A new study is released by the Ohio Business Roundtable. Entitled “Improving Ohio’s Energy Competitiveness,” this study represents a major analytical undertaking by McKinsey & Co. prior to the General Assembly reconvening to act on the renewable mandate freeze. The report recommends phasing out the mandates. “Richard Stoff, Roundtable president and CEO, defended the finding that renewable mandates, over the long run, would raise the cost of power. We have done the forecasting, it is our conclusion that over time mandates will result in higher prices that are passed on to the consumer,” he said in an interview. “In looking at these issues through a purely economic lens, it is our judgment that mandates ought to be phased out.”
On page 18 of the report, “Improving Ohio’s Energy Competitiveness,” the authors note:
RENEWABLES ARE EXPECTED TO BECOME A LARGER PART OF OHIO’S GENERATION MIX
“Renewables, especially wind, are expected to account for a growing portion of Ohio’s generation mix in the next 15 years (Exhibit 11). Renewables provided only 1% of Ohio’s and 3% of PJM’s power generation in 2014. By 2030, renewables are projected to represent 13% of Ohio’s total power generation. Ohio’s installed capacity for renewables is expected to almost double in the near future, thanks to new investments in renewable assets and improved efficiencies. Furthermore, the market-based adoption of renewables will accelerate as technology costs fall and certain customers prioritize renewable power.
Ohio’s geography and climate are not as suited to renewables as some other states, especially those in the southwest. Ohio’s year-round, frequent cloud cover is a challenge for solar power as an option for almost all of the state. Sustained winds are most common in the northern part of the state along Lake Erie and in west central Ohio, but the region lacks ample space to build wind turbines, and winds can be inconsistent.
Renewables, including solar and wind, are intermittent sources of power and increase demands on the power grid. Because power cannot be stored cost effectively after it is generated, a wind or solar farm that goes offline intermittently, when the wind stops blowing or the sun stops shining, must be replaced by other fast-starting gas, coalfired, or nuclear capacity. This adds complexity to managing a grid with a high share of renewables.”