Research & Commentary: Nevada Renewable Portfolio Standard
Nevada legislators are considering adjusting the state’s renewable portfolio standard (RPS). The RPS requires utilities to obtain a specified percentage of their power from renewable sources by a certain date. Twenty-two of the 29 states with such mandates in place have considered changing those laws in the past two years.
Nevada’s current RPS requires NV Energy to supply 25 percent of its total retail electricity through eligible renewable energy resources, with at least 6 percent being from solar. One proposal the legislature is considering would prohibit energy-efficiency measures from being counted toward the RPS mandate, forcing the state’s public utility to rely even more heavily on expensive, unreliable renewable sources.
Supporters of the RPS say the mandates are necessary to reduce pollution, will lead to the creation of “green” jobs, and will only marginally increase electricity prices. However, there is little evidence the mandate will benefit the environment. Renewable sources such as wind and solar technologies are intermittent and thus require fossil fuel generators to back them up. Running fossil fuel generators in this way can emit more pollutants than if they were used as primary power sources.
A joint report by the Nevada Policy Research Institute and Beacon Hill Institute found the mandate would increase the average Nevada household’s electricity bill by $70 per year, increase commercial businesses’ electricity costs by an expected $400 per year, and increase industrial businesses’ electricity costs by $26,220 per year.
These increases in energy costs will have negative effects on the economy. By 2025, Nevada’s employment will be lowered by an expected 1,930 jobs, and real disposable income will be reduced by $233 million.
Rolling back the Nevada RPS instead of increasing it would make energy more affordable for consumers, attract more business investment, and lead to more net job creation. It also would allow more efficient use of these resources and minimize dangerous emissions. Nevada should not mandate the use of certain types of energy and instead should encourage development of economically competitive energy sources through non-distorting regulatory and tax policies.
The following documents provide additional information about renewable portfolio standards.
Ten Principles of Energy Policy
Heartland Institute President Joseph Bast outlines the ten most important principles for policymakers confronting energy issues, providing guidance to help withstand ongoing changes in markets, technology, and policies adopted in other states, supported by a thorough bibliography.
The Status of Renewable Electricity Mandates in the States
The Institute for Energy Research analyzes the practical effects of renewable electricity mandates, finding states with mandates have on average 40 percent higher electricity rates than those without such mandates.
Study of the Effects on Employment of Public Aid to Renewable Energy Sources
Researchers at King Juan Carlos University in Spain found each “green job” created in Spain cost about $750,000. Electricity rates would have to be increased by 31 percent to account for the additional costs of renewables.
How Less Became More: Wind, Power and Unintended Consequences in the Colorado Energy Market
Bentek Energy, LLC, a leading energy markets information company, evaluates the “must take” provisions of Colorado’s Renewable Portfolio Standard, which forces coal plants to accommodate the intermittency of wind power by “cycling” generating units. The report finds the requirement results in inefficiency and produces significantly greater emissions.
Wind Farms vs. Wildlife
Clive Hambler, lecturer in biological and human sciences at Oxford University and a trained zoologist specializing in species extinction, describes how wind turbines wreak havoc on wildlife.
U.K. Study: Renewable Fuels Kill Jobs
A 2011 study by Verso Economics, a U.K.-based economic consultancy, found renewable power killed 3.7 jobs in the U.K. for every “green job” created. The U.K.’s “renewable obligation” cost the country an additional $US2.3 billion in 2009–10 when all economic costs, including electricity prices, were considered.
RPS: A Recipe for Economic Decline
This Nevada Policy Research Institute study quantifies the economic harm caused by renewable energy subsidies and mandates.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Environment & Climate News Web site at http://news.heartland.org/energy-and-environment, The Heartland Institute’s Web site at http://www.heartland.org, and PolicyBot, Heartland’s free online research database, at www.policybot.org.
If you have any questions about this issue or The Heartland Institute, contact Heartland Institute Policy Analyst Taylor Smith at firstname.lastname@example.org or 312/377-4000.