Climate 411

Still cheaper than coal – a report on the economics of solar power in Colorado

By Rama Zakaria / Published: March 26, 2018

Workers install solar panels on a building in Superior, Colorado. Photo: SolarDave.com

(EDF’s Graham McCahan co-authored this post)

A newly-updated report is shedding light on what President Trump’s solar trade tariffs may mean for one state – and underscoring a tremendous opportunity to move forward toward clean energy, with all the benefits it can bring.

Xcel Energy filed its 30-day bid report update with the Colorado Public Utilities Commission on March 1. The update follows Xcel’s filing at the end of last year, in response to an “all-source solicitation,” as part of its Electric Resource Plan and its proposed Colorado Energy Plan.

Xcel’s plan would shut down two units at the Comanche coal plant in Pueblo, Colorado, and replace the capacity with a mix of lower carbon resources. Earlier results were unprecedented, with more than 80 percent of the bids coming from renewable energy and storage at incredibly cheap prices.

Xcel then provided bidders an opportunity to refresh their bids following President Trump’s final decision in the Suniva/SolarWorld trade case in January, which imposed tariffs on imported solar equipment.

The refreshed bids in Xcel’s updated report show minimal change relative to last year’s results and confirm that new wind and solar power in Colorado continues to be cheaper than existing coal plants – despite the trade tariffs.

According to the report, Xcel “received bid affirmation and refresh responses from all but one of the 400 plus bids.”

Of these responses:

“58% of the bids affirmed no change in pricing, 16% increased pricing, and 26% decreased pricing.”

The solar photovoltaic (PV) median bid price increased by only $1.5 per megawatt hour, and the median bid for solar PV with battery storage increased by $2.3 per megawatt hour – still the cheapest solar plus storage bids in the U.S. to date.

Based on analysis by Carbon Tracker, this means that the median bid price for solar is lower than the operating cost of all existing coal units in Colorado, while the median solar plus storage bid is lower than roughly 70 percent of operating coal capacity.

Federal renewable energy tax credits are likely buffering some of the solar trade tariff effects. While recent analyses show significant cost declines for renewable energy, with wind and solar becoming increasingly competitive with conventional generation even on an unsubsidized basis, the renewable tax credits are still a significant factor contributing to favorable wind and solar economics in the short-term and in the face of the Trump solar tariffs. That said, it’s important to recognize that coal generation has enjoyed state and federal incentives for a century, and continues to do so.

The tax credits are being phased down in the next few years, with the production tax credit for wind phasing out in 2019 and the investment tax credit for solar in 2021. So it will be critical to act now to take advantage of those credits to deploy clean energy at lowest cost and secure the associated economic and public health benefits.

Colorado is an example of this tremendous opportunity to move forward now to lock in incredibly low-cost resources, with no fuel costs and therefore no medium- to long-term volatility or risk to consumers. The Xcel bids show that there is a lower-cost clean energy alternative to keeping the polluting Comanche units online in Pueblo, and it no longer makes sense to continue to operate and maintain these units at the expense of Colorado customers and Colorado air quality.

There is even the potential for low-cost utility-scale on-site solar to be used by Evraz Rocky Mountain Steel – a steel mill and the single largest manufacturer in Pueblo and largest producer of premium rail in North America – to help cut costs and keep manufacturing jobs in Pueblo.

Evraz is Xcel’s largest retail customer in Colorado, and the 175-200 megawatt Evraz solar project that the company is considering would provide a cost-effective option to meet Evraz’s growing needs, help guarantee Evraz low and stable electricity rates in the future, and therefore help keep Evraz in Colorado.

We are already witnessing some of the impacts of Trump’s solar tariffs on jobs in some areas of the U.S., and the potential for these tariffs to stall American competitiveness and innovation – for instance, American solar company SunPower recently announced that it will lay off hundreds of workers, largely from its research and development and marketing positions.

But the Xcel refresh bids in Colorado – a state blessed with high solar and wind potential – provides an important first look at what the solar tariffs mean for the competitiveness of clean energy in a state where clean energy conditions are favorable.

In Colorado, it is clear that the advantages of clean energy for consumers and the local economy remain compelling. Despite the tariffs – and in the presence of renewable tax credits, rapid technological advances, and plummeting costs of solar and storage technologies – solar still outcompetes fossil fuels. It also helps lower costs to consumers, and protects local manufacturing jobs.

The state should act now to lock in those benefits for the people of Colorado.

Also posted in Energy, Policy / Comments are closed

Leadership: The auto industry’s missing ingredient

By Jason Mathers / Published: January 16, 2018

The automotive industry’s capacity for innovation and marketing are on full display this month. Between the Consumer Electronic Show and the North American International Auto Show, every day brings a new story about the rapid development of vehicle technology. The industry possesses the know-how and ability to deliver on the zero-emissions future if it wants to.

A Ford at an electric car charging station in Buffalo, NY. Photo by Fortunate4now

Behind the headlines of engineering feats and product plans, though, is a disturbing fact. The industry is undermining its own innovation. It’s doing this through a campaign to dramatically weaken the central tool we have to move cleaner technology into the fleet – protective greenhouse gas reduction and fuel efficiency standards for new cars and passenger trucks.

Well-designed federal standards foster the deployment of fuel saving solutions. With the certainty of long-term standards in place, manufacturers are able to make the necessary investments to scale these solutions into the fleet. Scaled production further drives down costs, enhancing automaker profitability and consumer payback.

This cycle has been in full view over the past several years as automakers have brought to market ever more efficient vehicles with record sales and strong profitability. An exhaustive technical analysis completed by the U.S. Environmental Protection Agency, National Highway Traffic Safety Administration and California Air Resources Board found that automakers were well positioned to deliver even more fuel efficiency and emissions progress in the years ahead.

With this robust technical underpinning, the U.S. Environmental Protection Agency (EPA) issued a determination to maintain the existing 2022 to 2025 standards. Back in 2012, EPA finalized these standards with the broad support of the automotive industry. But fast forward to today, and the automotive industry is pushing for the Trump Administration to reconsider this determination.

This has set up a year of incongruity where the industry’s position that the standards need to be re-examined are consistently contradicted by its product announcements. In just this past year, automakers have made the following announcements:

  • Daimler AG announced a billion dollar investment to build electric vehicles in the U.S. with production starting in the early 2020’s.
  • BMW reached 100,000 in global electric vehicle sales while promising a dozen models of electric vehicles by 2025.
  • Toyota committed to having at least 10 models of all-electric vehicles by the early 2020’s.
  • Mazda promoted an engine breakthrough that could improve efficiency by up to 30 percent, and is planning to deploy the new engine in 2019.
  • GM laid out a bold vision for a “zero crashes, zero emissions, and zero congestion” future, announced plans for 20 new electric vehicles by 2023 – including two by 2019, and rolled out the acclaimed Chevy Bolt across the U.S.
  • Ford publicized its intention to have an electric vehicle with a range of 300 miles on the market by 2020.

These are not public announcements most automakers make lightly. They make them with high confidence in their ability to meet them.

As amazing as these announcements are, none of them are even necessary to meet the vehicle greenhouse gas standards that EPA finalized in 2012 and affirmed last year. The industry is already poised to meet these standards with broader adoption of more conventional technologies.

The impressive innovation in advanced engine design and electrification – which the industry clearly believes will start to scale over the next few years – will make the standards even more attainable.

Yet, despite the remarkable recent record of innovation and the significant investments made in developing a new generation of clean vehicle solutions, the automotive industry – through its trade associations – has chosen a path to weaken our existing emissions standards and has stayed silent as EPA Administrator Scott Pruitt has threatened California’s own protective vehicle emission standards.

The industry’s actions are contradictory and concerning. Yet, there is still time for automakers to choose a different path – one that looks to the future and seeks to build a new round of protective standards that rewards the industry’s innovation, lowers costs for families and protects human health and the environment.

As the announcements are made over the coming days, we should also be listening to hear if any automakers are willing to match their record on innovation with what the industry most needs now – leadership.

Also posted in Cars and Pollution, Greenhouse Gas Emissions, News, Policy / Read 1 Response

Trump Administration misleads Americans about the cost of climate pollution

By Susanne Brooks / Published: October 25, 2017

The Trump Administration is attempting to justify the rollback of crucial environmental and health protections by vastly undervaluing the costs of climate change.

The latest safeguards under attack are the Clean Power Plan, the nation’s first-ever limits on carbon pollution from existing power plants, and the Bureau of Land Management’s vital standards to reduce wasted natural gas from oil and gas facilities on public and tribal lands. They would have health, environmental, and economic benefits worth an estimated billions of dollars annually. But you wouldn’t know it from reading the Administration’s recently revised documents – because of a series of deceptive accounting tricks, including efforts aimed at obscuring the benefits of reducing carbon pollution.

The Trump Administration has used discredited methods to eviscerate the social cost of carbon — an estimate of the costs that carbon pollution inflicts on the public, represented as the dollar value of the total damages from emitting one ton of carbon dioxide into the earth’s atmosphere.

The social cost of carbon is a tool that helps ensure that policymakers consider the health, environmental and economic benefits of avoiding extreme weather, rising temperatures and intensifying smog when they make decisions that affect climate pollution.

Climate change harms businesses, families, governments and taxpayers through rising health care costs, destruction of property, increased food prices and more — so it’s common sense that we should properly account for the value of avoiding these harmful outcomes. But the Trump Administration has systematically undermined and attacked the well-established science of climate change – including the social cost of carbon, which has had a target on its back for a while now.

The most up-to-date estimates of the social costs of carbon were developed by an Interagency Working Group (IWG) of experts from a dozen federal agencies. They were developed through a transparent and rigorous process based on the latest peer-reviewed science and economics, and with input from the public and the National Academy of Sciences.

But in March, President Trump cast aside the results of this thorough and consultative process. He issued an executive order aimed at discrediting the IWG estimates, withdrawing them as government policy, and directing federal agencies to pick their own metric.

The executive order leaves federal agencies to fend for themselves without specific guidance, opens the door to extensive legal challenges, and effectively sets up agencies to cook the books to serve the Administration’s goals.

That’s exactly what EPA Administrator Scott Pruitt and Department of the Interior Secretary Ryan Zinke just did – releasing benefit-cost analyses that massively undervalue the costs of carbon pollution, radically reducing the estimates by up to 97 percent.

The Trump Administration would have us believe that the costs of carbon pollution are near zero. The Administration’s new estimates are only a couple dollars per ton of carbon dioxide – about as much as a cup of coffee or a bus ticket.

Sadly, communities around the country are already seeing just how wrong that is. From longer wildfire seasons to more intense hurricanes, the American public is already bearing the enormous costs of climate change.

Even the IWG estimates – roughly $50 per ton of carbon dioxide based on year 2020 emissions – are almost certainly a conservative lower bound since they do not yet reflect many different types of climate impacts.

A closer look at the Administration’s deceptive math 

There are two major flaws in the Administration’s drastically reduced estimates, both of which fly in the face of established science and economic principles in service of obscuring the very real benefits of climate action.

First, the reduced estimates ignore that carbon emissions are a global pollutant, so they omit important categories of climate change impacts on the United States.

Second, they shortchange the harm to our children and future generations from climate change.

The so-called “domestic-only” estimate

Since the impacts of carbon pollution are felt globally regardless of where the emissions come from, leading researchers and the IWG have appropriately focused on accounting for that full global impact.

In contrast, the Administration’s revised estimates claim to consider “domestic-only” impacts to the United States. But that title is a misnomer – the Administration’s flawed approach ignores important categories of impacts that affect the American public. Climate impacts beyond our borders have costly repercussions for U.S. citizens in the form of changing global migration patterns, economic and political destabilization, and other “spillover” effects.

The National Academy of Sciences specifically rejected the approach the Administration is taking in a report released earlier this year, concluding that:

[C]limate damages to the United States cannot be accurately characterized without accounting for consequences outside U.S. borders.

Economist Richard Newell – president of the think tank Resources for the Future, which is leading an effort to implement the Nation Academy of Sciences’ recommendations to update the social cost of carbon estimates – has criticized the Administration’s approach, saying that considering only direct domestic impacts is:

[U]nnecessarily constrained and unwise for addressing inherently global pollutants like greenhouse gases.

The use of a “domestic-only” number also harms Americans because it undervalues the cost of climate pollution and encourages other countries to similarly undervalue – and over-emit – this pollution.

More than half a dozen leading experts argue:

[The] United States benefits tremendously if other countries set policy based on global rather than local effects.

They also point out that the use of a global estimate can encourage reciprocal climate action elsewhere. For instance, the Canadian government incorporated the U.S. IWG value in its own policy analysis.

Undervaluing the impacts on children and future generations

The Administration’s estimates also use a sharply lower value for the benefits that today’s carbon reductions provide to children and future generations. Again, this is in direct conflict with the weight of expert opinion that supports valuing these impacts even more than we did before the Trump Administration.

The Administration’s estimates “discount” future impacts at 7 percent – a rate significantly higher than the 3 percent central rate of the IWG, and one that is wholly unsupported by the economics literature when it comes to the long-lived intergenerational effects of carbon pollution.

A growing consensus among leading economists supports lower or declining discount rates, as does the Council of Economic Advisors.

As Richard Newell of Resources for the Future points out:

Practically speaking, the use of such a high discount rate means that the effects of our actions on future generations are largely unaccounted for in the new analysis.

In other words, the Administration’s estimates reveal just how little they value protecting American children and generations to come.

The social cost of carbon has profound influence on our policy process and embodies the very real costs of climate change that communities around the country are already feeling.

The Administration’s distortion of these values is illustrative of a frequent strategy of theirs – twisting the facts to validate their desired outcome, and in the process sowing doubt around the overwhelming scientific consensus on climate change.

Unfortunately, while the math the Administration is using is warped, the costs of climate change are still very real – and the American public is footing the bill.

Also posted in Clean Power Plan, Greenhouse Gas Emissions, Policy, Setting the Facts Straight / Comments are closed

Underhanded maneuvers to repeal the Clean Power Plan put Americans’ lives and health at risk

By Rama Zakaria / Published: October 9, 2017

(EDF’s Ben Levitan co-authored this post)

Environmental Protection Agency (EPA) Administrator Scott Pruitt says he will sign a proposal tomorrow to repeal the Clean Power Plan – America’s only nationwide limits on carbon pollution from fossil fuel power plants.

If the proposal matches what we’ve already seen in a leaked draft, it would be one of the most deeply harmful and reckless actions an EPA Administrator has ever taken. It would cost thousands of American lives, harm public health in myriad other ways, and lead to years of costly delays in combating the urgent threat of climate change.

Administrator Pruitt would have to go to great lengths to obscure and ignore these harmful consequences. When EPA issued the Clean Power Plan in 2015, it estimated that the plan would create up to $54 billion in annual benefits, including:

  • The prevention of up to 3,600 premature deaths every year
  • The prevention of 90,000 childhood asthma attacks every year
  • The prevention of 300,000 missed school and work days every year.

By comparison, EPA concluded that the annual costs would be much lower. And in the two years since the Clean Power Plan was issued, new analyses – including this one from New York University’s Institute for Policy Integrity – have concluded that compliance with the Clean Power Plan has become dramatically cheaper as a result of the plummeting costs of clean energy.

Yet the draft proposal for repealing the Clean Power Plan seems to rely on a significantly higher costs estimate, and much lower benefits. How is that possible?

A careful look at the numbers shows that the Administrator Pruitt’s EPA cooked the books for this proposal. They used discredited methodologies to artificially inflate costs, and to mask the consequences for our climate and obscure the thousands of lives that could be lost as a result of their repeal of the Clean Power Plan.

Here are four tactics that Administrator Pruitt has employed in the leaked proposal to inflate the costs and hide the benefits of the Clean Power Plan:

1. Disregarding lives saved by the Clean Power Plan

EPA’s original analysis of the Clean Power Plan found that it would avoid thousands of premature deaths each year by reducing particulate matter pollution – yielding up to $34 billion in annual health benefits in 2030.

According to the American Lung Association, particulate matter pollution causes permanent damage to lung development in children, aggravates asthma and other respiratory problems, increases hospitalizations, and increases deaths from heart and lung diseases including lung cancer.

The Clean Power Plan would reduce exposure to this pollution across the country – avoiding these health harms and premature deaths.

Administrator Pruitt’s draft proposal assumes away those benefits by asserting – contrary to established medical research – that there is zero health impact from reducing particulate matter pollution below certain “threshold” levels. The proposal also suggests that EPA can count only the climate benefits associated with carbon pollution, with no consideration to any health benefits at all.

This claim that there is a “threshold” level of particulate pollution below which it does not harm human health is directly contradicted by the American Heart Association and was completely discredited many years ago by an expert panel convened by EPA under the George W. Bush Administration. It also runs contrary to EPA’s long-standing practice.

As EPA itself recently explained in a court brief:

The best scientific evidence, confirmed by independent, Congressionally-mandated expert panels, is that there is no threshold level of fine particulate pollution below which health reductions are not achieved by reducing exposure.

Ignoring the deaths and harm to Americans’ health that would result from repealing the Clean Power Plan is unconscionable. The plain truth is that undoing the Clean Power Plan would deprive Americans of billions of dollars in health benefits and put then at increased risk for premature death.

2. Artificially inflating the costs of the Clean Power Plan

EPA originally anticipated that parties would comply with the Clean Power Plan in part through investments in demand-side energy efficiency, “a highly cost-effective means” for reducing carbon pollution from the power sector.

Demand-side energy efficiency measures help consumers save electricity, resulting in lower electric bills for hard-working Americans, less pollution, and a more reliable electric grid. Investments in energy efficiency are largely offset by the electricity savings that result.

Yet the upside-down accounting in the draft proposal adds those energy efficiency investments to the costs of the Clean Power Plan without deducting the electricity savings those investments yield. This makes it look like the power sector is paying for both energy efficiency and the electricity that it no longer needs to produce. Therefore, this upside-down accounting includes billions of dollars of imaginary electricity costs – for electricity that will never be generated or purchased.

The draft proposal adds the cost of this imaginary electricity to its estimate of Clean Power Plan benefits — to represent the “benefit” of not having to purchase electricity that was never produced in the first place. When comparing costs and benefits, this imaginary electricity is a net wash ­– but it enables EPA to inflate its estimate of the plan’s costs by up to $19.3 billion in 2030.

The draft proposal also uses a higher discount rate of 7 percent for energy efficiency investments – providing no meaningful justification for a choice that further inflates costs by $6.2 billion.

The cumulative effects of adding the cost of imaginary electricity and using a higher discount rate increases costs by up to $25.5 billion in 2030.

3. Shortchanging the benefits of reducing carbon pollution

Administrator Pruitt’s proposal aggressively undercuts the social cost of carbon. That’s the estimate of damages that climate pollution causes for our families and communities – from more intense hurricanes and heat waves, more wildfires, and the many other threats of climate change.

By using an unrealistically low figure, the proposal severely undervalues the benefits of the Clean Power Plan’s carbon reductions.

The original Clean Power Plan utilized an estimate of the social cost of carbon developed over many years by experts from a dozen federal agencies who used the best available science and repeatedly considered public input.

The draft proposal for repealing the Clean Power Plan has new, misleading values that use unsound methods rejected by independent experts to yield a lower estimate of the Plan’s benefits.

The draft proposal simply ignores important categories of carbon reduction benefits

The new proposal claims to count only the domestic U.S. impacts of carbon pollution, even though this pollution causes worldwide harm. A recent report by the National Academy of Sciences affirmed the importance of counting global benefits, explaining that the benefits of reducing carbon pollution would be dangerously undervalued if every country used a domestic-only social cost of carbon.

The draft proposal’s “domestic-only” cost estimate also ignores significant harms to the U.S. that arise from climate change impacts in other countries – including “global migration, economic destabilization, and political destabilization,” and “[l]ower economic growth in other regions [that] could reduce demand for U.S. exports, and lower productivity [that] could increase the prices of U.S. imports.”

For these reasons, the National Academy of Sciences concluded earlier this year that:

Climate damages to the United States cannot be accurately characterized without accounting for consequences outside U.S. borders.

Administrator Pruitt’s approach flies in the face of that expert advice.

The draft proposal short-changes our children by discounting pollution reduction benefits for future generations

The new proposal also uses a sharply lower value for the benefits that today’s carbon reductions provide to future generations.

The original Clean Power Plan “discounted” the future benefits of carbon reductions at a rate of three percent per year, based upon the findings of the inter-agency working group.

But the new proposal uses discount rates as high as seven percent, without any justification – a value that is much higher than recommended by the National Academy of Sciences or the economics literature.

The cumulative effects of ignoring global impacts and increasing the discount rate are dramatic. In the original Clean Power Plan, EPA estimated climate benefits of $20 billion in 2030 (using a three percent discount rate). The draft proposal to repeal the Clean Power Plan estimates climate benefits of just $0.5 billion in 2030.

Click to enlarge

 

4. Ignoring how low-cost clean energy means the Clean Power Plan will be even more affordable

In the two years since EPA finalized the Clean Power Plan, the plan’s goals have become even more achievable and low-cost than originally projected – thanks to electricity sector developments including the sharply declining costs of renewable energy.

But the new draft proposal has made no attempt to update its economic analysis, and does not appear to acknowledge that recent studies of the Clean Power Plan have found compliance costs are now much lower than EPA originally estimated.

Instead, Administrator Pruitt is proposing to repeal this life-saving, economically beneficial public health protection before even bothering to properly consider the latest data.

The recent report from the Institute for Policy Integrity highlights the falling costs of complying with the Clean Power Plan and points to several power sector developments that explain this trend.

The report presents several recent economic analyses conducted by independent, non-governmental entities that estimate substantially lower compliance costs than EPA projected in 2015. For instance, a June 2016 analysis by M.J. Bradley & Associates, using the same electric sector model as EPA but updating several inputs, finds that compliance would cost up to 84 percent less than EPA originally estimated.

EPA recognized and evaluated many of these precise studies as part of its Clean Power Plan deliberations. Yet for the sake of repealing the Clean Power Plan, Administrator Pruitt has decided to ignore these studies.

America deserves better

The Clean Power Plan is the most significant step the U.S. has ever taken to address the crisis of climate change. Once fully implemented, it will provide enormous public health benefits – making Americans safer, healthier, and more productive.

If Administrator Pruitt is intent on rolling back a life-saving protection for human health and the environment, the American people at least deserve an honest evaluation based on the best available data.

Unfortunately, it looks like he’s using underhanded maneuvers and deceptive accounting gimmicks to justify rescinding the Clean Power Plan instead – and the consequences for the health and safety of Americans will be all too real for decades to come.

Also posted in Clean Power Plan, Energy, Health, News / Comments are closed

Climate and clean energy progress continues in spite of Clean Power Plan repeal rumors

By Charlie Jiang / Published: October 5, 2017

According to news reports, Environmental Protection Agency (EPA) Administrator Scott Pruitt is planning to start the process of repealing the Clean Power Plan very soon.

This seriously flawed and misguided effort would be a dangerous step backwards for public health and climate protections.

However, as the Trump Administration continues to unravel these protections, the transition to a clean energy future is accelerating. States, cities, and power companies are responding to the ongoing attacks by forging ahead with ambitious actions to slash carbon pollution in order to respond to the threat of climate change and accelerate the clean energy revolution.

Clean Power Plan repeal?

The Clean Power Plan is a common-sense rule to safeguard public health by reducing carbon pollution from power plants to 32 percent below 2005 levels by 2030.

The Clean Power Plan would prevent:

  • 3,600 premature deaths each year
  • 1,700 heart attacks each year
  • 90,000 asthma attacks each year

Administrator Pruitt reportedly intends to propose repealing the Clean Power Plan in the coming days.

If so, EPA will likely issue an “Advance Notice of Proposed Rulemaking” (ANPR) to solicit public input on a replacement rule – a protracted process that is likely to lead to a far weaker standard.

The ANPR process could lead to years of harmful and unjustified delay in implementing urgently needed limits on carbon pollution from fossil fuel power plants.

Forging ahead to a clean energy future

The U.S. power sector has already made enormous strides in deploying clean energy resources and slashing greenhouse gas emissions.

American Wind Energy Association

 

Solar Jobs Census 2016 – The Solar Foundation, interactive map

Globally, the International Energy Agency (IEA) reported yesterday that renewables accounted for almost two-thirds of new capacity installed.

  • Solar additions worldwide grew faster than any other fuel last year, including coal and natural gas.
  • Over the next five years, the IEA projects renewable capacity to grow by over 920 gigawatts – a 43 percent increase by 2022.

Meanwhile, by the end of 2016, carbon pollution from U.S. power plants had already declined to 25 percent below 2005 levels – meaning the power sector is already almost 80 percent of the way to achieving the Clean Power Plan’s 2030 targets.

A new report by the Institute for Policy Integrity highlights the falling costs of complying with the Clean Power Plan. The report points to several market and policy developments including low natural prices, declining renewable energy costs, the 2015 renewable energy tax credit extensions, and state programs supporting the adoption of clean energy technologies.

The Clean Power Plan targets have become a floor for forward-looking states and companies that acknowledge the Clean Power Plan was a first step towards realizing the promise of a low-carbon power sector.

Yet this shift towards clean energy – driven by market forces and accelerating subnational action – is no substitute for decisive federal action that will ensure continued and accelerated progress in achieving the emissions reductions required to stem the tide of climate change.

The U.S. Energy Information Administration projects that without the Clean Power Plan, carbon emissions from the power sector will increase by 2030 – reversing the current downward trajectory in the United States and leaving the country behind as the global clean energy revolution continues.

To keep us moving forward, state and local officials are stepping up their game by cutting carbon pollution and switching to clean energy in spite of — and in direct response to — President Trump’s rollbacks.

  • Fourteen states and Puerto Rico, accounting for more than 10 percent of U.S. carbon emissions from the power sector, pledged as part of the new U.S. Climate Alliance to reduce their greenhouse gas emissions consistent with the goals of the Paris Agreement, as well as meet or exceed their Clean Power Plan targets.
  • 381 mayors (and counting) representing more than 67 million Americans also pledged to honor the Paris Agreement goals and work to meet the 1.5° Celsius global temperature target. Dozens of cities have committed to move to 100 percent clean energy.
  • Colorado Governor John Hickenlooper signed an executive order in July 2017 committing the state to slash greenhouse gas emissions to 26 percent below 2005 levels by 2026, consistent with U.S. goals under the Paris Agreement. “The vast majority of our residents, and indeed the country, expect us to help lead the way toward a clean and affordable energy future,” Governor Hickenlooper said in a press release.
  • Nine states comprising the Regional Greenhouse Gas Initiative (RGGI) in August announced a proposal to cut carbon pollution from the power sector an additional 30 percent between 2020 and 2030 – a 65 percent reduction below the original 2009 pollution cap. The proposal demonstrates bipartisan commitment to combat climate change, with five Republican and four Democratic governors helming the RGGI states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont). Meanwhile, both New Jersey gubernatorial frontrunners have pledged to rejoin RGGI after this year’s election.
  • Virginia regulators are working to establish a “trading-ready” program to slash power plant carbon emissions in response to an executive order Governor Terry McAuliffe signed in May 2017. “Today, I am proud to take executive action to cut greenhouse gases and make Virginia a leader in the global clean energy economy,” Governor McAuliffe said when he signed the order.
  • California affirmed its position as a global leader on climate progress with a bevy of actions in the past year. In September 2016, legislators passed SB 32, which requires the state to slash greenhouse gas emissions to 40 percent below 1990 levels by 2030. In July 2017, the state secured a 10-year extension to its landmark cap-and-trade program and strengthened tools to improve local air quality in a bipartisan effort. “All over the world, momentum is building to deal seriously with climate change,” Governor Jerry Brown said in July. “Despite rejection in Washington, California is all in.”
  • At least 20 states and the District of Columbia have adopted ambitious greenhouse gas reduction targets, with most aiming for an 80 percent reduction by 2050 below baselines ranging from 1990 to 2006. Twenty-nine states and D.C. have binding renewable portfolio standards in place, while eight more have set renewable portfolio goals. Twenty states have set mandatory energy efficiency targets, while eight more have set energy efficiency goals.

The nation’s largest power companies are similarly pledging to slash carbon pollution and deploy renewable energy resources as they embrace the rapid transition to a clean energy economy.

  • The CEO of American Electric Power (AEP), the country’s largest generator of electricity from coal, had this to say in response to President Trump’s decision to withdraw the U.S. from the Paris Agreement: “I think it’s really important for us to stay engaged from an international community standpoint, particularly addressing large issues. And not withstanding that, we’re continuing on our path of moving to a clean energy economy.” AEP has cut carbon pollution by 44 percent since 2005, and has plans to add more than eight gigawatts of wind and solar in the coming years.
  • Duke Energy, the nation’s largest power producer, this year announced plans to reduce carbon emissions to 40 percent below 2005 levels by 2030. “Our next major investment platform focuses on generating cleaner energy,” said CEO Lynn Good. “Our retirement of more than 40 older, less efficient coal units, coupled with the addition of clean natural gas plants and renewables, is driving our emissions reduction.”
  • DTE Energy Co. announced plans in May 2017 to curb its carbon emissions more than 80 percent by 2050 by closing coal-fired power plants and adding new gas-fired generation and renewables. “Not only is the 80 percent reduction goal achievable – it is achievable in a way that keeps Michigan’s power affordable and reliable,” DTE Chairman and CEO Gerry Anderson said. “There doesn’t have to be a choice between the health of our environment or the health of our economy; we can achieve both.”
  • Xcel Energy committed in June 2017 to achieving a 60 percent reduction in carbon emissions by 2030, relative to 2005 levels. In August, the company announced plans to retire two coal-fired units in Colorado, continuing its progress towards a cleaner generating portfolio. In addition, Xcel’s massive new investments in renewable energy –including a proposal to add 3,380 megawatts of wind generation across seven states –will help the company generate 40 percent of its energy from renewables by 2021.
  • Berkshire Hathaway Energy subsidiary MidAmerican Energy has announced a goal to provide 100 percent renewable energy, including a $3.6 billion project to add 2,000 megawatts of wind, which will expand wind energy to 85 percent of the company’s sales. Said CEO Bill Fehrman: “Our customers want more renewable energy, and we couldn’t agree more.”
  • Minnesota Power, a division of ALLETE, plans to provide 44 percent of its electricity from renewable resources by 2025. Said one executive, “We look forward to working with our customers and regulators to continue down the path toward a safe, reliable, cleaner and affordable energy future.”

The imperative of addressing climate change, overwhelming public support for climate action, and clear market trends towards lower-carbon energy resources are driving states, cities, and power companies to lead the way to a low-carbon future.

If governors, mayors, and power sector CEOs continue to take steps to reduce carbon pollution, they will realize the tremendous benefits of a clean energy economy — thousands of new jobs, critical public health protections, and increasingly resilient communities and infrastructure.

The Trump Administration’s effort to repeal the common-sense Clean Power Plan – its latest attack on life-saving safeguards for our children’s health – will not change the reality of climate change or the accelerating transition to an economy powered by low-carbon energy.

However, without a quick return to meaningful federal progress, the U.S. will fall further behind in the global clean energy revolution – one that could lead to shared prosperity and enormous opportunities for millions of Americans.

Also posted in Clean Power Plan, Energy, Greenhouse Gas Emissions, News / Comments are closed

DOE seeks unprecedented action to exempt coal from competitive markets

By Michael Panfil / Published: September 29, 2017

(This post was co-authored by EDF’s Rama Zakaria)

Secretary of Energy Rick Perry today announced a sweeping and unprecedented proposal to pay coal and nuclear power plants, a move that would increase electricity bills and climate pollution for Americans.

The proposal would impose a new cost on all electric ratepayers that would be paid primarily to owners of coal plants, undercutting billions of dollars of investment by people risking their capital to compete in and transform our energy markets.

The decision, based on mischaracterized reliability concerns, ignores a recent Department of Energy (DOE) report Secretary Perry commissioned that found no reliability concern. The report’s finding is consistent with voluminous literature and evidence that concludes there are no signs of deteriorating reliability on the grid today, and cleaner resources and new technologies being brought online are strengthening reliability.

DOE’s proposal will increase electricity bills and hurt American families

DOE’s proposal provides cost recovery for uneconomic baseload generators such as coal-fired power plants at the expense of Americans’ electricity bills, families and communities’ health, and the environment.

Cost recovery, put simply, means that no matter how expensive coal-fired power gets Americans must foot the bill. No matter how old, expensive, or dirty a coal plant may be, it would be paid to remain online at the expense of cleaner, newer, and less expensive energy resources.

Such regulatory intervention would stand in the way of an economic and efficient electric grid required by law and would impose massive financial losses on the companies that have been investing to build a new and lower cost power system.

Multiple studies have already shown that coal generators that are retiring are old, inefficient units that are relatively expensive to operate. According to one study, coal units that announced plans to retire between 2010 and 2015 were 57 years old – well past their intended life span of 40 years. These units are not retiring prematurely; they are retiring because they are unable to compete against cheaper, more efficient, and cleaner resources.

As Secretary Perry’s own report stated, coal retirements are primarily driven by low natural gas prices. Yet with this proposal, DOE again appears determined to ignore competitive market forces and instead attempt to bail out coal-fired power plants, no matter the cost to Americans. Not only would this increase electricity bills for the public but also unnecessarily expose the public to dangerous and harmful air pollution.

The costly solution to a non-existent problem

A wide range of literature, including DOE’s own baseload study, confirm that electric reliability remains strong and bulk power system resilience continues to improve. Yet, DOE ignores its own findings and suggests that coal bailouts are needed for reliability and resiliency. Not only is DOE trying to solve a problem that doesn’t exist, it is doing so by forcing ratepayers to pay for a solution that doesn’t work.

DOE’s proposal would compensate coal units for a 90-day on-site fuel supply, yet just recently we saw in the aftermath of Hurricane Harvey that W.A. Parish, one of America’s largest coal plants, was forced to shutter two of its units after its coal piles were flooded. Indeed, available data indicates that coal plants fail more than any other resource.

In contrast, clean energy resources are increasingly demonstrating their ability to support reliable electric service at times of severe stress on the grid. For instance, wind energy contributed critical power during Hurricane Harvey. In another example, during the 2014 polar vortex – when frozen coal stock piles led to coal plant failures – wind and demand response resources were increasingly called upon to help maintain reliability.

Cleaner resources and new technologies boost grid reliability and resiliency

Many studies have highlighted the valuable reliability services that emerging new technologies, such as electric storage, can provide. DOE’s own report found that cleaner resources and emerging new technologies are creating options and opportunities and providing a new toolbox for maintaining reliability in the modern power system.

FERC has also long recognized the valuable grid services that emerging new technologies could provide. From its order on demand response to its order on frequency regulation compensation, FERC recognized the value of fast and accurate response resources in cost-effectively meeting grid reliability needs. More recently, FERC’s ancillary service reforms recognize that, with advances in technologies, variable energy resources such as wind are increasingly capable of providing reliability services such as reactive power.

Any action should allow all technologies to compete to provide the least-cost solution to a reliable and resilient grid

Essential Reliability Services, such as frequency and voltage support, are already being procured today to meet grid reliability needs. For instance, frequency regulation is procured as part of the ancillary services markets. These markets allow all resources to compete and to provide the necessary grid services at least cost to Americans.

FERC should ensure that any additional action taken in response to DOE’s proposal continues to be fuel-neutral, non-discriminatory and in-market. By doing so, Americans can not only have reliable and affordable electricity but can also reap the benefits of cleaner and healthier environment.

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