State RPSs Provide Significant Economic Benefits, DOE Study Says

State renewable portfolio standards (RPSs) provide around $7.4 billion in annual economic benefits and substantial reductions in water withdrawals and consumption, according to a new study from the Department of Energy’s Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory released on Jan. 6.

The study, “A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards” estimates that in 2013, $2.2 billion in benefits came from reduced greenhouse gas (GHG) emissions and $5.2 billion from reductions in other air pollution. The report also finds that national water withdrawals in 2013 were reduced by 830 billion gallons and consumption by 27 billion gallons.

Benefits Vary

The range of benefits, however, was fairly large. Benefits from GHG reductions were estimated from $0.7 billion to $6.3 billion, while air pollution reduction benefits ranged from $2.6 billion to $9.9 billion. These large ranges reflect differences in estimates of damage from climate change and in the epidemiological literature on health effects of air pollution, the authors say.

In terms of specific amounts, the study finds that GHG emissions were reduced by 59 million metric tons, sulfur dioxide by 77,400 tons, nitrogen oxides by 43,900 tons, and particulate matter by 4,800 tons.

In addition to health and environmental benefits, the study says state RPSs also helped support 200,000 jobs in the renewable energy sector in 2013, as well as saving end users $1.2 billion in reduced wholesale electricity prices and another $1.3 billion to $3.7 billion in reduced natural gas prices. These are not counted as benefits by the study as they largely comprised job and economic transfers from one group of stakeholders to another, namely from traditional generators to renewable generators as renewable energy displaced other generation with higher operating costs.

Costs of State RPSs Limited

The report is a follow-up to a 2014 study that surveyed the costs of state RPSs nationwide. That study found that in the 24 states for which data was available, RPS compliance costs amounted to about 1% of retail electricity rates, though there was substantial variation across states: from –$4/MWh (a net reduction) to $44/MWh (Figure 1).

 

state rpss benefits

  1. Estimated net state RPS compliance costs and targets in 2012/2013. Source: Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory

 

As in the 2014 study, the new study of state RPS benefits found wide geographic variation in where effects were felt. Air pollution benefits—mostly reduced SOx emissions—were found mostly in states with substantial coal-fired generation, mainly the Mid-Atlantic, Great Lakes, Northeast, and Texas. Reductions in water consumption and withdrawals were largest in California and Texas, while job benefits were largest in California, which has seem dramatic growth in solar photovoltaic generation.

—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).