Market Forces

Mass Appeal: How can we make electrification more affordable and equitable?

This post is the fourth in a series dedicated to the future of the electricity sector and new scholarship supported by the Alfred P. Sloan Foundation. Each post is based on a discussion between select researchers and experts working on relevant policy. To learn more and join one of our upcoming conversations, visit the series website.

Distributed energy resources (DERs)—from rooftop solar to electric vehicles (EVs)—have amazing potential to reduce greenhouse gas emissions and help us reach our climate goals. Their widespread adoption, however, could also bring unprecedented stress to an already aging electric grid. Upgrading both local and system-wide electricity grids to support this change will require thoughtful planning to minimize costs and recover these equitably.

On our recent webinar funded by the Alfred P. Sloan Foundation, the panel delved into the growing adoption of DERs, the data needed to understand trends and provide more accurate forecasting for future investment, as well as the costs—and their allocation—of upgrading our electric system to accommodate this seismic shift. Moderated by Elizabeth B. Stein, Lead Counsel for Energy Transition at Environmental Defense Fund, the panel included Dr. Jim Bushnell, Professor of Economics at the University of California, Davis; Dr. Anamika Dubey, Assistant Professor of Electrical Engineering and Computer Science at Washington State University; Dr. Alan Jenn, Assistant Professional Researcher at the Institute of Transportation Studies at the University of California, Davis; and Michelle Rosier, the Economic Analysis Supervisor for the Minnesota Public Utilities Commission.

As California goes… Read More »

Posted in Uncategorized / Leave a comment

Grid makeover: New research shows how the integration of renewables is exposing design flaws in energy markets and offers paths to improvement

This post is the third in a series dedicated to the future of the electricity sector and new scholarship supported by the Alfred P. Sloan Foundation. Each post is based on a discussion between select researchers and experts working on relevant policy. To learn more and join one of our upcoming conversations, visit the series website.

As energy providers around the country integrate a growing volume of wind, solar and batteries into their systems, researchers and regulators are seeing compelling evidence that markets may require design adjustments to address inefficiencies.

Our recent webinar, funded by the Alfred P. Sloan Foundation, examined how market designs can lead to clean energy outcomes—and potential unintended consequences like an increase in CO2 emissions.

Moderated by Sarah Ladin, an attorney at the Institute for Policy Integrity, the panel—which you can watch here—included Dr. Catherine Hausman, an associate Professor of Public Policy at the University of Michigan and a research associate at the National Bureau of Economics Research, Dr. Chiara Lo Prete, an Associate Professor of Energy Economics at the Pennsylvania State University and Valerie Teeter, the Deputy Director of the Office of Energy Market Regulation at the Federal Energy Regulatory Commission (FERC).

Ancillary services markets, renewables and their impact on generation

While most economists tend to examine wholesale energy markets, Dr. Hausman has researched ancillary service markets, which provide essential services for maintaining a secure and stable power system. One of these markets is the frequency regulation market, which is crucial for ensuring reliability. This market helps maintain the appropriate balance of supply and demand by paying generators to make small adjustments to their output. Dr. Hausman’s research explores the potential for ancillary service markets to interact with and affect the wholesale energy market.

Her research studied the PJM frequency regulation market in the northeastern United States from 2012-2014 to show how generators responded in the wholesale energy market. Her team discovered significant spillovers across markets, as generators adjusted both the amount of energy they generate as well as the fuel and technology type. For example, because the frequency regulation market requires generators to fluctuate their generation, some may need to increase their daily generation significantly in order to allow for the footroom needed to make these adjustments. These results suggest that the ancillary services markets interact directly with generation markets in ways that academic economists haven’t previously considered.

Renewables, batteries and climate change are leading to a rethinking of ancillary services, she argues. If system operators aren’t careful, the utilization of batteries to provide frequency regulation could lead to the unintended consequences of increasing CO2 emissions. For example, if a battery enters the frequency regulation market, this may reduce the need for a coal plant to participate in frequency regulation, resulting in an increase in coal-fired capacity in the wholesale market and, in turn, emissions. “In a world without the ideal carbon emissions regulation that we might hope for,” Dr. Hausman argued, “we need to be careful about the unintended consequences of our policies, especially around things like new technologies or changes to electricity markets.”

Managing the unpredictability of wind

Dr. Lo Prete’s research examined why the increasing penetration of wind in U.S. energy markets poses a unique challenge. Markets operated by Independent System Operators (ISOs) rely upon forecasts to schedule dispatch of both wind and non-wind resources one day ahead of time (with adjustments to dispatch happening in real time as demand and supply varies). While weather forecasts have improved dramatically, predictions for wind are not as precise, and any inaccuracy can impact other forms of energy, which need time to adjust their generation (for example, coal plants take 10-20 hours to reach 70% capacity).

If the wind does not blow as expected, “peaker” plants (dirty, inefficient fossil fuel-based generators that run only a few hours of the year) must ramp up quickly to meet demand. Conversely, if the wind blows unexpectedly hard, some non-wind generation units that had ramped up the day before in response to the forecast lose their spots in real time, leading them to burn fuel while sitting idle (units that have committed to turning on can’t easily turn back off, and then run at their minimum output level). “Once they’re committed, they can’t be de-committed,” Dr. Lo Prete explains.

Both these outcomes are inefficient and can increase the need for uplift payments, or out-of-market payments to generation or demand response resources that ensure generators are adequately compensated when they’re ordered to either produce or reduce power. Ensuring that forecasts are more accurate is one way in which these inefficiencies can be reduced.

She also found an interesting interaction between the wholesale and ancillary service markets that creates greater inefficiencies due to wind variability and inaccurate forecasting. Specifically, for baseload plants (including coal and natural gas combined cycle) that participate in both the energy and reserve markets, if the wind ends up blowing less than expected, these plants can shift capacity towards generating, thereby reducing their reserves. Because these plants are cheaper to operate than peaker plants, this reduces the market clearing bid below peaker plant marginal costs, thereby requiring more uplift. Dr. Lo Prete was surprised by this finding, and said she originally had not planned to incorporate both markets into her research. But her findings demonstrate the need for researchers to think about the system in a holistic manner, incorporating all market participation into their modeling efforts. She encouraged researchers in the audience to take this approach, stating that “it’s going to become more and more important to look at the combination of ancillary services with energy markets, and with other markets as well (such as capacity markets).”

FERC exploring market reform

Ms. Teeter noted that as the resource mix is changing, FERC (the agency that regulates transmission and wholesale markets) is exploring how market design in both the wholesale and ancillary service markets can address the need for greater operational flexibility. Given variable energy resources’ inability to ramp up or down generation on demand, the remaining generation needed to meet total load will need to be much more flexible in real time.

It is therefore critical that market rules do not create participation barriers for generators that can quickly ramp up or down. The Commission is exploring whether new market products can help compensate those generators able to meet this ramping need, as well as how market designs can better incentivize resources to reflect their operational flexibility in their price bids. Given that new resource types such as batteries have greater operational flexibility, the Commission is also examining whether market rules create any undue barriers that prevent these resources from providing this much-needed service.

Need for continued interaction between academics and policymakers

During a robust discussion among panelists, Dr. Hausman noted the critically important link between researchers and regulators. Because the grid is changing so quickly in the absence of a national climate policy on carbon emissions in electricity markets, researchers should be looking into unintended consequences and presenting their findings to agencies like FERC to find adequate solutions. “The market is not just going to automatically take care of itself,” she said.

Regulators rely upon this type of input for making informed decisions. Ms. Teeter described some recent technical conferences during which stakeholders, experts and academics discussed key issues related to changing system needs. Conferences like these, as well as the public docket, she noted, are ideal venues for academics to share some of their latest thinking on market issues and challenges that may exist.

“Commission staff appreciates the ability to dive into these issues and understand the technical thinking that’s been done and have that thinking inform their decisions,” Ms. Teeter notes. Research like that conducted by the other panelists can be useful to the commission and its staff as it examines whether energy and ancillary service market reforms are necessary to address changing system needs in the evolving electricity sector.

.

 

Posted in Uncategorized / Leave a comment

Generating public acceptance critical to modernizing the electrical grid

Who, when and how to engage to build support for new infrastructure.

This post is the second in a series dedicated to the future of the electricity sector and new scholarship supported by the Alfred P. Sloan Foundation. Each post is based on a discussion between select researchers and experts working on relevant policy. To learn more and join one of our upcoming conversations, visit the series website.

To make our electric grid cleaner, more reliable and more equitable, we need to invest in new infrastructure—and fast. In the effort to meet our country’s clean energy goals, policymakers will plan for new transmission lines, wind and solar farms and storage solutions, all of which will have an impact on the people living nearby. Communicating about these investments with the affected stakeholders must be done in a thoughtful and careful manner, or—as we’ve seen with other types of infrastructure projects—they can face delays or even fail altogether.

In our latest Alfred P. Sloan Foundation-funded webinar—which you can find here—we explored the barriers to public support of the infrastructure required to achieve a net zero electric grid as well as ways to engage with communities and other stakeholders more successfully.

The webinar, moderated by Dr. Elizabeth J. Wilson of Dartmouth College, featured panelists including Dr. Tanya Heikkila, Kate Konschnik, Dr. David Konisky and Amanda Ormond. Each of the academic panelists presented aspects of their research, while Ms. Ormond provided insights from her experience with infrastructure conflicts in the West.

Understanding constituencies—and conflicts

Dr. Heikkila’s research on conflicts around energy infrastructure found a variation in conflict intensity based on location, population and project type. Her analysis found that nonprofits and the general public tended to vocally oppose new infrastructure (regardless of the type), while energy companies were more supportive of infrastructure investments. Furthermore, “in high conflict cases,” Dr. Heikkila said, “people from different positions often talk past each other. So they’re not framing the issue in the same way.”

Ms. Konschnik’s research focuses on Regional Transmission Organizations (RTOs), which she describes as “the most important players in the energy transition that you’ve never heard of.” These non-profit organizations control transmission in a region, but also create the rules that affect market values, and in turn, investment decisions in key energy infrastructure.

However, RTOs (and very similar organizations known as Independent System Operators) function largely below the radar of the general public, as their consensus and decision-making processes are held behind closed doors, with energy market participants being the primary stakeholders engaging in these discussions. Though the public has largely been absent from these conversations, stakeholder agreement is not a foregone conclusion. In fact, as the energy market has become more diverse, with greater participation of renewable and distributed resources, conflicts around the rules between these market players have only increased.

No matter the stakeholders involved, Amanda Ormond says one of the biggest challenges facing policymakers today is extreme polarization. While opposition may have always existed, the outsized influence of politics, social media, hidden hands and even paid actors can lead to the abandonment of science-based decision making.

Location and project-type matter

The type of project and its location can determine the intensity of opposition. While more than 60% of the projects Dr. Heikkila studied experienced low-intensity conflict, pipelines and wind farms were found to generate greater opposition than solar and transmission lines. More intense opposition was found in infrastructure projects located in counties with a majority of residents associated with the Democratic party (except with regards to transmission lines), while lower-intensity conflict was more common in counties with Hispanic and Black residents, raising important questions about environmental justice.

Regional differences also exist. Pipelines tend to generate more intense conflict in the West and the Midwest, while transmission lines tend to generate greater conflict in the Northeast, Midwest and the West. The South has lower levels of conflict in general.

Dr. Konisky examined the phenomenon of NIMBYism, testing whether the “not in my backyard” sentiment is as common in opposition to infrastructure projects as it appears in media. After distributing 16,200 surveys across 6 states and 14 projects, his team found little evidence of NIMBYism, as opposition and support of projects did not tend to vary with respondent’s proximity to them. What he did find was that people opposed projects if they were concerned about the impacts on environmental quality and climate change or had greater distrust in energy companies.

Process is critical

All of the panelists discussed the need to improve public engagement in decision-making. For Ms. Ormond, that includes early engagement, assessment and testing to give policymakers a baseline understanding of sentiment prior to hearings. This is necessary, in part, because of the emergence of paid actors and organizations that engage in astroturfing to either generate a crisis or the impression that a project is universally supported. Without that baseline knowledge, a policymaker could be swayed by disingenuous parties, she says.

Dr. Konisky noted the importance of listening to diverse voices in the decision-making process. “Government is not always great at that,” he said, adding that building trust in institutions takes time—a luxury we do not have. “This is a real puzzle,” he said. “We have to figure out a way forward to do both things well—to go fast but to also be inclusive.”

In some cases, specifically among RTOS, there is a fear of engaging the general public, who they often view as lacking technical expertise. That said, Ms. Konschnik notes the need for greater transparency—including posting meeting minutes, in order to increase public understanding of the process and decision-making related to energy investments.

Part of the challenge, Dr. Heikkila says, is that the act of engaging the public itself can generate conflict. We need to determine how to create dialogue in a way helps build trust and allows us to talk to each other in a product manner. Engaging early is important, but how you engage is essential, she says.

Explaining the “Why” behind projects

Demonstrating the relevance of new energy infrastructure is important in generating support. Drawing connections between major climate-related events like wildfires could compel people to engage in energy planning. Increasing the knowledge of stakeholders takes time, but Ms. Ormond has seen it build trust and generate greater support for a clean transition.

Beyond that, both Ms. Ormond and Dr. Heikkila noted the need to articulate a broader energy policy. Without a consistent, national energy policy, individual projects can suffer from a lack of purpose in the eyes of the public. However, Ms. Ormond notes that state goals of becoming 100% clean can also demonstrate to the public how each project supports these objectives, giving them a better understanding of how infrastructure fits into a broader goal. Demonstrating how individual projects can help us meet climate goals while ensuring a more reliable, efficient and equitable grid should be at the forefront.

Achieving public acceptance of energy infrastructure is possible

As we move towards a cleaner grid, we will be making significant investments in energy infrastructure. This will naturally cause conflicts and concern as individuals will be affected by these investments, one way or the other. However, this webinar demonstrated that not all is lost. As long as we ensure that process is inclusive, transparent and clearly demonstrates the social and environmental benefits associated with the investment, we can achieve a future grid that is equitable, clean and responsive to the concerns of stakeholders.

Posted in Energy Transition / Leave a comment

People of color hit hardest by air pollution: EPA needs to consider this in benefit-cost assessments of policies

This blog was co-authored by Jeremy Proville, Director: Office of the Chief Economist, and Ananya Roy, Senior Health Scientist at EDF.

New analysis finds that prevalent methods of assessing impacts of air pollution underestimate pollution’s health impacts on people of color.

Everyone has the right to breathe clean air. Yet communities of color, falsely labeled as “hazardous” in the 1930s, experienced decades of depressed property values and higher siting of industrial facilities and highways, resulting in higher exposure to air pollution. Environmental racism like this causes unjust, unequal health harms.

Yet the issue of Environmental Justice and its impact on health extends beyond disparate exposure alone. Communities of color are exposed to higher levels of air pollution and are more vulnerable to that air pollution. Racist policies, institutional practices, and disenfranchisement have caused disinvestment in housing, transportation, economic opportunity, education, food, access to health care, and beyond in these communities. All of these overlapping inequities not only manifest in health disparities for these families, but also result in greater health impacts from pollution exposure. In fact, a recent study of 60 million Medicare beneficiaries found that older Black people are three times more likely to die from exposure to pollution than white people when exposed to the same levels of fine particle air pollution or soot.

The federal government usually assumes that air pollution exposes everyone to the same risk. Yet the risks are not the same. The disparate harm caused by pollution to Black and Hispanic communities cannot be ignored, and should be addressed directly in estimating the benefits and costs of pollution policies in order to ensure that everyone’s health and wellbeing is protected.

New research uncovers how pollution impacts have been underestimated

In a new journal article in Environmental Health Perspectives, EDF researchers and Carnegie Mellon University professor Nicholas Muller leverage this new understanding of racial/ethnic disparities in air pollution-caused mortality risks. The work seeks to understand the policy impacts of using race/ethnic-specific inputs rather than using data inputs that average the effects across all populations.

We find that using data inputs that average health response across race/ethnicity (effectively ignoring these real differences across groups) leads to:

  • An underestimate of the overall mortality impacts of air pollution to all populations by 9%
  • An undervaluation of the total costs of pollution across the country by $100 billion.

But this is even more damaging for Black families, as taking into account the larger impact of pollution on their health would increase their estimated pollution-caused burden by 150%.

This has real-world implications for cost-benefit analyses associated with air pollution improvement policies. For example, the Mercury Air Toxics Standard (MATS), a policy that helped reduce pollution from the electric sector, provided much larger benefits to Black people than previously understood: by not accounting for the fact that air pollution is more harmful to these communities, an assessment of the policy would underestimate MATS’ benefits to Black families by 60%.

Changing approaches at the federal level

In EPA’s Policy Assessment for the Reconsideration of the Particulate Matter National Ambient Air Quality Standards (PM NAAQS), the agency has used, for the first time, methods similar to our study to assess the distributional benefits of strengthening the standard.

The results indicate that, when considering both exposure and vulnerability differences across race/ethnicity, older Black people in 30 metropolitan areas bear 27% (13,600 premature deaths) of the mortality burden of PM2.5 at an annual PM2.5 standard of 12 µg/m3, despite making up only 13% of the total population. Strengthening the annual PM2.5 standard from 12 to 8 µg/m3 would result in 4,260 fewer air pollution-attributable premature deaths in Black communities (representing 31% of the total prevented PM2.5– mortality benefits).

Without this type of race/ethnicity-specific information on pollution vulnerability, the EPA would not have been able to accurately estimate the benefits to communities from lower pollution concentrations. This kind of assessment needs to become the rule rather than the exception.

Our data choices matter

Our findings have a very clear implication for policy: when thinking about air quality policy, government agencies should use the most up-to-date race/ethnicity-specific inputs to understand and reduce environmental injustices, especially in the context of estimating benefits and costs of policies. Being agnostic to existing differences in pollution impacts across race/ethnicity obscures the benefits we could achieve by improving our air quality – both for communities of color, but also for society as a whole.

Posted in Uncategorized / Leave a comment

Energy Justice and the Just Transition in the Power Sector – New Research and Policy Approaches

This post is the first in a series dedicated to the future of the electricity sector and new scholarship supported by the Alfred P. Sloan Foundation. Each post is based on a discussion between select researchers and experts working on relevant policy. To learn more and join one of our upcoming conversations, visit the series website.

While scholars across academia, nongovernmental organizations and think tanks are grappling with transitioning to a cleaner, more efficient, reliable and equitable electric grid, bridging the gap between research and policy is critical to making informed decisions that will impact consumers, communities and the environment.

As we shift from fossil fuels to a cleaner grid, ensuring that no one is left behind and all communities can benefit is critical to a successful transition. EDF and New York University’s Institute for Policy Integrity at the NYU School of Law, with the support of a grant from the Alfred P. Sloan Foundation, are highlighting some of the most exciting research emerging from teams funded by the Foundation in a series of webinars with leading scholars and relevant policy experts.

Our first conversation—which you can watch here—examined how to make the transition for ratepayers, utilities and communities equitable, so people and communities can prosper as we move to cleaner sources of energy. The conversation, moderated by EDF’s Lauren Navarro, Senior Manager, Regulatory and Legislative Affairs, featured a panel including: Dr. Charles Sims, Director of the Energy and Environment Program at the Howard H. Baker Jr. Center for Pubic Policy at the University of Tennessee, Knoxville; Dr. Roman Sidortsov, Associate Professor of Energy Policy at Michigan Technical University; and Raya Salter, an attorney, energy justice advocate and member of the New York State Climate Action Council.

Distributed solar adoption’s impacts on the grid and its customers

Dr. Sims led us through a recent simulation he developed of the Tennessee Valley Authority (TVA), modeling the individual decision to adopt rooftop solar panels and the impacts this adoption would have on grid and electricity costs. His agent-based computational model allowed his team to examine which groups would benefit and whether any groups may be worse off.

One of their important findings was that low-income incentive programs have helped close the gap of solar adoption between low- and high-income customers. However, they also found that net metering programs, which allow solar owners to be paid the full retail rate for solar generation, have widened the gap, likely due to a cost shifting between the two income groups.

New opportunities for old mines

Dr. Roman Sidortsov discussed his research on the barriers and opportunities associated with using underground mines as energy storage sites utilizing the pumped storage hydropower method (PUSH), a key technology to achieving a clean grid.

Dr. Sidortsov’s project examined whether old mines could take advantage of upper- and lower-level reservoirs to pump water through a hydroelectric turbine to generate power using a series of different designs. Leveraging an old mine in Negaunee, Michigan, as a case study, they found that not only could the mine serve the surrounding county’s population of 30,000 people continuously for 3.5 months; it could also to do so at a profit. Dr. Sidortsov sees great potential for nearly 1,000 decommissioned mines across the country to be used as storage facilities, which are already electrified and connected to a transmission system; this solution can help achieve a just transition in communities that would otherwise have been left behind as coal and mining are phased out.

Developing just transition policies in New York

Ms. Salter shared current progress under New York state’s ambitious 2019 Climate Leadership and Community Protection Act. The law, which aims to move the state to an economy-wide net zero goal by 2050, includes several provisions devoted to energy justice.

In addition to the Climate Action Council, the law also created a Just Transition Working Group, comprised of justice advocates, labor representatives, utilities and others. This group is charged with identifying electric generating facilities that may close due to the transition, studying job and workforce needs and providing recommendations to the council for how to best handle the transition equitably.

New York state is, as Ms. Salter noted, a tale of two grids. The upstate region benefits from greater access to hydroelectric power and renewables, while regions downstate draw an overwhelming percentage of their power from fossil fuels. She and others on the council are looking at ways to improve transmission from upstate to western and downstate regions to take advantage of the renewable generation pockets necessary to achieve the state’s goals. She and her colleagues are also hoping to address the need for long-duration storage to fill some of the renewable gaps the state experiences in winter.

Connecting research and policy

Ms. Navarro asked Drs. Sims and Sidortsov how their research directly applied to Ms. Salter’s policy work in New York and beyond. Dr. Sims explained that he initially gravitated toward the transition to solar, due to the existing gap in low- and high-income customers’ adoption. “There is also the fear that utilities will have to raise their rates,” disproportionately impacting low-income customers. Avoiding this scenario will depend on policy action and a greater understanding of any potential negative impacts caused by certain policies encouraging greater adoption of rooftop solar; academic research can thus help highlight any unintended outcomes from policy adoption.

Dr. Sims also sees connections between the retirement of coal plants and the subsequent impacts on local communities and low-income rate payers in rural communities, who may face price shocks due to large-scale adoption in higher-income, urban areas. He sees a lot of opportunity study how different policies can improve conditions for lower-income consumers.

Dr. Sidortsov said his work was conducted with the transition in mind, as he specifically considered the layered benefits for communities who may have been negatively impacted by the shuttering of mines. He hopes PUSH storage facilities could turn existing liabilities into assets, so communities that have been overburdened by risk could experience renewed prosperity.

Panelists also discussed the importance of listening to community concerns. Ms. Salter explained that energy justice goes beyond reducing greenhouse gas emissions. For mass adoption to take place, we need to consider aspects that may prevent communities from welcoming renewable facilities, especially as policymakers consider how some have already been unequally harmed by the fossil fuel industry.

Overall, this conversation showed how research can contribute to identifying equitable policies, but also the importance of having policy guide new avenues of research. When it comes to achieving a clean and efficient electric grid, we must think about the role that this transition plays in helping improve equitable outcomes, and whether policies may exacerbate existing inequities.

Looking ahead to stakeholders

The panelists’ interest in communities is apt, as it will serve as the next topic in our series. Our upcoming policy and research conversation, to be held December 16th, 10:30am ET, will examine public acceptance and governance topics for energy policy. Moderated by Dr. Elizabeth Wilson of Dartmouth, the panel includes Dr. Tanya Heikkila (University of Colorado Denver), Dr. David Konisky (Indiana University), Dr. Kate Konschnik (Duke University) and Amanda Ormond (Western Grid).

Posted in Energy Transition / Leave a comment

Solar power can have positive health impacts for Chile’s most vulnerable. Here’s how.

We know that solar power helps replace fossil fuel generation, getting the world closer to the international goal of keeping global warming to 1.5°C. But does it have other benefits? What happens to people’s health if we replace coal generation with solar power?

The Atacama Desert in northern Chile is one of the world’s most extreme landscapes. It is often used by NASA and film companies to stand in for Mars and is the sunniest place on Earth. It is also the best place in the world for solar power.

Since 2012, Chile has installed over 3300MW of solar power throughout the country, with a large percentage built in the regions in and surrounding the Atacama Desert. This rapid introduction of large-scale solar capacity makes the Atacama region a perfect case study for us to look at the health benefits of solar power replacing fossil fuel generation.

Due to Chile’s heavy reliance on fossil fuels, the country’s power sector releases large amounts of local air pollutants, including sulfur dioxide (SO2), nitrogen oxides (NOX), mercury (Hg) and particulate matter (PM). All of these pollutants are associated with adverse health effects, along with increased hospital admissions, mortality risks and threats to life expectancy. Annual air pollution in Chile generally exceeds life-threatening levels with daily average fine PM concentrations well above World Health Organization guidelines. Thus, Chile’s growing reliance on renewables is extremely important from a health perspective.

To that end, my co-authors and I have spent the past two years investigating the health benefits that solar generation produced in northern Chile due to this massive solar expansion. Our research found that the investments in solar capacity led to a displacement of daily coal- and gas-fired power generation. We estimated a direct, causal link between greater installed solar capacity and fewer cardiovascular and respiratory admissions due to reduced pollution from fossil fuel generation. Importantly, reductions were largest among the most vulnerable age groups: infants, children (ages 6–14), and seniors.

To estimate the effect, we relied upon wind direction to identify which cities were downwind of and close to the fossil fuel plants we found to be displaced by solar. For the populations living within 10km of displaced plants, we estimate that 1GWh of solar generation reduced annual respiratory hospital admissions by 13% on average. Similar findings, with decreasing magnitudes, occur in cities 50km and 100km downwind of displaced coal and gas-fired generation.

Our conclusions remained unchanged after several robustness checks, including the use of cities upwind of displaced facilities and those downwind of non-displaced units, as well as the use of hospital admissions of patients with diseases presumably not related to air pollution.

This research quantifies some of the benefits that solar power can provide in terms of reducing health impacts of air pollution in developing nations, yet our findings are likely an underestimate of the total health benefits that can emerge from solar generation. This is because:

  • Chile’s northern region has limited healthcare infrastructure. This means any reduction in hospitalizations increases the number of hospital beds available, which helps reduce the number of untreated unrelated injuries and illnesses.
  • Reductions in air pollution exposure for young children and infants has a lifelong benefit in terms of reduced illnesses and improved economic outcomes.
  • As demonstrated in both the US and India, disadvantaged populations often live closer to large air polluters. If this is the case, improvements in air quality may also help to reduce inequality.
  • Though the area we studied has relatively low population density, we were able to estimate a significant benefit on health outcomes- thus, solar’s contribution to cleaner air will produce even larger benefits in more populated regions or countries.     

Our research is a working paper published in the Environmental Defense Fund Economics Discussion Paper Series. You can download the paper for free here. This blog was co-authored with Nathaly M. Rivera, Research Fellow at the University of São Paulo.

Posted in air pollution, Economics / Leave a comment