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Reliability of Renewable Energy

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December 3, 2015

The Reliability of Renewable Energy reports are an examination of the five most common sources of renewable electricity generation: wind, solar, biomass, geothermal, and hydro. The studies assess each source’s economic, physical, and environmental aspects.

Reliability of Renewable Energy: Wind

Download Full Report here.

Download Condensed Report here.

Reliability of Renewable Energy: Solar

Download Full Report here.

Download Condensed Report here.

Reliability of Renewable Energy: Biomass

Download Full Report here.

Download Condensed Report here.

Reliability of Renewable Energy: Geothermal

Download Full Report here.

Download Condensed Report here.

The Reliability of Renewable Energy: Hydro

Download Full Report here.

Download Condensed Report here.

 


Reliability of Renewable Energy

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The United States has no federal mandate for “renewable” power production, so a majority of states, including Michigan, have created their own state laws called Renewable Portfolio Standards (RPS). These laws require certain renewable sources be included among the overall menu of options from which electricity companies produce power.

In October 2008, Public Act 295, also known as the Clean, Renewable and Efficient Energy Act, was enacted in Michigan, which called for utilities to generate 10 percent of retail electricity sales from renewable energy sources by 2015. In 2015, Michigan legislators and the governor propose differing bills dealing with the future of the RPS, ranging from doubling the standard to repealing it entirely.

The Utah State University’s Institute of Political Economy report analyzes how the changes in electricity markets caused by RPS alter the functioning of a state’s economy and institutions, with a specific focus on Michigan. The report uses a tax-based model, an empirical analysis, and a survey of legal rules to determine final conclusions.

View Report

Common Questions About Renewable Portfolio Standards (RPS)

Updated September 27, 2015

Q1. What is a renewable portfolio standard?

Simply put, an RPS is a state law that mandates a certain percentage of statewide electricity be provided by various government-subsidized, alternative sources of energy production – also known as “renewables.” Many states, like Michigan, Kansas, North Carolina, Ohio and Colorado have created their own mandate. Most of these laws require that states attain target percentages of electricity that must be utilized by a certain date.

Q2. Why research renewable portfolio standards (RPS)?

Strata, in conjunction with Utah State University Institute of Political Economy (IPE), does research on a variety of subjects related to energy, environmental and land topics. A number of states have recently implemented their own RPS, which uses a combination of mandates and subsidies to promote renewable energy resources. The study looks at real costs and the impact of economic incentives within the states where RPS has been implemented. We examine the impact on consumers and the prices they pay for energy, the impact on jobs, and other economic consequences of these mandated standards. Our academic focus and standard is to examine a spectrum of economic factors and provide information based on verifiable academic data. We also have ongoing research on a variety of energy sources, including coal, wind, solar, bio-mass, natural gas, and others.

Q3. Where do you find data to use in your research?

The RPS study is an academic, peer-reviewed research report intended for public consumption. The bulk of data for our RPS analysis comes from the federal Energy Information Administration (EIA), which is considered the most reliable data publicly available.

Q4. How is your research funded?

Strata receives funding from a variety of sources including individuals, foundations, corporations, and government grants. It is our mission to explore the issues with a strict focus on empirical, honest academic research of the highest quality. Our scholars do not conduct directed research or research for hire. Our research process is the same, regardless of the funder or topic of our research. Strata’s team comes up with premises for a research idea with areas we hope to further explore, then the concepts are presented to our broad network of funding groups through a grant request process. Organizations who provide funding, for this or any of our studies, are completely walled-off from the research and the process for the study’s completion. Funding sources do not provide input into how the study is conducted or what conclusions are reached. Our researchers and their teams come up with their own projects and follow a strict focus on empirical, straightforward academic research of the highest quality.

Q5. What is your publication process?

Utah State University’s Institute of Political Economy develops questions and ideas that are relevant to the public and policymakers. These questions and ideas are tested according to academic rigor using both time-tested and innovative methodologies. In order to achieve the greatest accuracy and insight, the methods are peer-reviewed and fact checked for accuracy. Our research is intended to be timely and responsive to current issues and trends.

Q6. What are the major takeaways of the RPS studies?

The RPS study findings utilize an innovative method of analysis originally developed by the Federal Reserve Bank of Philadelphia. Through econometric analysis and modeling, the methodology isolates the effects of policy mandates like RPS and outputs general impacts. Our findings show that states with RPS have a significantly higher set of negative economic impacts than states without RPS. Specifically, our research shows that across RPS states, industrial production (measured by electricity sales) is greater than a 13% decline. Additionally, real personal income declines in RPS states by almost 4 percent. In Michigan, for a typical household, this translates to about $3,800 per family, and about the same in North Carolina in 2013 alone. As a result, our analysis shows that Michigan has forgone over 24,000 jobs and other states like North Carolina has 23,769 fewer employed positions as a result of RPS mandates to date.

Q7. How do you respond to your critics who characterize your findings as well funded, special interest bought and paid for attacks on renewable energy?

The data from our study opens a critique about the real costs to organizations, individuals and families and highlights how Michigan’s RPS impacts the current economy and ratepayers today, and if not repealed, how these mandates will impact the future. We are aware the pro-RPS mandate lobby would not take this negative news without a fight. The industries with a financial interest in maintaining the RPS mandates stand to lose millions of dollars in government subsidies and market access. They are somewhat predictably countering our conclusions with their own data (which deserves scrutiny given it’s source and motivation) and doing whatever they can to discredit us as academics. We stand by our data and the conclusions.

Q8. Why do you oppose renewable energy?

We don’t. We champion any new ideas and innovation in the energy sector, and consider ourselves to be environmental economists. That said, we also think that government energy policy should also be good for the economy, for the environment and for ratepayers. The evidence from Michigan and other states across the country demonstrates that existing RPS mandates are falling short of their promise, and as a result are harming both state economies and families in the process.

Q9. What is the Institute of Political Economy (IPE)?

Originally founded by Professor Randy Simmons at Utah State University, The Institute of Political Economy is a think-tank and policy analysis center. IPE has grown to include several scholars interested the intersections between free markets, natural resources, public lands, and energy. Scholars also working with IPE include Dr. Chris Fawson, Dr. Ryan Yonk, and a variety of other professors and experts with expertise in our core areas.

Q10. When your first RPS study on the State of Kansas released, and then North Carolina and Ohio afterwards, the wind-industry trade group, AWEA, and others like the Sierra Club, said your methodology was flawed, is that true?

It is not surprising that an industry trade group that represents big wind interests would try to rebut the study, however we stand confident behind the study methodology and validity of the findings. The RPS studies from Utah State University’s Institute of Political Economy use practices and processes that are the industry-standard in the academic research community. The methodology used in each RPS study underwent a double-blind review process. During this verification process, anonymous and unbiased subject-matter experts provided challenges and feedback to study’s authors. Before the process concluded, the authors reconciled each individual challenge and piece of feedback before moving forward with the RPS studies.


Reliability of Renewable Energy

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The Institute of Political Economy at Utah State University has produced a report on the costs of Renewable Portfolio Standards (RPS) in Ohio.  Currently, the U.S. has no federal mandate for “renewable” power production. Instead, a majority of states, including Ohio, have created their own state laws that mandate a certain percentage of their statewide electricity be provided by various renewable sources. RPS legislation ignores market signals and forces ratepayers and utilities to use more expensive electricity from favored sources. The IPE analysis shows how the states RPS efforts have impacted the Ohio economy.

View Report

Common Questions about Renewable Portfolio Standards (RPS)

Updated June 18, 2015

Q1. What is a renewable portfolio standard?

Simply put, an RPS is a state law that mandates a certain percentage of statewide electricity be provided by various government-subsidized, alternative sources of energy production – also known as “renewables.” Many states, like Kansas, North Carolina, Ohio, Colorado and West Virgina have created their own mandate.  Most of these laws require that states attain target percentages of electricity that must be utilized by a certain date.

Q2. Why research renewable portfolio standards (RPS)?

Strata, in conjunction with Utah State University Institute of Political Economy (IPE), does research on a variety of subjects related to energy, environmental and land topics. A number of states have recently implemented their own RPS, which uses a combination of mandates and subsidies to promote renewable energy resources. Strata’s  study looks at real costs and the impact of economic incentives within the states where RPS has been implemented. We examine the impact on consumers and the prices they pay for energy, the impact on jobs, and other economic consequences of these  mandated standards. Our academic focus and standard is to examine a spectrum of economic factors and provide information based on verifiable academic data. We also have ongoing research on a variety of energy sources, including coal, wind, solar, bio-mass, natural gas, and others.

Q3. Where do you find data to use in your research?

Strata’s RPS study is an academic, peer-reviewed research report intended for public consumption. The bulk of data for our RPS analysis comes from the federal Energy Information Administration (EIA), which is considered the most reliable data publicly available.

Q4. How is your research funded?

Strata receives funding from a variety of sources including individuals, foundations, corporations, and government grants. It is our mission to explore the issues with a strict focus on empirical, honest academic research of the highest quality.

Q5. What is your publication process?

Utah State University’s Institute of Political Economy develops questions and ideas that are relevant to the public and policymakers. These questions and ideas are tested according to academic rigor using both time-tested and innovative methodologies. In order to achieve the greatest accuracy and insight, the methods are peer-reviewed and fact checked for accuracy. Our research is intended to be timely and responsive to current issues and trends.

Q6. What are the major takeaways of the RPS studies?

Strata’s RPs findings utilize an innovative method of analysis originally developed by the Federal Reserve Bank of Philadelphia. Through econometric analysis and modeling, the methodology isolates the effects of policy mandates like RPS and outputs general impacts. Our findings show that states with RPS have a significantly higher set of negative economic impacts than states without RPS. Specifically, our research shows that across RPS states, industrial production (measured by electricity sales) is greater than a 13% decline. Additionally, real personal INCOME declines in RPS states by almost 4 percent. For a typical household, this translates to about $4,000 per family in Kansas and slightly more than $3,800 in North Carolina in 2013 alone. As a result, our analysis shows that Kansas has lost over 5,500 jobs and North Carolina has lost 23,769 jobs as a result of RPS mandates to date.

Q7. What is the Institute of Political Economy (IPE)?

Originally founded by Professor Randy Simmons at Utah State University, The Institute of Political Economy is a think-tank and policy analysis center.  IPE has grown to include several scholars interested the intersections between free markets, natural resources, public lands, and energy. Scholars also working with IPE include Dr. Chris Fawson, Dr. Ryan Yonk, and a variety of other professors and experts with expertise in our core areas.

Q8. What is Strata Policy?

At Strata, our mission is to help people everywhere make informed decisions about issues that impact the freedom to live their lives. We work to achieve more prosperous and free societies by affecting a change in the climate of ideas. We do this by conducting robust research on energy and environmental issues, informing policy makers, citizens and civic leaders, and by mentoring high-achieving students to become future decision makers. Strata is located in Logan, Utah. We draw from the collective academic strength and ideas from the faculty and students at Utah State University and a strong network of academics and professionals throughout the world.


Reliability of Renewable Energy

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The Institute of Political Economy at Utah State University has produced a report on the costs of Renewable Portfolio Standards (RPS) in North Carolina.  Currently, the U.S. has no federal mandate for “renewable” power production. Instead, a majority of states, including North Carolina, have created their own state laws that mandate a certain percentage of their statewide electricity be provided by various renewable sources. RPS legislation ignores market signals and forces ratepayers and utilities to use more expensive electricity from favored sources. The IPE analysis shows how the states RPS efforts have impacted the North Carolina economy.

View Infographic

View Report

 

Common Questions about Renewable Portfolio Standards (RPS)

March 10, 2015

Q1. What is a renewable portfolio standard?

Simply put, an RPS is a state law that mandates a certain percentage of statewide electricity be provided by various government-subsidized, alternative sources of energy production – also known as “renewables.” Many states, like Kansas, North Carolina, Ohio, Colorado and West Virgina have created their own mandate.  Most of these laws require that states attain target percentages of electricity that must be utilized by a certain date.

Q2. Why research renewable portfolio standards (RPS)?

Strata, in conjunction with Utah State University Institute of Political Economy (IPE), does research on a variety of subjects related to energy, environmental and land topics. A number of states have recently implemented their own RPS, which uses a combination of mandates and subsidies to promote renewable energy resources. Strata’s  study looks at real costs and the impact of economic incentives within the states where RPS has been implemented. We examine the impact on consumers and the prices they pay for energy, the impact on jobs, and other economic consequences of these  mandated standards. Our academic focus and standard is to examine a spectrum of economic factors and provide information based on verifiable academic data. We also have ongoing research on a variety of energy sources, including coal, wind, solar, bio-mass, natural gas, and others.

Q3. Where do you find data to use in your research?

Strata’s RPS study is an academic, peer-reviewed research report intended for public consumption. The bulk of data for our RPS analysis comes from the federal Energy Information Administration (EIA), which is considered the most reliable data publicly available.

Q4. How is your research funded?

Strata receives funding from a variety of sources including individuals, foundations, corporations, and government grants. It is our mission to explore the issues with a strict focus on empirical, honest academic research of the highest quality.

Q5. What is your publication process?

Utah State University’s Institute of Political Economy develops questions and ideas that are relevant to the public and policymakers. These questions and ideas are tested according to academic rigor using both time-tested and innovative methodologies. In order to achieve the greatest accuracy and insight, the methods are peer-reviewed and fact checked for accuracy. Our research is intended to be timely and responsive to current issues and trends.

Q6. What are the major takeaways of the RPS studies?

Strata’s RPs findings utilize an innovative method of analysis originally developed by the Federal Reserve Bank of Philadelphia. Through econometric analysis and modeling, the methodology isolates the effects of policy mandates like RPS and outputs general impacts. Our findings show that states with RPS have a significantly higher set of negative economic impacts than states without RPS. Specifically, our research shows that across RPS states, industrial production (measured by electricity sales) is greater than a 13% decline. Additionally, real personal income declines in RPS states by almost 4 percent. For a typical household, this translates to about $4,000 per family in Kansas and slightly more than $3,800 in North Carolina in 2013 alone. As a result, our analysis shows that Kansas has lost over 5,500 jobs and North Carolina has lost 23,769 jobs as a result of RPS mandates to date.

Q7. What is the Institute of Political Economy (IPE)?

Originally founded by Professor Randy Simmons at Utah State University, The Institute of Political Economy is a think-tank and policy analysis center.  IPE has grown to include several scholars interested the intersections between free markets, natural resources, public lands, and energy. Scholars also working with IPE include Dr. Chris Fawson, Dr. Ryan Yonk, and a variety of other professors and experts with expertise in our core areas.

Q8. What is Strata Policy?

At Strata, our mission is to help people everywhere make informed decisions about issues that impact the freedom to live their lives. We work to achieve more prosperous and free societies by affecting a change in the climate of ideas. We do this by conducting robust research on energy and environmental issues, informing policy makers, citizens and civic leaders, and by mentoring high-achieving students to become future decision makers. Strata is located in Logan, Utah. We draw from the collective academic strength and ideas from the faculty and students at Utah State University and a strong network of academics and professionals throughout the world.