A new study estimates that $2.2 billion in benefits come from reduced greenhouse gas emissions and $5.2 billion from reductions in other air pollution for state renewable portfolio standard (RPS) policies operating in 2013.

A new report from the Department of Energy’s (DOE’s) Lawrence Berkeley National Laboratory (LBNL) and National Renewable Energy Laboratory (NREL) finds that state renewable portfolio standard (RPS) policies reduced greenhouse gas emissions and air pollution, while also reducing water use, creating renewable energy jobs and suppressing wholesale electricity and natural gas prices. The greenhouse gas and air pollution benefits alone saved the United States society $7.4 billion in 2013. Although not directly comparable, a previous report by the same lab team found average annual costs of RPS policies of only $1 billion: in other words, the benefits of these policies have vastly outweighed their costs.

RPS policies, which require utilities or other electricity providers to meet a minimum portion of their load with eligible forms of renewable electricity and currently are in place in 29 states and Washington, DC, have been a key driver for the renewable energy boom we’ve seen in the U.S. over the last several years. Roughly 60% of new U.S. renewable generation and capacity additions since 2000 were driven by these policies. So it’s no exaggeration to say that our incredible burst in renewable energy deployment has been made possible by these policies, along with technology cost reductions and federal tax incentives for renewable energy investment and production.

Today, many state RPS policies are approaching or eclipsing their final statutory targets, and stakeholders around the country are debating the relative benefits and costs of continuing or expanding these policies. To better inform these decisions, DOE’s Office of Energy Efficiency and Renewable Energy partnered with LBNL and NREL to undertake a multi-year project examining the costs, benefits, and other impacts of state RPS policies. 

The previous report in this series, A Survey of State-Level Cost and Benefit Estimates of Renewable Portfolio Standards, found average net RPS compliance costs in 2012 and 2013 of less than 2% of average retail electricity rates, or about $1 billion per year. The report relied largely on cost estimates developed by utilities or state regulatory agencies or on the cost of renewable electricity credits. Researchers determined many states had not considered benefits, and those that had used widely varying methodologies and different scopes. 

To address this gap, LBNL and NREL’s new report, A Retrospective Analysis of the Benefits and Impacts of U.S. Renewable Portfolio Standards, for the first time uses established consistent methodologies to assess potential societal benefits of the renewable energy deployed to fulfill RPS policies in 2013. Besides the greenhouse gas emission and air pollution reduction benefits – which, again, were worth $7.4 billion in 2013, or roughly 7.5 cents per kilowatt-hour of renewable energy generated – the report also shows national water withdrawal and consumption reductions of 830 billion gallons and 27 billion gallons in 2013.  Nearly 200,000 gross domestic renewable energy jobs were also created as a result of these policies in 2013, and consumers were able to enjoy lower natural gas prices and the effects of lower wholesale electricity prices.

EERE is now working with LBNL and NREL to develop a new study that will examine future costs, benefits and impacts of RPS policies using consistent methodologies. This will be especially timely as states develop plans to comply with the Clean Power Plan, and consider what role renewable energy should play. States can also use this report’s methodology to generate state-specific benefits analysis.

Please join NREL and LBNL for a webinar summarizing the results of this most recent study on January 13 at 1 p.m. Eastern.



Steve Capanna
A bio page for Steve Capanna, former Director of Policy and Analysis for EERE.
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