REPORT: Boosting Renewable Energy and Energy Efficiency
Can Save Money for Ohio Electric Customers
Model shows that incorporating advanced energy technologies would reduce electric rates in 2030 compared with more generation from traditional power plants
Policies that ensure investment in renewables and efficiency should be part of
Ohio’s future energy strategy
[Columbus, Ohio – September 22, 2016] – Utilizing a combination of renewable energy and energy efficiency would save money for Ohio customers compared with relying entirely on more electricity generation from fossil-fuel sources to meet future energy needs. Those are the findings of scenarios run through a modeling tool utilized by Advanced Energy Economy Institute (AEE Institute), which show that Ohio can chart an energy strategy to provide affordable and reliable power by taking advantage of cost-competitive advanced energy technologies.
“Our Ohio model shows that it is in the best interest of electricity customers to capitalize on the benefits of renewable energy and energy efficiency,” said Graham Richard, CEO of Advanced Energy Economy, a national business association with which the AEE Institute is affiliated. “By embracing investments in energy efficiency and renewable energy technologies, policymakers could ensure that Ohio is able to meet its energy needs at the lowest cost.”
“These results demonstrate that Ohio’s energy market growth is ripe for renewable energy and energy efficiency technologies that could provide ratepayers with savings when compared to doing nothing,” said Ted Ford, CEO of Ohio Advanced Energy Economy, AEE’s state partner in Ohio. “Ohio would also gain the economic benefits of renewable energy development and, with more diverse energy sources, some protection against price spikes from volatile natural gas prices.”
“Four Paths to Ohio’s Energy Future: Modeling Options for Meeting Electric Power Needs in 2030,” published today by the AEE Institute, presents the results of four specific scenarios that are representative of multiple runs utilizing AEE Institute’s modeling tool for assessing least cost options for meeting Ohio’s electricity needs. The report projects rate impacts of the following four scenarios, all through 2030:
(A) A “business-as-usual” approach that does not incorporate any investments in energy efficiency or renewable energy;
(B) An approach incorporating all the renewable energy development that would be competitive in the market, but no energy efficiency;
(C) A scenario incorporating all the available energy efficiency investment that is competitive in the market, but no renewable energy; and,
(D) An option incorporating both renewable energy and energy efficiency investments that are competitive in the market.
For each scenario, the model identifies the combination of generation sources, efficiency improvements, and other measures that represent the lowest cost means of meeting Ohio’s energy needs. The model also factors in assumptions based on the current and future price of natural gas, current policy barriers stalling investments in advanced energy, pending federal regulations with which the state may need to comply, and the retirement of aging coal facilities.
The analysis shows that failing to capitalize on the advanced energy technologies of renewable energy and energy efficiency would be the highest-cost path for Ohio. By contrast, policy measures that ensure that renewable energy gets to compete would diversify Ohio’s energy sources, providing protection against fuel price volatility while costing no more than relying entirely on traditional generation resources, and enabling investment in energy efficiency would provide the greatest savings for customers.
The base case, Scenario A, or “business-as-usual” approach is the highest-cost of the four scenarios tested by the model. The result of this scenario would increase rates by 2.83 cents/kWh - pushing electricity rates in Ohio up to 12.45 cents/kWh from the current price of 9.62 cents/ kWh (U.S. Energy Information Administration).
In Scenario B, the model allows renewable energy development to compete with other generation resources, while still excluding energy efficiency investments. The result of this scenario is a small rate reduction of 0.08 cents/kWh in 2030 compared to Scenario A.
In Scenario C, investment in energy efficiency is allowed to compete with traditional generation sources, while still excluding investment in renewable energy. This would lead to a rate reduction of 1.71 cents/kWh – a savings of nearly 2 cents per kWh compared to Scenario A.
In Scenario D, the model allows for both renewable energy and energy efficiency to compete with traditional generation resources leading to a savings of 1.69 cents/kWh compared to the base case. The savings are nearly the same as the efficiency-only Scenario C, while the addition of renewable energy would provide some protection against volatility in natural gas prices.
The analysis, which is available for download here, uses publicly available data from the Ohio’s investor-owned utilities’ (IOUs) planning documents to determine the rate impacts of these policy scenarios in 2030. The model, which is also available to the public (same link), can also be used to examine other scenarios not explored in this report.
About AEE and the AEE Institute
Advanced Energy Economy (AEE) is a national association of businesses that are making the energy we use secure, clean, and affordable. AEE’s mission is to transform public policy to enable the rapid growth of advanced energy companies. The Advanced Energy Economy Institute is a nonprofit educational and charitable organization whose mission is to raise awareness of the public benefits and opportunities of advanced energy.
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