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Columbus: A new study today released by Environment Ohio details how investing in renewable energy will help to meet Ohio’s future demand for electricity while also helping to stabilize rates and boost the state’s economy. “Investing in our Future: How Renewable Energy Will Help to Stabilize Electricity Rates and Stimulate Ohio’s Economy” details the advantages and impacts of diversifying with renewable energy compared to traditional or advanced resources.
“Slowly diversifying Ohio’s electricity mix with renewable energy will help to stabilize electricity rates and create a positive net economic impact,” stated Brandon Cavanagh, Advocate and author of the report. “Especially when factoring in rising fuel costs, it is becoming increasingly expensive to import the coal that we use to generate electricity. We could instead take advantage of free fuel from the wind and sun.”
Further, as Ohio is the 4th largest emitter of carbon in the U.S., a federal cap on carbon – which seems increasingly likely at this point – could dramatically increase the cost of electricity generated from coal. Fortunately, Ohio can reduce its exposure to increasing electricity prices by diversifying its electricity mix with renewable energy and energy efficiency.
Key points:
- The cost of renewable energy has declined over time. For example, according to the Renewable Energy Policy Project, the cost of wind went from 86 cents/kWh in 1980 to 6 cents/kWh in 1995. By comparison, between 1970 and 1995, the cost of nuclear increased from 4 cents/kWh to 9 cents/kWh.
- New energy derived from wind is cheaper than new advanced coal. According to the U.S. Department of Energy, total overnight costs in 2006 (in 2005 $/kW) were 2,134 for Integrated Gasification Combined Cycle (IGCC) with carbon sequestration; 2,081 for advanced nuclear; 1,491 for IGCC; and 1,206 for wind.
- Coal power plant (IGCC) in Indiana will raise rates by 16 percent there. This plant in Indiana will result in an average electric rate increase of about 16 percent, to be phased in between 2008 and 2012. Another IGCC project, in West Virginia, if approved, would result in an average electric rate increase of 12 percent by 2012. Further, according to the EPA, capturing – not including transporting or storing – 90 percent of carbon emissions from IGCC plants would increase the total cost of electricity by 38 percent.
- By comparison, according to the Ohio Department of Development and the Lawrence Berkeley Laboratory, a 15 percent by 2016 renewable energy standard (RES) in Ohio would increase average retail rates between 2.1 and 6.4 percent – both Senate Bill 221 and House Bill 487 only require a minimum 12.5 percent RES by 2025.
“Ohio has an opportunity to invigorate its economy by capitalizing on the opportunity to develop our own renewable energy resources,” stated Cavanagh. “Ohio has an advantage over other states and could dominate the market for manufacturing component parts for wind turbines and solar panels, if a bill passes that includes annual near-term benchmarks for compliance as well as a 1 percent solar carve-out.”
By diversifying Ohio’s electricity mix with renewable energy and energy efficiency, Ohio help to shield itself from upward-spiraling electricity costs and simultaneously improve public health and spur economic growth; an RES would not only reduce pollution, but it would also create tens of thousands of new jobs, increase the incomes of rural landowners by millions of dollars, generate tax revenue for school districts, and add billions of dollars to the Gross State Product.
In order to achieve these economic and environmental benefits as well as stabilize future electricity prices, Ohio must adopt aggressive renewable energy and energy efficiency standards. These standards must have benchmarks and require the public utilities commission of Ohio to enforce the standards and penalize utilities if they don’t meet them. This will ensure that the standards are met and that Ohio sees renewable energy development immediately.
Ohio is poised and ready for renewable energy development. The time is now to make it a reality.
