Why does a 50% RPS make sense for Nevadans right now?

Nevadans want more clean energy

Nevadans want to invest in clean energy to create new, well-paying jobs, reduce carbon pollution, and ensure we have healthier air to breathe. That’s why, in the November 2018 election, Nevada voters overwhelmingly approved Question 6, a ballot initiative to increase our state’s Renewable Portfolio Standard (RPS). The RPS would require electricity providers to meet at least 50% of their customers’ energy needs with renewable energy by 2030. Under Nevada law, Question 6 must be approved by voters a second time in the November 2020 election to take effect. But we don’t have to wait until 2020 to enact this common-sense measure and further leverage Nevada’s abundant renewable energy resources. The Nevada legislature instead should follow the voters’ direction and pass legislation this session to establish the 50% RPS, ensuring that NV Energy, Nevada’s largest electric utility, and other electricity providers continue investing in new solar, geothermal, and wind to power our economy.

Nevada can lead on clean energy

Under Nevada’s existing RPS law, our state’s major electric utility is required to get 25% of its energy from renewables by 2025. When the 25% renewable target was set by the legislature in 2009, Nevada was among the first states to pass such an ambitious, yet much needed, standard. But Nevada’s 25% renewable standard has now been surpassed by 13 other states –  and, more importantly, is no longer sufficient to achieve the clean energy vision that Nevadans want. By adopting a 50% standard, Nevada will once again become a national leader in the transition to clean energy – and reap the many economic, public health, and environmental benefits that come along with it.

State Renewable Portfolio Standard Comparison (25% or higher). The figure above shows all of the renewable portfolio standards (RPS) for individual states in the U.S. The graph shows the target of percent renewable energy and the year by which each state plans to achieve the goal. Nevada’s current RPS is 25% by 2025, which is well back in the pack of state standards. By adopting a 50% standard, Nevada will once again become a national leader in the transition to clean energy.

Source: Database of State Incentives for Renewables & Efficiency

How can Nevada realistically achieve a 50% RPS by 2030?

A path to a clean, renewable energy standard by 2030

In 2018, Western Resource Advocates (WRA) and the Southwest Energy Efficiency Project (SWEEP) commissioned an analysis of the energy resources needed to meet NV Energy’s customer demands and peak capacity needs, while achieving a 50% renewable standard by 2030. Our analysis identifies a clean energy portfolio of resources (the “alternative portfolio” in the full analysis) that demonstrates how NV Energy can increase investments in renewable energy and energy efficiency, retire aging coal units, and avoid new investment in natural gas generation. This clean energy portfolio would reduce utilities’ reliance on fossil fuels, save customers money, and reduce air pollution in Nevada – thereby improving public health. A bill establishing a 50% RPS will ensure Nevada’s electricity providers pursue these benefits for their customers.

What would a 50% RPS mean for Nevadans?

More renewable energy will reduce reliance on fossil fuels and stabilize electric rates

Natural gas, which currently generates over 70% of Nevada’s electricity, is subject to dramatic price swings – and if the cost of natural gas rises, that increase is passed on to customers in the form of higher electricity bills. Under NV Energy’s most recent projection, the utility will still be using natural gas for 67% of its electricity production in 2030, risking rate hikes. By contrast, electricity from Nevada’s solar and geothermal resources has no fuel price risk, ensuring stable rates for customers. A 50% RPS would reduce Nevada’s reliance on natural gas generation by 30% by 2030 and provide rate stability for customers by removing the fuel price risk on 50% of our electricity supply.

NV Energy’s Proposed Portfolio Energy Mix, 2030 vs. Clean Energy Portfolio Energy Mix, 2030. The figure above shows that under NV Energy’s most recent projection, the utility will still be using natural gas for 67% of its electricity production in 2030. A 50% RPS would reduce Nevada’s reliance on natural gas generation by 30% by 2030 and provide rate stability for customers by removing the fuel price risk on 50% of our electricity supply.

Source: Analysis of NV Energy’s Integrated Resource Plan and an Alternative Resource Portfolio

Moreover, shifting our energy mix from natural gas to renewables will boost Nevada’s economy, as dollars formerly sent out of state to import natural gas will instead be used to invest in new renewable projects and clean energy jobs right here in the Silver State.

More clean energy will save Nevadans money

The costs of renewable energy resources and battery storage have declined dramatically in recent years. In Nevada, the cost of electricity from large-scale solar power plants is now cheaper than the cost of electricity from any new fossil-fueled alternative. NV Energy will be paying less than 3 cents per kWh for electricity from all six of the new solar projects recently approved by the Public Utility Commission of Nevada, with electricity from the largest of these projects priced at 2.4 cents per kWh. In contrast, a typical, new combined cycle natural gas plant would generate energy expected to cost 4.1 – 7.4 cents per kWh; and those costs could rise with natural gas fuel prices. Investing in renewable energy and battery storage projects with extremely low and competitive prices like these today can reduce customer costs long-term.

To evaluate the savings from a 50% RPS, we compared the projected costs of our clean energy portfolio with the projected costs of NV Energy’s preferred energy resource plan between 2019 and 2038. While the Clean Energy Portfolio incurs up-front costs for additional solar, geothermal, wind, and battery storage projects, it avoids the capital costs of building new natural gas facilities and their ongoing fuel costs. Our analysis found that the clean energy portfolio could save NV Energy customers nearly $200 million (net present value) over the business-as-usual case modeled by NV Energy.

More clean energy will reduce air pollution and protect Nevadan’s health

Carbon dioxide emissions from electricity generation are a key driver of climate change. NV Energy has made significant reductions in its emissions over the past 13 years. To limit warming to 1.5 – 2 degrees Celsius and avoid the worst impacts of climate change, Nevada and other states must reduce carbon pollution by 45 – 60% below 2005 levels by 2030. Our analysis shows the clean energy portfolio could reduce NV Energy’s projected CO2 emissions by 2.0 million metric tons per year by 2030 as compared to the company’s business-as-usual projection. This would put Nevada on track to achieve those emission reduction goals. Reducing generation at natural gas plants also reduces other harmful pollutants, such as nitrogen oxides, which contribute to ozone pollution and make Nevada’s air less safe to breathe.

Estimated CO2 Emissions: NV Selected Portfolio vs the Clean Energy (Alternative) Portfolio. The figure above shows that the clean energy portfolio could reduce NV Energy’s projected CO2 emissions by 2.0 million metric tons per year by 2030 as compared to the company’s business-as-usual projection.

Source: Analysis of NV Energy’s Integrated Resource Plan and an Alternative Resource Portfolio

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In sum, Nevada legislators have a tremendous opportunity: By increasing Nevada’s RPS, they can spur our clean energy industry and keep Nevada on track to reduce carbon pollution. Our analysis finds that not only is it doable, but it will also save Nevada customers on their utility bills – a win-win proposition.

Thank NV Lawmakers for Supporting Clean Energy



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