Potential Impacts of Meeting Renewable Portfolio and Fuel Standards on the Economy of Tennessee

The primary objective of this study was to estimate how adopting a Renewable Portfolio (RPS) and Renewable Fuel Standards (RFS) would impact the economy of the State of Tennessee. This was accomplished by 1) developing representative state level RPS and RFS scenarios, 2) projecting Tennessee’s renewable energy capacity requirements under these scenarios, 3) identifying representative technologies and associated costs for renewable energy generation, and 4) evaluating decreases in economic activity in non-renewable technologies, such as coal or petroleum, in the state. The economic (output, employment, value-added) impacts were obtained using the IMPLAN, input-output model. Results showed that under the assumptions made, the largest total output and value-added impacts on the Tennessee’s economy among five scenarios was the scenario which included electricity generation from such renewable resources as biomass, wind, solar, landfill gas, wastewater gas, biodiesel and animal waste. The purchase of renewable energy credits was also accounted for in this scenario. For this scenario, total output annual operating impacts were equal to $1.6 billion; total output investment impacts accounted for $1.4 billion. For total value added, total annual operating impacts were equal to 931 million dollars; total value added investment impacts were equal to 651 million dollars. For the RFS scenario, the sum of total output annual operating impacts was equal to 351 million dollars, and total output operating impacts were equal to 137 million dollars, and total value added investment impacts were equal to 81 million dollars. The largest impacts on the economy under RFS scenario included those from an ethanol facility.