Boost the Renewable Portfolio Standard
A doubling of the yearly increase is needed
AT THE SAME TIME president-elect Donald Trump has loudly promised job creation measures, he has also vowed to invest in fossil fuel expansion, including the coal industry. These two promises are incompatible in the long term. With renewables poised to take the place of a dying coal industry, promoting development of the renewable energy sector is a sure-fire job creator.
In a time when many federal policies are standing on shaky ground, strong state policy has never been more important. In Massachusetts, a commitment to supporting the development of the renewable energy sector will result in new jobs across the state. The first step to supporting clean energy growth is increasing the Renewable Portfolio Standard.
Simply put, the RPS sets the amount of renewable energy that electric utilities are required to purchase each year. Currently, the RPS is set at 11 percent and increases by 1 percentage point per year. At that rate, by 2030, only 25 percent of our power will come from clean energy. If we lift the rate to 2 percentage points per year, we would reach 50 percent renewable energy by 2030, putting us on par with other leading states.
Such an increase would spur local renewable energy production, benefiting not only local clean energy companies, but also the overall state economy. Massachusetts currently spends almost $18 billion per year on energy. It’s money that leaves the state. By shifting to home-grown, renewable energy, we would keep that money in the state while making a dent in our greenhouse gas emission reduction mandates.
With renewable energy expansion comes tremendous in-state employment opportunities. Aeronautica is a member of Climate Action Business Association, a group that aims to build the state’s economy and create jobs through supporting progressive energy policy. Michael Green, the group’s executive director, believes businesses such as Aeronautica are leading the charge towards transitioning the economy. “A growing renewables industry will create a surge of new high-tech, low-tech, white-collar, and blue-collar jobs and create a new tax base for the Commonwealth.”
Renewable energy technology has come a long way in recent years, and is now reaching cost competitiveness with fossil fuels. Already solar has drastically decreased in cost, showing a nearly 50 percent reduction (prior to incentives) since 2008. Wind power is on a similar trajectory – a report from Bloomberg New Energy Finance declared wind to be comparable to the price of fossil fuels as of 2015.
Out of all types of renewable energy, onshore wind is by far the cheapest. In 2013, Massachusetts electric companies signed cost competitive contracts for onshore wind power in New England, and the price has been dropping ever since. There is great potential for further development of wind energy in the Commonwealth, and with local manufacturing comes new jobs and affordable local energy. Creating a robust wind industry in Massachusetts will help lower our energy costs while benefitting the local economy.Increasing the RPS is on the radars of our Massachusetts legislators and was discussed in the Green Energy Caucus this week, but it is not guaranteed. The legislature must not drag its feet on improving this policy. By prioritizing an increase in the RPS, the Commonwealth will spur innovation, create jobs, and further drive down the cost of renewable energy, as well as demonstrate Massachusetts’ commitment as a national leader.
Vincent Moschella is the portfolio manager at Aeronautica Windpower.