Managing Risk in Ohio: The Role of Clean Energy in a Reliable, Diverse Power Supply (2013)

September 2013
Managing Risk in Ohio report
As Ohio prepares for a new energy future, it can mitigate the risks of reliance on coal and natural gas by broadening its portfolio to include renewable energy and greater energy efficiency.

 Ohio stands at a crossroads. As the state retires its aging fleet of coal power plants, it must decide which energy resources will best serve Ohio ratepayers over the coming decades.

Natural gas has been the primary fuel of choice in recent years, but shifting to an electricity system dependent on coal and natural gas does not alleviate the myriad risks — to the environment, economy, or public health — posed by coal alone. In fact, it sustains them, and creates new ones.

By integrating significant amounts of renewable energy and energy efficiency into its energy mix, Ohio can build a more diverse electricity portfolio that minimizes these risks while meeting energy demand cost-effectively and sustainably.

Building a diverse energy portfolio helps protect ratepayers and provides other substantial benefits

Just as a diverse financial portfolio protects investors from volatile economic markets, a diverse electricity portfolio can protect ratepayers from the risks inherent in relying too heavily on a few resources to meet electricity demand. Because of their unique characteristics, renewable energy and energy efficiency help alleviate the risks of fossil fuel dependence while spurring economic development and improving public health and the environment.

Key to building a truly diverse energy portfolio for Ohio are the state’s renewable energy and energy efficiency standards that require utilities to develop increasing amounts of these resources over the coming years. Although still early in their implementation, these standards are already driving development of renewable energy and energy efficiency that is delivering important economic, public health, fuel diversity and environmental benefits to communities throughout the state.

Maintaining, and even strengthening these policies ensures the continued integration of clean energy resources into Ohio’s electricity portfolio and moves the state towards a lower-risk, more affordable and sustainable electricity supply.

In this white paper, UCS demonstrates that:

  • Ohio’s overdependence on coal and natural gas for electricity generation leaves the state vulnerable to a wide range of economic, reliability, environmental, and public health risks.
  • Diversifying Ohio’s electricity portfolio by incorporating meaningful levels of renewable energy and energy efficiency can mitigate the risks inherent in the state’s current overdependence on coal and natural gas.
  • Ohio’s renewable energy and energy efficiency standards are vital and effective tools to diversify Ohio’s electricity portfolio and wean the state from its overreliance on fossil fuels while meeting the state’s energy demands in a cleaner, safer and more sustainable manner.

To ensure a cleaner, healthier, and economically stronger future for Ohio, UCS recommends:

  • Strengthening Ohio’s renewable energy standard to set higher targets for renewable energy like solar and wind power. Setting Ohio’s renewable energy standard to require 20% or more renewable energy by 2025 would reduce Ohio’s exposure to the risks of overdependence on coal and natural gas and create economic benefits for the state as these resources are developed.
  • Enact policies to encourage utilities to enter into long-term contracts for renewable energy. Long term contracts maximize the risk-mitigating benefits of renewable energy by locking in a supply of renewable energy for a set price over ten years or more. These contracts also give renewable energy developers the certainty they need to go forward with projects, thereby facilitating the development of renewable energy resources.
  • Retaining Ohio’s strong energy efficiency standard as currently written to ensure that Ohio residents continue to save money and use electricity wisely.