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Little power price impact seen from U.S. renewable mandate

Little power price impact seen from U.S. renewable mandate

NEW YORK (Reuters) - A proposed federal mandate to force power companies to provide up to 25 percent renewable energy by 2025 is likely to have little impact on electric prices though 2020 and negligible impact after 2030, the Energy Information Administration said in a study Monday.

The largest impact would likely be seen in 2025 when the renewable electricity standard would go into effect, boosting average prices by up to 2.9 percent, EIA projected.

Price impacts would vary from region to region, with renewable resource rich regions like the Great Plains and the Pacific Northwest seeing price declines, while other regions, especially those dependent on coal-fired generation, would see price increases of up to 6 percent between 2025 and 2030.

EIA, the U.S. Department of Energy's statistical arm, conducted the study in response to requests by Massachusetts Congressman Edward Markey Chairman of the Subcommittee on Energy and Environment, for analysis on the effect of a 25 percent federal renewable standard.

The study projected power companies would primarily build biomass and wind energy facilities, while cutting back on coal and natural gas projects.

Wind generation would increase from 32 billion kilowatt-hours in 2007 to between 208 billion kWh and 249 billion kWh in 2030, while biomass generation would increases from 39 billion kWh in 2007 to between 438 billion kWh and 577 billion kWh in 2030.

With the growth in demand for power, the study found that coal and natural gas fired generation would climb but at a slower rate than without the renewable mandate.

(Reporting by Scott DiSavino; Editing by Christian Wiessner)

Full article on http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE53Q6ZA20090427

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