Clean Energy, the Environment, the
Electric System, and the Economy:
d "I"!" Assessing the fttefO^ lB©ffil(§l?^S
of State and Local Clean Energy Initiatives
What are clean energy initiatives?
Policies and programs that governments
can use to save energy, improve air quality,
reduce carbon emissions, improve system
reliability and security, and improve
economic development. Examples include:
Energy efficiency policies that reduce
demand for energy: energy efficiency
building codes and portfolio standards,
public benefit funds for energy efficiency
standards.
Energy supply policies that increase the
use of renewable and clean sources: clean
distributed generation and net metering
interconnection standards, output-based
environmental regulations, public benefit
funds for clean energy, and renewable
portfolio standards.
Power sector initiatives that limit or create
incentives to reduce greenhouse gas (GHG)
emissions: CO2 offset requirements, GHG
performance standards, and power sector
GHG cap-and-trade policies.
Greenhouse gas reporting policies that
measure, such as: GHG registries and
mandatory GHG reporting.
Planning and incentive structures that
advance clean energy: climate change
action plans, clean energy and energy
efficiency goals for public facilities, efficiency
and alternative fuel goals for public fleets.
Transportation sector initiatives such as
GHG auto standards and low carbon fuel
standards.
What's Inside:
O Why assess the many benefits of clean
energy?
O What are the steps involved in estimating
the benefits of clean energy initiatives?
O How can policy makers estimate the
benefits of clean energy initiatives?
O Quantitative examples of how clean energy
programs result in direct energy benefits.
O How to find more information.
dEPA
United States
Environmental Protection
Agency
What are the multiple benefits of clean
energy initiatives?
Increased electric system security, diversity, and overall reliability improvements
for the electric system.
Enhanced environmental quality, human health and quality of life.
Improved economic growth through energy cost savings, avoided medical costs,
higher disposable incomes, increased labor productivity and more jobs.
How do state and local clean energy
initiatives result in multiple benefits?
Clean energy initiatives reduce demand
for fossil-fuel powered electricity
and increase electricity generated
with clean, renewable energy. These
initiatives can:
Reduce harmful air pollution.
Improve air quality and people's health.
Lower the costs of meeting federal air
quality standards and climate change
mitigation goals in the long term.
Reduce health care costs and enhance
worker productivity from fewer
illnesses, hospitalizations, sick days,
and deaths.
Increase disposable income and
revenues for consumers, businesses,
and utilities through lower energy or
fuel costs.
Improve competitiveness of local
businesses by lowering costs.
Improve electricity system reliability
and avert blackouts.
Avoid or reduce need for construction
of additional power plants.
Avoid or defer transmission and
distribution (T&D) investments and
avoid energy loss during T&D.
Stimulate economic development
in clean energy industries and
the companies that support them,
increasing income, jobs, and output.
Slate and Local
Climate and Energy Program
This resource provides rules-of-
thumb estimates for quick
approximations of economic benefits,
such as:
For income and output:
Every $1 spent on concentrated
solar power in California produces
$1.40 of additional GSR
Every $1 spent on energy
efficiency in Iowa produces $1.50
of additional disposable income.
Every $1 million in energy savings
in Oregon produces $1.5 million
of additional output and about
$400,000 in additional wages per
year.
For employment effects:
Every Gigawatt Hour (GWh) of
electricity saved through energy
efficiency programs in New York
yields 1.5 sustained jobs.
Every $1 million of energy
efficiency net benefits in Georgia
produces 1.6-2.8 jobs.
Every $1 million invested in energy
efficiency in Iowa produces 25
job-years, and every $1 million
invested in wind produces 2.5
job-years.
Every $1 million invested in wind
or PV produces 5.7 job-years,
versus 3.9 job-years for coal
power.
Sources: See references section on page 3.
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Why assess the many benefits of
clean energy?
Understanding the range of environmental, economic and electric
system benefits of clean energy can help planners:
Comprehensively assess the full value of clean energy investments.
Strengthen how benefits are incorporated in cost-benefit analyses.
Demonstrate how clean energy initiatives achieve cross-cutting multiple
energy, environmental, and economic goals.
Identify specific opportunities where clean energy can support multiple
goals.
Design or select clean energy options that maximize benefits.
Appeal to audiences with metrics and priorities they care about most.
Build support among state and local decision makers.
What are the steps involved in
estimating the benefits of clean
energy initiatives?
Choose which policies, activities, and programs to evaluate.
Establish the goals and objectives of your agency's analysis. Consider:
- Why is the analysis being conducted?
- Which benefits will be analyzed?
Determine how to conduct the analysis. Issues to consider include:
What financial and staff resources are available?
What other kinds of expertise (e.g., in-house staff and outside
consultants) are available?
Do data exist from similar analyses or for other states or regions? Or
will a new analysis be required?
Is the analysis retrospective (an historical assessment) or prospective
(forward looking)?
What level of rigor is required? Is it for regulatory purposes or a
preliminary screening of options?
Will the analysis entail an iterative approach, where the state explores
a wide range of options using screening methods and then conducts a
more comprehensive analysis of only the most promising options?
Gather the appropriate data and estimate the benefits of clean energy.
A 2007 study by the American Solar Energy
Society, found that in Ohio in 2006:
Gross revenues for the energy
efficiency (EE) industry totaled over $50
billion and supported nearly 500,000
jobs
Gross revenues for renewable energy
(RE) industry totaled nearly $800
million and supported more than
6,600 jobs.
When assessing the potential for clean energy
industries in Ohio, the study found that by
2030 the RE industry could yield:
$18 billion in revenues annually and
support 175,000 jobs.
« The EE industry could yield $200 billion
in revenues annually and support
more than 2 million jobs.
Source: Bezdek 2007.
A New England study analyzed clean
energy benefits from Public Benefits Funds
and Renewables Portfolio Statement
programs. The study found clean energy
resulted in a reduction between 2000 and
2010 of:
1,421 Megawatts, or 5 percent, of peak
energy demand
31.7 million tons (6 percent) of CO2
34,200 tons of SO2
22,039 tons of NOX
And a net increase of:
$6.1 billion economic output
$1.04 million wage income
28,190 job years
Source: Sedano et al, 2005.
Southwest Energy Efficiency Project found
that investments of $9 billion in energy
efficiency in the southwestern United States
between 2003 and 2020 could result in:
Increased regional employment by
0.45% or 58,400 FTE jobs per year
versus 2020 baseline
Increased salary income by $1.34
billion per year versus 2020 baseline
« Avoided $10.6B capacity investment
(thirty-five 500 MW plants)
« Avoided $25B electricity supply
costs per year by 2020
Avoided $2.4B end-use natural gas
COSt per year by 2020
Source: SWEEP, 2002.
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Relationship Between Energy Savings & Other Benefits of Clean Energy Initiatives
ENERGY SYSTEM BENEFITS (Chapter 3)
DIRECT ENERGY IMPACTS
(Chapter 2)
Change in kWh supplied
Change in kWh consumed
Primary Electric System Benefits
^ -Avoided generation.
Energy loss, and
System capacity
Secondary Electric System Benefits
Ancillary costs,
Reliability, and
Fuel diversification
1
AIR AND HEALTH BENEFITS (Chapter 4)
Criteria Air Pollutant Air Quality Benefits
and/or GHG Benefits Micrograms per cubic
Pounds or tons of: meter ([ug/m3], or
CO Parts per million [ppm]
CO,
S02,
NOX,
03-
VOCs
ECONOMIC BENEFITS (Chapte
Direct Effects
Energy cost, waste heat or displacement
savings
equipment, and operating costs
Sector transfers
i
r5)
Macroec
Changes i
Employrr
^^^^ Gross sta
Econom
Econom
Personal
Human Health Benefits
Changes in incidences of:
Mortality, bronchitis,
respiratory
^ -Hospital admissions.
Upper and lower
respiratory symptoms,
and
Asthma effects
onomic Benefits
n:
lent,
te product,
c output,
c growth,
income/earnings
"I
How can states and locals quantify the many benefits of clean
energy initiatives?
State and local governments can use direct energy impacts to estimate the air and health, economic, and electric system
benefits of clean energy, as illustrated in the graphic above, using a range of approaches and tools.
Basic approaches approximate the impact of clean energy initiatives on energy, public health, the environment, the economy,
and the electric system by adapting others' estimates of benefits or by doing spreadsheet analyses of related factors. Basic
estimates provide reasonable approximations of the benefits and are appropriate for preliminary assessments or screening
exercises or when time, budget and access to data are limited.
Sophisticated analyses can be conducted using computer-based models that simulate and project energy, environment,
economic and/or electric system benefits of clean energy initiatives. These approaches require more inputs compared with
basic methods, but also provide additional detail, confidence and rigor that may be appropriate for some analyses, including
thosethat support legislative action.
Tools available: There is a range of tools to help states and locals quantify the benefits of clean energy. Some tools address
single benefits while others estimate more than one.
For more on estimating the benefits of dean energy, and the tools available, see Assessing the Multiple Benefits of Clean Energy: A Resource for
States at http://epa.gov/statelocalclimate/resources/benefits.html
References:
Bezdek. Roger. 2007. Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century. Prepared for the American Solar Energy Society.
Chicago Climate Action Plan website.
Grover. S. 2007. Economic Impacts of Oregon Energy Tax Credit Programs (BETC/RETC). Prepared by ECONorthwest for the Oregon Department of Energy. May.
Jensen. V. and E. Lounsbury. 2005. Assessment of Energy Efficiency Potential in Georgia. Prepared for the Georgia Environmental Facilities Authority by ICF Consulting.
May.
NYSERDA. 2008. New York Energy SMartsm Program Evaluation And Status Report: Year Ending December 51. 2007.
Sedano R. and C. Murray. 2005. Electric Energy Efficiency and Renewable Energy: An Assessment of Existing Policies and Prospects for the Future.
Singh. V. and J. Fehrs. 2001. The Work That Goes Into Renewable Energy. Renewable Energy Policy Project Research Report. November.
Stoddard. L. J. Abiecunas. and R. O'Connell. 2006. Economic. Energy, and Environmental Benefits of Concentrating Solar Power in California. Prepared by Black &
Veatch for U.S. DOE National Renewable Energy Laboratory. April.
Weisbrod. G.. K. Polenske. T. Lynch, and X. Lin. 1995. The Economic Impact of Energy Efficiency Programs and Renewable Power for Iowa: Final Report. Economic
Development Research Group. Boston. MA. December.
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Where can state and local governments and policy makers
go for more information about tools, methods, and resources
available to estimate the benefits of clean energy initiatives?
Assessing the Multiple Benefits of Clean Energy: A Resource for States, an essential manual to help estimate and
communicate the benefits of clean energy, provides tools and approaches for state and local governments.
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