Carnegie Mellon Boffins’ Blast from the Past: Why Renewable Portfolio Standards Stink

Washington, D.C., March 14, 2014 – Renewable portfolio standards, mandating specific percentages of the generating mix be met with renewable generating technologies, are popular among many U.S. state governments. But does it make sense to impose a nationwide renewable standard? Absolutely not, said the principals at Carnegie Mellon University’s Electricity Industry Center six years ago and their advice still resonates.

Writing in the National Academy of Sciences’ online journal Issues in Science and Technology in the Fall of 2008, which just came to my attention, Jay Apt, Lester Lave (who died in 2011 and was one of my go-to gurus on energy economics), and Sompop Pattanariyankool argued that a national RPS would “be costly, anger many people, and undermine the reliability of the electricity system.”

The Carnegie Mellon electricity mavens said in their article – A National Renewable Portfolio Standard? Not Practical — that they “share the goals of reducing pollution and greenhouse gas emissions, enhancing energy security, maintaining electric supply reliability, and controlling costs. The mistake is to think that a blinkered emphasis on renewable energy sources is the best way to achieve these goals. Unfortunately, this mistake has swept through 25 state legislatures.”

The Pittsburgh economists wrote of a confusion of terms. “Renewable” and “low greenhouse gas emissions” are not synonymous, as “there are several other practical and often less expensive ways to generate electricity with low CO2 emissions.” Also, wind, solar and geothermal “are located far from where most people live. This means that huge numbers of unpopular and expensive transmission lines would have to be built to get the power to where it could be used.”

Wishing a policy into effect does not mean actual accomplishment, warned the Carnegie Mellon economists. “As Massachusetts has already discovered,” they said, “implementing an RPS is farm more difficult than passing popular legislation. The proposed wind farm off Cape Cod is stalled, and Massachusetts is badly behind in meeting its RPS.” That’s true six years later.

A renewable portfolio standard, argued the Carnegie Mellon academics, “is essentially a narrowband solution to a broadband problem. By placing an inordinate focus on a limited number of renewable energy sources, legislators are neglecting numerous other options that can make significant contributions to the larger social goal of an adequate supply of clean, low-carbon, reliable, and affordable electricity.” The chief resource that RPS requirements leave off of the menu, they argue, is energy efficiency.

Compared to much of the rest of the world, they noted, the U.S. “is a profligate user of energy.” Americans use twice as much energy per capita and per dollar of gross domestic product as Denmark and Japan. California has shown that “aggressive policies can substantially reduce the growth of electricity demand.”

While RPS policies with strict deadlines are politically popular, said the Carnegie Mellon team, they can lead to “high costs, disputes over land use, and unreliable electricity, leading to a public backlash against these policies. The United States needs to focus on the goals, provide substantial incentives to meet them, and avoid policies that exclude economical ways to meet them.”

The article, now almost six years old, is also worthwhile for its unusually tart language: “A discussion of renewable energy seems to addle the brains of many sensible people, leading them to propose policies that are bad engineering and science or have a foundation in yearning for utopia.” Then the authors took a shot – well deserved – at former New York City mayor and self-made billionaire Mike Bloomberg, who “proposed putting wind turbines on the tops of skyscrapers and bridges. No need to ask the engineers whether the structures could bear the strain or were there were good wind resources.”