Renewables and Efficiency: Achieving Illinois’s Clean Energy Potential

, energy analyst | April 21, 2015, 12:30 pm EDT
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We’ve just put out a new study that shows how strengthening Illinois’s energy efficiency portfolio standard (EEPS) and renewable portfolio standard (RPS) would reestablish Illinois as a national clean energy leader, and would drive billions of dollars in new investment to develop Illinois’s clean energy resources. What’s more, strengthening both the EEPS and RPS is achievable, affordable, and would save consumers billions in avoided energy costs even after accounting for the clean energy investments.

Power Ahead Illinois Minigraphic

Illinois passed its current EEPS and RPS in 2007. The RPS requires investor-owned utilities and other electricity suppliers to provide 25 percent of their electricity from renewable energy resources such as wind and solar by 2025. Illinois’s EEPS requires utilities to reduce energy demand by 2 percent each year compared to the previous year’s sales. However, both are hampered by policy design flaws that have limited their success at driving clean energy investments.

Fortunately, the Illinois legislature is currently considering legislation that would not only fix these flaws, but also strengthen both standards so that the RPS requires utilities to achieve 35 percent renewable energy by 2030 and the EEPS would require a 20 percent reduction in electricity demand by 2025.

We at UCS analyzed what the state’s energy future could look like under the proposed fixed and strengthened RPS and EEPS. We used the Regional Energy Deployment System (ReEDS) model that was developed by the U.S. Department of Energy’s National Renewable Energy Laboratory. We compared Illinois’s energy future under the fixed and strengthened RPS and EEPS (what we call the “Strengthened EEPS + RPS case) to a future in which Illinois has no RPS or EEPS (the “No Policies” case), and to a future in which Illinois fixes its current RPS to achieve 25 percent renewable energy by 2025 and continues to implement its existing EEPS (the “Existing EEPS + Fixed RPS case).

Our findings show that Illinois can adopt a strengthened RPS of 35 percent by 2030, and a strengthened EEPS of 20 percent reduction in energy demand by 2025 while maintaining a reliable and affordable electricity supply. Further, by 2030 these policies:

  • Drive $23 billion in clean energy investment in Illinois, consisting of $6.3 billion in renewable energy investment and $16.7 billion in energy efficiency investment
  • Build more than 5,200 megawatts (MW) of new wind and solar power capacity in Illinois
  • Generate $12.1 billion in consumer electricity savings, reducing the typical residential customer’s electricity bill by 23 percent (or $22 per month)
  • Achieve all these benefits despite a 7.7 percent average rise in electricity rates between 2015 and 2030, because savings from energy efficiency savings far outweigh higher electricity prices
  • Inject more than $200 million annually into Illinois’s economy through renewable energy operating and maintenance expenditures, lease payments to landowners who host wind farms and, tax revenue to local governments
  • Deliver important environmental and public health benefits by achieving reductions in carbon pollution and lower emissions of pollutants associated with lung disease, asthma, and other respiratory ailments

Increasing renewable energy while reducing energy demand

Under the 35 percent by 2030 RPS, Illinois’s renewable energy development grows at a robust and sustained rate through 2030. More than 5,200 more megawatts (MW) of renewable energy would be developed when compared to the No Policies case.

Under our No Policies case, renewable energy development in Illinois essentially stagnates between now and 2030, with only a small amount added after 2025.

Under our No Policies case, renewable energy development in Illinois essentially stagnates between now and 2030, with only a small amount added after 2025.

But with a strengthened RPS, Illinois experiences sustained and robust renewable energy development, adding more than 5,200 MW of new renewable energy by 2030.

But with a strengthened RPS, Illinois experiences sustained and robust renewable energy development, adding more than 5,200 MW of new renewable energy by 2030.

Even as the strengthened RPS is driving renewable energy development in Illinois, the strengthened EEPS is driving down energy demand, saving more than 300 billion kilowatt-hours (kWh) of electricity from 2015 to 2030—more than double the savings that will be achieved under the existing EEPS.

The strengthened EEPS drives down Illinois energy demand, achieving more than twice the energy savings as the existing EEPS.

The strengthened EEPS drives down Illinois energy demand, achieving more than twice the energy savings as the existing EEPS.

Driving investments in Illinois’s clean energy

Strengthening Illinois’s EEPS and RPS would drive $23 billion in new clean energy investment through 2030: $16.7 billion in energy efficiency and $6.3 billion in renewable energy. This includes $4.7 billion in new wind power development and $1.6 billion in new solar energy.

New investments in renewable energy and energy efficiency in Illinois through 2030

Table-1

Saving Illinois consumers money on their electricity bills

Even after all this investment, consumers across Illinois would realize significant savings on their energy bills. These savings occur because the cost of avoiding electricity use by investing in energy efficiency is cheaper than the cost of generating and delivering electricity to consumers.

FINAL ILLINOIS bills figure

Under the Strengthened EEPS + RPS case, consumers realize more than $12 billion in net savings between now and 2030 through avoided electricity expenditures when compared with having no policies in place. This is $9.4 billion more than would be saved under the existing EEPS.

Electricity bills would be reduced by 11 percent, or more than $10 per month in 2020, and 23 percent, or nearly $22 per month, in 2030. When compared to the Existing EEPS and Fixed RPS case, the Strengthened EEPS + RPS case would reduce typical residential customers’ electricity bills by 8.4 percent in 2020 and more than 18 percent in 2030. Consumers would begin seeing savings in 2018.

Illinois can be a national clean energy leader

Our analysis shows how strengthening Illinois’s RPS to 35 percent by 2030 and the EEPS to 20 percent energy reductions by 2025 will spur economic growth, diversify the state’s electricity mix with clean energy resources, cut pollution, and provide Illinois’s consumers with significant savings. It’s a win-win-win for Illinoisans and would reestablish Illinois as a national clean energy leader.

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