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In a stunning reversal of popular wisdom, overzealous state legislators and interest groups are jeopardizing over $4 billion in economic activity and thousands of jobs promised in Missouri’s 3-year old renewable energy law. Missourians should override their mistaken legislators, reaffirming their commitment to local renewable energy and even consider the benefits of maximizing the state’s clean electricity production.

Clean Power

Energy Self-Reliance Worth 20 Times the Economic Benefit for Missouri

In a stunning reversal of popular wisdom, overzealous state legislators and interest groups are jeopardizing over $4 billion in economic activity and thousands of jobs promised in Missouri’s 3-year old renewable energy law. Missourians should override their mistaken legislators, reaffirming their commitment to local renewable energy and even consider the benefits of maximizing the state’s clean electricity production.

Missouri State CapitolIn a stunning reversal of popular wisdom, overzealous state legislators and interest groups are jeopardizing over $4 billion in economic activity and thousands of jobs promised in Missouri’s 3-year old renewable energy law.  Missourians should override their mistaken legislators, reaffirming their commitment to local renewable energy and even consider the benefits of maximizing the state’s clean electricity production.

In 2008, Missouri voters approved a state renewable energy standard with a two-thirds majority, requiring utilities to get 15% of their power from renewable sources within the state or nearby.  But in January, the Republican-controlled legislature fired the first salvo against Proposition C, stripping the “buy local” provision from the law and allowing Missouri utilities to acquire renewable energy via accounting measures rather than constructing wind and solar projects in the state.  This summer, the law’s solar rebate program narrowly avoided a legal defeat when the Missouri Retail Association finally gave up its court battle.

Opponents to the renewable energy law have cited high costs, but their actions are heavy with irony: the economic benefits of keeping the “buy local” provision are at least 20 times higher than the savings from importing renewable energy from elsewhere.

The cost for in-state wind power would be less than 5 cents per kilowatt-hour (kWh) including federal tax incentives.  Even solar PV is affordable.  Counting the 30 percent federal tax credit and the $2.00 state rebate (recently saved from the legal battle), solar PV can deliver electricity for 9 cents per kWh.  For comparison, an average resident of Missouri currently pays around 8-9 cents per kWh of electricity.

There are meager savings from importing cheaper wind power instead of building locally.  The cheapest wind power in the U.S. would save – at best – about 1.5 cents per kWh compared to wind power generated in Missouri.  If it could (impossibly) be delivered to the state with zero transmission cost, the savings to ratepayers of meeting their renewable energy goal with remote wind instead of local wind would be $200 million.

But these savings are dwarfed by the economic value of in-state renewable energy.  The economic benefit of a single 2-megawatt wind turbine is $2 million, according to the American Wind Energy Association.  If the state met its renewable standard with in-state wind instead of imports, the economy would gain at least $4.2 billion and over 3,000 jobs.

Even an all-solar program would beat imported electricity generated with wind by a 4-to-1 ratio.  While the cost of solar electricity (and the state rebate program) would be higher relative to imported wind power, close to $1 billion, the economic benefits of meeting the state mandate with solar would be counter-balanced by an economic gain of $4 billion.  Because solar is more labor intensive, an all-solar 15% renewable energy program would also create nearly 80,000 jobs.

The benefits could rise much higher.  Unlike out-of-state renewable energy projects, wind and solar arrays built in Missouri could be locally owned.  The economic value of locally owned projects is 1.5 to 3.4 times higher than projects built locally but absentee owned.  The economic value of maximizing local wind and solar could rise as high as $13 to $14 billion with local ownership, 65 times the savings from importing cheap wind power.   Local ownership also means more Missouri jobs.  An all-wind approach to the 15% standard, all locally owned, would double the number of jobs created.

Given the economic advantages, Missouri voters could do one better than a 15% standard and pursue 100% renewable energy.  A 2010 report by the Institute for Local Self-Reliance found the state could get 21 percent of its power from rooftop solar alone, and has enough high quality wind to power the state three times over.  If the state met its electricity needs by maximizing rooftop solar and then using high-quality wind power, the state’s economy would be boosted by at least $27 billion, 20 times the savings from importing out-of-state wind.  Maximizing solar and wind power production in this fashion could also create over 125,000 construction and maintenance jobs in the renewable energy sector.

Outsourcing Missouri’s renewable energy standard might possibly save a few pennies on electricity bills, but it’s penny-wise and pound-foolish, costing the state thousands of jobs and billions in economic activity.  Missouri voters should ask for better.

 
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Written By

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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