Lawrence Berkeley Lab released a report estimating the economic benefits from the renewable portfolio standards (RPS) around the U.S. Two surprising findings were:
- ratepayers saved up to $1.2 billion in wholesale power costs (on top of a $1.3-$3.7 billion reduction in natural gas costs from reduced overall demand); and
- air quality benefits were about equal to GHG reductions in economic value.
Both of these claims require a deeper review because they run contrary to previous analyses.
Based on PG&E’s Power Charge Indifference Adjustment (PCIA), the renewables contracts that it holds are increasing its rates by almost 2 cents per kilowatt-hour. It is only recently that renewable contract prices have started approaching conventional resource costs, so it’s hard to understand how an RPS could have already reduced electricity rates. (I do see that this will eventually be the case.)
Typically the emission reduction benefits from GHG reductions are several multiples of those from criteria air pollutants (e.g., NOx and volatile organic compounds (VOC or ROG) that produce ozone; particulate matter (PM 2.5)). For example, ClimateCost has issued studies estimating reduced energy impacts and health benefits compared to air quality benefits that show much larger GHG benefits.