory, in a Webinar on January 13.

“Most of those benefits accrue in the eastern half of the country, and particularly in the Northeast,” he added, given that those states are downwind from coal-burning plants in the Midwest. The analysis showed the combustion-related emission reductions were concentrated primarily in the Great Lakes region, the Mid-Atlantic, Texas, California and the Pacific Northwest.

The research found that state renewable portfolio standards led to 98 terawatt-hours of new renewable energy generation in 2013, representing 2.4% of nationwide electricity generation, and resulting in a 3.6% drop in total fossil-fuel production. The associated reductions in emissions of nitrogen oxides, sulfur dioxide and particulate matter yielded $5.2 billion in societal benefits. Some 59 million tonnes of greenhouse-gas emissions were also avoided, contributing to an estimated $2.2 billion in additional global societal benefits, the report said.

Researchers also looked at how an increase in renewable energy affected water use in the electric sector, which is highly dependent on water for cooling. They estimated a drop in net water withdrawals of 830 billion gallons, and in net national water consumption of 27 billion gallons. Those figures represented approximately 2% of overall power sector water withdrawals and consumption, respectively.

Since water use is largely a regional issue, the reductions were not felt uniformly across the country. The largest withdrawal savings were found in drought-prone California, and the largest consumption savings were seen in Texas.

“Water-use reductions can be considered a co-benefit of RPS standards, especially where water is scarce,” said Wiser, though researchers were not able to place a monetary value on those savings. “They help reduce the vulnerability of the electricity supply, potentially avoiding electric-sector reliability events and freeing up water for other productive environmental or local ecosystem uses.”

The report also looked at how state renewable energy standards affected job growth, calculating that they supported nearly 200,000 gross domestic jobs in 2013, each with an average salary of $60,000. The standards also led to wholesale electric price reductions, though there was a considerable amount of uncertainty regarding the potential impact on retail prices, with estimates ranging from no impact to $1.2 billion in national consumer savings.

Turning specifically to natural-gas markets, researchers found that state RPS’s lowered natural-gas consumption by 1.6%, and reduced gas prices by $0.05 to $0.14 MMBtu. When applied to all gas sectors of the economy, the aggregate consumer savings in 2013 ranged from $1.3 billion to $3.7 billion, the report said.

Wiser cautioned that while a drop in consumer prices would help ratepayers, it hurt electricity generators, and rather than view lower prices as a societal benefit, they would be better perceived as a transfer payment from producers to consumers. “A consumer might view a reduced electricity bill as a benefit,” he told the Webinar. “If you are fossil-fuel generator, or even a renewable [energy] generator who benefits from selling into the wholesale market, you may view it as a cost,” he said.

–By Rona Cohen

Additional resources:

You can download LBNL’s report, “A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards,” here.

Listen to a recording of the Webinar here: https://www.youtube.com/watch?v=zZkBupB5rpg&feature=youtu.be