How State RPS Policies Benefit The Market

As a result of state renewable portfolio standard (RPS) policies operating in 2013, $2.2 billion in benefits came from reduced greenhouse-gas emissions and $5.2 billion came from reductions in other air pollution that year, according to a new study.

The report, entitled “A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards,” was conducted by researchers from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory (NREL). It evaluates the benefits and other impacts of RPS policies in 2013, the most recent year offering the necessary data for the study.

In addition, the report shows that national water withdrawals and consumption were reduced by 830 billion gallons and 27 billion gallons, respectively, in 2013.

RPS policies require utilities or other electricity providers to meet a minimum portion of their load with eligible forms of renewable electricity. They currently exist in 29 U.S. states and Washington, D.C., and have been a driver for renewable electricity generation in the U.S. over the past decade, the study explains.

However, many states are currently considering whether to extend, eliminate or otherwise revise existing RPS policies.

“This work is intended to inform these ongoing discussions by helping states evaluate RPS programs,” explains Berkeley Lab’s Ryan Wiser, one of the authors of the report.

The Berkeley Lab and NREL note that the report describes its methods and highlights uncertainties in its findings: For example, benefits from greenhouse-gas reductions were estimated to range from $0.7 billion to $6.3 billion - reflecting differences in underlying estimates of damages caused by climate change.

Similarly, air pollution reduction benefits, which arise primarily from avoided premature mortality, were estimated to range from $2.6 billion to $9.9 billion in 2013 - reflecting differences in underlying epidemiological literature, among other factors, according to the research.

In addition to evaluating environmental benefits, the study also assessed other impacts. Specifically, the research estimates that RPS policies supported 200,000 renewable-energy-related jobs in 2013, saved consumers up to $1.2 billion from reduced wholesale electricity prices and saved another $1.3 billion to $3.7 billion from reduced natural gas prices.

According to the report, consumer savings from reduced electricity and natural gas prices occur because renewable electricity displaces other electricity generation with higher operating costs - much of which is fueled by natural gas. The study is careful to describe these as impacts rather than benefits, as they represent resource transfers from some stakeholders to others, rather than net societal benefits on state, national or global scales, note NREL and the Berkeley Lab.

This work was a follow-up to an earlier study by the two labs that focused on the costs of state RPS programs to date and noted the need for a full understanding of the potential benefits, impacts and costs of RPS programs. To that end, this study provides a point of comparison for estimates of RPS program costs, the labs explain.

Based on the results of this study, benefits from reduced greenhouse-gas emissions equate to 0.7 to 6.4 cents per kWh of renewable energy, while benefits from reduced emissions of criteria air pollutants amount to 2.6 to 10.1 cents per kWh. Consumer savings from wholesale electricity market and natural gas price reductions represent another 0 to 1.2 cents per kWh and 1.3 to 3.7 cents per kWh, respectively.

Although the study takes a national view - evaluating all state RPS programs as a whole - many of the associated benefits and impacts were regional, the labs note.

For example, the economic benefits from air pollution reductions are associated mostly with reduced sulfur-dioxide emissions from coal-fired power plants and are concentrated primarily in the Mid-Atlantic, the Great Lakes, the Northeast and Texas. Reductions in water withdrawal and consumption were the largest in California and Texas, respectively - both states that regularly experience droughts - while renewable energy jobs from RPS projects were concentrated mostly in California, where much utility-scale photovoltaic generation was being built 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,” says NREL’s Jenny Heeter, another author of the report.


NYSERDA Re-Allocates $6 Million To Extend Incentives

The New York State Energy Research and Development Authority (NYSERDA) has re-allocated more than $6 million in unused funds to extend current solar incentives in certain NY-Sun Solar MW Block programs.

Under Gov. Andrew Cuomo’s MW Block initiative, residential, small commercial and large commercial solar projects are eligible for incentives that decrease project costs and support the use of clean, sustainable solar power. The total amount of incentives available is based on a pre-established amount of energy designated for a specific region.

Once a block’s capacity is fully subscribed, all unused funds are re-allocated to the current block in that region. Hence, funds are made available due to the cancellation of projects in the region or changes in project scope or funding.

The MW Block regions of the state include Upstate Region Residential, Upstate Region Small Non-Residential, Con Edison Residential, Con Edison Small Non-Residential, Long Island Region Residential, Long Island Small Non-Residential, Upstate Commercial/Industrial and Con Edison Commercial/Industrial.

According to NYSERDA, the progress of residential and small commercial MW Blocks is approximately six to seven months ahead of schedule, reflecting the high demand for solar in New York State.

“Under Governor Cuomo’s Reforming the Energy Vision strategy, New Yorkers are adding solar at a rate that exceeded 300 percent from 2011 to 2014 - twice the rate of the U.S. overall - and we expect even more growth in the coming years,” says Richard Kauffman, chairman of energy and finance for New York.

“The re-allocation of funds will ensure an appropriate level of support is available to residential and small commercial projects in regions where funds were allocated, but not used,” says John B. Rhodes, NYSERDA president and CEO.

The following are the individual MW Block regions where funds are being re-allocated:

Long Island Non-Residential is not included in the current re-allocation.

NY-Sun staff will continue to monitor the MW Block regions for unused capacity.

Policy Watch

How State RPS Policies Benefit The Market




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