Clean Energy Future Is the Clear Choice, Renewable Advocates Say
Issue #1507
Transitioning to a low carbon, clean-energy electricity sector would have profound economic and environmental impacts across the western United States, according to a study released last week by The Western Grid Group, a renewable energy advocacy organization. “Western Grid 2050: Contrasting Futures, Contrasting Fortunes” builds upon research done by a host of western energy organizations, including Western Electricity Coordinating Council (WECC), Western Climate Initiative (WCI), the Western Governors’ Association (WGA), Edison Electric Institute (EEI) and others.
The analysis expands the 10- and 20-year planning horizons out to 40 years and evaluates the economic, environmental, energy security and health consequences that energy policy decisions made over the next decade will have in the later half of the century.
“With the Western electricity sector investing more than $200 billion by 2030 regardless of the development path taken, the choices made will significantly affect quality of life in the West out to 2050 and beyond,” the report says, which was supported by the Western Clean Energy Advocates (WCEA)–an alliance of roughly 25 western renewable energy and environmental groups.
The report contrasts the performance differences of two base cases–Business As Usual (BAU) and Clean Energy Vision (CEV)–of the western electricity grid’s development trajectory from the present to 2050. The evaluations are broken into five scenarios; BAU base case and high-case growth scenarios and CEV low case, base case and high case growth scenario.
The BAU case assumes that western utilities will invest to retrofit and repower existing coal plants, as well as add some new coal generation to existing portfolios. Incremental energy needs would be met with new gas-fired generation, and renewables will be developed only to meet state RPS guidelines.
The CEV trajectory focuses on aggressive investment in energy efficiency and renewable energy technologies, as well as investments in communication technologies that would bring more flexibility to grid operations. It features a transition “completely away” from conventional coal and gradually de-rates existing hydro generation to 80 percent of current levels.
“The CEV trajectory assumes that technology choices, participant behavior and participant relationships change dramatically from what is observed today,” the report says. “A dramatic shift toward demand reduction on the customer side of the meter occurs. Energy efficiency programs, demand response programs, and distributed generation are pursued as aggressively as possible which produces significant demand reduction.”
The two alternatives require different infrastructure, different grid operations, different grid planning, and different utility regulation so that “an intentional choice between the two must be made,” the report says. Predictably, the CEV trajectory wins in all categories. T
he study found that total BAU costs range from $12 billion less to $46 billion more than the CEV alternative. Under the CEV case, the West can expect to generate more jobs per dollar invested than the BAU cases. A cutting-edge western electricity sector could also expect to be a “producer and exporter” of advanced technologies.
“Roughly $2 trillion will be invested in clean energy globally over the next 10 years,” the report says. “Clean energy leadership nationwide would attract an additional $97 billion to the U.S. over the next 10 years. A CEV trajectory will position the West to garner a significant share of that potential investment.”
The CEV case reduces the use of coal and natural gas, thus “decreasing the West’s exposure to expected continued fuel price increases and volatility,” according to the report. The CEV case also produces less emissions and scores much higher in the category of public health and climate. But trying to forecast 40 years into the future has its perils and the report leans heavily on several key assumptions.
First, the report assumes a carbon-pricing policy will be implemented and fuel prices, mainly natural gas prices, will be “high” over the next several decades. “The only way the business as usual case costs less is in the event carbon costs and fuel costs stay low for that time period,” Carl Linville, lead author of the study and director of integrated energy analysis and planning at the Aspen Environmental Group, said during a press conference Aug. 24th. But putting a price on carbon in the U.S. is a big assumption, given that the federal government currently lacks the political will to legislate a carbon price and many western states have backed away from the WCI’s regional cap-and-trade proposal. Only California and Quebec remain as potential market participants.
Former Colorado Gov. Bill Ritter touched on the difficulties of setting a carbon price during the press conference. Gov. Ritter championed Colorado’s renewable portfolio standard–one of the strongest in the nation–and helped create a flourishing clean energy economy in Colorado. But he resisted joining the WCI’s proposed cap-and-trade market out of fears it would “come and go based upon the political winds in a state.”
“The most important thing we can do as a nation is adopt a price on carbon or create a carbon market nationally,” Ritter said. The report also assumes that grid operations will become more flexible and a region-wide imbalance market will be created, allowing for increased cooperation between the 38 balancing authorities in the West.
Another key assumption is that the EPA will maintain the political backing to successfully force utilities to shut down older coal-fired power plants, rather than invest an estimated $16 billion in emissions upgrades needed to comply with Clean Air Act regulations.
The Western Grid 2050 report is the first of two studies from WGG and the WCEA proposing a sustained transition to clean energy across the western U.S. In September, the groups will release the second report, “Clean Energy Vision Policies,” which will identify policies to help guide a transition to a clean energy future [Steve Ernst].
Notes and References Introduction, p. 1. Over the next 20 years, western states will invest more than $200 billion to maintain and enhance the electricity system. Western Grid 2050: