| May 20, 2009 |  |
New Energy Dept. Analysis Concludes a Strong National Renewable Electricity Standard Is Achievable and Affordable
Electric Rates Would Stay Relatively Flat as Renewables Come Online
WASHINGTON (May 20, 2009)—The Department of Energy's National Renewable Energy Laboratory (NREL) today released an analysis that indicates three leading proposals in Congress to increase national reliance on renewable energy are affordable and achievable. Its findings echo those of two other recent studies, one by the DOE's Energy Information Administration (EIA) and another by the Union of Concerned Scientists (UCS).
The NREL analysis found that average national electricity prices under the three proposals would fluctuate by less than 1 percent annually. According to NREL, electric rates would remain relatively flat because the capital costs of building more renewable energy would be offset by reduced demand for, and price of, coal.
The three draft proposals analyzed by NREL would require utilities to obtain a certain percentage of their electricity from renewable sources by a certain date. One proposal, sponsored by Sen. Jeff Bingaman (D-N.M.) calls for 20 percent renewables by 2021, but allows energy efficiency to meet as much as one-quarter (5 percent) of the goal. A second proposal, introduced by Rep. Edward Markey (D-Mass.) would require 25 percent renewables by 2025. The third proposal, introduced by Rep. Henry Waxman (D-Calif.) also would require 25 percent renewables by 2025, but utilities could meet one-fifth (5 percent) of the requirement through energy efficiency.
"Today's study is the third in as many months to show that a national renewable energy requirement would have a minimal impact on electricity prices," said Jeff Deyette, an analyst in the Clean Energy Program at the Union of Concerned Scientists (UCS). "The data indicate we can transition to clean energy without hurting ratepayers. Lawmakers should support and strengthen the two standards moving through the House and Senate."
The NREL study comes on the heels of an April EIA analysis that reached a similar conclusion despite using a different model and set of assumptions. The EIA study analyzed Rep. Waxman's 25-percent-by -2025 standard. That requirement is included in the draft "American Clean Energy and Security Act," a comprehensive energy and climate bill that would reduce the heat-trapping emissions that cause global warming. The EIA found that through 2030, the standard's impact on cumulative electric and natural gas bills would range from a marginal increase of 0.2 percent ($8.4 billion) to a slight savings of 0.1 percent ($2.5 billion).
In March, UCS released an analysis of a stronger 25-percent renewable standard based on a modified, peer-reviewed version of the same model EIA used for its study, with no option to include efficiency to meet the requirement. The analysis found that ratepayers would save $64.3 billion on their electric and natural gas bills by 2025. Between 2010 and 2030, electric rates would be as much as 7.6 percent lower than they would be without the renewables standard.
Like the EIA and UCS studies, the NREL analysis found that increasing the nation's reliance on renewable energy would be an effective way to address climate change. Compared with business as usual, annual carbon dioxide emissions under a 25-percent-by-2025 standard would decline 150 million metric tons by 2030, the equivalent of taking 24.5 million cars off the road.
The national renewable electricity standards under consideration in Congress are modest compared with existing state policies. Under a business-as-usual scenario, NREL projects that renewable energy would increase to about 12.4 percent of total U.S. electricity generation by 2025. By contrast, NREL found that the Waxman and Markey 25-percent-by-2025 standard proposals would only increase renewable energy use 17 and 22 percent respectively, because of exemptions for small utilities and the opportunity for utilities to rely partly on energy efficiency initiatives. Sen. Bingaman's 20 percent by 2021 proposal would effectively require utilities to boost their reliance on renewables to only 12.1 percent by 2021.
"Opponents of clean energy say the sky will fall if Congress enacts a national renewable electricity standard," said Marchant Wentworth, Washington representative in the UCS Clean Energy Program. "The truth is that a strong 25-percent standard is entirely within reach, and the standards Congress is now considering are even easier to meet. The public overwhelmingly supports renewable standards that would produce more renewable energy development, and Congress should deliver."
Wentworth pointed to a recent poll by the American Wind Energy Association that found that 75 percent of registered voters support a 25-percent-by-2025 national renewable electricity standard. That support is consistent across all political affiliations and regions.
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet's most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future.
