Renewable Energy Program Produces Positive Economic, Environmental Impacts

May 14, 2014

The state's renewable energy fund and the program designed to stimulate the development of renewable energy projects in Rhode Island are producing positive outcomes: more jobs and less pollution. That's according to a recent report by the Rhode Island Office of Energy Resources.  

The Distributed Generation Contracts Program, also known as the DG program, requires National Grid to enter into 15-year renewable energy contracts with private landowners, businesses, and municipalities at a set and fixed price. The program expires this year. State Rep. Deborah Ruggiero, who sponsored the program’s bill in 2011, is sponsoring a new bill this year to extend and expand the program.

"We'll get close to $31 million annually in Rhode Island as economic output, and that means in-state development, these projects being built, Rhode Islanders being hired for these jobs and the economic multiplier of people spending money here in the state."

Ruggiero said within three years, the program has seen great success.

“The program has been oversubscribed. We have had in Rhode Island over 75 applications for 29 renewable energy projects in 20 municipalities,” said Ruggiero.

“So that means that it’s tax revenues for cities and towns; it creates jobs," said Ruggiero. "Everything stays in Rhode Island, because all of these energy projects are built in Rhode Island, whether they are hydro, wind, solar, anaerobic digestion.”

Ruggiero said a few examples of projects sparked by the DG program include solar arrays in East Providence’s landfill and at Quonset Business Park, and the wind farm in Coventry.

The three-year program caps National Grid’s power from this renewable energy program at 40 megawatts. The new bill aims to expand the program to 160 megawatts. The report finds the program would create nearly 250 jobs over a 25-year period, if the program is expanded. 

The report’s findings are “heartening,” said Janet Gail Besser, vice president of policy and government affairs for the New England Clean Energy Council, which promotes, supports, and helps develop the distributed generation program.

“What this study really shows is that if the program is expanded to 160 megawatts, which is one of the scenarios this study looked at, it will quadruple the benefits produced by the existing, smaller 40 megawatt program,” said she. “And that’s really tremendous for Rhode Island.”

The report notes that investing in the program will require fairly modest utility rate increases. Mark Berkman with the Brattle Group, the firm that prepared the report for the state, said Rhode Island will still reap benefits, both in the economy and in the environment.

"And they [the clean energy projects] will also reduce emissions of both carbon dioxide and what are called the criteria pollutants, the pollutants that are under the regulation of the U.S. EPA and the Clean Air Act," said Berkman.

It’s also a long-term investment to develop clean energy in the state, added Jurgen Weiss, who’s also with the Brattle Group.

“At present and without these programs, almost all the electricity consumed in Rhode Island will be produced outside of the state,” said Weiss. “So that’s one important point that ultimately drives the fact that it [the program] creates net economic benefits for the state.”

Weiss said the required rate increases are moderate and small in comparison to the type of rate fluctuations that have happened and will happen in response to changing natural gas prices.

“The most recent winter showed how dramatic those changes can be,” said Weiss.

As distributed generation is deployed more broadly, costs will come down, said Besser.

“We’ve seen this in other states,” said Besser. “And so as you think out into the future, as you build that base, and you achieve economies of scale, then you can see costs continuing to decline over time, as you have more and more projects… as you think about solar, wind, hydro, anaerobic digestion – it’s a growth industry for Rhode Island.”

Besser said Rhode Island has an opportunity to invest in itself as it struggles to fully recover from the economic downturn.   

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