One year ago this week, the California legislature passed landmark legislation committing the state’s power providers to supplying 60% of their electricity from renewable energy by 2030 and setting a target of 100% clean, or carbon-free, power by mid century. It was a bold action that significantly raised the bar for other states considering policy action.

And over the last 12 months, another six states (bringing the total to eight states) plus the District of Columbia and Puerto Rico have answered the call with various obligations toward 100% clean energy over the next few decades.

What’s driving this surge in state-level clean energy leadership? And which states will be the next to step up?

A banner year for state clean energy policy

State-level policies supporting renewables and other carbon-free resources are on a roll in 2019. In January, the District of Columbia committed to a renewables-only future when the mayor signed a measure passed unanimously by the city council to increase its renewable electricity standard (RES) to 100% by 2032, a target only previously matched in ambition by Hawaii, which adopted a similar measure (with a target year of 2045) in 2015.

Later in the spring, Puerto Rico also committed to a 100% renewable energy future by 2050—while ending coal use by 2028—as the strong and resilient island rebuilds from the devastation of Hurricane Maria.

And in June, Maine adopted a sweeping set of clean energy measures, including a doubling of its RES to 80% by 2030 and setting a goal of 100% renewables by 2050.

Maine Governor Janet Mills signs into law a bill increasing the state’s renewable energy standard and setting a goal of 100% renewables by 2050.

During the same period, another tranche of states took a similar path to 100% as California by broadening the policy support to other carbon-free technologies—like nuclear power and carbon-capture and storage—while also ensuring a dominant role for renewables. For example:

• In March, New Mexico adopted an 80% by 2040 RES along with requiring a 100% carbon-free power sector by 2045.
• Also in March, New York’s Governor Cuomo signed a sweeping climate and clean energy bill into law in July that includes a 70% RES by 2030 and 100% carbon-free requirement by 2040.
• In Washington state, which already gets more than 70% of its electricity from renewables (mostly large-scale hydropower), Governor Inslee signed a measure in May to make the state’s power sector coal-free by 2025 and carbon-free by 2045.
• In addition, the Nevada legislature included the goal of a 100% clean energy power supply by mid-century as part of the bill it adopted in April to double its RES to 50% by 2030.

And finally, in June, New Jersey Governor Phil Murphy released a detailed draft energy master plan through the Board of Public Utilities to achieve 100% clean energy by 2050, a goal the governor put forward through an executive order in May of 2018. This plan builds on an increase in the state’s RES to 50% by 2030 that became law earlier in 2018 and is a meaningful step toward a 100% clean energy future, despite not having a legislative mandate behind it.

Eight states plus Washington DC, and Puerto Rico (not pictured here) have committed to 100% renewable or clean energy either through mandatory requirements or goals (California, Maine, and Nevada have established goals). At least 13 additional states are actively considering similar measures.

A tipping point?

A decade or more from now, when we reflect on the progress made in the urgent race to de-carbonize the US power sector, this past year will likely be viewed as a pivotal tipping point. To be sure, a lot of work remains to be done to ensure the 100% clean energy transition is achieved affordably, reliably, and equitably. And not every state is moving in the right policy direction with respect to renewable energy (see Ohio’s HB 6 as Exhibit A).

However, this is the year when the vision of a clean energy economy has come into focus with the weight of strong policies to back it up. What was once only a rallying call of progressive climate and clean energy advocates is now enshrined in statute in states across the nation.

Consider the aggregate influence these 100% clean energy states can have in moving the entire country toward a carbon-free power supply:

• More than 86 million residents, 27% of US population in 2016
• 18% of US electricity consumption in 2016
• 138 million metric tons of power sector carbon dioxide emissions in 2016, 8% of the US total

Many factors contributing to 100% momentum

Momentum has been building toward 100% clean energy for some time now, but the recent surge in state-level clean energy leadership can be attributed to several key factors. First and foremost, the 2018 election ushered in a wave of new governors and state legislators who campaigned on an aggressive clean energy agenda. At least six of the newly elected governors last year made pledges to join the US Climate Alliance, support the Paris Climate Agreement, and pursue 100% clean energy policies.

While all six of these governors were Democrats, it should also be noted that the push for 100% is not exclusively a partisan issue. That’s because a large majority of Americans—including 95% of Democrats and 71% of Republicans according to one recent poll—support the goal of 100% renewable or clean energy by 2050.

And while that strong bipartisan public support hasn’t materialized into bipartisan policy support in many cases, there is encouraging evidence that it is beginning to happen at the state level at least. For example, the 100% clean energy policies passed in Nevada, New Mexico, and Maine this year all garnered solid bipartisan support.

Of course, a primary reason that public support for renewable energy has soared is because they are cost competitive with new and existing fossil fuels, and in many places are helping to reduce consumer electricity bills. In addition, through innovative technologies and practices, utilities and grid operators are getting increasingly comfortable with the notion that the grid can reliably accommodate much higher levels of renewable energy. Low prices and increased reliability have resulted in a surge of renewable energy investments by major corporations and voluntary decarbonization commitments by many utilities, which has in turn given more confidence to political leaders in supporting aggressive policy action.

Further fueling state momentum on 100% clean energy is the urgent call to action by the world’s leading scientists in the United Nation’s climate report released last October. With the complete abdication of climate or clean energy leadership within the Trump Administration and among majority leadership in the US Senate, state leaders know their actions are critical for maintaining clean energy progress and reducing carbon emissions.

Who’s going to commit to 100% next?

The flurry of state action on 100% clean energy policies is poised to continue as a broad and diverse set of stakeholders and political leaders are pursuing legislation in at least 13 states, including Connecticut, Colorado, Florida, Illinois, Iowa, Massachusetts, Maryland, Michigan, Minnesota, North Carolina, Pennsylvania, Virginia, and Wisconsin.

• Among the most promising in the near-term is Illinois, where the Clean Energy Jobs Act, a comprehensive clean energy and climate bill that requires 100% carbon-free electricity by 2030 and 100% renewable energy by 2050, has already been co-sponsored by a majority of state Senators and is supported by the governor.
• In addition, just two weeks ago, Wisconsin’s Governor Tony Evers issued an executive order creating a new Office of Sustainability and Clean Energy with the goal of working with the state’s utilities to achieve 100% clean energy by 2050.
• And in Maryland, Republican Governor Larry Hogan indicated, after in May allowing to become law an increase in the state’s RES to 50% by 2030, he plans to push for a 100% clean energy standard during the 2020 legislative session.

The urgent need to act on climate change by decarbonizing our economy is recognized now more than ever. A critical step in achieving that goal is a swift transition to 100% clean and carbon-free energy. The barriers to such an ambitious vision have been torn down and many states are now stepping forward to lead. Let’s work together to keep the 100% list growing.

1. California goes all in for carbon-free electricity

In late August, California—the world’s 5^th largest economy—committed to the target of fully decarbonizing its power sector by 2045. The landmark legislation also strengthens the state’s renewable portfolio standard (also known as a renewable energy standard, or RES) from 50 to 60 percent by 2030. What’s more, at the bill signing, Governor Jerry Brown, signed an executive order that establishes a goal of achieving carbon-neutrality across all sectors of California’s sprawling economy by 2045, cementing the state’s place as a global leader in climate action.

2. Several states strengthen their RES requirements

State-level renewable electricity standards continued to be a primary driver of new renewable energy development in 2018. In addition to California, legislatures in New Jersey (50% by 2030), Connecticut (40% by 2030), and Massachusetts (35% by 2030) all adopted stronger targets for renewable energy, accelerating their states’ transitions away from fossil fuels. In addition, voters in Nevada overwhelmingly approved a measure to increase their state’s RES to 50% by 2030 (the measure must be approved again in 2020 to officially become law).

3. Clean energy champions win gubernatorial races

One of the bright spots in November’s election results was the number newly elected governors who campaigned on aggressive clean energy and climate change agendas. Newly elected governors in at least 10 states, including California, Colorado, Connecticut, Illinois, Maine, Michigan, Minnesota, Nevada, New Mexico and Wisconsin, have pledged to accelerate clean energy and carbon reductions in their states by supporting US commitments to the Paris Climate Agreement, joining the US Climate Alliance, and/or calling for renewable energy targets of 80%-100%. These election results demonstrate the widespread support for greater investments in renewable energy and signal the push for even stronger clean energy policies in the coming year.

4. Record low prices for renewables

Innovation, growing economies of scale, and attractive financing continued to drive the costs down for renewables in 2018. Power purchase agreements for wind and solar projects in states like Arizona, Nevada, Colorado, Kansas, New Mexico, Oklahoma and Texas have reportedly ranged between $20-$30 per megawatt-hour, well below the cost of natural gas generation—and the technologies are positioned for further cost reductions to continue to be low-cost options even as federal tax incentives change. What’s even more exciting is that the many of these low-priced projects also include energy storage components, increasing their value to the grid.

Utility-Scale Solar Power Purchase Agreement Prices, by Project Size, 2008-2018.
Source: GTM Research.

5. Major utilities commit to low-carbon portfolios

Earlier this month, Xcel Energy became the first major utility to commit to a completely carbon-free electricity supply across the eight states it operates in. In doing so, it joins a growing number of utilities that are committing to phasing out their use of coal and transitioning to substantially lower carbon energy portfolios. Also this year, both Consumers Energy in Michigan and NIPSCO in northern Indiana announced plans to phase out coal generation and utility giant American Electric Power announced a goal of reducing its carbon emissions 80% by 2050. What’s especially exciting about these utility actions is that they are driven primarily by economics, clearly demonstrating the competitiveness of clean energy technologies.

6. Corporate renewable energy purchases keep growing

Low renewable energy prices continue to attract major corporations looking to save money and achieve ambitious sustainability goals. As a result, direct corporate purchases of renewable energy have become a major driver of renewable energy deployment. In 2018, the Rocky Mountain Institute reports, corporate renewable energy purchases—led by companies like Facebook, Walmart, ATT and Microsoft—reached more than 6.4 gigawatts (GW). The number of corporations investing in renewables expanded at a record pace this year as well, with nearly two-thirds of Fortune 100 and nearly half of Fortune 500 companies now having set ambitious renewable energy goals.

7. Offshore wind moves forward

While no new offshore wind projects came online in the US this year (the next project—off the Virginia coast—is scheduled for 2020), the industry did take some big leaps toward becoming a major player in the nation’s power supply. For example, the winning bid for Massachusetts’s first request for offshore wind proposals to help meet the state’s offshore wind requirements passed in 2016 went to an 800-megawatt project from Vineyard Wind at a shockingly low price of about 6.5 cents per kilowatt-hour. In addition, the latest US Bureau of Ocean Energy Management auction for leasing parcels of water for future projects resulted in 11 bidders and $405.1 million in winning bids, both smashing previous records. And strong state policies, including new offshore wind requirements in New Jersey and elsewhere, mean that there’s a lot more action to come.

8. Storage steps into the spotlight

Once a fringe player in the electric power sector, the energy storage industry is quickly emerging as a game changer in the transition to a clean energy economy as a tool for integrating much higher levels of renewable energy. In 2018, the pipeline for new storage projects doubled to nearly 33 GW as more utilities are investing in the technology thanks largely rapidly falling prices and growing support from state policies. While California has led the nation in storage deployment to date, New York recently established the strongest storage requirement in the country at 3,000 MW by 2030. Earlier this year, New Jersey set an ambitious storage target of 2,000 MW by 2030 and Massachusetts significantly increased its storage requirement to 1,000 megawatt-hours by 2025. At the federal level, the Federal Energy Regulatory Commission issued Order 841, which directs regional grid operators to set market rules that allow energy storage to participate on a level playing field in the wholesale energy, capacity and ancillary services markets.

Lithium-ion batteries for advanced energy storage. Photo: Argonne National Laboratory/Flickr

9. PG&E turns down the gas with storage and renewables

In one particular sign of what’s to come in 2019 and beyond in terms of how these technologies fit together to displace fossil fuels, one of the most exciting regulatory decisions I saw this year was the California Public Utility Commission’s approval of PG&E’s plan to use energy storage to replace retiring gas generators. One of the key barriers to fully transitioning to a carbon-free economy is replacing natural gas generation and the ancillary services they provide to the power grid. This decision, which marks the first time a utility will directly replace power plants with battery storage, should spur many more similar projects to move forward in California and across the country and open the door for integrating much higher levels of renewable energy onto the power grid.

These nine stories are just a sampling what occurred in 2018 to further the clean energy transition. As the year comes to a close, UCS will continue to work hard to keep up the clean energy momentum in 2019.

In a world where the threat of climate change is increasingly dire and the need to dramatically cut carbon emissions is even more urgent, every source of zero-carbon energy is important. But make no mistake: FirstEnergy’s bailout proposals for its struggling nuclear plants are poorly conceived and must be rejected. Here’s why.

FirstEnergy isn’t interested in advancing clean energy or reducing carbon emissions

After doubling down on coal and nuclear despite the rise of cheap natural gas and renewables, FirstEnergy has spent years trying to get support for a bailout of all of its uneconomic power plants, including its fleet of old, inefficient, and dirty coal-fired plants.  First, it appealed to the Ohio utility commission for a bailout of its coal plants, then it went to President Trump and the Federal Energy Regulatory Commission predicated on debunked claims that coal plant retirements would impact the reliability of the electricity sector. Both plans have fortunately failed thus far. But that hasn’t stopped FirstEnergy, and if they get their way, ratepayers will be subsidizing uneconomic, carbon-intensive coal plants to the detriment of our public health, environment, and climate.

Furthermore, FirstEnergy is actively trying to stall Ohio’s clean energy momentum. They have spent years at the Ohio legislature trying to gut the state’s energy efficiency and renewable energy standards that have helped spur Ohio’s nascent clean energy industries. Wanting to subsidize uneconomic coal on one hand and trying to kill clean energy progress on the other leaves no room for negotiation in supporting its nuclear facilities.

Of the 30 states with nuclear power plants, 17 states–including Ohio–have nuclear capacity that is unprofitable or scheduled to close.
Source: UCS

FirstEnergy’s newest proposal fails our conditions for support on all accounts

FirstEnergy’s latest attempt to bail out its Ohio nuclear plants is a “zero-emissions nuclear” (ZEN) proposal (HB 381 in the Ohio Legislature) that would generate ZEN credits for every megawatt-hour (MWh) of power produced from their nuclear plants and then require Ohio’s electric utilities to buy the credits for $17 dollars each (adjusted annually for inflation) through 2030. The legislature’s fiscal analysis reveals the proposal would cost Ohio ratepayers $180 million or more per year.

UCS’ new report argues that we must consider the impacts of potential abrupt nuclear plant retirements in achieving the carbon reductions necessary to avoid the worst impacts of climate change. While the potential retirement of Davis-Besse and Perry poses no threat to the reliability of the region’s power supply, the analysis does show that in the absence of strong policies such as a price on carbon or robust low-carbon electricity standards, coal and natural gas would largely replace their lost generation, thereby raising near-term carbon emissions at exactly the time when those emissions need to be going down. As a result, exploring some means to ensure that these and other unprofitable plants continue operating warrants discussion.

Importantly, the UCS report lays out five conditions that must be met before any consideration should be given by policymakers to providing economic support exclusively to struggling nuclear plants. FirstEnergy’s nuclear bailout proposal fails all of them:

• Safety: any plant qualifying for economic support must meet or exceed the Nuclear Regulatory Commission’s highest safety standards. The Davis-Besse plant fails this test with one of the worst safety records in the nation’s nuclear fleet.
• Transparency: nuclear plant owners should open their financial books for regulators and the public to protect ratepayers by demonstrating the need for economic support. FirstEnergy’s proposal far exceeds our estimate of what these plants would need to survive, and they’ve offered no proof that this level of support is necessary.
• Flexibility: To further protect consumers, financial support should be temporary and adjustable to account for changing economic or policy conditions. FirstEnergy’s proposal appears to lock in significant ratepayer expense through 2030 with no meaningful review or provisions for adjustment.
• Strengthened renewable energy and energy efficiency standards: FirstEnergy’s proposal does nothing to stimulate the rapid growth in clean energy resources needed to meet our deep carbon reduction goals. As discussed above, FirstEnergy has spent considerable effort to stop Ohio’s momentum in advancing renewables and efficiency. In contrast, Illinois, New York, and New Jersey significantly or strengthened their renewable electricity and energy efficiency standards as part of legislation that provided financial support for distressed nuclear plants.
• A commitment to impacted communities: Transition plans for affected workers and communities – to attract new investment, replace lost jobs, and rebuild the tax base once nuclear plants eventually do retire – must be included in any economic support proposal. FirstEnergy’s proposed legislation does not put forth anything meaningful in this respect.

So, there you have it: zero out of five conditions met. Because FirstEnergy has shown no commitment to seriously addressing the threat of climate change and because its proposal for bailing out its unprofitable nuclear power plants meets none of the above criteria, it’s clear that Ohio legislators should say no to FirstEnergy’s bailout proposal and instead move forward with a clean energy plan that builds on Ohio’s abundant potential for renewable energy and energy efficiency.

Let’s be clear: UCS does not prefer a piecemeal approach to achieving necessary carbon reductions in our electricity sector. We strongly recommend state and federal policies such as a price on carbon emissions or a low-carbon electricity standard that provides a level playing field for all low-carbon technologies. Our analysis shows these policies would cost-effectively achieve much greater carbon reductions. Unfortunately, there’s currently a leadership void in Washington, DC. Given the urgency of climate change, we must therefore explore alternatives. But we must also ensure that the alternatives stand up to scrutiny and ultimately move us toward a truly clean economy fueled primarily by renewable energy resources. FirstEnergy’s current proposal simply doesn’t pass muster.

NOTE: UCS Sr. Analyst Sam Gomberg contributed in the drafting of this blog.

1. Affordable power for all

Arizonans currently pay more for their electricity than consumers in most other states, which places undue burden especially on the state’s low-income communities. Fortunately, greater investments in renewable energy could help alleviate those higher costs. In fact, a recent study found that achieving the renewable energy requirements under Proposition 127 could save Arizona consumers as much as $4 billion between 2020 and 2030. That’s because the cost of solar and wind have dropped dramatically to the point where they are cheaper than new investments in fossil fuels, especially in places with strong resources like Arizona.

2. Improved public health

Two-thirds of Arizona’s current in-state power generation comes from fossil fuel power plants, which pollute the air with harmful emissions and cause a myriad of public health impacts. Many of Arizona’s most populated cities, including Tucson, Phoenix, Flagstaff, and Yuma have very poor air quality according to the American Lung Association. Greater dependence on renewable energy sources instead of coal and natural gas will lead to less pollution and cleaner air for all Arizonans. That means fewer asthma attacks, heart attacks, and lost sick days each year.

3. Fewer carbon emissions

Last month’s dire report from the Intergovernmental Panel on Climate Change (IPCC) assessing expected climate change impacts is a stark reminder of the urgent need to dramatically cut carbon emissions by mid-century. Arizonans are already experiencing climate change impacts such as extreme heat, drought and wildfires, and those impacts will only worsen if we don’t act now. Accelerating the deployment of renewable energy and relying less on coal and natural gas will help significantly lower carbon emissions in the power sector—Arizona’s largest source of heat-trapping emissions.

4. More jobs and economic development

With nearly 8,400 solar-related jobs in 2017, Arizona ranked 6^th nationally. That’s laudable, but Arizona has the potential to derive so much more economic benefit from its solar resources. Instead, the lack of a long-term policy to drive solar deployment has resulted in Arizona ceding economic ground to other states. The renewable energy development supported by Proposition 127 will provide a significant boost to the state’s economy, spur billions of dollars in local investments and create thousands of new jobs.

5. Less stress on critical water supplies

Water is a vital, yet increasingly stressed resource in Arizona. Even though the power sector represents a small share of Arizona’s water use, any savings in a drought-prone state is valuable. Replacing coal power plants—a major driver of electricity-sector water use—with renewable energy would result in important reductions in water use, freeing up supplies for other critical needs.

6. Reduced risks of overreliance on natural gas

Arizona has no significant natural gas resources, but utilities sourced 40% of their power from gas power plants in 2017. Instead of investing more in homegrown clean energy sources, Arizona’s largest investor-owned utility, Arizona Public Service (APS), wants to double down on its use of natural gas by proposing major new natural gas investments (and virtually no investments in renewable energy) in its latest long-term resource plan. Why? Because APS can apparently profit more from investing in natural gas instead of renewable energy. But by significantly increasing its dependence on natural gas, APS would put its customers at greater risk of higher—and more volatile—electricity prices, poor air quality, some of the worst impacts of climate change. Passing Proposition 127 would put Arizona on a far more sustainable and sensible clean energy pathway.

7. 50% renewable energy is absolutely achievable!

Arizona is the sunniest state in the US but currently gets just 6% of its electricity from solar power. With today’s uber-competitive costs of wind and solar, rapidly falling costs of energy storage, and new advances in grid integration technologies, Arizona could tap far more into its wealth of resources and readily supply at least 50% of its power from renewables by 2030.It’s these attractive factors which have led numerous other utilities in the region and throughout the country to commit to 50% targets of their own. For example, Xcel Energy’s recently approved Colorado Clean Energy Plan will significantly increase renewable energy investments such that in total they will account for 55% of the utility’s power supply by 2026. In addition, seven states and the District of Columbia have adopted renewable energy requirements of 50% or higher, with several more states actively considering it as well. Proposition 127 will keep Arizona competitive with other clean energy leaders.

On November 6, Arizona voters have the power to propel the state toward a clean energy future. Vote Yes on Proposition 127.

Here’s a quick rundown of what’s been happening recently and what to look for come November 6.

States taking the lead

The biggest news-maker in recent weeks that exemplifies the undeniable shift toward a clean energy economy is the California legislature’s passage of SB 100. Signed into law by Governor Brown, the new law increases the state’s renewables portfolio standard (RPS) to 60% by 2030 and establishes a longer-term goal to reach 100% carbon-free electricity by 2045. California has long been a national leader in renewable energy deployment, but that’s a bold goal (Hawaii is currently the only other state with a similar ambition) that puts the world’s 5^th largest economy on a path toward a fully decarbonized electricity system.

And if that wasn’t enough, at the SB100 signing ceremony, Gov. Brown unveiled an executive order that sets a goal of reaching carbon neutrality across the entire California economy—electric power, transportation, buildings, and industry—by 2045.

California isn’t the only state strengthening its clean energy commitments. Earlier this year, New Jersey and Connecticut raised their targets to 50% and 40% respectively. And in early August, Massachusetts passed legislation that raises the state’s RPS to 35% by 2030 (up from 25%), advances energy storage, improves upon the nation’s leading energy efficiency efforts, and potentially doubles the requirement for offshore wind development to 3,200 megawatts by 2035. The first tranche of the offshore wind is already under contract, at a surprisingly low price that could accelerate the technology’s deployment even faster than many have anticipated.

Xcel Energy’s Comanche Coal Plant in Pueblo County, Colorado will be retired and replaced with wind, solar, and energy storage.

More utilities turning away from coal

Many electric utilities across the country are also getting into the clean energy act by accelerating coal retirements and investing in renewable energy. For example, Xcel Energy recently obtained approval from the Colorado Public Utilities Commission to close 660 megawatts (MW) of coal capacity at their Comanche generating station and put in its place more than 1,800 MW of wind, solar, and energy storage by 2026. Dubbed the Colorado Clean Energy Plan, the $2.5 billion investment will result in renewable energy accounting for 55% of Xcel’s power supply and curb carbon emissions by some 60% compared with 2005 levels in 2026. What’s even more remarkable about Xcel’s plan is that prices for the new renewable energy projects are so low this plan will save ratepayers between $213 million and $374 million cumulatively.

The low cost of renewable energy was also a primary reason offered by Northern Indiana Public Service Company (NIPSCO) executives when they announced just last week they will move up several coal plant retirements—amounting to 1,800 MW of capacity—and be entirely coal free within the next decade. Consider that coal accounts for more than 70% of Indiana’s power generation mix today and NIPSCO’s decision becomes even more jaw-dropping. In addition, while final decisions have not yet been made, NIPSCO’s own analysis suggests that the most cost-effective strategy for replacing their coal fleet is through a mix of wind, solar and battery storage.

Corporations go for 100% renewables or bust

Despite the great leadership that many states and utilities are showing, some experts argue that the rapid increase of renewable energy procurement by major corporations has been a main driver for the clean energy transition in the last couple of years. Indeed, more than 150 major global businesses have made pledges to source 100% of their power consumption from renewable energy. In just the past few weeks, apparel industry titan PVH corporation (Calvin Klein, Tommy Hilfiger) joined the growing list, as did Facebook, who expects to achieve the goal by 2020. Rocky Mountain Institute estimates that nearly 3,900 MW of new renewable energy will be spurred by the direct corporate purchases announced so far this year.

Cast your vote to bring clean power to the people

Of course, voters have the potential to be a far more powerful driver of clean energy than any utility or corporation. And come November, voters in three states will be able to cast ballots directly in favor of greater clean energy investments. In Arizona and Nevada, there are ballot initiatives (Proposition 127 and Question 6, respectively) to increase each state’s RPS to 50% by 2030. In Washington state, voters will have their say on Initiative 1631, which would curb carbon emissions by placing a fee on the state’s largest polluters and then reinvesting the revenues in clean energy and climate resilience programs.

Voters in Arizona, Nevada, and Washington are not the only ones that can take control of their clean energy future this election. Across the country, candidates running for local, state and congressional offices are taking a stand for clean energy and climate change solutions. Climate policy has become a hot topic in many of the 36 states with gubernatorial races, for example, with some candidates pledging to support strong renewable energy requirements and others committing to help meet US obligations under the Paris Climate Agreement.

Now is the time to educate yourself on candidate positions and cast your vote to keep clean energy momentum going strong into 2019 and beyond.  To find more opportunities to get involved this upcoming election, check out sciencerising.org.

Capitalizing on untapped potential

Wyoming has some of the best wind resources in the country. The state ranks fifth nationally in total technical potential, but no other state has stronger Class 6 and 7 wind resources (considered the best of the best). And yet, wind development has remained largely stagnant in Wyoming since 2010.

In the last seven years, just one 80-megawatt wind project came online in Wyoming as the wind industry boomed elsewhere—more than doubling the installed US wind capacity to 84,000 megawatts.

Fortunately, it appears that Wyoming is ready to once again join the wind power bonanza, bringing a much-needed economic boost along with it. On June 29th, Rocky Mountain Power—Wyoming largest power provider—filed a request with regulators for approval to make major new investments in wind power and transmission. The plan includes upgrading the company’s existing wind turbines and adding up to 1,100 MWs of new wind projects by 2020, nearly doubling the state’s current wind capacity.

In addition to the $3.5 billion in new investments, Rocky Mountain Power estimates that the plan will support up to 1,600 construction jobs and generate as much as $15 million annually in wind and property tax revenues (on top of the $120 million in construction-related tax revenue) to help support vital public services. What’s more—thanks to the economic competitiveness of wind power—these investments will save consumers money, according to the utility.

Rocky Mountain Power isn’t the only company making a big investment in Wyoming’s rich wind resources. After more than a decade in development, the Power Company of Wyoming (PCW) has begun initial construction on the first of the two-phase Chokecherry and Sierra Madre wind project, which will ultimately add 3,000 MW of wind capacity in Carbon County. The $5 billion project expects to support 114 permanent jobs when completed, and hundreds more during the 3-year construction period. PCW also projects that over the first 20 years of operation, the massive project will spur about $780 million in total tax revenues for local and state coffers.

Diversifying Wyoming’s economy with wind

When completed, these two new wind investments will catapult Wyoming to the upper tier of leaders in wind development in the west and nationally. And combined with Wyoming’s existing wind capacity, the total annual output from all wind projects could supply nearly all of Wyoming’s electricity needs, if all the generation was consumed in state. That’s not likely to happen though, as much of the generation from the Chokecherry and Sierra Madre project is expected to be exported to other western states with much greater energy demands.

Still, the wind industry is now riding a major new wave of clean energy momentum in a state better known for its coal production.

Coal mining is a major contributor to Wyoming’s economy, as more than 40 percent of all coal produced in the US comes from the state’s Powder River Basin. But coal production has fallen in recent years as more and more coal plants retire and the nation transitions to cleaner, more affordable sources of power. In 2016, Wyoming coal production dropped by 20 percent compared with the previous year, hitting a nearly 20-year low. That resulted in hundreds of layoffs and confounded the state’s efforts to climb out of a long-term economic slump.  And while production has rebounded some this year, many analysts project the slide to continue over the long-term.

Of course, Wyoming’s recent wind power investments and their substantial benefits alone can’t replace all its losses from the coal industry’s decline. But a growing wind industry can offset some of the damage and play an important role in diversifying Wyoming’s fossil-fuel dependent economy. In fact, Goldwind Americas, the US affiliate of a large Chinese wind turbine manufacturer, recently launched a free training program to unemployed coal miners in Wyoming who want to become wind turbine technicians.

A growing wind industry can also provide a whole new export market for the state as more and more utilities, corporations, institutions and individual consumers throughout the west want access to a clean, affordable, reliable and carbon-free power supply.

Sustaining the momentum

As the wind industry tries to build on its gains in Wyoming, what’s not clear today is whether the state legislature will help foster more growth or stand in the way. In the past year, clean energy opponents in the Wyoming legislature have made several attempts to stymie development, including by significantly increasing an existing modest tax on wind production (Wyoming is the only state in the country that taxes wind production) and penalizing utilities that supply wind and solar to Wyoming consumers. Ultimately, wiser minds prevailed and these efforts were soundly defeated.

That’s good news for all residents of Wyoming. Wind power has the potential to boost the economy and provide consumers with clean and affordable power. Now that the wind industry has returned to Wyoming, the state should do everything it can to keep it there.

It’s the market, stupid

Non-hydro renewable energy sources accounted for nearly 9 percent of our nation’s power supply in 2016, more than double 2010 levels. Since 2010, more than 86,500 megawatts (MW) of new wind and solar power capacity has come online, far more than their fossil fuel competitors. In fact, 2016 marked the first year that more solar power capacity was installed—14,762 MW—than any other power source.

Much of this rapid development has been aided by state policies and federal incentives, but simple market economics is playing an increasingly important role. Costs for wind and solar have dropped so dramatically in recent years that a recent comparison of power sources shows new wind and solar to be cheaper than new fossil fuel generation. As a result, more and more utility planners are opting to add renewables—and close aging coal generators—based largely on economics.

Consider Xcel Energy’s recent announcement to build 11 wind projects in seven states, totaling 3,380 MW of new capacity. In a statement Xcel executive David Hudson said, “The decision to add additional wind generation is purely in the economic interest of our customers.”

New Mexico’s largest utility, PNM, also recently released an analysis showing that closing their San Juan coal plant would result in “long-term benefits for consumers” and provide “an opportunity to increase renewable energy production.”

And in Ohio, Dayton Power & Light announced in March it will close two coal plants because they “will not be economically viable beyond mid-2018.” The utility also plans to invest in at least 300 MW in new wind and solar projects over the next five years.

‘Yuge’ competition among states

In addition to today’s market forces, policy drivers have been—and will continue to be—critical to ensure the swift transition to a renewable energy economy. And with the Trump Administration laying waste to federal solutions, the onus on states to step up and deliver has never been greater. Fortunately, many states are rising to the challenge through increasingly stronger renewable electricity standards (RES).

Indeed, there is stiff competition brewing among states to be a national leader in terms of commitment to renewable energy development. Just a few years ago, having a target of 25 to 30 percent of its electricity coming from renewable sources would put a state among the pack of leaders. Today, six of the 29 states with existing RES policies have requirements of at least 50 percent, including Hawaii, which has set its sights on achieving 100 percent renewables by 2045.

During this legislative season, at least eight states have actively pursued significantly stronger targets. Among them are three states—California, New York, and Massachusetts—that are seeking to match Hawaii’s 100 percent target. Even in a more conservative state like Nevada, legislators are considering an increase in their RES from 20 percent to 50 percent by 2030.

If successful, these collective state actions will help ensure there is a robust market for renewables over the long term.

This Bud’s for you!

It’s not just states and prudent utilities that are driving the renewable energy revolution. Corporate demand for renewables is also a rapidly expanding market opportunity in the clean energy industry. In 2015, corporate power purchase agreements for wind outpaced new wind investments by utilities for the first time in the United States, according to the Rocky Mountain Institute (RMI). RMI also estimates that at least 60,000 MW of new wind and solar will be needed by 2025 to serve the US corporate market.

Competitive pricing and increasingly stringent sustainability goals are leading many of the largest U.S. (and global) corporations to invest directly in renewable energy. A recent Advanced Energy Economy survey found that nearly half of all Fortune 500 companies (and 70 percent of Fortune 100 companies) have set renewable energy or sustainability targets. Of this list, at least 23 corporations have set renewable energy goals of 100 percent, including giants like Amazon and Walmart.

Anheuser-Busch InBev, makers of Budweiser beer, has joined the growing list of companies committing to sourcing 100 percent of their power needs from renewable energy. Photo: Jack Snell CC BY-NC-SA 2.0

The latest multi-national company to make a 100 percent renewable energy commitment is Anheuser-Busch InBev, makers of Budweiser and Corona beers, among others. In rolling out its announcement, the company said, “We do not expect our cost base to increase. Renewable electricity is competitive with or cheaper than traditional forms of electricity in many markets.” We can all raise our glasses to that!

(Renewable) Power to the People

Citizens all across the country also have the power to stand up against the President’s climate rollbacks and demonstrate their support for renewable energy. Thanks to a combination of falling costs and state and federal incentives, solar PV installations in the residential sector have experienced steady growth over the last six years. At the end of 2016, there were 1.3 million solar households in the United States, more than twice the number from 2014! California leads all states with a 35 percent share of the solar PV market, but all states have solar homes and tremendous potential to grow.

What’s more, you don’t need to be a homeowner to get in on the renewable energy revolution. Community solar is an exciting and burgeoning option for consumers where investing in a rooftop system may not be a viable option. In addition, anyone can sign-up for certified green power either through their utility’s green power pricing program (if they have one) or through a national green power marketer.

Despite President Trump’s misguided actions to undermine climate progress, we must keep pressing forward toward a clean and low-carbon energy future. Thanks to the emergence of wind and solar as affordable and reliable sources of power, we can.

A renewable energy economy is achievable and affordable for New Mexico

The New Mexico Wind Energy Center, located in the southeast part of the state, generates clean, renewable power for energy consumers. Photo Source: Oak Ridge National Laboratory

Introduced as SB312, the legislation builds on New Mexico’s current RES (also referred to as a renewables portfolio standard or RPS) and would require investor-owned utilities like PNM, Southwestern Public Service, and El Paso Electric to increase their supply of electricity from renewable energy sources to 80 percent by 2040.

Rural co-ops would have to achieve a slightly lower target (70 percent renewables by 2040).

While this newly proposed commitment is substantial, transitioning New Mexico’s economy to one powered primarily by renewable energy is certainly achievable. That’s because New Mexico is home to some of the best and most diverse renewable energy potential in the country, including vast untapped wind, solar, and geothermal resources.

A 2016 National Renewable Energy Laboratory analysis found that New Mexico’s economic renewable energy resource potential, which accounts for the renewables’ cost as compared with the typical regional cost of electricity, is more than 2.6 times total state electricity sales in 2015 (see figure). That means there is more than enough cost-competitive renewable energy resources available today to comply with the proposed targets that utilities have more than two decades to achieve.

Of course, New Mexico’s technical renewable energy resource potential far exceeds these economic potential estimates. As technology costs continue to decline, more and more of the untapped technical resource potential will also become cost-effective over time.

New Mexico’s Renewable Energy Economic Potential vs. Electricity Sales.
New Mexico has more than enough cost-effective renewable energy potential to achieve an 80 percent RES. The National Renewable Energy Laboratory estimates the state’s economic potential at more than 260 percent of total electricity sales in 2015.
Sources: Economic Potential from Primary Case 3a in NREL’s Estimating Renewable Energy Economic Potential in the United States, Electricity Sales from U.S. Energy Information Administration’s New Mexico State Electricity Profile 2015.

Wind and solar costs, in particular, are falling rapidly. The most recent comparison of costs by the energy consulting firm, Lazard, shows new wind and solar to be cheaper than new fossil fuel generation, even without subsidies.

This trend is reflected in recent power purchase contracts for wind and solar projects in the region. For example, Southwestern Public Service signed a contract for a 140 megawatt (MW) solar project near Roswell for about 4 cents per kilowatt-hour (c/kWh). Similarly, reported costs for recent wind projects in the Southwest have been as low as 2.3 to 3.8 c/kWh.

For context, Lazard estimates the cost of power from a typical new natural gas combined cycle plant ranges from 4.8 to 7.8 c/kWh.

The proposed 80 percent by 2040 RES expansion ramps up gradually over time, with interim targets for public utilities of 35 percent in 2025, 50 percent in 2030, and 65 percent in 2035. That level of increasing targets affords utilities plenty of time to plan for new renewable energy development as older fossil fuel generators retire. What’s more, the legislation builds in consumer protections should compliance costs prove to be higher than anticipated.

New Mexico’s renewable energy transition is already delivering benefits

New Mexico’s current RES is already successfully driving new renewable energy deployment and delivering economic and environmental benefits throughout the state. Today, more than 1,500 MW of wind and solar power capacity is cranking out clean power for New Mexico’s energy consumers. The wind power development alone represent more than $1.8 billion in investments and provide up to $5 million annually in land lease payments for local residents.

Another 1,500 MW of wind and nearly 1,400 MW of solar are either under construction or in various stages of development in the state. When completed, these projects combined with those already operational will exceed the state’s current renewable energy targets. Further diversifying New Mexico’s power supply with additional renewable energy can provide much needed investment and tax dollars to local economies and the state government’s struggling budget coffers.

Combined, the wind and solar industries are supporting 4,000 to 5,000 good paying jobs in the state, and that number continues to grow. Earlier this month, Albuquerque-based solar manufacturer SolAero Technologies announced plans for a $10 million expansion that will add more than 100 jobs. New Mexico’s excellent and affordable solar energy resource is also an important reason that Facebook decided to build a new data center in the state. An investment of $45 million will fund three new solar facilities that will fully power the new facility and create hundreds of new jobs.

Photo Source: U.S. Department of Interior

In addition to jobs and local economic benefits, New Mexico’s existing renewable energy development is helping to curb power sector carbon emissions—the principal contributor to global warming— and other air pollutants like sulfur dioxide and particulates that harm state residents. These toxic pollutants are responsible for numerous health problems including aggravated asthma attacks, breathing problems, heart attacks, and premature deaths, especially in vulnerable and disadvantaged communities closest to the sources.

In strong contrast to fossil fuel generation, wind and solar power generation also use virtually no water, an incredibly valuable benefit in a water-constrained state like New Mexico. The American Wind Energy Association estimates that in 2015, the state’s wind projects avoided the consumption of 264 million gallons of water.

All of these economic and environmental benefits are poised to grow substantially if SB 312 is adopted and New Mexico accelerates its shift away from a heavy dependence on coal for power generation.

Joining the 50 percent (plus) club

New Mexico is not alone in its pursuit of a cleaner, safer, and more affordable energy system. Several states—including California, Oregon, New York, Vermont, Massachusetts, and Hawaii—have already expanded their RES targets to at least 50 percent (100 percent, in Hawaii’s case), and are implementing effective solutions to reliably integrate significant amounts of renewable energy on their power systems. Nevada is considering similar RES expansion legislation this year as well.

With a new federal administration seemingly determined to stay stuck in the fossil fuel age, this kind of state leadership is needed now more than ever. New Mexico should adopt SB 312 and set a course to fully embrace its renewable energy future. Doing so will deliver significant rewards for the state’s residents and set an example for other states to follow.

Thazin, UCS 2016 Schneider Fellow

Every year, generating power from the sun is becoming more and more affordable across the country. Even so, rooftop solar is still not accessible to many Americans. Perhaps your home is not suitable for solar because of size, orientation, shading, or material. Or perhaps you rent your house or apartment.

Accounting for just those roof-related barriers, an NREL study estimates that 49% of households in America are unable to install solar on their homes. And even if the roof is solar friendly, financing a solar photovoltaic (PV) system may be difficult because of credit scores or cumbersome regulations, making rooftop solar even more inaccessible to households and small businesses.

While rooftop solar may not be an option for you, going solar is not a lost cause. You might still be able to enjoy many of the benefits from investing in solar by participating in community solar projects.

What is community solar?

Similar to the concept of a community garden, community solar, also known as solar gardens or shared solar, refer to local solar projects or programs in which multiple subscribers can access and benefit from the electricity produced. Instead of fresh produce, community solar subscribers typically get utility bill credits for the power produced by their share of the community solar project, without having installed solar PV on their own roofs.

As a subscriber, you don’t have to worry about maintenance, and you often have the option to transfer your benefits if you move in the same utility territory service area. Buying a piece of a larger system (and one well-oriented for solar production) can also bring you economies of scale, which could translate to more savings.

Because of these reasons, community solar can also be attractive to home and business owners with adequate rooftop solar potential.

Community Solar Project at the Rainshadow Community Charter High School in Reno, Nevada (Black Rock Solar/Flickr)

Commonly, community solar projects can be hosted by your own utility or a third party organization. Third party organizations can be national organizations such as Clean Energy Collective LLC, operating community solar programs across the country. They can be community-driven projects in which projects are initiated by the leadership of local community members as well.

Because community solar projects are usually located locally, your choices will be limited to the programs that are available in your utility territory.

How do community solar finances work?

Like rooftop solar, utility and third party community solar providers may offer leasing and ownership options for your share of the community solar project.  They may also offer a subscription-based option. As shown in Figure 1, providers can present a variety of financing packages for each option. For instance, when buying a portion of the panels in a solar farm, you may be able to make single up-front payment or multiple monthly payments.  For subscription-based models, you may be able to lock in a fixed rate over the life time of the project or an escalating rate for solar that starts lower and increases over time.

Figure 1: Community Solar Enrollment Options (Based on Energy Sage)

When evaluating programs offerings, one key consideration is how quickly you’d like to see a return on investment (e.g., payback period) from subscribing to the project. Here are a few things to keep in mind when estimating your potential savings:

• Input assumptions: Depending on your local utility, project, and even state, several factors can impact your bill savings, including: increases in utility rates; the rate at which the PV system degrades over time; applicable utility, state, or federal solar incentives; and more broadly, inflation rates.
• Program length and exit option: Most programs will allow you to subscribe to the community solar program for the system lifetime, which is normally around 20 to 25 years. Depending on the program, you can typically transfer your program if you move within the same utility area.
• Fees: Some programs may also charge an early termination fee for breaking a contract early. For subscription-based models, there may be a membership fee and or a recurring administrative fee for enrolling in the program.

You can use freely available calculators to evaluate your potential savings.

The future is bright for community solar

Community solar projects have become increasingly popular since the first project in the US came online in 2006. Currently, community shared solar capacity amounts to more than 172 MW of power, enough to power 28,000 average American homes. Projects exist in 25 states, and 15 of those states (including Maryland in 2016, and Washington D.C.) have policies in place that support community solar. In 2015 alone, seven states advanced policies on community solar, and many others are evaluating policies to enable more community solar projects. Because of the increasingly supportive regulatory environment and growing interest in community solar, community solar could contribute to 32% to 49% of solar installations by 2020 (Figure 2).

Figure 2: Estimated Market Potential for Shared Solar (NREL, 2016)

In our transition to a clean energy economy, renewable energy on both sides of the electric meter will play an important role in decarbonizing the electricity sector. To that end, community solar is such a promising option for so many people without access to rooftop solar. With the economies of scale that community solar can bring, subscribers can benefit financially from savings, while making a renewable energy future happen, one kilowatt at a time.

A powerful 1-2 policy combination punch

Last December, in a rare but welcome demonstration of bipartisanship, Congress passed a 5-year extension of the production tax credits (PTC) and investment tax credits (ITC) for renewable energy.

These important tax incentives have been a major driver of new wind and solar development over the past decade. With the PTC expiring at the beginning of 2015 and the ITC set to expire this year, a significant slowdown loomed for near-term growth. Now, these industries have the market certainty they need to forge ahead through at least the year 2021. That’s when the EPA’s Clean Power Plan moves in and continues the clean energy momentum.

The recent 5-year extension of federal tax credits for solar and wind energy will help accelerate the nation’s transition to a clean energy economy. Photo credit: Grid Alternatives

Finalized last summer, the Clean Power Plan sets state-by-state targets that will lead the US power sector to curb carbon emissions by an estimated 32 percent below 2005 levels by 2030, with the first compliance date starting in 2022. States have the option of using both renewable energy and energy efficiency as key components in their compliance strategies. And with the tax credit extension in place, states now have an even greater incentive to capitalize on near-term renewable energy development to help them achieve their Clean Power Plan targets.

In our new analysis, we use an energy planning model developed by the National Renewable Energy Laboratory (see the technical appendix for details on our methodology and assumptions) to examine the impacts of this powerful policy combination on the US power sector. In particular, we compare our Clean Energy Transition case (which includes tax credits extension and assumes full compliance with the Clean Power Plan) with a Reference Case scenario (which assumes no new state or federal policies). The resulting benefits to consumers, the economy, and the environment are truly impressive.

Renewable energy development soars

Under our Clean Energy Transition Case, the federal tax credits help spur 113 gigawatts (GW) of new renewable capacity by 2020. Led primarily by wind and solar, that growth represents 71 GW (or 170 percent) more than the renewable energy capacity developed under the Reference Case. The Clean Power Plan continues to drive progress through 2030 when new renewable energy capacity reaches 202 GW (for a total of 297 GW). That projected level of development, which is consistent with findings from two recent similar analyses—would stimulate more than $227 billion in new capital investments by 2030.

Rapid, sustained growth in renewable energy and energy efficiency helps to diversify the US power supply, and reduces dependence on fossil fuels. Under the Clean Energy Transition Case, non-hydro renewable energy sources account for more than 21 percent of total US power generation by 2030 (Figure 1), triple their share today. Electricity sales are also nearly 7 percent lower than the Reference Case by this time, as a result of $64 billion in energy efficiency investments.

Figure 1. The Clean Energy Transition Case diversifies our nation’s electricity mix

As renewables and efficiency expand over the forecast period, electricity generation from fossil fuels declines. For example, under the Clean Energy Transition Case, coal generation is 19 percent lower than the Reference Case by 2030. Natural gas generation is also 4 percent lower in 2030 compared with the Reference Case, and 10 percent lower compared with 2014 levels. Keeping natural gas power generation in check is critical for limiting the serious consumer, health, and climate risks associated with its over-reliance as we transition away from coal.

Carbon emissions drop

As dependence on coal and natural gas declines, power sector carbon emissions—which are the biggest single contributor to US global warming emissions—fall along with it. Combined, the tax credit extension and the Clean Power Plan help drive down annual carbon dioxide (CO₂) emissions from the power sector to 33 percent below 2005 levels by 2030 (See Figure 2).

Figure 2. Clean energy transition policies reduce power sector carbon dioxide emissions

It is also worth noting that the near-term renewable energy development driven by the tax credits helps to deliver emission reductions earlier, so that the cumulative reductions from 2016 to 2030 are much greater what would occur than the Clean Power Plan alone. The tax credits help curb CO₂ emissions by an additional 31 percent cumulatively (equivalent to 854 million tons) through 2030 (see figure).

In addition to cutting CO₂ from power plants, the Clean Energy Transition Case would also cut NOx emissions by 24 percent and SO₂ emissions by 22 percent in 2030. Our analysis estimates the monetized health and economic benefits from reducing CO₂, NOx, and SO₂ emissions at $127 billion through 2030.

Consumer benefits from a clean energy transition

Accelerating the transition to a cleaner energy economy is both affordable and can provide important health and economic benefits to consumers. In fact, our analysis shows that the Clean Energy Transition Case delivers net savings to the power sector every year from 2016 to 2030. Cumulative net savings to power sector consumers during this period reach $30.5 billion. Net savings reflect electricity system expenditures—including the costs of implementing the Clean Power Plan as well as the renewable energy and efficiency investments—plus revenues generated from the trading of carbon allowances (see below).

Net power sector savings also translate into lower electricity bills for the typical household. Diversifying the power supply with more renewable energy helps stabilize electricity prices and greater investments in efficiency helps household power use. As a result, residential consumers would see modest electricity bill savings every year from 2016 to 2030. By 2030, annual household electricity bill savings under the Clean Energy Transition Case are $17 (or 1.9 percent below the reference case).

The auctioning of carbon allowances for Clean Power Plan compliance would also generate significant revenues that can be used for public benefit in all states. By setting a carbon cap and issuing allowances equal to state Clean Power Plan targets, auctioning those allowances, and participating in a nationwide interstate carbon trading program, states can generate a combined average annual revenue of $6.8 billion from 2022 to 2030 under the Clean Energy Transition Case. These revenues could then be reinvested for public benefit, including for assistance to communities of color and low-income communities that are disproportionately burdened by pollution from coal-fired power plants, worker training and other economic-transition support for coal-dependent communities, and additional deployment of renewables and efficiency.

Boosting a power sector already in transition

Progress toward to a clean energy economy is already well underway in the United States thanks in large part to the eroding economics of coal, falling costs of wind and solar, and state-level policies like renewable electricity standards, energy efficiency resource standards, and carbon caps. Combined, the federal tax credit extension and Clean Power Plan can provide a critical boost for keeping clean energy momentum going and helping to achieve our global warming emissions reduction commitments under the recent Paris Climate Agreement. To make this clean energy future a reality, however, states must take advantage of the tax credit extension to accelerate renewable energy development today, and continue to pursue plans to comply with the Clean Power Plan.

The recent Supreme Court decision to stay the Clean Power Plan does not change the very significant economic and public health benefits from making the shift to renewables and efficiency, nor does it change the urgent need to cut carbon emissions to limit climate change.

As my colleague Rachel Cleetus writes, in order to fulfill the promise of the Paris Climate Agreement and limit the most dangerous effects of climate change, we can and must reduce carbon emissions much further than what the Clean Power Plan and tax credit extensions will deliver. But that journey must start by fully capitalizing on these powerful policy tools today.

Peabody Energy, the world’s largest private-sector coal company, filed for Chapter 11 bankruptcy today. Here are four things you should know about the company’s remarkable collapse and the broader implications for transitioning to a clean energy economy.

1) Peabody Energy’s downfall is symptomatic of much more expansive coal industry woes.

Just five years ago, Peabody Energy led the U.S. coal industry with a market capitalization value of nearly $19.7 billion. Since then, Peabody’s market value has fallen by a whopping 99 percent and today stands at approximately $38 million as the company scrambled to sell off assets in recent weeks in an attempt to avoid bankruptcy. Having failed to do so, Peabody Energy now joins a long list of bankrupt coal companies—including 3 of the top 4 U.S. coal producers.

Indeed, Peabody Energy’s situation is not unique as the entire coal industry is showing signs of serious stress. Total US coal production in 2015 was 10 percent below 2014 levels and 24 percent below the record high in 2008. In fact, you would have to go all the way back to 1986 to find a year in which less coal was produced than in 2015.

The sharp decline in coal production is directly correlated to less demand from the industry’s largest customer—the electric power sector. Coal-fired power plants supplied half of total US electricity needs as recently as 2008, but in 2015 coal’s share was just 34 percent—an historic low that barely outpaced natural gas as the nation’s top power source.

Signs of a recovery for coal producers are nowhere to be seen. The U.S. Energy Information Administration projects another 16 percent decrease in US coal production this year. And other experts are even suggesting that the drop in coal demand is “irreversible,” as structural changes in the power sector are permanently altering the coal industry’s market.

2) Poor business decisions and a ‘perfect storm’ of market and policy factors are driving the coal industry’s precipitous decline.

Peabody Coal executives and many other coal supporters are constantly trying to pin blame for the industry’s problems on President Obama and the EPA’s Clean Power Plan. But that’s a smokescreen that doesn’t stand up to scrutiny. The truth is, of course, significantly more complex than that.

Much of the responsibility falls squarely on Peabody Energy and the many other coal producers that made serious miscalculations in the global demand for metallurgical (met) coal, which is used to produce steel. Anticipating significant growth in the global demand for met coal, especially from China, Peabody Energy and its competitors took on huge loans in 2011 to acquire new coal reserves. But those investments didn’t pay off as China’s economy—and demand for steel—declined and the market price for met coal, historically more valuable than the thermal coal used in power production, plummeted. These events have saddled Peabody Energy with big debts and little means to generate the revenue needed to pay them down.

A combination of other market and policy factors are also creating stiff headwinds and exacerbating the coal industry’s poor economic decisions. Such factors include:

• Mounting coal-fired power plant retirements. The US coal fleet is aging, inefficient, and increasingly uneconomic. As a result, many coal generators are facing retirement. At least 370 coal generators in 39 states—representing more than 65,000 MW of coal power capacity—have either retired since 2012 or are scheduled to close through 2030.
• Persistently low natural gas prices. Natural gas prices are at historic lows, due largely to advances in hydraulic fracturing and horizontal drilling techniques that have increased accessibility to natural gas reserves and driven up production. Low prices have caused power producers to turn to natural gas to generate electricity at an unprecedented rate.
• Rapid growth in renewable energy. Significant cost declines, advances in technologies, and state policies are accelerating the growth of wind and solar resources nationwide. This trend is set to accelerate with the 5-year extension of the production tax credit (PTC) for wind and the investment tax credit (ITC) for solar, adopted by Congress at the end of last year.
• Slow growth in power demand. Increasing investments in energy efficiency is helping to curb the demand for new power generation. For example, state efficiency programs provided annual electricity savings equal to 0.7 percent of total electricity sales in 2014, up 6 percent over 2013 levels.
• Tighter clean air, clean water, and public health standards for the US power sector. After decades of delays, the EPA is working to implement and enforce environmental and public health standards for power plants, including implementation of the Mercury and Air Toxics Standard and the forthcoming Clean Power Plan to limit carbon emissions.
• A global commitment to curb global warming emissions. Last December, 195 nations came together in Paris and made an historic commitment to limit the increase in global temperatures to well below 2°C above pre-industrial levels. The Paris Agreement provides a clear signal to governments, businesses, and investors worldwide to move swiftly toward economies based on low-carbon energy sources.

3) Bankruptcy must not absolve Peabody Energy of its social and environmental responsibilities.

Filing for bankruptcy does not mean Peabody Energy is going out of business. More likely, the company would use Chapter 11 protection to unload bad investments and restructure its debts so they can be better managed over the long-term.

As part of that process, Peabody Energy must be compelled to uphold its responsibilities to those most directly impacted by the company’s actions, namely its employees and the surrounding communities where it operates. That includes the promises Peabody Energy made to its retirees. Only a few months ago, the company reached an agreement with the United Mine Workers of America to support retirees from its twice-bankrupt spinoff company, Patriot Coal.

Peabody Energy’s responsibilities to the communities around its mines further extends to ensuring funds are available to fully clean up those mines once they are closed. And as my colleague Kathy Mulvey writes, emerging from bankruptcy Peabody Energy should make several changes to take greater responsibility for its role in climate change and climate science denial.

4) Which energy sources replace coal matters greatly for consumers, public health, and the climate.

Photo Source: National Renewable Energy Laboratory

The decline in Peabody Energy’s market share and the coal industry in general creates new growth opportunities for other energy sources. Many utilities are now choosing to replace coal with natural gas for meeting electricity demand. From 2007 to 2015, as coal’s share of the power supply declined, the contribution from natural gas increased from 22 percent to 33 percent. While this shift offers near-term benefits, strong evidence suggests that an over-reliance on natural gas poses significant risks, including price volatility, rising global warming emissions, and contamination of drinking water supplies from natural gas production.

Fortunately, prioritizing the deployment of renewable energy and energy efficiency as a replacement for coal in our power supply avoids many of the dangers of an over-reliance on natural gas. Investments in these technologies are already accelerating nationwide, demonstrating that they can deliver affordable and reliable power.

With stronger state and federal policies in place, including renewable electricity standards, energy efficiency resource standards, carbon pricing programs, tax and other financial incentives, and a national power plant carbon standard, renewables and efficiency can thrive as we transition to a truly clean energy economy.

The Clean Power Plan (CPP) presents a historic opportunity to reduce global warming pollution from U.S. power plants. The plan sets state-specific targets for cutting power plant carbon pollution, leading to a nationwide reduction of approximately 32 percent below 2005 levels by 2030, according to the EPA.

The Union of Concerned Scientists examined the likely economic and environmental impacts of achieving the emission reductions required by the CPP. In particular, we modeled each state’s compliance with its respective mass-based targets, including old and new power plants (to limit the potential for emissions “leakage”), and we allowed for nationwide trading of carbon allowances (see the methodology for more details). We found that this course toward a clean energy future, which we call our “CPP National Trading Case,” would not only help diversify our nation’s electricity mix and cut global warming emissions but also deliver significant economic and public health benefits across the country.

Eight key takeaways from the new analysis

1. The CPP helps speed up the shift toward a cleaner, more diversified mix of low-carbon power sources. Under the CPP National Trading Case, renewable energy accounts for 21 percent of the power supply in 2030, while savings from energy efficiency investments are equivalent to 7 percent of total electricity sales in that year (see figure 1). Compared with a Reference Case (e.g. no Clean Power Plan) projection, generation from coal and natural gas plants is 22 percent and 2 percent lower, respectively, in 2030. To provide for the increased renewable energy generation under the CPP, the United States adds more than 200 gigawatts of wind, solar, and geothermal capacity above current levels by 2030. This deployment represents nearly $189 billion in cumulative renewable energy investments in the United States. In addition, more than $64 billion in energy efficiency improvements are made in homes, businesses, and industries by 2030.
   

   Figure 1. The Clean Power Plan helps accelerate our nation’s transition toward a more diversified portfolio of cleaner energy sources.

2. The clean energy growth spurred by the CPP makes economic sense for consumers. While average electricity bills for a typical household that are modestly (3.2 percent or $2.50 per month) higher than the Reference Case in 2022, they would see small net savings of 1.1 percent, or $0.81 per month by 2030. Diversifying the power supply with more renewable energy and efficiency also limits the consumer impacts from increases in fossil fuel prices.
3. Auctioning of carbon allowances would generate significant revenues that can be used for public benefit in all states. By setting a carbon cap and issuing allowances equal to state CPP targets, auctioning those allowances, and participating in an interstate carbon trading program, states can generate a combined average annual revenue of $17.8 billion from 2022 to 2030 under the CPP National Trading Case (see map).
   

   Figure 2. State-by-State Average Annual Carbon Revenues from Auctioning Allowances under the CPP National Trading Case, 2022–2030

   These revenues could then be used to offset higher near-term consumer electricity bills or be reinvested for public benefit. Investment options could include: assistance to communities of color and low-income communities that are disproportionately burdened by pollution from coal power plants; worker training and other economic-transition support; additional deployment of renewables and efficiency sources; power-grid infrastructure improvements; or making buildings and infrastructure more climate-resilient.

4. The CPP provides health and economic benefits—worth some $103 billion cumulatively through 2030. In addition to cutting CO₂ from power plants by 38 percent below 2005 levels by 2030, the CPP National Trading Case would also cut NOx emissions by nearly 26 percent and SO₂ emissions by 24 percent in 2030. Using the same methodology applied by the EPA in its CPP impact assessment, the monetary savings from reducing these pollutants under the CPP National Trading Case is estimated at $14.8 billion on average each year from 2015 to 2030.
5. Newly extended federal tax credits for wind and solar can work together with the CPP to generate even greater near-term consumer, economic, and health benefits. It’s important to note that the benefits presented from this analysis due not include the effects of the five-year federal production and investment tax credits extension for wind and solar passed in December (which were not considered in this analysis due to timing constraints). However, other recent analyses have shown that the tax credits extension could spur record-setting growth in renewable energy and provide a bridge for states to meet their CPP emission reduction targets.
6. Interstate trading of carbon allowances lowers costs and increases retirements of inefficient coal plants. Our analysis shows that interstate trading would lower cumulative compliance costs under the CPP by $9.8 billion through 2030, compared to a scenario with no interstate allowance trading. Additionally, the CPP National Trading Case results in increased retirements of inefficient polluting coal plants and greater use of cleaner energy sources and, in some cases, the nation’s more efficient coal plants. Between 2015 and 2030, an addition 5 GW of coal plant capacity are retired under the CPP National Trading Case compared with a no interstate trading case.
7. Additional measures are needed to ensure an equitable and just transition to the clean energy economy. Communities of color and low-income communities bear a disproportionate burden of pollution from coal-fired power plants. To ensure that all Americans benefit from the transition away from coal, state compliance plans should include specific provisions for meaningfully engaging with residents in these communities and conducting an environmental justice analysis to evaluate localized impacts of the plans. States should also address transition assistance for coal-dependent communities and adopt measures to minimize the potential for concentrating fossil fuel generation in overburdened communities and creating co-pollutant “hot spots.”
8. States should continue to pursue plans to comply with the CPP and invest in renewable energy and energy efficiency despite the recent Supreme Court’s stay. The recent Supreme Court stay on the CPP does not change the underlying economic and public health benefits from a shift to renewables and efficiency, nor does it change the urgent need to cut carbon emissions to limit climate change. The clean energy transition has strong momentum and it is good for all Americans to continue building on that.

A new UCS analysis released today shows that moving forward in this way would accelerate the state’s clean energy transition while delivering important economic, consumer, and public health benefits.

Strengthening New Mexico’s clean energy commitments

New Mexico has the potential to be a national leader in the rapidly growing clean energy economy. Wind and solar power development is increasing, largely thanks to great resource potential, declining costs, and a successful state-level requirement that utilities supply 20 percent of their power from renewable sources by 2020 (referred to as a renewable electricity standard or RES).

Increased renewable energy development will help New Mexico meet its Clean Power Plan targets while also generating economic benefits. Photo: Macho Springs Solar LLC

Investments in energy efficiency—spurred by an energy efficiency resource standard (EERS) that requires electricity providers to implement programs that reduce electricity demand 10 percent below 2005 levels by 2020—are also helping to save consumers money and reduce electricity demand.

Yet much of New Mexico’s clean energy resources remain untapped, and nearly two-thirds of the state’s power still comes from aging and polluting coal power plants.

Strengthening its commitment to renewables and efficiency as part of a broader Clean Power Plan compliance strategy can help New Mexico reduce its dependence on coal and bring the state in line with other national leaders in the clean energy transition.

Evaluating a robust pathway for Clean Power Plan compliance

Using the Regional Energy Deployment System model developed by the National Renewable Energy Laboratory, our analysis examines the impacts on consumers, the economy, and the environment of an accelerated clean energy transition in New Mexico.

Specifically we evaluate a “Clean Path Case” that couples a robust carbon emissions trading program with strengthened RES and EERS policies (respectively 31 percent renewable energy by 2030, and 1.5 percent per year efficiency savings starting in 2022). This pathway toward a clean energy future will not only help the state reach its carbon emissions reduction target, but also reap significant health and economic benefits for all New Mexicans. Our findings show that the Clean Path Case will:

• Yield 2,400 megawatts of new wind and solar capacity by 2030, stimulating more than $2.7 billion in new capital investments
• Drive $766 million in energy efficiency improvements by 2030, reducing electricity sales by more than 11 percent
• Generate $115 million in average annual revenue from 2022 to 2030 due to the sale of carbon allowances
• Provide $223 million in health and economic benefits through 2030 by decreasing carbon dioxide, sulfur dioxide, and nitrogen oxides pollution

An affordable transition to a lower-carbon economy

The clean energy growth in New Mexico spurred by the Clean Path Case is not only achievable but also can save consumers money (see figure). The average monthly electricity bill for a typical household under the Clean Path Case is 1.7 percent lower than compared with ‘business as usual’ in 2022, amounting to an annual savings of about $13.

The Clean Path Case leads to consumer electricity bills in 2030 that are 4.3 percent lower on average than in the Reference Case. Energy efficiency helps consumers save electricity, and more renewable energy helps diversify the electricity mix and limit potential impacts from increases in natural gas prices.

And although monthly bill savings under the Clean Path Case are less by 2025 (0.4 percent decrease or approximately $3 in savings per year), the case soon returns to stronger consumer savings: 4.3 percent lower electricity bills by 2030, or $33 in annual savings. This is due to several factors—the cost to operate most renewable energy facilities is much lower than that of fossil fuel plants, energy-efficient buildings and appliances cost less to operate, and more renewable energy and efficiency helps diversify the electricity mix and limit fossil fuel price increases.

Securing a clean energy future in New Mexico

It makes sense for New Mexico to join other clean energy leading states in continuing to develop its Clean Power Plan compliance strategy. Indeed, with well-designed policies and careful planning and coordination, New Mexico could greatly enhance its clean energy resources, cost-effectively comply with its emissions reduction requirements, and reap important economic and public health benefits.

Furthermore, with a robust emissions trading program, coupled with rigorous equity and justice protections, New Mexico could generate significant carbon revenues that could be used to support renewable energy and energy efficiency, strengthen disadvantaged communities, and boost economic development throughout the state.

New Mexico is well-positioned to cut its carbon emissions and accelerate the growth of clean energy. Building on, rather than staying, that progress is the most prudent and responsible course of action.

Feature image: J.N. Stuart/Flickr

It’s an ambitious and achievable proposal that raises the bar in defining what it means to be a global clean energy and climate leader.

Phasing out coal power

Late last year, a group of stakeholders including environmental organizations, consumer advocates, and Oregon’s two largest utilities—PGE and Pacific Power—came together and agreed on a comprehensive policy package that will completely transform the state’s power supply over the next two decades. A foundational component of the agreement—known as the Clean Electricity and Coal Transition Plan—is the gradual elimination of all coal-fired electricity sold to Oregon consumers.

Currently, about one-third of the power delivered to homes and businesses in Oregon comes from coal-fired power plants, the vast majority of which are located out-of-state. The only coal-fired power plant within Oregon’s border—PGE’s Boardman Plant—is already scheduled for retirement in 2020. HB 4036 would require Pacific Power to stop importing electricity from their out-of-state coal-fired generating facilities by 2030. PGE would have an additional five years (if needed) to retire or stop receiving power from the coal generating units it currently owns at the Colstrip plant in Montana. Combined, these moves are projected to nearly cut in half the carbon emissions of the state’s two largest electric utilities.

This piece of the legislative proposal is by far the most precedent-setting. Many other state and federal policies have been implemented to reduce pollution from coal plants and shift power supplies toward cleaner alternatives, but none have explicitly required a coal phase out. And while this proposal won’t guarantee more coal plant retirements on its own, it does make their retirement more likely.

The loss of access to Oregon’s power market, along with increasing competition from cleaner alternatives and other state and federal policies to curb carbon pollution, will ratchet up the pressure to close additional coal generators throughout the region. Indeed, Oregon’s successful leadership on this front could spur other states to take similar actions and greatly accelerate the nation’s transition to a low-carbon power system.

Doubling down on renewable energy

One of the great advantages of Oregon’s proposed coal phase out is that creates room in the power supply for cleaner energy sources. The Clean Electricity and Coal Transition Plan helps fill that void by doubling Oregon’s existing renewable portfolio standard (RPS) from 25 percent by 2025 to 50 percent by 2040 (for PGE and Pacific Power only, Oregon’s other power providers remain on the existing target schedule).

A renewable portfolio standard (also often referred to as a renewable electricity standard, or RES) is a market-friendly policy that requires electricity providers to gradually increase the amount of wind, solar, and other renewable energy sources in their power supplies. Currently, 29 states and the District of Columbia have RPS policies in place. Oregon adopted its current RPS in 2007, and utilities in the state are on track to meet the standard at virtually no additional cost to consumers.

If adopted by the legislature, the Clean Electricity and Coal Transition Plan would double the size of Oregon’s existing RPS, and drive significant new wind and solar development. Photo: John Womack (littlejohn)

The RES has proven to be one of the most successful and cost-effective means of driving of new renewable energy development across the country, including in Oregon. A recent U.S. Department of Energy study also found that state-level RES policies are helping to substantially improve public health and the environment, create jobs, and protect consumers. That’s why most states with an RES have revisited and strengthened their targets over time.

A 50 percent RES in Oregon is an achievable target that would place the state among a select group of national renewable energy leaders that have recently adopted similar (or even stronger targets), including California, New York, Hawaii, and Vermont.

Avoiding an overreliance on natural gas

Beyond the coal phase out and stronger RES, there is even more to like in the Clean Electricity and Coal Transition package. For example, it increases access to community-based solar development, including for low-income Oregonians; reduces barriers to greater investments in electric vehicle infrastructure; and codifies into law the existing practice by utilities of developing cost-effective energy efficiency as a first resource.

What’s more, combining a coal phase out with a stronger renewable energy requirement wisely avoids having Oregon fall victim to an overreliance on natural gas. Many states are putting their electricity consumers at financial risk because of a large-scale switch to natural gas. The Clean Electricity and Coal Transition Plan helps Oregon bypass the misguided “natural gas as a bridge fuel” strategy, which will help protect consumers and achieve deeper carbon emission reductions more swiftly.

Raising the bar for clean energy leadership

Oregon has a long history of leading by example on environmental issues. With the Clean Electricity and Coal Transition Plan, the state is once again rising to the challenge with an innovative and achievable policy proposal that, if adopted, will drive down harmful carbon emissions, keep communities healthy, and spur economic growth.

Now that’s setting a new precedent for clean energy and climate leadership that other states should replicate!

The RES is a market-based policy that requires electricity providers to gradually increase the amount of wind, solar, and other renewable energy sources in their power supplies. Currently, 29 states and the District of Columbia have RES policies in place. And for nearly two decades, the RES has been a primary driver of new renewable energy development in the United States. Through 2014, state-level RESs have spurred more than 50 gigawatts (GW) of new renewable energy development, and they are projected to support an additional 67 GW through 2030.

Key findings

This new analysis, conducted by researchers at DOE’s National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory, examines a suite of potential benefits and impacts from the new renewable energy sources developed to achieve state-level RES compliance in 2013. The results are calculated at the national level and they are impressive. In 2013 alone, new renewables driven by state RES policies:

• Generated $7.4 billion in public health and other societal benefits from the reduction of carbon dioxide, sulfur dioxide (SO₂), nitrogen oxide (NOx), and particulate matter. Power plant carbon emissions are the single largest contributor to U.S. global warming pollution, while SO₂, NOx, and particulates are major contributors to acid rain, smog, asthma, and premature death from heart and lung disease.
• Supported nearly 200,000 domestic renewable energy jobs, with an average annual salary of $60,000.
• Saved consumers as much as $1.2 billion from lower wholesale electricity prices and up to $3.7 billion from reduced natural gas prices. Bringing more renewable energy on to the grid reduces the demand for (and helps lower the price of) natural gas and other power sources with higher operating costs.
• Reduced power plant water consumption by 27 billion gallons and water withdrawals by 830 billion gallons. In the U.S., more water is withdrawn by power plants than for any other use. As climate impacts worsen, it puts water supplies and water-dependent power plants at risk.

What’s most impressive about these RES benefits is that only represent a single year. Most benefits, especially those related avoided pollution, will continue to accrue—and even expand as RES targets increase—in future years.

Benefits from new renewable energy developed to achieve state-level RES compliance in 2013.

Benefits far outweigh costs of RES compliance

DOE’s latest report follows an analysis completed by the same team in 2014 that focused on the costs of state-level RES compliance. That work found total RES compliance costs across all states to be about $1 billion per year between 2010 and 2013, which is generally equivalent to less than 2 percent of average statewide retail electricity rates.

This new analysis helps put these compliance costs into context, and clearly shows that the benefits far outweigh compliance costs. The health and societal benefits from avoided pollution alone provides a remarkable return on investment of more than 7 to 1!

Why is this new research so important?

DOE’s analysis comes at a critical time and offers significant value to decision makers in the effort to transition toward a low-carbon economy. Here are three of my key takeaways for how this report can contribute:

1. With the EPA’s Clean Power Plan now finalized, states must develop compliance plans to achieve their carbon emissions reduction targets. RES policies can offer a powerful complementary policy measure for all states to use as part of a cost-effective compliance strategy.
2. Many state RES policies have been under attack in recent years by fossil-fuel funded front groups using disinformation to try and undermine the value of renewable energy. Fortunately, nearly all of those attacks have failed. But this analysis provides further valuable evidence needed to rebut bogus claims and reject further attempts to weaken RES laws.
3. The comprehensive nature of DOE’s analysis and the clear, uniform methods they use can serve as a blueprint for state RES administrators across the country to evaluate the benefits from their respective RES programs.

The message from this new analysis is clear: Accelerating the transition to greater use of renewable energy (and using the RES to do it) is a great way lower emissions, improve public health, create jobs, and save consumers money.

In the near term, the U.S. has committed to economy-wide emissions reductions of 26–28 percent below 2005 levels by 2025; and the nation’s electricity sector needs to play a major role in accomplishing that goal.

Fortunately, efforts to curb power sector carbon emissions—our nation’s largest source of global warming pollution—gained a lot of momentum in 2015. Looking back at the last year, I see nine clear signs that the clean energy transition is well underway all across the country.

1. Clean Power Plan finalized!

In August, the EPA finalized the Clean Power Plan, placing the first-ever national limits on carbon emissions from our nation’s power plants. The plan requires fossil fuel power generators to cut carbon pollution by 32 percent below 2005 levels by 2030, and represents the largest carbon emission reduction measure in our nation’s history. Most states are actually already well on their way to compliance, and thanks to some improvements the EPA made in the final rule, wind, solar, and other renewable energy sources—as well as energy efficiency—are now even better positioned to help states meet their emission reduction targets.

2. Renewable energy cost declines fueling strong growth in solar and wind

The cost of building new solar and wind projects have never been more competitive. Solar PV costs have fallen by more than 50 percent in the last five years, while the price of wind energy, particularly in the central U.S., is averaging less than 2.5 cents per kWh—an all-time low. These positive cost trends are helping both industries achieve new growth milestones.

The wind industry now has more than 70,000 MW of installed capacity and is supplying 5 percent of our nation’s power. U.S. solar installations will soon pass 25,000 MW, and solar is on track for yet another record-breaking year of development. Recent news of an agreement by Congress to provide a long-term extension of the federal tax incentives for wind and solar will help fuel continued rapid growth.

3. Offshore wind breaking ‘ground’ in U.S.

After nearly 15 years of anticipation, the U.S. offshore wind industry got underway with the first offshore wind facility beginning construction this past summer in Rhode Island. Expecting to be operational by next fall, the Block Island Wind Farm could help usher in a new era of renewable energy growth along U.S. shores.

4. States reaching new heights with stronger renewable electricity standards (RES)

State-level RES policies in 29 states have proven to be one of the most successful and cost-effective means of driving new renewable energy development in the United States. Historically, most of the 29 states with RES requirements have periodically revisited—and strengthened—their renewable energy targets.

In 2015, several states significantly upped the ante for what it means to be a clean energy leader. For example, in May, Vermont upgraded from a renewable energy goal to a new 75 percent by 2032 standard. Then, in June, Hawaii took the even bolder step of requiring that 100 percent of their power come from renewables by 2045. In September, California reasserted its claim as the nation’s largest renewable energy market by increasing its RES from 33 percent by 2020 to 50 percent by 2030. And even more recently, New York’s Governor Cuomo initiated the process to increase its RES to 50 percent by 2030 as well, as part of an overall effort to reform the state’s utility business model to better serve a cleaner, more distributed power system.

5. Energy efficiency programs ramping up across the country

For the fifth year in a row, Massachusetts held the top spot in ACEEE’s 2015 scorecard of energy efficiency programs. But the real story in this year’s assessment was the 20 states that took actions that improved their scores over the previous year, including “most improved” states like Texas, Maryland, and Illinois. Overall, investments from state efficiency programs provided annual electricity savings equal to 0.7 percent of total electricity sales in 2014, a nearly 6 percent increase over 2013 levels.

6. Southeast states joining the renewable energy revolution

For many years, Southeast states have resisted the transition to cleaner energy sources. But that’s rapidly changing.

North Carolina has emerged a national leader in solar power development, ranking behind only California in new solar PV installations over the last two years, and has its first wind farm under construction. Georgia is also poised to join the national leaders in solar development thanks to a new law that allows third party financing and Georgia Power’s long-term energy plan. And in September, Alabama Power received approval to secure up to 500 MW of new renewable energy to help meet demand from its largest customers.

Apple’s solar PV facility in Maiden, North Carolina is helping the state become a national solar leader. Photo: James West/Climate Desk

7. Major corporations plugging directly into renewable energy

With wind and solar costs being so competitive and a need to reduce carbon liabilities, more and more major corporations are bypassing utilities and investing directly in new renewable energy projects. Whether it’s through on-site projects or long-term power purchase agreements, companies are creating new development opportunities in the increasingly popular voluntary renewable energy market. A growing number of companies across the country are directly investing in solar PV, accounting for more than 900 MW of operating power capacity.

8. King Coal continuing to lose steam

The U.S. coal industry has been in general decline for nearly a decade, but total annual coal power generation is on pace to fall by a whopping 12 percent in 2015 compared with 2014, and by 31 percent compared with its historic high in 2007. Electric generation from coal is projected to account for just 34 percent of the total U.S. power supply this year; the lowest level since before World War II.

The year’s precipitous decline stems from both the retirement of older, inefficient coal generators—by September, 71 coal units totaling nearly 11,000 megawatts of power capacity had shut down—and the increased competition facing many other coal generators that is resulting in their less frequent use. More coal plant retirement announcements are likely in 2016, as competition from natural gas, renewable energy, and energy efficiency ratchets up further.

9. Clean energy opponents losing ground (and support)

Anti-clean energy front groups largely failed once again in 2015 in their efforts to undermine state-level clean energy policies. An even stronger sign that the clean energy transition is upon us is the waning support such anti-science groups are receiving. It is becoming more and more difficult for major corporations—including those in the fossil-fuel industry—to defend their affiliations with groups that stymie clean energy policies and spread disinformation about clean energy and climate change.

This year alone we’ve seen BP, Shell and American Electric Power leave the American Legislative Exchange Council, budget shortfalls hit the American Coalition for Clean Coal Electricity, and the Koch-funded Beacon Hill Institute forced to sever ties with its long-time host Suffolk University. Just last week, Volvo announced it would leave the National Mining Association, and described that group’s lobbying against the Clean Power Plan as “quite crazy.” Politicized efforts to obstruct progress will no doubt continue into 2016, but we are now in a strong position to ensure they fail once again.

These are the top stories and trends from 2015 that make me optimistic about the transition to a clean energy economy, but there are so many more to choose from what was a remarkable year. What’s on your list?

The plan—ordered by Governor Nixon—has been a year and a half in the making and benefited from a robust public stakeholder process. And based on the executive summary that was released last week, the final plan looks to be a significant improvement over the draft version because it includes clear and effective recommendations for prioritizing greater investments in renewable energy and energy efficiency. Missouri officials now have a great opportunity to kick start the State Energy Plan’s implementation by incorporating its recommendations in the state’s Clean Power Plan compliance strategy.

Improvements in the final plan

As part of the governor’s broad stakeholder process, several of my Union of Concerned Scientists (UCS) colleagues participated in technical working groups that afforded us the opportunity to provide feedback on the draft State Energy Plan. In a June 2015 blog, I identified three key recommendations that the final State Energy Plan needed to include in order to help accelerate Missouri’s clean energy transition. And I’m happy to report that the Missouri DED successfully incorporated our comments (which were also echoed by many other clean energy advocates and concerned citizens) in its recommendations. These include:

1. Strengthening the Renewable Electricity Standard (RES) to 20 percent by 2025. An expansion of the current 15 percent by 2021 RES provides a clear stable market signal for developers to continue investing in Missouri’s homegrown renewable energy resources. In support of this recommendation, UCS submitted independent analysis showing that Missouri could cost-effectively exceed its existing RES target. DED recommendations also call for establishing voluntary RES goals for non investor-owned electric utilities.
2. Making Missouri’s existing voluntary energy efficiency goals mandatory. The Missouri Energy Efficiency Investment Act (MEEIA), adopted in 2009, establishes voluntary goals for utilities to invest in energy efficiency measures. Under the State Energy Plan, these annual reductions in electricity demand would become mandatory, like two dozen leading states have done.
3. Strengthening Missouri’s Net Metering and Easy Connection Act. To help address Missouri’s current inadequate policy for incentivizing rooftop solar investments, the State Energy Plan recommends increasing net-metering system size limits from 100 kilowatts to 500 kilowatts, and requiring annual (rather than monthly) credits for excess power at the retail level.

In addition to these smart and effective recommendations, the State Energy Plan calls for a number of additional clean energy measures, including:

• a more diversified and secure power supply by decreasing dependence on imported fossil fuel energy sources and maximizing in-state clean energy resources
• a thermal clean energy standard to support for renewable thermal technologies
• standardized microgrid interconnection requirements
• tax incentives to foster greater wind development and maximize supply chain development for renewable energy equipment
• on-bill financing programs to enable consumers to receive upfront funding for energy efficiency improvements
• expanded residential energy efficiency programs to hard-to-reach customers and vulnerable households

The strong focus on renewable energy and energy efficiency policies in its recommendations is in large part a reflection of the overwhelming support these technologies received during the public comment period (see figure). The DED should be lauded for developing a plan moves the state toward an energy future that its citizens so clearly want.

If successfully implemented, these recommendations have the potential to put Missouri on track toward greater renewable energy and energy efficiency deployment while reducing the state’s risk of overreliance on natural gas as it shifts away from coal.

An unfortunate disconnect

One important lapse in the plan’s Executive Summary is the lack of a serious discussion of Missouri’s need to develop a compliance strategy in the next year for the U.S. EPA’s recently finalized Clean Power Plan. The Clean Power Plan, for the first time, puts national limits on power sector carbon emissions and requires states to collectively reduce their emissions 32 percent below 2005 levels by 2030.

The good news is that thanks to Missouri’s sensible existing commitments to renewable energy, energy efficiency, and closing old and uneconomic coal plants, the state is already well positioned to comply with it Clean Power Plan targets. A recent UCS analysis shows that these existing commitments will put Missouri nearly two-thirds of the way towards meeting its 2022 emission reduction targets and at least 30 percent of the way toward its final 2030 targets. Fully implementing the recommendations in the State Energy Plan will put Missouri on even better footing.

Now comes the hard part

The State Energy Plan presents a compelling case for further investing in Missouri’s clean energy future. Now comes a tougher challenge—ensuring the report and its recommendations don’t get relegated to collecting dust on a bookshelf. Governor Nixon and DED officials appear committed to not letting that happen. That’s good news, and not only because so much time and resources went into its development.

Many of the plan’s recommendations require legislative action, and convincing legislative leaders to embrace the State Energy Plan’s findings won’t be easy. But it’s worth a shot. In addition to environmental and climate benefits, following the State Energy Plan’s recommendations can help help create jobs and spur economic development.

That’s an argument that all parties can support. It’s time to put this plan into action, and start leading Missouri toward a clean energy future.

Key takeaways

In their analysis, NREL explored a range of economic potential under different scenarios (see the end of my blog for a brief description of their methods). I’m still digging into the rich amount of data presented in this report, but here are my top four quick takeaways from the analysis so far:

1. The economic potential for deploying renewable energy resources today is enormous nationally. Across the three primary cases that NREL examined, the range of results show that renewable energy resources have the potential to affordably supply from one-third to as much as 10 times total current U.S. generation (see highlighted text in Table 1). These results are in addition to the roughly 13 percent of U.S. generation that renewables supplied in 2013.

Table 1. Estimated Aggregated U.S. Economic Potential for Primary Cases (Source: NREL).

While renewables’ economic potential is substantial, it’s also worth noting that it is still a small subset (0.4 – 13 percent) of the total technical potential in the United States. Therefore, as the technologies continue to improve in cost and performance through innovation and experience, their economic potential will grow.

2. Solar and wind have the greatest economic potential. Utility-scale solar and land-based wind resources show the greatest potential for competing economically today, though distributed PV, geothermal, and hydro all show strong economic potential as well. Under these scenarios, NREL found no economic potential for deploying bioenergy resources in dedicated power plants, but they did not evaluate the economic potential for co-firing bioenergy resources in existing coal power facilities, which could be economic in some states.These finding are consistent with the actual deployment of renewable energy in recent years, with wind and solar showing record growth thanks to significant cost declines, state-level renewable energy standards, and federal tax incentives.

3. Every state has the potential to deploy cost-effective renewable energy. While the results vary substantially from state to state—as expected, resources and power prices vary as well—NREL did find that all states have economic potential to deploy one or more of the technologies they examined. In fact, under Case 2 (NREL’s more optimistic scenario), 29 states were found to have economic potential for renewables that exceeds their total state electricity generation (Figure 1). Even under NREL’s most conservative scenario (Case 3), 22 states showed economic potential for new renewables development equal to at least 25 percent of their total electric generation (Figure 2).

Figure 1. Economic Potential as a Percent of 2010 Total Generation, Case 2 (Source: NREL).

Figure 2. Economic Potential as a Percent of 2010 Total Generation, Case 3 (Source: NREL).

4. NREL’s findings validate the strong role renewables can play in helping states affordably achieve their carbon emission reduction requirements under the Clean Power Plan. In its final Clean Power Plan rule, the EPA significantly increased the role of renewable energy in setting state emission reduction targets. This new NREL analysis validates the changes that EPA made and underscores the ability of renewables to cost-effectively reduce carbon emissions.

With the Clean Power Plan rule now finalized, the states are in the driver’s seats to determine how best to cut their emissions. NREL’s new analysis is a welcome resource for them. It lays out a strong argument for states to pursue compliance plans that prioritize renewable energy over natural gas in the transition to a low-carbon power supply.

What does “economic potential of renewable energy” mean?

NREL’s analysis examines the economic potential for deploying renewable energy technologies (wind, utility-scale solar PV, distributed solar PV, hydropower, geothermal, and dedicated biomass plants) in the United States. Economic potential is a subset of the overall theoretical resource potential for producing renewable energy, after accounting for technical and cost constraints.

In this case, NREL calculates economic potential by evaluating the levelized cost of producing renewable electricity at more than 150,000 technology-specific sites and comparing it with the levelized avoided cost of energy (essentially, the cost that a utility would not have to incur from purchasing other sources of energy). Where cost of renewable energy is less than the avoided cost of energy, it is included in the economic resource potential.

Rather than examine just one set of economic potential, NREL explored a range of scenarios, including accounting for some market factors such as inter-regional transmission costs and the avoided costs associated with the environmental and public health impacts from fossil fuel generation, including carbon emissions.

Strengthening the renewable energy building block

In its draft rule, the EPA made the sensible decision to include renewable energy as an eligible compliance option for states to cut their carbon emissions. Renewable energy was also one of the four low carbon options, or “building blocks”, that the EPA used to set state emission reduction targets.

However, in detailed technical comments submitted to the EPA, my colleagues and I identified several ways that the draft rule significantly underestimated the potential role of renewable energy in determining those targets. In fact, the EPA’s proposed methodologies resulted in barely any additional renewable energy beyond what would have occurred under business as usual (i.e., without the proposed rule).

So when the final Clean Power Plan came out earlier this week, I was especially eager to see what changes the agency might have made. And I’m happy to report that the EPA largely agreed with our comments (and similar comments from many others) and made several important modifications that strengthened the renewables building block:

• First, the EPA modified its approach for quantifying the building block to incorporate historical deployment patterns for renewable energy technologies. Demonstrated rates of renewables deployment onto the power grid are a sound barometer for what states can achieve in future years.
•  Second, the EPA validated its historical deployment approach by modeling the economic potential of renewable energy technologies using a set of improved model assumptions. In addition to updating their cost and performance estimates for wind and solar energy technologies to better reflect actual project experience, they eliminated a key parameter that artificially constrained the development of cost-effective renewables.

A significant improvement

As a result of these changes, the EPA identified more than 706,000 gigawatt-hours (GWh) of new (post 2012) renewable energy generation nationally as meeting the economic and technical criteria for inclusion in the final rule. That’s more than double the results from the EPA’s proposed rule (Figure 1). And combined with existing (2012) non-hydro generation levels, is equivalent to 25 percent of total current U.S. electricity consumption.

Data Source: EPA

What’s more, because of the updates in cost and performance assumptions for renewables, the EPA’s modeling found that the increased renewables generation in the final plan can be achieved at virtually the same level of cost-effectiveness ($37/ton of carbon dioxide reduced) as in the draft plan ($36/ton).

Because of other significant changes that the EPA made to calculating state emission rate targets (a blog topic for another day), not all of the cost-effective renewable energy generation made its way into state-level emission rates. Instead, the amount of incremental renewable energy generation fully captured in those targets nationwide is 540,000 GWh. While that’s more than 60 percent greater than the renewables generation used to set emission rates under the proposed rule, the potential for cost-effectively deploying renewables is still much greater. And of course, the Clean Power Plan creates a framework for states to go further with renewable energy than the levels embedded in the building block.

Directly displacing fossil generation with renewables

The EPA further strengthened the role of renewable energy by recognizing their value in directly displacing fossil fuel generation and its associated carbon emissions. The EPA didn’t fully account for this effect under the formula for setting state emission rate targets in the draft proposal.

However, in the final rule, the agency does credit renewables for emission reductions from displaced fossil generation. The change much more accurately reflects what happens in real life when we get more renewables onto the power grid, and has a meaningful impact in tightening the Clean Power Plan’s emission rates.

Credit trading and the Clean Energy Incentive Program

In addition to a stronger renewables building block, the Clean Power Plan offers at least two additional features that will accelerate the growth of renewables nationwide:

• Credit Trading: The final rule paves the way for states who choose to do so to design compliance strategies that are “trading ready”, providing for the opportunity to use out-of-state credits (under rate-based plans) or allowances (under mass-based plans) to meet emission reduction requirements. This offers a golden opportunity for states to tap into regional markets for the most cost-effective renewable energy resources available.

• Clean Energy Incentive Program: In an effort to spur early investments in renewable energy and limit a rush to natural gas, the EPA developed the Clean Energy Incentive Program (CEIP). The CEIP offers states credits for renewables generation in the years 2020 and 2021 (ahead of the Clean Power Plan’s 2022 start date) from wind and solar projects that start construction after a state’s compliance plan is finalized. Energy efficiency investments in low-income communities also qualify. The voluntary program should give states a jumpstart on their compliance strategies and help keep the momentum in renewables deployment going.

States now in the batter’s box

As the details of the final Clean Power Plan come into focus, it’s clear that clean energy facts trumped fossil-fuel fiction with the EPA prioritizing the role of renewable energy as a cost-effective cutter of carbon. Now it’s time for states to step up to the plate and prioritize renewables in their compliance plans. Doing so will help reduce the risks of our growing reliance on natural gas, accelerate carbon emission reductions, and transition the U.S. to a truly clean and affordable energy economy.

This week the American Legislative Exchange Council (ALEC) is holding its annual meeting in San Diego and one look at the agenda reveals this fossil fuel-funded front group remains bent on preventing the nation’s transition to a clean energy economy. With the EPA set to finalize its Clean Power Plan in the next few weeks, ALEC is frantically ramping up efforts to obstruct and roll back policies that support renewables and efficiency and curb carbon emissions. Here’s a quick guide on what to look out for.

ALEC’s tumultuous year

On many counts, ALEC has had a rough time since last year’s annual meeting. Last fall, Facebook joined other major tech companies that have severed ties with ALEC. In fact, more than 100 corporations have now left the organization, including big oil companies like BP, with many opting to leave since public outcry began over ALEC’s now notorious attacks on climate science and renewable energy. The exodus is expected to continue, with Shell signaling it may leave soon.

ALEC and their fossil fuel allies also continued their long history of failure in attempting to roll back renewable energy and climate policies in 2015. For example, ALEC’s attempts to obstruct implementation of the Clean Power Plan—the first-ever national limits on global warming pollution from power plants—failed in 21 out of 22 states.

Even ALEC’s ‘wins’ this year were largely meaningless. First, they scored a hollow ‘victory’ this past spring in making the Kansas renewable energy standard (RES) voluntary: the state’s 20 percent by 2020 RES has already been achieved and Kansas is now a national leader in wind development. And in another “win”—repealing West Virginia’s nonbinding alternative energy goal that allowed for fossil fuels to count towards compliance in addition to renewable energy—even the organization itself admitted it was purely symbolic.

Far more often than not though, ALEC’s efforts have come up way short.

Meanwhile, many states continued to push for new or stronger renewable energy polices. Hawaii committed to 100 percent renewables by 2045, while Vermont joined the ranks of states with a mandatory RES, and New York is setting its sights on 50 percent renewables by 2030. The California legislature is also moving toward a 50 percent renewables target, and at least 10 other states have considered expanded RES policies.

Doubling down on deceit and deception

One might think ALEC would learn its lesson and listen to a public that strongly supports policies requiring more use of renewable energy sources and limiting global warming pollution from power plants. But that has not happened.

Instead, the folks at ALEC are using their annual meeting to double down on their deceptive tactics.

For example, the meeting features a workshop on “Renewable Energy Mandate Reform.” Headlining the panel will be Ohio senator Bill Seitz, who earned national notoriety for likening the state’s now frozen RES, which he voted for in 2008, to “Joseph Stalin’s 5-year plan.” Seitz will be joined by the head of the Kansas Chamber of Commerce, known for its role in “blowing smoke” about the cost of renewable energy in the Sunflower State.

And that’s the tip of the iceberg. ALEC’s Energy, Environment, and Agriculture Task Force, which is led by the utility AEP, is slated to consider ‘model policies’ and resolutions that will make your jaw drop:

• “The Environmental Litigation Act.” This cut-and-paste bill would allow for “gifts, grants, and donations” to an official state fund used for the sole purpose of researching and pursuing frivolous lawsuits filed by states to obstruct implementation of the Clean Air Act, Clean Water Act, Endangered Species Act, Safe Drinking Water Act, or any other federal law that causes “detriment…to industries.” It’s not hard to guess who would be making these “gifts, grants, and donations,” given ALEC’s usual clientele.

• “Resolution Concerning Special Markets for Direct Solar Power Sales.” The stated purpose of this resolution is to oppose removing market barriers that would allow solar providers to sell electricity directly to homes and businesses, empowering solar to compete on a more level playing field with traditional electric utilities. For an organization that claims to stand for free markets and oppose government “picking winners and losers,” this gem of misinformation is particularly ironic.

• “State Power Accountability and Reliability Charter.” Here is another cut-and-paste bill that would tie the hands of state environmental and air quality regulators in red tape, by inhibiting their ability to incorporate renewable energy, energy efficiency, or even natural gas, into state compliance plans for meeting the EPA’s Clean Power Plan.

• “Act Providing Incentives for Carbon Reductions Investment.” I wrote about this wolf in sheep’s clothing when it popped up in the agenda for an earlier ALEC meeting. In summary, this bill is simply a thinly-veiled attempt to undermine state RES’s by restricting investments in real renewables, such as wind and solar, and allowing for non-renewable energy technologies to be used for compliance.

On the bright side

In an agenda that’s otherwise laden with clean energy policy attacks, there is one silver lining for those who have been shining a light on ALEC’s closed-door convenings of corporate lobbyists and state legislators. So far at least, ALEC’s annual meeting agenda does not include any obvious direct attacks on climate science—a major departure from the blatant disinformation doled out at ALEC’s summer and winter meetings last year. But we will be watching for any last minute appearances by climate deniers.

Let’s build on that success, and continue to push back on ALEC’s ongoing attempts to undermine the nation’s transition to an affordable, reliable, and low-carbon energy future.

UPDATE (July 27, 3:30pm): Last week, I mentioned we would keep an eye out for disinformation about climate science at ALEC’s annual meeting. Unfortunately, but not surprisingly, I have to report that Stephen Moore, a member of ALEC’s Private Enterprise Advisory Board, dropped a whopper during one of the few sessions that was open to select reporters.

“The biggest scam of the last 100 years is global warming,” Moore said before going on to engage in a personal attack on scientists.

The real hoax is the decades-long disinformation campaign against science perpetrated by special interest groups, including ALEC, and funded by fossil fuel interests. Last week’s ALEC meeting is case in point: we now know that the sponsors once again reflect a laundry list of oil, coal, and utility interests, including AEP, the American Coalition for Clean Coal Electricity, Chevron, and ExxonMobil.

You can join UCS in holding industry bad actors accountable for funding ALEC: click here to take action today.

Set for release later this summer, the EPA’s Clean Power Plan (CPP) will further curb carbon emissions in Missouri and across the U.S. power sector. At the same time, a comprehensive State Energy Plan now under development by Governor Nixon’s administration offers an excellent opportunity to prioritize renewable energy and energy efficiency in Missouri’s CPP compliance strategy and accelerate the state’s transition to a clean energy economy.

A legacy of coal dependence

For decades, Missouri has been heavily dependent on coal for its power generation. In 2013, coal accounted for 83 percent of the state’s electricity generation—the fifth most coal-dependent among all states (see pie chart). To generate that power, all of the coal must be imported because Missouri has virtually no coal mining production. In 2012, that amounted to more than $1.4 billion leaving the state, primarily to Wyoming.

Missouri is currently among the nation’s most coal-dependent states. Source: EIA

Missouri’s coal dependence also takes a heavy toll on public health, local air and water quality, and of course, in contributing to climate change. Power plants are our nation’s largest source of global warming emissions and Missouri consistently ranks in the top 10 states for power sector carbon emissions. From heat waves to major flooding, global warming is already impacting Missouri communities.

The winds of change

Fortunately, the coal industry’s grip on Missouri’s power supply is slowly beginning to loosen. In 2008, voters approved a renewable electricity standard (RES) that requires Missouri’s electric providers to supply at least 15 percent of their power from renewable energy sources by 2021.

Missouri’s RES has already helped spur more than 450 megawatts of wind power in the northwest corner of the state, and has driven important economic and environmental benefits. However, this just scratches the surface of how clean energy resources can deliver for Missouri consumers. The state is ranked 14^th nationally in terms of wind resource potential and is home to a tremendous amount of potential for solar energy and energy efficiency that remains untapped.

Closing uneconomic coal plants

In addition to investing in more renewables, closing old, inefficient, and uneconomic coal generators is another quick and cost-effective strategy for cleaning up Missouri’s power supply. Ameren Missouri—the state’s largest electric utility—has announced that it will be closing its 564-MW Meramec coal power plant in the next few years. Meramec’s closure joins the nearly 300 coal generating units in 39 states (representing 46,600 MW of power capacity) that have either retired or are scheduled to between 2012 and 2020 thanks to growing competition from cleaner, more affordable energy alternatives. A 2013 UCS analysis identified another 1,635 MW of economically vulnerable coal generators in Missouri alone that should also be considered for retirement.

Making progress toward Clean Power Plan compliance

These sensible commitments to renewable energy and cutting carbon emissions have positioned Missouri well for complying with the EPA’s forthcoming Clean Power Plan.

In fact, a new UCS analysis shows that these existing commitments will put Missouri more than two-thirds of the way towards meeting the 2020 emission reduction benchmarks proposed by the EPA (see bar chart). Thirty additional states are also on track to be more than halfway toward their 2020 benchmarks thanks to existing RES policies, energy efficiency resource standards, and scheduled coal plant retirements.

Missouri needs a comprehensive state energy plan

Missouri’s Projected Progress Toward Meeting its 2020 Benchmarks under the Clean Power Plan. Missouri’s current renewable electricity standard and decision to close uneconomic coal generators are helping to cut carbon emissions and putting the state far along the pathway toward compliance with the Clean Power Plan.

This is all good progress for one of the most coal-dependent states in the nation. But Missouri can and should do more to accelerate its clean energy transition. That starts with Governor Nixon’s administration developing a compliance strategy for fully meeting the Clean Power Plan’s targets by prioritizing investments in renewables and efficiency. And one effective way to ensure that happens is for the state to develop a comprehensive and aggressive State Energy Plan that also prioritizes clean energy development.

One year ago today, Governor Nixon put the wheels in motion for such a plan when he signed Executive Order 14-06, which instructed the Missouri Department of Economic Development’s Division of Energy to develop—through broad stakeholder input—a comprehensive State Energy Plan. A 55-member governor-appointed steering committee representing a broad range of energy interests helped lead the plan’s development; several public hearings were held; and six technical working groups were convened (of which, several of my colleagues participated in) to explore multiple topics on Missouri’s current and potential future energy use.

Policy recommendations

Initially scheduled for release last month, the State Energy Plan has since been delayed to October 15. While delay is not normally good, in this case it could be a positive. Thus far, discussions on the state’s energy plan have not included considerations for the Clean Power Plan. By postponing until after the final rule’s expected release, Governor Nixon’s team now has a golden opportunity to include recommendations directly related to a compliance strategy that makes Missouri a clean energy leader.

To help ensure that happens, here are three recommendations Governor Nixon’s state energy plan needs to include:

1. Strengthen the Renewable Electricity Standard. Independent analysis has shown that Missouri can cost-effectively exceed its current 15 percent by 2021 RES. Leading states in the Midwest and nationally have established RES targets of at least 25 percent.
2. Adopt a mandatory Energy Efficiency Resource Standard (EERS). Missouri currently has voluntary goals for energy efficiency, but the state should join leading states and enact a mandatory EERS requiring utilities to reduce electricity demand by 2 percent annually.
3. Strengthened net metering policy. Missouri’s current policy for incentivizing rooftop solar investments is inadequate. The state should strengthen its net metering policy to expand the program size, increase system capacity limits, and provide monthly credits for excess power at the retail level.

Investing more heavily in renewable energy and energy efficiency offers a smarter, faster, and less risky pathway toward a more affordable, reliable, and diversified electricity system that delivers not just short-term economic and environmental gains, but also achieves the long-term goals of addressing climate change.

Now is the time for Governor Nixon to lead his state toward a clean energy future.

States Suing the EPA and Their Progress Toward the Clean Power Plan’s 2020 Benchmarks Based on Clean Energy Decisions They Have Already Made

Retiring uneconomic coal plants

How are they doing it? Well, in 12 of the 14 states suing the EPA, power plant owners have already retired or plan to retire 135 uneconomic coal units between 2012 and 2020, accounting for nearly 25,000 megawatts (MW) of generating capacity. These decisions are part of a broader transition well underway in the U.S. power sector, in which many of the oldest, dirtiest, and least efficient coal units are being retired in favor of lower-carbon and more cost-effective energy options like renewable energy, energy efficiency, and natural gas.

Collectively, the coal retirements in Alabama, Indiana, Kansas, Kentucky, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, West Virginia, Wisconsin, and Wyoming will reduce annual carbon emissions by an estimated 42 to 69 million metric tons, depending on whether their generation is replaced with natural gas or zero-carbon resources such as renewables and efficiency (our analysis conservatively assumes natural gas).

Though not required by the draft rule, retiring uneconomic coal plants is one effective strategy for cutting carbon and complying with the CPP. In the case of Kentucky, this measure alone is sufficient to put the state on track to surpass its 2020 emissions reduction benchmark. Alabama’s coal retirement decisions will get the state 86 percent of the way toward its 2020 benchmark, and closures in Indiana, Ohio, and West Virginia will also contribute substantially toward CPP compliance in those states.

State renewable energy policies spur investments

Five of the states suing the EPA have also taken advantage of popular and successful clean energy policies that cut carbon emissions by spurring investments in renewables and efficiency. For example, Kansas, Ohio, and Wisconsin are among the 29 states and the District of Columbia that have implemented the renewable electricity standard (RES), a market-based policy that requires utilities to gradually increase the supply of wind, solar, and other renewable energy sources in their power mix.

State RES policies have been a leading driver of new renewable energy development over the past two decades, helping to bring down technology costs and deliver significant economic and environmental benefits in the process. In Kansas, before it was scaled back (see below), the RES helped make the state a national leader in wind development, spurring nearly 3,000 megawatts (MW) of wind capacity and $5.5 billion in new investments.

State energy efficiency policies save energy and money

In addition, Arkansas, Indiana, Ohio, and Wisconsin are among the 24 states that have implemented energy efficiency resource standards (EERS), which requires electricity providers to implement efficiency programs for residents and businesses that reduce electricity demand each year. Like the RES, an EERS is one of the most effective ways for a state to guarantee long-term gains in energy efficiency and save money for consumers. For example, the American Council for an Energy Efficient Economy reports that states with an EERS averaged incremental electricity savings of 1.1 percent of retail sales in 2013 compared with an average savings of 0.3 percent in states without an EERS.

Rolling back progress

Unfortunately, despite their initial commitments, several of these states—Indiana, Kansas, and Ohio—have undermined their clean energy progress by recently rolling back their RES and EERS policies. Not surprisingly, fossil-fuel funded clean energy opposition groups like ALEC and Americans for Prosperity were behind these repeal efforts, using the very same disinformation tactics they are now deploying to try and weaken implementation of the CPP.

Shooting themselves in the foot not only hurts consumers now, it’s going to haunt these state’s CPP compliance efforts later. Had Indiana not repealed its EERS last year, for example, that commitment to investing in energy savings—along with the state’s current coal plant retirements— would have been sufficient to surpass its 2020 emissions reduction benchmark.

Harvesting the wind

Speaking of shooting yourself in the foot, several of the states trying to stop the CPP are home to some of the best, most economical wind resources in the world, and they are just beginning to harness it. By the end of 2014, nearly 10,000 MW of wind power capacity was operating in Nebraska, Oklahoma, South Dakota, Wyoming, and Kansas, with another 1,282 MW under construction, according to AWEA. In 2014, South Dakota generated 25 percent of its power from wind, second only to Iowa. Kansas generated nearly 22 percent of electricity from wind in 2014, while Oklahoma, Wyoming, and Nebraska generated 17 percent, 9 percent, and 7 percent, respectively.

What’s more, these figures just scratch the surface of the renewable energy potential available in the Great Plains states. And with the CPP in place, these states will have a tremendous opportunity to further develop their wind resources; not just for their own clean power needs, but to export to other states as well. Trying to undermine the CPP puts this massive economic opportunity in jeopardy.

No, Chicken Little, the sky isn’t falling

Just last month, Wisconsin Governor Scott Walker called the CPP’s emission reduction targets “unworkable” in a letter to President Obama. That’s a central theme in the arguments made by the states suing the EPA. But it doesn’t hold up to the facts, and instead exposes the states’ legal challenge as being based more on politics than ability to meet the CPP.

Governor Walker’s letter failed to say that thanks to some smart decisions previously made—to invest in renewables and efficiency, and to close uneconomic coal plants—Wisconsin is already on track to be more than halfway toward their 2020 benchmarks. By strengthening their RES, which levels off this year, and doubling down on efficiency investments, Wisconsin can get all the way there. In fact, that is the roadmap for reducing carbon emissions that all states should follow.

The 14 states involved in the legal challenge have locked in clean energy decisions that will take them at least 40 percent of the way toward their 2020 benchmarks collectively. That’s quite impressive, especially for states that supposedly aren’t capable of curbing emissions. If these states stay the course, and further develop their renewable energy potential, reduce their energy use through efficiency measures, and where it makes sense, join forces with neighboring states, they should have no trouble meeting their interim targets and 2030 goals.

Learn more about our analysis in the slide show below:

With its latest model legislation, the American Legislative Exchange Council (ALEC) is continuing its efforts to undermine clean energy and roll back renewable electricity standards.

A wolf in sheep’s clothing

Take, for example, model legislation that members of ALEC’s Energy, Environment, and Agriculture Task Force are considering for endorsement. Entitled, “Act Providing Incentives for Carbon Reduction Investments,” this proposed policy might make you think that ALEC is changing its tune with respect to climate denial. However, closer examination reveals that this bill is yet another thinly veiled attempt to weaken the state-level renewable electricity standards (RES).

State RES policies have been a driving force behind the remarkable growth that wind, solar, and other renewable energy resources have experienced in the last decade. State experience shows that the RES is cost effective and delivers significant economic and environmental benefits. And for years, ALEC has been trying to discredit renewable energy and roll back RES policies.

In its latest attempt, ALEC is seeking to expand the eligibility criteria for complying with state RES policies to include non-renewable energy technologies such as natural gas, investments in electric vehicle infrastructure, carbon sequestration, and energy storage. To be sure, some of these technologies deserve thoughtful consideration of policies to truly foster their development. However, that is not what is going on here.

By simply cramming these technologies into existing RES policies, all that is achieved is, at best, a zero sum game in which no additional carbon emission reductions are achieved. At its worst, where natural gas deployment displaces renewable energy development, carbon emissions increase along with the consumer and environmental risks of over-reliance on natural gas.

Perhaps even more damning in revealing ALEC’s true intent here is the provision in their model legislation that would cap investments at one percent of a utility’s annual revenue requirement. Most state RES policies already have sensible protections in place to keep compliance costs from unduly harming consumers. But this kind of one-sided provision (e.g., accounting for just the costs and not the benefits in its assessment) would be one of the most restrictive nationwide, and would do nothing more than stifle investments in renewable energy technologies.

If at first you don’t succeed…

ALEC and their fossil-fuel funded allies have a very long history of failure in their attempts to roll back renewable energy and climate policy. Despite its recent hollow ‘victory’ in repealing the Kansas RES—the state’s 20 percent by 2020 RES has already been achieved and Kansas is now a national leader in wind development—far more often than not, ALEC’s efforts have come up short.

This hasn’t stopped ALEC in the past, and very clearly isn’t going to deter them now. Fortunately, though, in most states policy makers and citizens are choosing clean energy facts over the fossil fuel fiction that ALEC and their allies are selling. So long as that continues, ALEC’s “Act Providing Incentives for Carbon Reduction Investments” will end up where it belongs—in the trash heap of deceptive policy ideas—and the nation will continue its march toward a clean energy future.

A renewable electricity standard (RES) requires electric utilities to gradually increase the amount of renewable energy—such as wind, solar, and geothermal—in their power supplies over time. It uses a market-based approach that stimulates competition among developers and multiple technologies to provide the greatest amount of clean power for the lowest price, and an ongoing incentive to drive down costs. RES policies have been a successful driver of renewable energy at the state level for more than two decades.  A strong national RES would cement this progress and ensure that the entire nation contributes to—and reaps benefits from—the clean energy transition.

Describing our analysis

To examine the economic and environmental impacts of a 30 percent by 2030 national RES on the U.S. electricity sector, we used the National Renewable Energy Laboratory’s (NREL) Regional Energy Deployment System (ReEDS) model. Our analysis compares a Business as Usual scenario, which assumes no new state or federal policies beyond those which existed at the end of 2014, with a 30 percent by 2030 national RES scenario that is modeled after the key policy provisions in S. 1264. See our technical appendix for more details on the scenarios as well as information about modifications we made to some cost and performance assumptions of energy technologies in ReEDS based on project-specific data and recent studies.

Here are the highlights of our results:

Benefits for consumers

Investing in greater amounts of renewable energy can provide important benefits for consumers. Costs of developing wind and solar facilities have fallen dramatically in recent years and these technologies are increasingly cost competitive with coal and natural gas generation in some regions of the country. In addition, renewable energy helps diversify the power mix and expands competition in the U.S. electricity market. This reduces the demand for fossil fuels, especially natural gas, which leads to lower and more stable natural gas prices.

Under the 30 percent RES scenario, natural gas prices in the power sector are 7.8 percent lower in 2030 than business as usual. Lower natural gas prices help keep electricity prices stable for the power sector and consumers, even as investments in renewable energy increase significantly.

Electricity prices are virtually unchanged from 2015-2030 between the 30 percent RES and business as usual scenarios (see Figure 1). In 2020, electricity prices are less than 0.1 percent higher under the 30 percent RES than business as usual, and in 2030, retail power prices are just 0.2 percent higher. However, the reduction in natural gas prices more than offsets the small increase in electricity prices, resulting in a net savings on combined consumer natural gas and electricity bills. In fact, cumulative consumer electricity and natural gas bills would be $25 billion (or 0.5 percent) lower from 2015-2030 under the 30 percent RES than business as usual.

Figure 1.

Energy consumers in all sectors of the economy would benefit, but how does this translate for homeowners? Well, for a typical household that uses some 600 kilowatt-hours of electricity a month; their annual electricity bills would be $0.72 in higher in 2020, and $1.69 higher in 2030. However, for the more than 50 percent of U.S. homes that also use natural gas for heating, these slightly higher electricity bills would be more than offset by the savings they’ll see in their lower natural gas bills. Under the 30 percent RES, consumers will save $10.11 on the typical annual natural gas bill compared with business as usual in 2020, and $37.50 in 2030.

Energy diversity and economic growth

A 30 percent national RES would diversify our nation’s power supply as renewable energy generation would be 57 percent higher than business as usual by 2030, with wind and solar primarily driving growth (Figure 2). By contrast, natural gas generation is down by 27 percent in 2030, and coal generation is 6 percent less than under business as usual. Displacing natural gas by prioritizing renewable energy development can help our nation overcome the numerous and complex risks that are linked with natural gas overreliance, including persistent price volatility and rising global warming emissions.

Figure 2. Electricity Generation Mix, Business as Usual and 30 Percent by 2030 National RES

Sustained investments in new capacity installations drive the growth in renewable energy generation. Under the 30 percent RES, total U.S. wind power capacity increases to 180 gigawatts (GW) in 2030, nearly three times today’s levels and 80 GW higher than business as usual. Solar photovoltaics also benefits from the national RES, growing to 152 GW by 2030, which is nearly 13 times over today’s levels and 27.3 GW greater than business as usual. This nationwide commitment to renewable energy development represents a significant opportunity to spur innovation and economic growth. Under the 30 percent RES, local economies would be boosted in the following ways:

• $294 billion in cumulative new capital investments from 2015-2030; $106 billion more than business as usual
• Nearly $4.3 billion in annual operation and maintenance payments in 2030
• $2.6 billion in cumulative property taxes received by local governments from 2015-2030
• $830 million in cumulative wind power land lease payments to rural landowners from 2015-2030

Fewer power sector carbon emissions

Investing more in renewable energy is a smart and cost-effective way to cut carbon dioxide (CO₂) emissions in the power sector. Power plants are responsible for nearly 40 percent of the total U.S. CO₂ emissions, constituting the nation’s largest source of this heat-trapping gas. And under business as usual, power plant CO₂ emissions continue to grow unabated (Figure 3). But our analysis found that by implementing a 30 percent national RES, these emissions are reduced by nearly 11 percent in 2030. Cumulatively, the 30 percent RES would reduce CO₂ emission from the power sector by 1.5 billion metric tons between 2015 and 2030.

Figure 3. Power Sector CO2 Emissions

The monetary value of these CO₂ reductions can be calculated using the U.S. government’s estimates for the social costs of carbon (SCC). The SCC is a calculation of the dollar amount of damages to public health and the environment caused by emitting an additional metric ton of CO₂ in a given year. Under the 30 percent RES, net societal benefits from reducing CO₂ emissions reach $12.7 billion in 2030, and cumulative societal benefits are $40.4 billion from 2015 to 2030.

These levels of emission reductions represent good progress, but a national RES is no substitute for the comprehensive climate and energy policies needed to achieve the deep carbon reductions over the long term to meet U.S. climate goals. A previous UCS analysis showed that it is possible to cut U.S. power sector emissions in half by 2030, and that prioritizing renewable energy along with investments in energy efficiency offers the best opportunity to make these reductions quickly and affordably.

This summer the EPA will finalize its Clean Power Plan, the first-ever standards to limit carbon emissions from existing power plants, that would reduce power plant CO₂ emissions by 30 percent below 2005 levels by 2030. While the Clean Power Plan can and should be strengthened before it is finalized, bolstering it with complementary policies like a national RES and stronger state RESs makes a lot of sense. In fact, the 30 percent RES would cost-effectively deliver more than one-third of emission cuts required under the Clean Power Plan by 2030. That fact, combined with the consumer and economic benefits that a strong national RES would deliver, should make S. 1264 a top priority as the Senate considers new legislation to modernize America’s energy system.