Could Cleaner Energy Save Ohio Ratepayers $50M in 2030, Alone?

by | Oct 26, 2016

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An economic study released on October 24 finds that a solid mix of energy efficiency and clean energy in Ohio could provide savings of between $28.8 million and $50.9 million for Ohio electricity customers in 2030 alone, through reduction in out-of-state power purchases and via substantial avoided costs on the transmission and distribution system. 

The research report, “Grounds for Optimism: Options for Empowering Ohio’s Energy Market,” was commissioned by the two advocacy groups, the Environmental Defense Fund (EDF) and The Nature Conservancy (TNC); and was conducted on their behalf by the energy market experts Greenlink Group and Runnerstone.

The paper compares three forecasts of the state’s electricity market – an Accelerated Efficiency scenario, an Intermediate Pathway that provides a balanced mix of renewables and efficiency, and an Expanded Renewables scenario – against a baseline of an indefinite extension of the current freeze on clean energy standards. All scenarios assume that the current setback rules for new wind development will be revised.

“Ohio policymakers are at a crossroads. They can create jobs, grow the economy, cut pollution, and save customers money by rebuilding the state’s renewable and efficiency policies, or they can continue to let Ohio fall behind other states in the clean energy boom,” said Dick Munson, director, Midwest Clean Energy, for Environmental Defense Fund. “Fortunately, this study shows there are multiple potential paths forward, all of which will greatly benefit Ohioans.”

“We were asked to consider Ohio’s future electricity needs and determine the true economic implications of various strategies,” said Greenlink COO Dr. Matt Cox.

According to the three scenarios, the renewable energy and energy efficiency industries are expected to:

  • Create between 82,300 and 136,000 new jobs in Ohio, with the wind industry serving as one of the largest contributors.
  • Enhance Ohio’s GDP by from $6.7 billion to $10.7 billion by 2030.
  • Provide savings of between $28.8 million and $50.9 million for Ohio electricity customers in 2030, alone.

For example, the Expanded Renewables scenario relies on greater growth in renewable energy (e.g., wind and solar); and features the greatest increases in jobs and payroll growth, largely due to manufacturing jobs related to wind power industry. In addition, the Expanded Renewables pathway would attract private market investment that would limit financial impact on ratepayers up-front and in the long-term.

In addition to the comparative forecasts, the report calls for five market-focused reforms that would advance energy innovation and investment within Ohio; including revisions to the wind setback rule, which has prevented further wind development in the state, advocates claim.

“Reinvigorating Ohio’s renewable and efficiency policies will allow the state to maintain flexibility while building a cleaner, healthier energy system,” said Josh Knights, executive director of The Nature Conservancy in Ohio.

“Ohio was once a clean energy leader,” Knights said. “This report provides lawmakers with options for getting the Buckeye State back on track, so Ohioans can have a cleaner, more affordable energy system.”

Not so fast …

However, while the two advocacy groups support the study recommendations, the local news outlet, The Columbus Dispatch, pointed out, “Forecasts like this are used by the participants in the long-running debate over clean-energy standards in Ohio, with each side arguing that its approach will lead to more jobs and lower bills.”

At the end of the year, a two-year freeze on Ohio’s clean-energy standards will be lifted. Some Republican lawmakers want to extend the freeze or at least make the requirements optional in the short term, the paper reported on October 24.

Specifically, groups such as the Ohio Chamber of Commerce support an extension of the freeze. They note the high costs of the energy rules for large businesses, which indirectly gets passed on to consumers.

“Our message at the end of the day is that the mandates cannot go back into effect on January 1 as written [because] they’re burdensome for businesses as currently constructed,” Zack Frymier, director of Energy and Environmental Policy for the Chamber, told The Dispatch. “Those are significant costs for businesses and compromises their ability to create jobs.”

His group supports proposals to extend the freeze and disagrees with the way that environmental groups analyze the costs, the newspaper reported.

The topic is likely to be on the agenda when the Ohio General Assembly returns to session following the November election.

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