Very Good News—Part 2: State Policies Can Spur Clean Energy

The second in a two-part series about the potential of state energy policy. You can find the first installment here.

If you’re concerned about the fate of our climate and the job-creating clean energy industry over the next four years—and, really, given everything the Trump administration has said and done in recent days, who wouldn’t be?—just repeat this mantra to yourself, over and over again: “The states can lead.”

Indeed, a new report from the U.S. Department of Energy shows state renewable energy standards can pack an important punch, simply by requiring utilities to get certain percentages of their electricity from sources such as wind and solar power. That’s true not just over the next four years, but also between now and 2050.

By upping their renewable energy standards, states can help our nation get almost 50 percent of its electricity from clean, renewable sources, and create a host of public benefits, including millions of new jobs.

Lexey Swall

That’s the critical time horizon, if we intend to get out ahead of climate change’s worst effects. So the report’s finding that forward-looking standards alone can help the country get almost 50 percent of our electricity from renewable sources is good news. Already, one in five Americans lives in a state that intends to get at least that much. But to hit that figure nationwide, more states have to decide to get into the game and reap the tremendous benefits that clean energy has to offer us all.

That’s far from the only good news in this report, though: In terms of hard, cold cash, these benefits far outweigh any costs that might result from deploying pollution-free electricity. In other words, as states safeguard our climate, they can create new, good-paying jobs, save massive amounts of water, and give our kids cleaner air to breathe, just by implementing new standards where they don’t exist and strengthening some that already do. That sounds like a win for everyone.

A full 29 states and Washington, D.C., already have what are often called, in wonkspeak, renewable portfolio standards, or RPSs. The DOE researchers wanted to know what might happen if other states followed their lead. So they examined two scenarios: In the first, they looked at the impact of current standards—those in effect as of summer 2016. In the other scenario, “most states” would adopt “RPSs of 25-50 percent,” explains researcher Trieu Mai, from the National Renewable Energy Laboratory.

Once they punched all the data into their models, the researchers found:

• Widespread deployment: Existing RPSs, which include hydropower, get us to a respectable (but not adequate to protect the climate) 26 percent of the nation’s electricity from renewable sources by 2030 and 40 percent by 2050. The so-called High RE (renewable energy) scenario does a lot better: 35 percent by 2030 and 49 percent by 2050. Cutting carbon faster, earlier is far better for the climate, which is why now is the best time for states to adopt new or stronger standards.

Electricity prices: The existing RPS scenario finds some pretty impressive possibilities for consumer cost savings, with price changes ranging from a drop of 2.4 cents/kilowatt-hour (kwh) to an increase of 1 cent/kWh. For the High RE scenario, electric prices could dip by as much as 1.9 cents or rise by as much as 4.2 cents. The actual outcome will depend on things such as future natural gas prices and renewables costs. Since there’s a lot of uncertainty involved there, the researchers studied a range of possibilities to provide a reasonable lower and upper bounds.

Natural Gas Prices: Potential increases in electricity costs shouldn’t be seen in a vacuum. Because RPS-driven renewable energy will displace a lot of natural gas consumption at power plants (between 3.3 and 4.3 percent nationally), natural gas prices will decline. Those price declines, in turn, should result in customer savings of $78 billion in the Existing RPS case and $99 billion in the High RE scenario, or 1.9 cents/kWh and 0.9 cents/kWh respectively, amounts that can help offset any increases in electricity prices.

Public Health Savings: Here’s where the benefits of renewable energy really kick in. Declines in just three of the many air pollutants  that power plants produce—sulfur dioxide, nitrogen oxides, and particulate matter 2.5—result in public health benefits valued at $97 billion for the Existing RPS scenario and $558 billion in the High RE scenario. Translated into benefits per kilowatt-hour, the Existing RPSs earn us 2.4 cents/kWh and the High RE scenario nets us a whopping 5 cents/kWh. In other words, the public health savings alone would exceed any potential increases in electricity prices.

Climate Benefits: The more carbon pollution we keep out of the atmosphere, the less economic disruption we experience — fewer costly hurricanes, droughts, wildfires, and floods. Existing RPSs can save us $161 billion that way between now and 2050; the High RE scenario’s benefits are huge: $599 billion. That’s equal to 3.9 cents/kWh in the Existing RPS scenario, and 5.4 cents/kWh in the High RE scenario.

Jobs: The clean energy economy is already strong, and growing fast. With the Existing RPS scenario, our economy gets a boost of 4.7 million job-years between now and 2050. With the High RE scenario, it’s 11.5 million job-years. (A job-year is just what it sounds like: one year of full-time employment.)

Water Savings: Conventional and nuclear power plants use huge amounts of water; wind and solar power don’t. Thus, existing RPSs will cut consumption from the power sector by 4 percent and cut withdrawals—water that’s later returned to its source—by 3 percent. In the High RE scenario, those numbers plunge further, with consumption and withdrawals dropping by 18 percent.

For those keeping score at home, the public health and climate benefits alone dwarf even the upper bound of the costs of the standards. And that’s also before noting that, under certain conditions, like higher-than-expected natural gas prices, we could end up closer to the lower bound, with the RPSs leading to savings for our wallets, public health, and our climate.

In other words, if you need a mantra over the next four years and a place to focus your climate-protecting energies, remember: RPSs can help states lead. No matter who’s in the White House or Congress, states can be huge drivers of clean energy development.

About the Authors

Nathanael Greene

Director, Renewable Energy Policy, Energy & Transportation program

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