When the Environmental Protection Agency (EPA) finalized America’s Clean Power Plan in early August, it marked the first time our country has put a limit on emissions from the nation’s largest source of carbon pollution: power plants. The standards represent a huge step forward for cleaner air and all of the benefits that come along with it.
Texas leaders immediately denounced the final plan, boldly proclaiming it would have catastrophic consequences, and vowed to fight the Clean Power Plan.
But if state decision makers stop to look at the facts, they will see that the Clean Power Plan is well within our reach. In fact, Texas can get to 88 percent of the way toward compliance simply through current trends alone, as shown in our new report out today, Well Within Reach: How Texas Can Comply with and Benefit from the Clean Power Plan. And, not only is compliance achievable, the plan actually provides Texas the opportunity to use it to grow the state’s economy.
Texas’ clean energy transition gets the state most of the way there
We’ve written before about how the market is already moving Texas toward a clean energy economy. Lower prices and technological progress have led to renewable energy and natural gas increasingly powering Texas, while the use of imported coal is on the decline. Plus, the deregulated structure of the state’s electricity market opened it up to competition in the Electric Reliability Council of Texas (ERCOT), the grid operator for 90 percent of the state. Combine that with the construction of the massive highway of transmission lines built to carry West Texas wind to cities throughout the state, the Competitive Renewable Energy Zone, and the state’s abundant clean energy assets – all of these elements have worked together to create an excellent economic context for cleaner fuel sources in Texas.
But we wanted to show exactly what this clean energy momentum meant for the Clean Power Plan. Using an industry-vetted tool from MJ Bradley and Associates, we embarked on an analysis to determine just how far along Texas would be toward compliance, even if our state decision makers did nothing but let the market play out.
As a result, we evaluated a forecast scenario based on the following factors:
- Business-as-usual trends in electricity generation based on projections from the state’s primary grid operator, ERCOT;
- The wind power capacity ERCOT projects will be on the grid in 2017, as well as industry projections to 2029;
- The current energy efficiency results ERCOT’s municipal utilities, Austin Energy and San Antonio’s CPS Energy, are achieving; and
- The significant impacts that increased production and falling prices of natural gas have in reducing demand for coal.
The results surprised even us: Texas can achieve nearly 90 percent compliance with the Clean Power Plan solely based on these existing market trends.
Three ways Texas can go from 88 to 100 percent compliance
- Develop a state plan within the existing ERCOT market structure: This is the first thing Texas needs to do in order to get the rest of the way there. If Texas decides not to create its own compliance strategy, like it chose to do in 2010 with greenhouse gas emissions permitting, EPA will create one for us. Ceding this critical responsibility to EPA would be an enormous lost opportunity for Texas.
- Maximize clean energy resources: Decision makers should capitalize on energy efficiency – our most cost-effective energy resource – and renewable energy, as well as advance programs that enable financing of clean energy projects. Specifically, the Property Assessed Clean Energy (PACE) program, an innovative financing mechanism that ties private loans for clean energy projects to property tax bills, was enacted during the 2013 Texas legislative session with support from both sides of the aisle. PACE has the potential to unlock a significant amount of private funding and should be fully implemented.
- Incorporate an option for mid-course review: In developing the Texas CPP compliance plan, leaders should build in an option to review it after a few years, allowing the state to take advantage of new technologies and opportunities that arise. The cleantech sector is experiencing rapid development, as evidenced by Austin’s burgeoning cleantech economy. Texas should have a nimble plan that would allow for incorporating up-and-coming technologies, like energy storage.
Beyond compliance: An enormous economic opportunity
The biggest economic development opportunity for Texas lies in going beyond compliance with the Clean Power Plan. Texas is fortunate to have an abundance of clean energy resources like wind, solar, and energy efficiency potential. State decision makers can leverage these advantages to export excess renewable power to help other states comply. Alternately, Texas could go above and beyond its target and sell carbon allowances or emission-rate credits to states with a more difficult time complying. By ramping up the production of homegrown energy sources, Texas can transform the Clean Power Plan from an environmental standard to a robust economic development strategy, bringing more jobs and increased revenues while saving huge quantities of water.
The Clean Power Plan is well within Texas’ grasp. Let’s stop fighting these commonsense standards, and start talking about how we can create a plan that best suits our resources and policies. Our economy will thank us.