UCS Blog - Clean Energy (text only)

Which Parks and Rec Character is FirstEnergy?

Source: Florian64190/Wikimedia Commons

FirstEnergy at it again, begging this administration for a handout.

FirstEnergy is a large, investor-owned, electric utility that operates in 13 different states. It operated a competitive generation subsidiary, First Energy Solutions (which is currently bankrupt). Recently it announced its intentions to retire two coal-fired power plants, observers believe this was just an attempt to garner support to get bailed out. The local grid operator (PJM) concluded the lights will stay on absent these two plants.

Despite being a billion-dollar corporation, FirstEnergy acts a lot like an entitled teenager. Not satisfied with its allowance, it moved out only to find out that the real world is tuff.

Now, after racking up huge amounts of debt, the spoiled brat wants to move back in and live rent-free.

And get its allowance back.

And wants all of us to pay off its debt.

And the debt of all its friends.

A problematic history

Other analysts and watchdog groups have chronicled the economic dire straights that FirstEnergy is facing and the dubious efforts they’ve engaged to try and get out the current predicament, which includes:

(this list may not be comprehensive) 

In part, a self-inflicted problem

I’ve conducted a comprehensive look at how coal-fired power plants operate in competitive energy markets including PJM, where FES does business. Two of FES’s coal-fired power plants (Kyger Creek and WH Sammis) operated for long periods of time when it would have been cheaper to just turn off.

Over the past three years, FES ran Kyger Creek and W.H. Sammis in such a way that likely imposed nearly $90 million in unnecessary costs onto FES’s financial ledger. $90 million is a drop in the bucket compared to the billions of dollars FES is seeking to be bailed out, but it goes to show you how poorly run the company is.

What does all this have to do with Parks and Rec?

In many ways, FirstEnergy reminds me of the Parks and Rec character Mona-Lisa Saperstein (portrayed by the brilliant and amazingly talented, Jenny Slate).

FirstEnergy demands to be bailed out.

Ohio says, “No.”

FirstEnergy tells everyone that without a bailout coal will retire, and it will impact reliability or even national security.

And then lobbies again for a bailout.

Meanwhile, Buckeyes, consumer advocates, environmental advocates, grid experts and plenty of other folks think that FirstEnergy is…

https://commons.wikimedia.org/wiki/File:Parks_And_Recreation_Logo.png NBC NBC NBC NBC NBC

Senate Should Reject Trump’s Coal-Friendly Energy Commission Nominee

Photo courtesy of Sen. Martin Heinrich

 

The steady parade of unqualified, ideologically driven appointees for key Trump administration positions has resumed now that things in Washington have settled down after the mid-term elections. Last week, Trump tapped Matthew G. Whitaker to replace Attorney General Jeff Sessions. This Thursday, the Senate will hold a hearing to confirm attorney Bernard McNamee to fill a vacancy at the five-member, presidentially appointed Federal Energy Regulatory Commission (FERC), a relatively obscure—but critically important—independent agency that oversees interstate power lines and pipelines.

Trump presumably picked McNamee to put the administration’s pro-fossil-fuel spin on a number of key decisions FERC will make in the coming months, especially one that would bail out uneconomic coal plants. If that happens, Americans will be saddled with higher electric bills, more toxic air pollution, and more heat-trapping emissions that cause climate change. The commission also will be considering rules that would encourage energy storage, rooftop solar installations, and remotely located renewable sources.

McNamee would replace Robert Powelson, a former utility executive and Pennsylvania utility regulator who left the commission in August after less than a year. One of the three Republicans on the commission, Powelson maintains that FERC should be insulated from political pressure. “I don’t make any decision based on the fact that I’m a lifelong Republican,” he told Energywire. “I have a mean independent streak in me.”

McNamee, who has no utility sector experience, is all about partisan politics. He worked for Republican attorneys general in Virginia and Texas and advised Republican Sens. George Allen and Ted Cruz before joining the Department of Energy (DOE) in May 2017 as deputy general counsel for energy policy.

Last February, he left DOE to work for the Texas Public Policy Foundation, a libertarian think tank funded by a rogues gallery of polluters, including Chevron, Devon Energy, ExxonMobil, Koch Industries and Luminant, the largest electric utility in Texas. It’s the same outfit that produced Trump’s unqualified—and rejected—nominee to head the White House Council on Environmental Quality, Kathleen Hartnett White.

While at TPPF, McNamee penned a paean to his favorite energy source for The Hill, a political trade publication, titled “This Earth Day, let’s accept the critical role that fossil fuel plays in energy needs.” “We have been told that fossil fuels are wrecking the environment and our health,” his April 17 column read. “The facts are that life expectancy, population and economic growth all began to increase dramatically when fossil fuels were harnessed….” Renewable energy sources, he added, cannot replace fossil fuels, but not to worry, “America is blessed with an abundant supply of affordable natural gas, oil and coal.”

McNamee rejoined DOE in June as the executive director of the agency’s policy office. Before and after his brief stint at TPPF, he promoted Energy Secretary Rick Perry’s proposal to require regional transmission operators to buy electricity from power plants that can store a 90-day fuel supply on site, ostensibly to strengthen electricity-grid resiliency. The plan, which would prop up coal and nuclear plants that have been struggling to compete on the open market with cheaper natural gas and renewables, would cost ratepayers an estimated $17 billion to $35 billion annually.

At Trump’s behest, Perry asked FERC in September 2017 to issue grid resiliency rules to protect failing coal and nuclear plants. FERC rejected the request, concluding that DOE did not provide any evidence that coal and nuclear plant retirements would undermine grid reliability. An analysis by Mid-Atlantic grid operator PJM of the impact of closing at-risk plants in its region also found no threat to the grid.

Besides trying to reverse FERC’s coal- and nuclear-power bailout decision, McNamee could do lasting damage in other ways. For example, the commission is currently not required to consider the impact of climate change when making electricity policy decisions, but the two Democratic commissioners think the “social cost of carbon”—the financial damage caused by carbon pollution—should be incorporated in environmental reviews for gas pipelines and other fossil fuel infrastructure. Likewise, the commission will be deliberating over whether it should eliminate barriers to electric energy storage, make it easier for solar panel owners to sell their excess power back to electric utilities, and recommend federal incentives for more transmission-line construction, which would enable remotely sited wind and solar projects to compete with natural gas. Given McNamee’s biases, it is unlikely he would support any of those initiatives.

This week’s confirmation hearing, hosted by the Senate Committee on Energy and Natural Resources, will be chaired by Sen. Lisa Murkowski, who is no stranger to the FERC confirmation drill and quite knowledgeable about the commission’s mandate. In her opening statement during a FERC commissioner confirmation hearing in 2013, Murkowski made a case for rejecting an Obama nominee that could be easily applied to McNamee.

“FERC is independent by law and by design. It is clearly distinct from executive agencies that carry out policy directives from the White House…,” she explained. “It is critically important for us to enable the agency—and its professional nonpartisan employees who report to the chairman as their CEO—to maintain its strong culture as an expert agency free of undue political influence.”

Murkowski should hew to that line on Thursday—and the Senate should reject the McNamee nomination.

Ørsted, Deepwater Wind: Are Offshore Wind Mergers Good for Us?

Kim Hansen/Flickr (https://www.flickr.com/photos/slaunger/5483311060/)

Last week saw offshore wind giant Ørsted complete its acquisition of local star Deepwater Wind. Is that a good thing?

The players and the scorecard

The $510-million deal brings together two important players in the offshore wind space. Rhode Island-based Deepwater holds the distinction of being the developer of the first offshore wind project in the Americas, the Block Island Wind Farm in Rhode Island waters. Since no successor projects have gotten that far, it also holds the distinction of being the owner of the only offshore wind project in the Americas.

Ørsted, formerly the Danish Oil and Natural Gas company, developed the very first offshore wind farm, in Denmark in 1991, and is the largest developer of offshore wind in the world, including the new world recordholder for largest offshore wind farm. In this country, it holds an offshore wind lease in federal waters off the Jersey coast, and a half share of another off Massachusetts. It’s also involved in a pilot project under development off Virginia.

For Deepwater’s investors, the acquisition by Ørsted, originally announced last month, likely represents a successful exit on the bet they took with the company, established in 2007.

For Ørsted, acquiring Deepwater gives it an even more solid footing in the US market. Along with the Block Island project, Deepwater holds two of the four federal offshore wind leases off Rhode Island and Massachusetts, and half of another off Maryland. It won bids early this year to supply Rhode Island with 400 MW of offshore wind and Connecticut with 200 MW. And its proposed 90 MW wind farm east of Long Island looks like a good bet to be one of the next places for steel in the water.

Credit: Derrick Z. Jackson

What about us?

The Ørsted press release announcing the Deepwater acquisition said that they expected it “to deliver a healthy value creation spread on top of our cost of capital, with additional significant strategic upside.” It’s not entirely obvious what that business-speak means, but it’s clear they think it’s a good idea for them.

But what does this merger mean for us—consumers, policy makers, or just interested observers?

On the one hand, competition is good, and a merger like this arguably reduces competition—in the case of bid opportunities like the ones from Rhode Island and Connecticut (and Massachusetts), for example. Some might also feel some regret having an American company get acquired from abroad.

On the other hand, it’s easy to view this as a strong vote of confidence by a company that knows more than a thing or two about the offshore wind space. If Ørsted is willing to put a half a billion dollars into increasing its presence in these parts—not to mention the investment that its new portfolio of projects will require—that’s a pretty strong sign that we (the public, the states, the federal government) must be doing something right in working to create an attractive climate for investment in offshore wind.

There’s also clearly a lot of value in achieving economies of scale in this industry. European offshore wind project keep getting larger and cheaper, and now we’ve seen dramatic drops in the price of power from offshore wind on this side of the Atlantic, in Massachusetts’s recent long-term contracting.

And, while Deepwater was no shrinking violet, financially (its owner was a hedge fund with tens of billions of dollars under management), Ørsted brings plenty of capital to bear plus its 27-year experience in the offshore wind space.

Given the incredible challenge of climate change, our need to do offshore wind power not just quickly but correctly, and the tremendous potential off our shores/near our cities, most anything that accelerates the ramp-up of offshore wind in this country is probably a good thing for us as consumers, and for us as citizens of a world in need of decarbonization.

Because ultimately, that’s where our focus needs to be: faster, cheaper, right-er. We’ll be watching the industry to make sure that’s where their focus stays too.

Photo: Kim Hansen/Wikimedia Commons

Forget the Trump Bailout—Here’s a Real Solution for Nuclear and the Climate

The Trump Administration’s proposal to bail out uneconomic coal and nuclear power plants is a bad idea predicated on a made-up problem. The real crisis we face is the climate crisis, as the recent IPCC report highlighted in stark terms last month. We must steeply reduce CO2 emissions over the next decade and beyond or we will lock in warming that will have disastrous consequences for people around the word.

We’ve dwindled away our most precious commodity in the climate fight… time. Now there are no easy options; no easy pathways. We are in a world of trade-offs. We must reconcile the science and the clock with the reality of where we are in our transition to a clean energy economy.

For the electricity sector, that means building a lot (a lot a lot) more renewables and increasing energy efficiency. It means modernizing our grid, ramping up energy storage, and phasing out coal and natural gas without carbon capture and storage (CCS). And it also means scratching and clawing for every metric ton of CO2 we can avoid, including guarding against the risk of existing nuclear power plants retiring abruptly and being replaced by natural gas.

UCS’ new report, “The Nuclear Power Dilemma: Declining Profits, Plant Closures, and the Threat of Rising Carbon Emissions” analyzes the economics of the existing nuclear fleet and concludes that a well-designed carbon price or a low-carbon electricity standard will help keep existing nuclear plants that meet high safety standards online.

The Trump coal and nuclear bailout is not a real solution

Earlier this year, the administration issued a notice of proposed rulemaking to the federal electricity regulatory commission (FERC), which would use executive authority to force consumers to buy more expensive electricity produced from coal and nuclear plants.

This is a bailout. Not only would it cost rate-payers (or taxpayers, depending on how the bailout is paid for), but the additional use of coal would hurt public health and increase the heat-trapping emissions that drive climate change.

The administration said they needed to take this unprecedented action because the prospect of coal and nuclear plant closures would jeopardize electricity reliability—keeping the lights on—and make the grid less resilient. This justification has been widely disproved by grid experts and was unanimously rejected by FERC. The administration’s actions appear to be based more on politics than on substance.

Even if this administration abandoned the current architecture of the proposal, jettisoning the coal bailouts and focusing only on nuclear, it would still be a poor approach. Dumping a bunch of rate-payer or taxpayer money into the coffers of private interests without big public benefits, transparency, and accountability is wrong.

Likewise, temporary bailouts for nuclear don’t address the systemic market failure which is a significant part of why nuclear plants are losing money in the first place: zero-carbon benefits are not rewarded in the marketplace in most states. Nuclear is competing with natural gas on an uneven playing field, and it’s losing. A temporary nuclear bailout would do nothing to address the underlying issue; applying a Band-Aid on a deep, gaping wound is not a real solution. Throwing good money after bad is not a responsible use of the public trust; these plants would be right back in the red the minute that money runs out.

What nuclear and other low-carbon technologies need is durable policy support that corrects this systemic market failure.

Real policy solutions that help existing nuclear and the climate

Our new report found that even a very modest carbon price ($25 per ton in 2020, increasing 5 percent per year) would solidify the economic position of the existing nuclear fleet, helping to avoid an over-reliance on natural gas and significant emissions increases. It would also incentivize the development and deployment of renewables, as well as other low- or zero-carbon energy technologies.

One policy option that hasn’t received as much attention and can also deliver similar benefits as a carbon price is a National Low-Carbon Electricity standard (LCES), or “Clean” Energy Standard.  UCS has supported this approach in the past, but as i will explore in a subsequent blog, the policy design matters.  For example, the last federal iteration of this policy was the Bingaman Clean Energy Standard Act of 2012, which gave partial credit to natural gas generation without CCS, which we would not support today, given the country’s growing over-reliance on natural gas, and the significant associated carbon emissions.

UCS modeled two policy scenarios: a modest carbon price case ($25 per ton) and a modest low-carbon electricity standard (60% by 2030/ 80% by 2050). The figure below compares the modeling results for our nation’s electricity generation mix under the policy scenarios to the 2017 generation mix, a reference case in 2035 (which includes the 5 nuclear plants slated to retire by 2025) and to three ‘early nuclear retirement scenarios’ that assume an additional 13-26 percent of the current nuclear fleet retires by 2026 because of economic reasons (before their current 60-year operating licenses expire). The early nuclear retirement scenarios are based on our analysis of the profitability of the existing fleet.

Both the carbon price and the LCES help maintain existing nuclear generation at reference case levels through 2035. In the case of the LCES, we see additional reductions in natural gas and additional development of wind and solar. How much the generation mix shifts to low-carbon resources is a function of the stringency of the policy; a higher carbon price or a more ambitious LCES target would show even more renewables.

The figure below shows the emissions trajectory of the different scenarios, including a carbon price and an LCES. Note that our early nuclear retirement scenarios show a 6 percent increase in emissions at a time when we need to be on track to achieve a 90 percent reduction by 2040 (shown here as the National Research Council Carbon Budget) to stay on track with our climate goals. The figure also shows that a 60 percent by 2030 LCES provides similar emissions reductions as the $25 per ton electricity sector carbon price, but note that those policies only get us a little more than half way to our emission reductions target by 2035. More stringent policies or additional complementary polices are required.

A national LCES is good for red states

UCS has been a leading advocate of renewable electricity standards (RES) around the country for many years, and supported the last federal iteration back in 2015, the Udall 30 by 2030 bill. We continue to believe that Congress should pass a strong national RES to help incentivize more renewables development, reduce our nation’s growing over-reliance on natural gas, and aggressively bring down carbon emissions. But, a properly designed national LCES can provide similar benefits, while also solidifying the economic position of existing nuclear plants that meet strict safety standards (preventing abrupt closures). And while we did not analyze this in our modeling, an LCES could also provide an incentive for developing new low and zero carbon energy technologies, including potentially new nuclear reactors and carbon capture and sequestration technologies (CCS), giving us more tools for the climate fight.

A national LCES can broaden the tent of support for low-carbon electricity in parts of the country that are not as far along in their transition to a clean energy economy. This policy helps mitigate some of the imbalances to states with less renewable development relative to a national RES. And it gives many red state congressional delegations a clean energy policy that may be a better fit for their state, freeing up badly needed support from conservatives.

For example, a strong national LCES would provide a lot of benefit to states like South Carolina and Tennessee, for which nuclear power makes the biggest contribution to their electricity mix, with very little coming from renewables. These states could be in position to benefit economically from this policy, while an LCES would also incentivize additional renewables and/or low-carbon development in those states as they prepare to eventually replace those nuclear plants when their useful life expires.

A strong national LCES would also benefit states like Iowa and Kansas, which have enormous wind power as well as nuclear, but also have a lot of coal in their electricity mix. A national LCES would help that existing nuclear stay online, as well as retire some of that expensive and harmful coal generation, while also building on the amazing 36-37% wind energy in their mix. Iowa and Kansas could also easily comply with an LCES and will benefit economically.  All of the states below would realize significant public health benefits that come with trading off coal for renewable energy development.

Electricity Generation Share by Sources, 2017 (source: The Nuclear Power Dilemma)

STATE Nuclear Coal Nat. Gas Hydro Wind Solar Biomass Other SC 58% 19% 17% 3% 0% 0% 3% 0% TN 40% 35% 13% 10% 0% 0% 1% 0% IA 9% 45% 6% 2% 37% 0% 0% 1% KS 21% 38% 5% 0% 36% 0% 0% 0%

We need to create incentives for states to reduce investments in coal and natural gas, maintain the low-carbon generation they already have, and substantially increase investments in new low or zero carbon technologies. Complementary policies to boost energy efficiency will also be needed. With a national LCES, several years from now the table above could show a significant reduction in generation from coal (and natural gas), while holding nuclear generation steady, and substantially increasing the contribution from renewables.

Absent a national LCES or some other policy that incentivizes and protects low carbon generation, the electricity mix in states like South Carolina and Tennessee is likely to go in the wrong direction for the climate.

We need real solutions, not bailouts

Our new analysis of the economics of the existing nuclear fleet clearly show there’s a risk of abrupt retirements, and that the generation would be replaced primarily by fossil fuels. That’s a climate problem, but it’s also a public health problem, it’s a jobs concern, there are tax revenue implications for communities, and much more. States like Illinois, New York and New Jersey avoided abrupt nuclear retirements by working with stakeholders to reach agreements that spawned real policy solutions. Pricing carbon and creating national standards for low emissions electricity are real policy solutions that would protect existing nuclear that can be implemented at the state or the federal level.

These policies don’t cost taxpayer money, and the modeling we’ve done on the electricity price impacts has shown no significant increases.

Juxtapose these real policy solutions with the coal and nuclear bailout proposed by the Trump administration that will cost substantial rate-payer or tax payer money, will NOT protect nuclear in the long-term, and will assuredly exacerbate the climate crisis while increasing threats to public health.

The choice is clear. We need real policy solutions, not bailouts for political supporters.

No, Natural Gas Power Plants Are Not Clean

You may have heard that natural gas is “clean.” Compared to coal, natural gas produces less global warming emissions and air pollution. But coal is just about the dirtiest way to produce electricity, so almost anything will seem cleaner in comparison. The fact of the matter is that natural gas power plants still produce a significant amount of air pollution, and that’s a problem.

NOx is not your friend

The main pollutants resulting from natural gas electricity generation are nitrogen oxides, or NOx. Not only does NOx cause respiratory problems, but NOx also reacts with other substances in the air to produce particulate matter and ozoneParticulate matter and ozone cause the extensive list of adverse health outcomes you hear at the end of a prescription drug commercial – shortness of breath, heart attacks, premature death; the list goes on. In short, NOx is bad news for human health.

Natural gas power plants have an impact on air quality

At this point you might be wondering, “So how bad is it? How much NOx is coming from natural gas power plants?” That is where things get complicated. According to projections from the California Air Resources Board, stationary sources account for roughly 21% of NOx emissions, while mobile sources account for a whopping 74% of NOx emission in the state. However, emissions from natural gas power plants are only a fraction of the emissions from stationary sources, so NOx emissions from natural gas power plants end up being roughly 1% of total NOx emissions in California.

Displays “grown and controlled” oxide of nitrogen projected emissions for 2019, excluding emissions from ocean-going vessels further than three nautical miles from the coast. Data from California Air Resources Board Emissions Projection Analysis.

Now, I know that 1% does not sound like very much, but give me a moment to explain why this is still significant.

First, natural gas power plants do not move – they just sit there and emit NOx when they are operating. Those NOx emissions may linger in nearby communities, leading to serious health problems for the people living near plants. And since half of California’s natural gas power plants are concentrated in some of the most socioeconomically and environmentally disadvantaged communities in the state, these emissions harm communities that are already overburdened with pollution.

Second, just because the electric sector is cleaner than the transportation sector does not mean the electric sector is not dirty.  Some of the highest-polluting natural gas power plants emit over 100 tons of NOx per year, which is roughly equivalent to the NOx emissions from traveling 11 million miles (assuming an emissions rate of 8.18 grams of NOx per mile) in a diesel school bus, one of the most-polluting types of vehicles. Furthermore, when studying a proposed natural gas power plant, a California Energy Commission analysis found that local one-hour concentrations of NO2 (one form of NOx) would nearly double from their background levels.  These emissions really can affect local air quality, and that is why this is a problem.

The air pollution problem may get worse

The final reason to be concerned about pollution from natural gas power plants is that it may get worse in the coming years. A recent study by the Union of Concerned Scientists found that natural gas power plants in California will start and stop much more frequently in the future, and this increase in natural gas plant start-ups may increase NOx emissions. Natural gas power plants emit more NOx when they are starting up; on average, they emit anywhere between three and seven times as much NOx during start-up than during one hour of full-load operation. As paradoxical as it may sound, California may continue to achieve its global warming emissions reduction goals and increase air pollution from natural gas power plants at the same time.

Let’s make sure that does not happen. Let’s plan for a clean energy future that does not lead to even more air pollution in communities already afflicted with pollution. Let’s make sure we bring everyone along in the transition to clean electricity. UCS recently co-sponsored a bill in the California legislature that was designed to shed light on pollution from natural gas power plants and require better planning for pollution reductions from plants. Though UCS’s legislative effort did not succeed this year, UCS is committed to finding solutions that allow us to transition away from natural gas in a way that is not only economical, but also equitable.

public domain

Even in a Carbon-Constrained World, FirstEnergy’s Nuclear Bailout Proposal in Ohio Must Be Rejected

The 908 MW Davis-Besse nuclear power plant, owned by FirstEnergy and located 21 miles east of Toledo, Ohio on Lake Erie. Photo: Nuclear Regulatory Commission.

A new report, The Nuclear Power Dilemma, released today by my UCS colleagues, finds that more than one-third of the nation’s nuclear power fleet – that provides more than 20 percent of the country’s nuclear power – are uneconomic or slated to retire over the next decade primarily due to economic, safety, and performance reasons. Two of the uneconomic plants—Davis-Besse and Perry—are in Ohio and owned by Akron-based FirstEnergy Corp. Like the analysis’s other unprofitable nuclear plants, Davis-Besse and Perry can’t compete in today’s power markets with the cheap natural gas and renewable energy that is transforming our nation’s electricity sector. That’s why FirstEnergy is now seeking a bailout from the Ohio legislature to keep these facilities open.

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.

Carbon Pricing is Key to Economic Viability of Xcel’s Nuclear Power Plants in Minnesota

The 671 MW Monticello Nuclear Generating Station is located along the Mississippi River 40 miles northwest of the Twin Cities and provides about 10 percent of Xcel’s electricity in the Upper Midwest. Photo: Source: Nuclear Regulatory Commission/Flickr

A new UCS report released today found that more than one-third of U.S. nuclear plants–representing 22 percent of total US nuclear capacity–are uneconomic or slated to retire over the next decade under current market conditions. The UCS study, The Nuclear Power Dilemma, shows that the economic viability of the nation’s nuclear plants is threatened by low natural gas prices, the declining cost of renewable energy, investments in energy efficiency, and the costs of upgrading aging plants to ensure safe operation.

The uneconomic plants include Xcel’s Monticello and Prairie Island nuclear power plants, which provided 23 percent of Minnesota’s electricity generation in 2017 and about half of the state’s low carbon electricity. A key reason why these plants appear to be uneconomic compared to cheaper alternatives is because current market prices do not include the costs and damages inflicted on the climate and society from burning fossil fuels.

Without strong policies such as a meaningful economy-wide cap or price on carbon emissions, the study found that natural gas and coal would largely replace the lost generation from closing at-risk nuclear plants before their operating licenses expire, resulting in an increase in US power sector carbon emissions over the next two decades. In stark contrast, the Intergovernmental Panel on Climate Change (IPCC) released a sobering report last month showing that to limit global average temperature increases to 1.5o Celsius (2.7o Fahrenheit) and avoid some of the worst impacts of climate change, the US and other countries will need to achieve net zero global warming emissions by 2050, with half of those reductions coming by 2030.

US nuclear power plants at risk of early closure or slated for early retirement

More than one-third of existing plants, representing 22 percent of US nuclear capacity, are unprofitable or scheduled to close.

What does this mean for Minnesota?

The UCS study analyzes the economic viability of the nation’s nuclear plants based on how much revenue they could earn from selling electricity into the wholesale market and from providing capacity to the electricity system during times of peak demand compared to how much it costs to operate them. The study’s methodology and results are consistent with several recent studies by MIT, Bloomberg and others, that also showed Monticello and Prairie Island are more expensive than cheaper energy alternatives available in market.

The risk of closing of these plants early is lower than nuclear plants owned by “merchant” generators that sell their power in states and regions with competitive markets. This is because regulated utilities like Xcel are typically allowed to recover the costs of operating their plants from customers, along with a return on investment, subject to approval from state Public Utilities Commissions (PUCs).

While the risk might be lower, regulated utilities are not completely immune from the market pressures of lower cost alternatives. For example, the fact that regulated utilities have also historically received cost recovery for coal plants hasn’t stopped Xcel and other regulated utilities across the country from retiring and replacing them with lower cost alternatives such as natural gas, wind, solar and efficiency. And like many utilities that needed to make investments in pollution control equipment to reduce public health impacts from coal plants, Xcel and many other utilities are planning on making major capital investments to upgrade their aging nuclear plants.

Earlier this year, the Minnesota legislature rejected a bill that would have pre-approved $1.4 billion in new upgrades over the next 17 years to keep Xcel’s nuclear plants running until their operating licenses expire. UCS and many Minnesota groups opposed this legislation because it would have circumvented the state PUC, which provides important oversight to make sure any new utility investments are prudent for ratepayers compared to other alternatives. Retaining the PUC’s authority to oversee these investments is especially important given the over $400 million in cost overruns and delays Xcel experienced when they made the last major upgrades to Monticello in 2013.

A meaningful value for low-carbon generation makes Xcel’s nuclear plants profitable

Today, the price of coal and natural gas does not reflect the costs inflicted on society from climate change that results from burning fossil fuels. The UCS report recommends national or state policies that put a cap or price on carbon emissions as the best approach to address this market failure and level the playing field for all low carbon technologies.

Our analysis shows that a national price on carbon dioxide (CO2) emissions that starts at $25 per metric ton in 2020 and increases 5 percent per year would be enough to make Monticello, Prairie Island, and all of the other uneconomic nuclear plants in the country profitable. While Minnesota currently does not have a carbon price, the Minnesota PUC has required Xcel and other utilities to include a range of CO2 prices in their Integrated Resource Plan (IRP) modeling since 2008. Working with other clean energy groups in Minnesota, UCS played an important role in advocating for this.

The PUC updated these values earlier this year, requiring utilities to model scenarios that include a range of $5-$25 per ton of CO2 starting in 2025 to reflect the likelihood of future CO2 regulatory costs. The PUC also requires utilities to include in their modeling a range of environmental externality costs of $8.44-$39.76 per ton of CO2 in 2017, increasing to $15.20-$69.48 per ton of CO2 in 2050, based on the federal social cost of carbon.

Xcel is counting on nuclear to meet its 2030 carbon-free vision

Xcel is in the process of conducting modeling for its next IRP to determine the mix of electric generating technologies they will invest in between 2019 and 2034 to meet electricity demand, while maintaining reliability and minimizing costs to customers. The plan is due February 1, 2019, but Xcel recently requested a five-month extension to July 1.

Xcel is counting on running both of its nuclear plants until their 60-year operating licenses expire (in 2030 for Monticello, and in 2033 and 2034 for the two reactors at Prairie Island) to meet the utility’s goal of 85 percent carbon-free electricity by 2030 across its system in the Upper Midwest. To achieve this goal, Xcel is retiring and replacing most of their coal plants in Minnesota with energy efficiency, major new investments in wind and solar power that would increase renewables to 60 percent of their electricity sales by 2030, and a new natural gas plant that was recently approved by the legislature. At the same time, Xcel is projecting an increase in electrification of vehicles and buildings that will result in greater electricity demand and the need for more low carbon generation.

Source: Xcel CEO Ben Fowke presentation to Minnesota PUC, October 17, 2017

Replacing an additional 1,770 MW of capacity from Xcel’s nuclear plants in the next decade would be challenging to do, without increasing natural gas use and carbon emissions. In addition to making it difficult for Xcel to achieve its emission reduction targets, an overreliance on natural gas would pose economic risks to consumers. But with more time and continued cost reductions for clean energy, it’s more likely that Xcel could replace its nuclear plants with renewables, efficiency and other low carbon technologies when their licenses expire.

Xcel is required to consider these tradeoffs as part of its IRP. The IRP process at the PUC is the appropriate venue to evaluate these complicated tradeoffs—including whether the $1.4 billion Xcel wants to invest in upgrades for its nuclear plants is the best way to spend ratepayer money compared to other low carbon alternatives. The legislature is not the place to address these complex issues.

Time for the next generation of climate and clean energy policies in Minnesota 

It has been more than a decade since Minnesota has passed major climate and clean energy legislation. The Next Generation Energy Act of 2007 required Minnesota utilities to meet a renewable electricity standard of 25 percent by 2025 (and 30 percent for Xcel), achieve energy efficiency savings targets to reduce electricity and natural gas usage by 1.5 percent per year, and adopt a statewide goal of reducing global warming emissions at least 30 percent below 2005 levels by 2025 and at least 80 percent by 2050.

As I have mentioned in previous blogs, these policies have made Xcel and Minnesota national clean energy leaders. But since 2007, six states have adopted higher renewable standards of 50 percent or more by 2030 and other leading states have adopted stronger energy efficiency standards that reduce electricity use by 2-3 percent per year. In addition, the cost of deploying wind, solar, and battery storage has fallen dramatically over the past decade, while many energy efficient technologies, such as LED lighting, have also improved.

Despite progress, Minnesota still has a long way to go to meet its statewide emission reduction targets. Reducing emissions 80 percent by 2050 will likely require increased electrification of vehicles and buildings with zero carbon electricity sources to achieve reductions in other sectors. Stronger climate and clean energy policies will be needed to meet these targets and to ensure that when Xcel’s nuclear plants are eventually retired, they are replaced with low carbon technologies.

Photo: Source: Nuclear Regulatory Commission/Flickr

Why We’re Taking a Hard Look at Nuclear Power Plant Closures

Diablo Canyon nuclear power plant in California. Photo: Mayra/wikimedia

Last month the Intergovernmental Panel on Climate Change (IPCC) issued a sobering report. Based on the most up-to-date scientific evidence, the report warns that we are rapidly losing any appreciable chance of meeting the Paris climate agreement goal of keeping temperature increases to “well below” 2 degrees Celsius above pre-industrial levels.

The report also makes clear that if we fail to meet this goal, the consequences will not only be severe, but they will be experienced sooner than expected. (For more information on the IPCC report, see our blog series)

In stark defiance of science, here in the United States the federal government has abdicated its leadership role and is now taking a wrecking ball to the pillars of progress—the Clean Power Plan, our nation’s first limits on CO2 from power plants; fuel economy/greenhouse gas emission limits for cars and trucks; and rules to limit methane emissions from oil and gas operations.

While a number of states, cities, businesses, universities and others have stepped up admirably, many observers have concluded that there is a high degree of uncertainty about whether we will meet or even get close to the pledge we made as part the Paris Agreement—a 26 to 28 percent reduction from 2005 levels by 2025. This graph, adapted from a study performed by the Rhodium Group, depicts this:

US projected emissions compared to the US Paris pledge. Source adapted from Taking Stock 2018, Rhodium Group

These sobering realities dictate that we keep an open mind about all of the tools in the emissions reduction toolbox—even ones that are not our personal favorites. And that includes existing nuclear power plants in the United States, which currently supply about 20 percent of our total electricity needs and more than half of our low-carbon electricity supply.

A new UCS report, The Nuclear Power Dilemma: Declining Profits, Plant Closures, and the Threat of Rising Carbon Emissions, indicates that more than 22 percent of total US nuclear capacity is unprofitable or scheduled to close over the next five to 10 years. The report also indicates that without new policies, the electricity generated by these and other marginally economic nuclear plants is likely to be replaced in large part with natural gas-fired generation (although this will vary from plant to plant). If this occurs, cumulative carbon emissions in the electric sector could increase by up to 6 percent between 2018 and 2035.

While a 6 percent increase in emissions doesn’t sound that sizable, emissions from the electric sector must decrease, rapidly and substantially. The National Research Council has found, for example, that power plant emissions must decrease by 90 percent by 2040 to meet US climate goals.

Most of that reduction will be achieved by using electricity more efficiently, expanding increasingly cheap solar, wind, and energy storage, modernizing our grid, and building more transmission lines to connect these renewable sources to load centers. We are counting on these approaches to replace capacity as coal plants close; cut down on an overreliance on natural gas in the short term and displace it over time; and increase overall electricity supply to pave the way for the electrification of transportation, space and water heating, and industrial processes.

But if nuclear power plants close prematurely, we add a fourth task—replacing lost nuclear capacity. While efficiency, renewables, transmission and storage may be up to the task, governments must adopt policies that assure that we will decarbonize even if these resources fall short of our expectations.

Factoring all of these considerations in, our new report calls for proactive policy to preserve nuclear power from existing plants that are operating safely but are at risk of premature closures for economic reasons or to ensure that lost nuclear capacity is replaced with carbon-free sources.

The best policy is an across-the-board national carbon price, which UCS has been advocating for years. Another policy solution that hasn’t received as much attention is a national low carbon electricity standard. This policy builds on the success of state renewable electricity standards but would include other low or zero carbon energy technologies. Either option would help the existing nuclear fleet, substantially boost solar and wind energy, and substantially decrease natural gas and coal use, while reducing US power sector carbon emissions by up to 28 percent cumulatively by 2035. These are durable policy solutions. Rather than a temporary fix that throws money at the problem, these policies address a systemic market failure that will help level the playing field for nuclear and other low carbon technologies in the long-run.

In the absence of national carbon price or low carbon electricity standard, the report calls upon states—which have plenary authority over the electric sector—to take proactive measures of their own. For example, California’s strong renewable energy and energy efficiency standards and climate policies mean that it can likely replace the Diablo Canyon nuclear facility by 2025 with clean energy and continue to drive down emissions. New York, Illinois and New Jersey have all adopted policies to provide financial support for distressed nuclear power plants that value their carbon-free power attributes. At the same time, these states have boosted renewables and efficiency, and sought to ensure that preserving existing nuclear power does not in any way undermine expansion of renewables.

The UCS report does not argue for subsidies for any specific plants. That case will have to be made in state-specific forums. Should states decide to support nuclear power plant subsidies, our report calls for them to be temporary and subject to periodic reassessment. And companies seeking subsidies must open their books and allow the public and regulators to make sure that the subsidies are needed and cost-effective, and that the same level of carbon free power cannot be provided during the relevant time period with less costly options.

Finally, our report makes clear that we would never support financial assistance that is tied to also subsidizing fossil-based energy sources, such as the rumored Trump administration proposal to bailout coal and nuclear plants based on spurious national security grounds.

Our report also factors in the critical issue of nuclear safety. Since its founding, UCS has been deeply concerned about the risks posed by nuclear power. An accident or terrorist attack at a US nuclear reactor could severely harm public health, the environment, and the economy. For this reason, UCS has worked as a nuclear power safety and security watchdog for more than 40 years. Consistent with our longstanding advocacy for nuclear safety, subsidies should be considered only for plants that at a minimum earn the highest safety rating from the Nuclear Regulatory Commission. This ensures that subsidies are not used to correct safety problems caused by bad management and gives under-performing plants an incentive to improve to be eligible for subsidies. And our report in no way backtracks from our longstanding insistence that there be strict oversight from the Nuclear Regulatory Commission, and that nuclear power plant operators continue to make their plants safer by expediting the transfer of spent fuel to dry casks, bolstering emergency management procedures, increasing emergency planning zone sizes, and other measures outlined in numerous UCS reports, including Preventing an American Fukushima.

Nuclear power plants are controversial, for legitimate reasons. But the IPCC report reminds us that we are running out of time and will have to make hard choices. Preserving the capacity of safely operated nuclear plants or ensuring that this capacity is replaced with zero carbon alternatives is an imperative that cannot be ignored.

Natural Gas is Undermining Pennsylvania’s Nuclear Plants—And That’s Bad News for the Climate

Beaver Valley nuclear in PA. Photo: United States Nuclear Regulatory Commission

Today the Union of Concerned Scientists released a report that assesses the economic viability and safety records of nuclear power plants in the United States. The report asks what happens to carbon emissions if a significant number of those plants were to retire abruptly—given their high risk of being replaced by natural gas and coal—and seeks to inform both state and federal policy makers about how to address the issue. Ultimately, it argues that policymakers at the national and state level should implement climate-smart policies that value all types of low-carbon electricity generation and include stringent safety standards for all nuclear plants.

Why did we write this report, and what are the implications for Pennsylvania, which has five nuclear power plants that in total provide the second highest nuclear operating capacity of any state?

We must correct market failures to decarbonize the US economy

The Intergovernmental Panel on Climate Change (IPCC) recently drove home the point that we collectively need to reduce emissions as much as possible—and quickly. The IPCC special report underscores the urgency of the climate crisis: keeping global temperature increase to below 1.5 degrees C requires global net CO2 emissions to decline by about 45 percent from 2010 levels by 2030 and reach net zero around midcentury. The US must lead this effort, meaning it must go further, achieving net negative emissions by 2050.

One major obstacle in achieving this result is the market failure currently facing low-carbon sources of electricity like nuclear and renewables—specifically, the fact that in most of the country, it’s free to emit unlimited amounts of carbon dioxide (and other greenhouse gases) into the atmosphere, even though these emissions are the primary driver of climate change and its impacts on people and ecosystems everywhere.

To overcome that obstacle, we recommend a well-designed carbon cap or price, or low-carbon electricity standard. Our new report also provides information and recommendations for states that may be considering policy actions to address this problem on their own because the federal government is unable or unwilling to act on climate. Although a national carbon price would be most effective in addressing the market failure, we also recommend that states consider implementing a carbon price, similar to leading states like California and the nine states that participate in the Regional Greenhouse Gas Initiative (RGGI) have done. A carbon cap (such as that imposed by RGGI) can help reduce emissions and send a market signal favoring low-carbon resources.

Pennsylvania is one of those states evaluating policy options. Policymakers there are actively considering how to respond to calls from some stakeholders for financial support for the state’s uneconomic nuclear power plants. But as our report details, we do not support blanket financial support for any nuclear operator that comes looking for it—we detail specific conditions that must be met. And as my colleague writes, not all proposals are good ones: FirstEnergy’s proposal in Ohio, for example, is deeply flawed and they’ll be looking for something similar in Pennsylvania.

Pennsylvania’s electricity mix

In 2017, nuclear provided 39 percent of Pennsylvania’s electricity—more than any other fuel source—but natural gas was not far behind at 34 percent, and almost all the rest of the state’s electricity (22 percent) came from coal, with non-hydro renewables remaining a tiny portion of Pennsylvania’s generation at less than 3 percent. That represents a huge transition over the past decade—natural gas increased from 15 percent in 2010, and coal fell from 48 percent in 2010, while nuclear increased only slightly from 34 percent. Given the dramatic growth of the natural gas industry in the state over the past decade with the development of the Marcellus shale (and with more gas plants under development in Pennsylvania and the surrounding region) and the state’s relatively weak policies to support renewable energy and energy efficiency, under current conditions, any decline in nuclear power in Pennsylvania would be made up by an increase in natural gas and coal power—without thoughtful and strong policies. And that would mean that carbon emissions would go up if nuclear plants retire, posing a threat to our climate goals.

Part of the reason gas prices are so low is the lack of a price on carbon; the growth in gas is in part a response to that market failure.

Our report lends credence to this assumption. At the national level, we modeled a set of early retirements of nuclear power plants and found that in the aggregate, most of the loss in nuclear generation was made up by existing power plants powered by natural gas and coal.

Evaluating profitability

To assess the economics of nuclear power plants, we looked at the projected average annual operating margin over the period 2018—2022. That sounds like a mouthful, but it just means projected revenues minus projected costs over the next five years. The net result, calculated in dollars per megawatt-hour, is how we assessed the economic viability of each plant. Plants with negative operating margins were deemed unprofitable. To get a sense of which plants might be at risk of becoming unprofitable, we identified which plants had operating margins between $0 and $5 per MWh, which we label marginal. Plants above $5 per MWh are classified as profitable.

Nationally, we found 16.3 GW of unprofitable nuclear capacity. Not surprisingly, the results are very sensitive to the assumption about future natural gas prices.

Using the insights from assessing the profitability of the entire set of nuclear power plants, we then evaluated which ones might be at risk of abrupt retirement over the next eight years. We then modeled the impact to the electricity system through 2035 of the closure of those plants, which represent between 14 and 27 GW of nuclear capacity. We found that at the national level, cumulative CO2 emissions would be about 6 percent higher in 2035 compared to the reference case.

That might not sound like a lot, but keep in mind that abruptly losing a significant portion of low-carbon generation: 1) takes us in the wrong direction at a time when we need to be rapidly reducing CO2 emissions, and 2) would be magnified greatly in Pennsylvania, which relies heavily on nuclear power and does not currently produce very much electricity from renewables.

Meeting stringent safety standards

An accident or terrorist attack at a US nuclear reactor could severely harm public health, the environment, and the economy—and it would also jeopardize the prospects for US nuclear energy for decades and limit available options to meet near-term carbon reduction targets. It is thus essential that policymakers and other stakeholders consider financial support only for nuclear reactors that meet or exceed the Nuclear Regulatory Commission’s highest safety standards.

The Keystone State’s nuclear plants

The results of our profitability analysis for Pennsylvania’s nuclear plants are shown below in the table. According to our analysis, Three Mile Island is unprofitable, while Beaver Valley and Susquehanna are marginally profitable. Exelon plans to shut down the remaining reactor at Three Mile Island in 2019, and FirstEnergy plans to shut down the Beaver Valley plant in 2021, along with two other plants in Ohio. For our early retirement cases, we assume that these plants are retired in those years, along with Susquehanna.

Pennsylvania’s five nuclear power plants provide almost 10 GW of capacity.

Plant Name Number of Reactors 2018 Operating Capacity (MW) Deactivation Notice UCS Assessment Beaver Valley 2 1,867 2021 Marginally Profitable Limerick 2 2,386 Profitable Peach Bottom 2 2,584 Profitable Susquehanna 2 2,593 Marginally Profitable Three Mile Island 1 827 2019 Unprofitable

Although all of Pennsylvania’s nuclear power plants are currently meeting or exceeding the Nuclear Regulatory Commission’s highest standards, there are other reasons it may not make sense to keep every nuclear plant online, such as high operating costs or major safety problems. Or as Exelon’s CEO recently said:

“I will be the first one to tell you that some of the nuclear plants are small, uneconomic and they won’t make it and they probably should not make it. Let’s not save every one.” –Chris Crane, Exelon CEO

Policies matter

Exelon is already receiving financial support for five nuclear plants in Illinois and New York. FirstEnergy has similarly submitted deactivation notices for its Davis-Besse nuclear plant in 2020 and its Perry plant in 2021, both of which are in Ohio. Following the bankruptcy of one of its subsidiaries, FirstEnergy continues to search high and low for a handout to make up for its bad financial decisions, including to the federal government and to the Ohio legislature.

PJM and other grid operators have shown that retiring these plants does not threaten electricity reliability and resilience:

“Our analysis of the recently announced planned deactivations of certain nuclear plants has determined that there is no immediate threat to system reliability. Markets have helped to establish a reliable grid with historically low prices. Any federal intervention in the market to order customers to buy electricity from specific power plants would be damaging to the markets and therefore costly to consumers.”

The possibility that these plants will be replaced with natural gas and coal rather than low-carbon sources raises serious concerns about our ability to achieve the deep cuts in carbon emissions needed to limit the worst impacts of climate change.

Recommendations for Pennsylvania policymakers

Three states—Illinois, New York, and New Jersey—have taken policy actions to value the low-carbon attributes of nuclear power. As part of legislation providing financial support for some nuclear plants, each state simultaneously strengthened policies to support renewable energy and energy efficiency. New York and New Jersey both increased their Renewable Portfolio Standards (RPS) to 50 percent by 2030, and Illinois fixed problems with its RPS that will allow the state to reach 25 percent by 2025. All three states also set higher energy efficiency targets as part of the legislation.

While a few of the Keystone State’s nuclear power plants may be facing economic headwinds in the immediate future, policymakers should carefully weigh the evidence and consider the big picture before simply writing a check on behalf of ratepayers—since many residents face economic hardship and high energy burdens.

UCS offers the following recommendations based on our analysis:

  • Require transparency: Companies should open their books and demonstrate need. Our analysis is based on the best available cost data, but it cannot replace a thorough examination of a given plant’s financials, because this information is proprietary. Transparency ensures that impact to ratepayers is limited.
  • Limit and adjust support: Any financial support to struggling plants should be limited and adjusted over time, as market conditions change.
  • Ensure safe operation: Any plant receiving financial support should be required to meet strong safety guidelines. The need for low-carbon electricity absolutely does not trump safety.
  • Strengthen support for renewables and efficiency: If policy support for nuclear power is done based on its low-carbon attributes, policymakers should simultaneously invest in renewables and efficiency in order to transition to a low carbon future. Pennsylvania’s Advanced Energy Resource Portfolio (AEPS) is relatively weak and has not been updated since 2008. The state’s energy efficiency standard is not achieving cost savings realized by leading states. Policymakers must include actions to strengthen standards to drive greater deployment of renewable energy and energy efficiency.
  • Plan for the transition: Nuclear power plants will close eventually as they reach the end of their safe operating lives. Companies should be required to develop transition plans for communities and workers that will be negatively impacted by the closure. With adequate time, adverse economic impacts can be mitigated.

What the New UCS Report on Nuclear Plants Means for Illinois

Photo: Montgomery County Planning Commission

Today UCS released a new report entitled The Nuclear Power Dilemma that examines the economic viability and performance of most of the 60 nuclear power plants operating in the United States as of July 2018.

The report also analyzes what electric generating resources are likely to replace these nuclear plants if some of them were to abruptly retire from service.

So what did the report find and what does it mean for a state with so much nuclear power like Illinois?

Illinois’ nuclear fleet is in sound financial shape

The economic viability of power plants is typically defined by how much revenue they earn compared to how much it costs to operate them. Our analysis defines “profitable” as making more than $5 per megawatt-hour (MWh) of electricity and “marginally profitable” as making somewhere between $0 (breaking even) and $5 per MWh.

Illinois is host to six nuclear plants (Braidwood, Byron, Clinton, Dresden, LaSalle, and Quad Cities) that total 11.6 gigawatts (GW) of electric generating capacity, the most nuclear capacity of any state. The plants provided 53 percent of Illinois’ electricity generation in 2017.

Our analysis found that Byron and Dresden—accounting for just over 4 GW combined—fell into the marginally profitable category. The rest of Illinois’ nuclear power plants were determined to be profitable. In the case of the Quad Cities and Clinton facilities, financial support they receive from the Illinois Zero Emission Credit program, established as part of Illinois’ Future Energy Jobs Act (FEJA) of 2016, pushed the plants up to profitable status. Without this support, Quad Cities and Clinton would have been listed as marginal and unprofitable, respectively.

Nuclear Capacity at Risk of Early Closure, by State

From The Nuclear Power Dilemma (UCS 2018)

Even though our analysis found that all Illinois nuclear plants are currently making money, low natural gas prices are one of the primary factors squeezing the economics of nuclear plants and could pose a long-term threat to the profitability of Illinois plants if prices stay at current levels.

Indeed, low natural gas prices are a major factor in the analysis’ finding that 22 percent of total U.S. nuclear capacity is slated to close or is unprofitable and at risk of closing prior to expiration of their operating licenses, including many plants across the Midwest.

Without new policies, and with continued low natural gas prices, our analysis found that early nuclear plant retirements are likely to be replaced primarily with output from natural gas and coal plants—and that means increased carbon emissions and the wrong way to go for addressing climate change.

Our report recommends that federal and state governments should enact a price on carbon or a low-carbon electricity standard, which would help level the financial playing field for carbon-free power generation like nuclear and renewables. Today these resources must compete with fossil fuel plants who are allowed to spew greenhouse gas pollution into our atmosphere for free—a carbon price or low-carbon electricity standard would help fix that.

The next generation of Illinois clean energy policies

The Clinton Nuclear Generating Station

As mentioned above, Illinois is no stranger to the debate over nuclear plant profitability. In late 2016 Illinois passed FEJA, which created a program to compensate the struggling Clinton and Quad Cities plants for the carbon-free attributes of their power generation.

UCS supported FEJA because it also included measures for significantly increasing investments in renewable energy and energy efficiency. But the debate over including the nuclear subsidy and providing electric ratepayers’ money to Exelon, the private corporation who owns those plants, was contentious and difficult to say the least.

The Nuclear Power Dilemma report shows that the Byron and Dresden plants are earning a small profit. And Exelon says the facilities are not at risk of early retirement right now. That’s good news.

Even better news is that the policies enacted in FEJA are spurring new clean energy development and expansion of efficiency programs that save consumers money and reduce emissions.

As these additional resources continue to grow, it’s time to develop the next set of policies to continue the momentum and keep Illinois and the Midwest moving toward a clean energy future. In addition to the carbon policies recommended above, Illinois should adopt stronger measures to accelerate investments in clean energy technologies like wind, solar, energy efficiency, and battery storage. These are exactly the kinds of policy conversations that the Illinois Clean Jobs Coalition is having right now through its Listen. Lead. Share. initiative.

The severity of the climate crisis demands that we consider all zero carbon energy sources—including nuclear power. But should any of Illinois’ existing nuclear plants be forced into an early retirement, let’s be ready to replace them with clean energy technologies, not dirty coal or gas plants.

Photo: Montgomery County Planning Commission Photo: Daniel Schwen/Wikimedia Commons

The Elections, and What They Mean for Climate, Energy, and Science

If you are like me, you arrived a bit blurry-eyed to the office this morning after staying up watching election results last night. You’ve undoubtedly already heard and read commentary on what this election means for the country, but may be wondering what the outcome means for climate, security, energy, and science policy. I sat down with my colleague, Alden Meyer, UCS Director of Strategy and Policy, and put our usual water-cooler deconstruction on paper.

Alden: So the Democrats have taken control of the House, but the Republicans expanded their control of the Senate. What’s your take on the overall meaning of the election results? Did environmental issues have any resonance in this election?

Ken: Rahm Emanuel’s prediction of about a week ago seems to have been true—a blue wave, with an equally-strong red undertow. The blue wave is the new majority in the House and several new governors, many in swing states; the red undertow is the gains Republicans made in the Senate.

That being said, a clear overall message is that voters want to see checks and balances. One-party rule has had a corrosive effect on democracy. Major pieces of legislation (e.g., the $1.7 trillion tax cut and Affordable Care Act repeal proposal) have been crafted in backrooms, with very limited public input and opportunities for the opposing party to offer their ideas, and then enacted with little debate or even knowledge of what our representatives were voting for. That’s a problem. The voters are saying no to this, and as an organization that promotes public decision-making based on science, facts, and the competition of ideas, from my perspective at UCS, this is very positive.

I also must add, though, that the President’s fear-mongering in the final days may have worked to energize his base in some of the states with close Senate and Governors’ races; if so, this is not a healthy sign for our democracy and for government based on reason.

I also think that environmental issues, long considered second tier ones, played a role in this election. In several of the Rust Belt states, for example, water quality in both urban and rural areas was a major issue, and in the state of Nevada, voters championed clean energy ballot initiatives. Perhaps most impressively, voters elected new governors in Nevada, Wisconsin, Illinois, Michigan, and New Mexico who acknowledged the need to address climate change and showed interest in making their states clean energy champions.

One major disappointment was the defeat of the carbon fee ballot initiative in Washington state. Unfortunately, the big oil companies, many of whom claim they support carbon pricing as a climate solution, spent about $30 million to defeat this initiative, arguing cynically that the initiative did not go far enough. This hypocrisy needs to be strongly called out.

Alden: Indeed. It’s also notable that climate change was raised as an issue in a number of Senate debates. In 2016, we had to work intensively with the Republican mayor of Miami and others to get a single question asked on climate change in the Republican presidential candidate debate in Florida. This year, questions on climate change—many of them citing the recent Intergovernmental Panel on Climate Change report on the devastating impacts of further increases in global temperature—were asked by moderators in at least seven Senate candidate debates (in Arizona, Indiana, Nevada, New York, North Dakota, Ohio, and Texas). The increased prominence of the issue, especially in so many red states, demonstrates that increasing voter awareness and concern about the costly impacts of climate-related extreme weather events is making it more difficult for politicians to say that climate change isn’t a serious issue that needs to be addressed.

Ken: Looking out over the next two years, I think the election gives us three important new opportunities. Congressional oversight, or even the threat of it, is a key way to keep the executive branch operating within the bounds of law and reason; it has been sorely lacking in the last two years. UCS will work with new leadership in key House committees to ensure that there is oversight and accountability, particularly in the many instances in which science has been suppressed, maligned, or ignored.

Second, there are opportunities for bi-partisan progress on issues we care about, and we can and will try to cobble together majorities for centrist legislation that can move the country forward.

Third, we can help craft and push in the House more ambitious legislation that can lay the groundwork for a healthy debate in the 2020 election and potentially get enacted thereafter.

Alden: Congressional oversight is really important. We’ve been working closely with quite a few House members who care deeply about facts and evidence over the last two years to shine a spotlight on the Trump administration’s attacks on science-based safeguards across a wide range of federal agencies. While this has helped to raise the visibility of these abuses in the media and has provided grist for activists to use in their interactions with their members of Congress in town hall meetings and other venues, it has not produced a meaningful change in the administration’s behavior.

But with control of the House, these pro-science legislators will have a lot more tools at their disposal to address Trump administration officials’ blatant conflicts of interest, their lack of enforcement of laws and regulations to protect public health and worker safety, or their efforts to undermine the independent science advisory process, restrict the use of scientific research in policymaking, and to sharply cut back the scientific staff capacity of their agencies to carry out their missions. Through a combination of information requests, staff investigations, and hearings, House committees and subcommittees can shine a spotlight on policies and activities they believe are against the public interest or that fail to execute laws according to the intent of Congress.

They can compel testimony and response to follow-up questions from Cabinet and sub-cabinet officials, can request agency Inspector General investigations where appropriate, and can draw on analysis by the Congressional Research Service, the Congressional Budget Office, and the General Accountability Office. They can also use a combination of expert witnesses and everyday citizens to put a human face on the impacts of executive branch actions, such as the rollback of regulations to protect public health and safety.

Ken: Great point. Our staff has been working with these incoming committee chairs and their staff on their oversight strategies for next year, on issues ranging from scientific integrity in policymaking to ineffective and destabilizing missile defense programs and new nuclear weapons systems, from political interference in climate and energy technology research to harmful changes in federal dietary guidelines for all Americans. Needless to say, it’s a target-rich environment!

Alden: As far as new legislative opportunities, there are a few areas where it may be possible to garner bipartisan support for legislative action in the next Congress: targeted incentives for electric vehicles, energy storage, and other clean energy technologies, or the limited but still useful energy bill introduced by Senators Murkowski (R-AK) and Cantwell (D-WA) that would boost energy efficiency in buildings, increase energy system cybersecurity, spur investments in power grid modernization, among other things. House Democrats have made clear that a federal infrastructure bill addressing not just investments in transportation, but in the water, electricity, natural gas distribution system, and other sectors as well, will be among their top priorities; it seems unlikely that Senate Republicans and the White House would be willing to reach an acceptable deal on such a bill, but it’s not out of the question.

There are a much broader set of issues where we expect House Democrats to move positive legislation forward to floor passage, despite low prospects that it would be approved by the Senate and signed into law by President Trump; the goal would be to raise public awareness and support and to help shape the debate going into the 2020 elections. We will be working to promote the scientific integrity legislation that Rep. Paul Tonko (D-NY) introduced in the House and that has 156 cosponsors, as well as opportunities to support science-based safeguards and public health protections. We will also work with Rep. Adam Smith (D-WA), incoming chair of the House Armed Services Committee, to move forward his bill establishing a policy of no first use of nuclear weapons.

Climate change and energy will also be a priority for several incoming committee chairs, such as Frank Pallone (D-NJ) of the Energy and Commerce Committee, Raul Grijalva (D-AZ) of the Natural Resources Committee, and Eddie Bernice Johnson (D-TX) of the Science Committee. It is also a priority for House Democratic Leader Nancy Pelosi, who just last week indicated her interest in creating a select committee on climate change, modeled on the one chaired by now-Senator Ed Markey (D-MA) from 2007 to 2010. We are discussing legislative options with these and other House Democrats, as well as with our allies in the environmental, clean energy, labor, and climate justice communities, ranging from comprehensive climate policy to more targeted bills focusing on the electricity or transportation sector, or on ramping up assistance to local communities that are struggling to cope with the mounting impacts of climate change.

But yesterday’s elections also resulted in a number of new governors. What do you see as the opportunities for progress at the state and regional level?

Ken: I’m particularly excited about the new governors in Illinois, Wisconsin, and Michigan. UCS and others have been working for years on a project to modernize the electric grid in the heartland of the country to fully unleash the power of clean and cheap wind and solar, and we believe that many of these new governors can help champion this transformation.

UCS is also busy working in the Northeast on a regional plan to reduce transportation emissions. Key governors who are supportive of the idea (Cuomo in New York, Baker in Massachusetts) won their races, and some promising newcomers, such as Governor-elect Mills in Maine and Lamont in Connecticut, can add to the critical mass.

In Illinois, with governor-elect Pritzker in office, we will now have increased opportunities for passage of comprehensive clean energy and climate legislation; while in Michigan, with governor-elect Whitmer in office, we will now have new opportunities to advance modern grid policies that can deliver greater quantities of clean electricity to communities, support electric vehicles, and increase the resilience of the electricity grid to the impacts of climate change. In addition, we have new governors in Kansas, New Mexico, and Nevada, and we will look to help these states become clean energy champions.

I know you warned me last week that the 2020 election kicks off today (ugh!). So I’m curious what you think last night’s results might mean for the 2020 elections.

Alden: I think the new governors who ran on a clean energy platform and won their elections will add a lot to the national conversation over the next two years. Not only will they work to push through strong policies, but they will be strong messengers on how these solutions are good for their states’ economies and job creation, bring strong public health benefits by cutting conventional pollutants, and reduce their energy consumers’ vulnerability to fossil fuel supply disruptions and price shocks. Their advocacy and visibility on clean energy and the need to address the mounting impacts of climate change will help make clear that these are priorities for states in the heartland, not just on the coasts.

Put these new governors together with the active agenda we expect to see in the House on climate and clean energy issues next year, as well as the growing public support for climate action that’s demonstrated in recent opinion polls, and it’s safe to say that these issues will be front and center going into the 2020 elections. Of course, health care, immigration, the economy, national security, and terrorism will continue to be top-tier issues, but it will be more difficult than ever for candidates for federal office to deny the reality of climate change.

And, as long as we’re talking about 2020, can you say a little about the work we’re doing with other groups to lay the groundwork for ambitious climate action in 2021?

Ken: Absolutely. UCS, along with many other partners, such as labor, science groups, environmental advocates and so many others are already focusing our sights on a prize—comprehensive, federal climate change legislation by 2021. We can’t let another opportunity slip, we need to get ready for it, and that means starting now. Among other things, we have to learn a key lesson from the Obama era—relying exclusively on regulations doesn’t work, as a successor administration or a hostile court can undo them. We need to lay the groundwork for a durable solution that is set in law, and that means bringing in Republicans to offer their best ideas and ensuring that they too have skin in this all-important game. This is also true for our work on nuclear weapons and sustainable and healthy farms—we need to set our sights on bi-partisan legislation and get to work on it now.

Alden: As we’ve discussed, there are some opportunities to make progress on our issues at the federal level over the next two years, and even more opportunities at the state and regional level. But let’s be honest, we still face tremendous challenges, central among them a president who has no respect for science, makes up his own facts, and continues to take a wrecking ball to the capability of the EPA and other federal agencies to protect public health and the environment. As you rightly note, solutions to all the issues UCS works on need to be worked out on a bipartisan basis to be durable. The good news is that more and more Republicans privately acknowledge the need for action on climate change and other issues; the bad news is that their willingness to stand up to President Trump remains extremely limited. Creating incentives for them to do so—in coordination with allies in the business, faith, security, and conservation communities—is one of the key challenges we need to meet to be successful.

Ken: It is good to remember that politics in America resemble a pendulum. The pendulum swung far in one direction in 2016. The election of a new majority in the House, new governors in key swing states and many young, diverse and exciting new leaders shows that the pendulum is starting to swing back. Our job, as I see it, is to help push the pendulum back in favor of leaders from both parties that support science-based policies. And to be ready when the pendulum swings back far enough to make progress again.

Arizona and Renewables: 7 Reasons to Vote Yes on Prop. 127

Photo: Samuriah

When Arizonans go to the polls tomorrow they’ll have a tremendous opportunity to take control of their energy future and put the state on the path to a much cleaner, healthier, more affordable power supply. Proposition 127 requires the state’s largest utilities to obtain at least half of their electricity from renewable energy sources, such as solar, wind and small-scale hydropower, by 2030. Here are 7 great reasons to vote Yes.

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 6th 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.

Photo: Samuriah Photo: US Dept of Interior

Unmasking the Waukegan Coal Plant Reliability Myth

More than 150 Lake County residents march to call on NRG Energy to set a retirement date for its coal-fired-power plant. Waukegan, near NRG coal plant, November 2015. Photo by Karen Long MacLeod for CPLC

Oftentimes the coal industry and utilities will raise the false specter of the lights going out if their aging, polluting power plants are shut down.

Last week UCS released a new report entitled Soot to Solar: Illinois’ Clean Energy Transition. Among our key findings was that the coal-burning power plant owned by NRG in Waukegan, Illinois, can be retired with no impact on electric grid reliability.

When asked about our report, NRG implied similar sentiments as the above in saying it hadn’t had the opportunity to review our study or our “assumptions on impact to grid reliability.”

In this post, I highlight Soot to Solar’s analysis of electric reliability and retiring the Waukegan plant to further explain our process and what we found.

Chicago’s ring of fire

As recently as ten years ago, the Chicago region was surrounded by six coal-fired power plants. Today the Waukegan plant is among the last to continue operating. The Fisk, Crawford, and State Line plants have been retired and the Joliet plant was converted to run on natural gas (another coal-fired unit continues to operate in nearby Will County).

For several years, local residents and the grassroots organization Clean Power Lake County have been pushing for the retirement of the Waukegan coal plant and creation of a just transition plan for workers and the community. The Waukegan effort is featured in a companion case study to Soot to Solar.

The Waukegan coal units were built in 1958 and 1962. In recent years they have only operated at around a 30% capacity factor, which is a measure of how much electricity a plant produces compared to its full potential output. This is a sharp reduction from the 60-70% range in 2011 as shown in the charts below (“ST 7” and “ST 8” are unit designations for the two coal boilers):

Data from S&P Global Market Intelligence

While the Waukegan plant is burning less coal than it used to and did install some equipment to reduce emissions in 2014 and 2015, we analyzed what effects, if any, there would be on the power grid if the plant was retired.

Retiring the Waukegan coal units does not affect electric reliability

 

Community leaders stand with local residents at Waukegan Municipal Beach to demand healthier clean-energy economies. At Clean Power Lake County’s (CPLC) Hands Across the Sands event, September 2014. [Photo by Karen Long MacLeod for CPLC]

For this part of our Soot to Solar analysis, we retained PowerGEM, an electric engineering and transmission firm, to conduct a retirement analysis of the existing generation at the Waukegan site. In addition to the coal units, there are also four oil-fired combustion turbines at the site totaling about 100 megawatts of capacity. These turbines run only a handful of hours a year.

The power grid functions across the eastern U.S. with electricity flowing throughout the Eastern Interconnection, under the control and management of grid operators like PJM and the Midcontinent Independent System Operator (MISO). The needs of the Northern Illinois area are met from power plants both nearby and distant, based on the economics of supply and demand, and the limits of the transmission system.

PowerGEM used what is known as a power flow model from PJM which details what the electric grid will look like in 2022, and what will limit the delivery of energy to the Chicago area. So, what happened when PowerGEM removed the existing Waukegan power generation from the model? It was replaced by uniform increases from other resources in the PJM system.

In other words, the test for removing the Waukegan plant was to verify that other power generators could pick up the slack with no problems showing up in several technical categories designed to ensure the grid functions properly (known as base thermal, voltage, generator deliverability, and load deliverability). The Waukegan plant passed this test.

Another part of the analysis, known in the technical jargon as N-1-1, looked at what would happen to the power grid in the ComEd/Chicago service area during a sequence of events such as loss of a large power line, followed by system adjustments, followed by loss of another transmission line or plant.

PowerGEM found that needs shown in the N-1-1 analysis for the retirement of existing Waukegan generation could be solved by placing a new 100 megawatt generator at the Waukegan site to replace the oil-fired combustion turbines. As discussed in Soot to Solar, it could also be solved through installing the same amount of clean energy options like solar, storage, demand response, efficiency improvements, and other distributed generation located across many cities and towns surrounding downtown Chicago.

 

Retiring the Waukegan plant opens the door to clean energy and cleaner air

As we discuss in detail in our report, coal-fired power plants emit numerous harmful air pollutants and carbon pollution, create troublesome coal ash waste disposal areas, and use up valuable land that could be put to other important uses for communities.

Thanks to the Future Energy Jobs Act, clean energy is expanding across Illinois. Opportunities abound for places like Waukegan. Now is the time for NRG and local officials to respond to the desires of community members and develop a plan for closing the plant, cleaning up the site, and providing support for economic development to create good jobs for the community and replace lost tax revenue.

The myth that the Waukegan coal plant is needed for grid reliability should not stand in the way of this important transition.

There is a Standard for Comparing Power Plant Closings with Energy Shortages; Let’s Use it!

As we change the power grid, we need to keep the standards that have guided good utility practice. Photo: Mike Jacobs

The debate about modernizing our energy system has been marred by shifting claims that we need old power plants. We are replacing fossil fuels with steady and rapid adoption of clean renewable energy, and more efficient buildings and appliances and we need to keep the basic reliability principles front and center. The latest analysis from the electricity grid operator in the Mid-Atlantic US, leaves out a crucial piece.

We do need a reliable electric system and we need professional managers guided by clear policies. No one is served by rhetoric when facing the decisions ahead. However, we do have an industry standard that has been formally applied to address how much reliability, and how much money we spend, for the electric power supply. In 1968, the Mid Atlantic Area Council (MAAC) set a standard for planning and maintaining the supply of power plants. Here it is:

“Sufficient megawatt generating capacity shall be installed to ensure that in each year for the MAAC system the probability of
occurrence of load exceeding the available generating capacity shall not be greater, on the average, than one day in ten years.”

For decades, regulators have guided utilities to plan the electricity supply with a defined and very small possibility that there could be a shortage.

State utility regulators have asked what this means in terms of how much consumers are paying for electricity, and is this the right standard. Here’s what they got for an answer. I will let you read that report, but suffice it to say the state regulators who are responsible for the health and safety implications of a power outage did not change the one day in ten years standard.

PJM, the grid operator for 13 states and the District of Columbia, yesterday unveiled a body of work examining the reliability of the grid. Reliability and MAAC standards are not new to PJM. But their discussion of what’s new in thinking about reliability was missing a reference to the existing standard.  PJM described scenarios with multiple, compounding events, but there was no probabilities associated with the events and no attempt to tie this work on reliability back to their own, long-standing standard for acceptable risk of outages.

For this discussion of power plant closures and reliability to fit into the professional, legal and clear context of government regulation of electric utility decision-making, we are going to need the engineering debate to refer to their own standards which have been vetted and relied upon for 50 years.

Photo: Mike Jacbos

Washington’s I-1631: A Chance to Choose Hope, Not Fear

It has been a tense and tragic time in the runup to the midterm election next week, and voters nationwide have reasons to feel fear about what may happen next, but we need to remember that there are also opportunities for great hope in the election next Tuesday.

For example, few issues have generated as much excitement for climate action as the Washington State carbon pricing initiative, I-1631.   This initiative, developed after a painstaking and highly inclusive planning process that has  garnered enthusiastic support from a large, diverse coalition of constituencies, would create a groundbreaking carbon fee on polluters that would be reinvested in Washington’s communities, businesses, and clean energy industries.  (UCS describes the initiative and how it would work in detail here.)  At a time when Washington DC is in retrograde motion on climate change, even after a summer when extreme heat, storms, and wildfires made more devastating by climate change have pummeled the nation and the world, the chance for state and regional progress on climate change in this election is not only a reason for hope but a possible harbinger of greater state and regional action to come.

And Washington carbon reductions matter.  Washington is already warming up, and is experiencing impacts associated with climate change including increasingly destructive wildfires, decreased water runoff from snowpack, and rising sea levels, all resulting in devastating impacts to people and property.   While opponents to I-1631, mostly out-of-state oil companies, claim that Washington can’t afford to price and reduce carbon emissions, the fact is that individuals, businesses, and taxpayers are already footing a very large bill for the damage done by global warming pollution and the price tag will continue to grow unless emissions can be dramatically reduced.

Big oil’s campaign of disinformation

The opposition has made I-1631 the most expensive initiative campaign in Washington history.  The six out-of-state oil companies that are financing 99% of the more than $30 million pouring into the state to defeat the measure have also mounted one of the most cynical disinformation campaigns I’ve ever seen, saying the measure unfairly “exempts” polluters!

The oil industry’s desperate tactic of campaigning against “polluters” is absurd on its face and gives an indication–along with their eye-popping electoral investment–of how desperate the industry is to not let this initiative happen.  The No campaign has been characterized by exaggerations and disinformation, including listing Latino business owners as opponents to the measure who actually support it. We’ve seen lies and disinformation from the western states oil industry many times before, as UCS has documented.

One issue that Big Oil is hammering on is the idea that the I-1631 polluter fee will cause gas prices to go way up.  The initiative will definitely cost the oil industry money, but whether drivers feels those increases at the pump is another matter, as California learned in 2015 when it put a carbon price on oil.  Big Oil promised in a huge PR campaign that the carbon price would cause California gasoline prices to spike, but instead prices actually decreased.  This was an important lesson–that because oil is a global commodity, local fees and taxes are limited in terms of influencing what you pay at the pump.  Far more important is what is happening to global supply and demand for oil (and by the way we can’t pump our way out of that situation domestically because the price of oil is set as a global commodity.)  Significant oil price spikes are often the result of events we can’t control, like global conflicts in oil producing regions, supply chain disruptions- sometimes caused by climate change-influenced extreme weather- and refinery shutdowns or accidents.

One way to protect ourselves from oil price increases that we can have some control over is reducing our demand for gasoline, using low-carbon and carbon-free transportation fuels and alternatives that reduce our need for petroleum-derived and other carbon-intensive fuel sources.  The kinds of measures that will help reduce carbon fuel demand are exactly the types of investments that can be funded by the polluter fees under I-1631–yet another reason that oil money is flowing to stop this measure.

Believe scientists, not oil companies

If it passes, Washington will be the second west coast state after California to put a price on carbon. In 2019 Oregon could become the third.  The combined carbon reduction influence of these three economic powerhouse states is enormous.  The three states combined are in the top five largest economies globally, so to claim, as opponents of I-1631 have, that Washington’s contribution to carbon emissions reductions under the initiative wouldn’t make a difference are not looking at the bigger picture.

Scientists have led the way on climate action for decades while the oil industry has stood in their way and drowned out their warnings. More than 200 of Washington’s scientists are asking us to vote yes on 1631. We must accept the facts about climate change and listen to their warnings, not the lies of the fossil fuel companies, or the myths they are promulgating about I-1631.

Scientists understand that Washington’s actions alone won’t prevent global warming but will contribute to both desperately needed emissions reductions in the United States and to momentum to the global movement to dramatically reduce emissions if we are to have a positive future. UCS urges Washington voters not to succumb to the negative and misleading propaganda of the oil industry, but to believe the science, choose hope over fear, and support I-1631.

Will This Case Finally Bring Down ExxonMobil’s Culture of Climate Deception?

On October 24, New York Attorney General Barbara Underwood filed lawsuit against ExxonMobil for defrauding investors regarding the financial risks the company faces from climate change regulations. Photo courtesy of New York attorney general's office

New York State Attorney General Barbara Underwood recently filed what could be an enormously consequential securities fraud lawsuit against ExxonMobil, exposing in great detail the company’s long history of lying about issues related to climate change.

According to the findings of the AG’s investigation, ExxonMobil kept one set of numbers internally about the likely future costs of carbon-emission rules while using another set for its shareholders that it knew to be false. For internal planning purposes, the company low-balled estimates for the cost per ton of carbon that would likely be imposed by regulation to make its projects appear to be more profitable. Meanwhile, the company told its shareholders it was using a higher, more plausible, price when determining its projects’ long-term economic viability. By doing so, the complaint charges, ExxonMobil deceived its investors, falsely assuring them that its oil and gas reserves would not become unusable for economic reasons—what the industry refers to as “stranded assets.”

The 97-page legal complaint is chock-full of examples of ExxonMobil reports and statements that deceived shareholders about the likely cost of carbon-emission standards. It charges the company with “a longstanding fraudulent scheme” that “was sanctioned at the highest levels of the company.”

Just as the notorious Prohibition-era gangster Al Capone was ultimately brought down on tax fraud charges despite a long rap sheet of murder and mayhem, the case raises the prospect that New York’s unique securities fraud law, the Martin Act, could be the legal tool that holds the company accountable for a culture of deception about climate change that spans decades.

The legal complaint cites one notable corporate statement titled “ExxonMobil and the carbon tax” in which the company reiterated its dubious contention that it supports a carbon tax. In fact, ExxonMobil has never publicly supported an actual carbon tax bill and has consistently funded members of Congress who oppose the idea. The company did get some positive press recently for pledging to donate $1 million to Americans for Carbon Dividends, a new lobby group promoting a revenue-neutral carbon tax, but the group’s plan would pre-empt climate-related lawsuits against fossil fuel companies and roll back federal regulations curbing carbon emissions.

ExxonMobil also has long lied about its ongoing support for climate science denier groups. In 2007, a company vice president claimed it stopped funding them after the Union of Concerned Scientists revealed that ExxonMobil had spent millions of dollars on dozens of groups to sow doubt about the reality and seriousness of climate change. The company’s own corporate giving reports show that it continues to fund them to this day. From 1998 through last year, ExxonMobil spent at least $36 million on climate science disinformation groups, more than any other funder besides Charles and David Koch, the multibillionaire owners of Koch Industries.

The bottom line of the New York AG’s complaint is that, when calculating costs for major projects, ExxonMobil “assumed, contrary to its representations [to investors], that existing climate regulation would remain in place, unchanged, indefinitely into the future.”

What would make ExxonMobil so confident that currently weak-to-nonexistent carbon-emission standards would remain the same? Likely its success over the past 20 years in stifling meaningful government action. After all, ExxonMobil and the rest of the US fossil fuel industry have spent enough money on their friends in Congress that a critical mass of them deny the reality of human-driven climate change. So, as long as fossil fuel industry-funded groups continue to provide lawmakers with bogus studies and ply the news media with industry mouthpieces, it is not surprising that ExxonMobil believed it could maintain the status quo.

As the New York AG complaint shows, however, ExxonMobil’s strategy relied on the belief that it could get away with privately counting on business as usual while telling investors it was taking into full consideration the risks to its business posed by the global effort to dramatically curb carbon emissions. When it comes to defrauding investors in New York state, this looming court battle may prove the company wrong.

Photo: NY attorney general's office

Fighting Climate Change: You’re 4x As Powerful As You Think

Photo: UCS/Audrey Eyring

The latest news on climate change is incredibly sobering stuff, and talking with my family about it hasn’t made for uplifting dinner conversation. But once you get past the initial shock, episodes like that can get you thinking about what more each of us can do. When I did, I realized that the answer is a lot—and in more ways than might occur to us. We might, in fact, be four times as powerful as we think.

Us as consumers

We’re consumers of a big range of goods and services, on timescales ranging from daily to less than annual—figuring out how to get to work or school in the morning, making choices about our meals, or thinking about where we live and how, for example. Acting in that capacity is certainly a big factor in how we contribute to climate change.

Every time we make a decision about buying something, in fact, we’re voting with our wallets. About the thing we’re buying. About the company that makes it. About the other things we’re not doing with that money.

What we can do about the carbon implications of our consumer choices is the topic of our book Cooler Smarter: Practical Steps for Low-Carbon Living. Cooler Smarter analyzed where the carbon comes from in our lives, and offered lots of information, ideas, and inspirational examples for doing meaningful things to fight climate change at home, and beyond. The “smarter” part is about finding opportunities to cut carbon that also save you money, or help you live more healthily—things like making your home more energy efficient (lower utility bills, happier residents), using renewable energy (solar panels, for example), having efficient cars (or walking, biking, or using public transportation).

Our research found that in this country addressing carbon in our own lives typically comes down to (1) what and how we drive, (2) how we use energy at home, and (3) what we eat. And there are loads of carbon-cutting opportunities in each of those areas.

So our power as consumers is clear.

We can’t all put solar on a roof, but as consumers, we have choices, and those choices can make a difference when it comes to climate change. (Photo: PublicSource)

Us in the community

Dealing with the carbon in our lives is key, but it’s a starting place, not an end. As we’re tackling our own opportunities, it’s important to take the knowledge and experience we’re gaining and spread them far and wide.

Family and friends are great places to start. They may well know something about climate change, but maybe not know what to do about it. The important thing is to inspire, not frighten. They should understand the seriousness of climate change, but it’s essential that they also understand the seriousness of our potential responses.

And they should understand the opportunities that those responses present, that these days, those responses are increasingly attractive from our wallets’ perspective, too. You might be motivated enough without the “smarter” part of being Cooler Smarter, but it sure can help motivate action by others.

And then there’s the broader community—your office, your school, your faith community. The Rotary meeting. The bowling alley. The bus stop. Anywhere that you’re interacting with people, actually, probably presents chances to slip in something about climate change and solutions.

Fighting climate change in your own life and working to help others do it makes you twice as powerful.

Making a difference by speaking up (Photo: UCS/Audrey Eyring)

Us as advocates

Then there are decision makers at all levels of our democracy—local, county, state, and federal. Elected leaders and others in government need to hear from you that “I care about climate solutions, and I want you to care about them (and act on them)” and “I’ve done these things in my own life; I want you to make it easier for others to do them.”

Because there’s a lot we can do on climate change as individuals, from the bottom up, but there’s a whole lot more that needs to happen with the support of well-designed laws and policies. Like ones that accelerate the power sector’s move to renewable energy, or that make it easier for homes and businesses to embrace energy efficiency, or that make cleaner cars and buses more accessible to a broader swath of society.

Your advocacy efforts can also tackle those corporations that you interact with as a consumer. Companies can be forces for good on climate change, given their buying power, societal heft, and customer bases, including in response to customer campaigns. But it’s certainly not a given.

Folks who are fortunate enough to be shareholders have another route for impelling corporations in the right direction on global warming, and letting companies—think oil and gas types, for example—know that we care about honest treatment of issues, that we don’t look kindly on efforts to obscure the truth to forestall action on important issues like climate change.

Add your voice to efforts to move government, and corporations, in the direction of climate action and you just might find you’re three times as powerful.

Power at the polls (Photo: Element5 Digital/Unsplash)

Us as voters

And then there are times like right now, when many of us are getting a chance to exercise the most powerful role we have in our democracy—stepping into voting booths, and being part of making decisions that are key.

Key to determining whether the ship of state stays on its current disappointing (in many cases) course or turns toward progress on climate change… or further away from it. Whether we can count on the checks and balances that our Founders wisely put in place two centuries ago, so that we have rational policies (on climate change and more), sensibly implemented. Whether science is at the center of our decision making, or pushed aside or attacked for political gain.

It’s not a coincidence that the Union of Concerned Scientists focuses on science at times like this (as at all other times), and even has a whole initiative around standing up for science in the upcoming elections, and is part of a broad effort to make sure that “science is front-and-center in the decision-making processes that affect us all.”

Because whatever issues you care about, around public health, say, or justice, or economics, or the environment, having sound science available and appropriately considered is crucial for good decision making. “Science—free from political interference—is fundamental to building a healthier planet and a safer world,” UCS says.

Apart from the important candidate races across the country, this election cycle offers some really interesting ballot initiatives for fighting climate change. In Washington State, for example, Initiative 1631 lets voters choose to tackle climate change head-on, with a fee on carbon pollution and investments in clean air, clean energy, healthy communities, and more. In Nevada, Question 6 offers voters a chance to up the state’s renewable energy standard to the robust 50% renewables by 2030 that nearby states have embraced. Arizona’s Proposition 127 aims at the same clean energy goal.

Our roles as voters can build on each of the other ways we can be fighting climate change, or can serve as a platform for more progress in those areas.

Great power, great opportunity

Add up all those roles, and you’re four times as powerful as you would think if you were focusing on just one.

Actually, you’re at least four times as powerful, since there are other avenues for making a difference. If you’re a teacher, for example, you have an incredible power to instill a sense of respect for science, and a belief in our ability to bring about positive change. (And if you’re a student—especially a STEM major—you have a particular chance to boost the voting numbers among your fellow students.) If you’re a parent, or an aunt or uncle or grandparent,…

Climate change demands real action from a lot of people in a whole lot of roles. We’ll make better progress if we remember that our own multiple roles make us a lot more powerful than we might think.

So on Tuesday, vote for science. And don’t stop there. With great power comes great responsibility, but also great opportunity. Carpe diem, indeed.

Photo: PublicSource

How Affordable is Your Electricity? Comparing Electric Rates, Bills, and Burden

Nearly 1 in 3 US residential household struggles to pay their electric bill. With so many folks struggling, it raises a question: What makes electricity “affordable?”

Do you know what you pay for electricity?

It’s okay if you don’t. A lot of folks probably don’t.

The most commonly used data source for calculating the average retail electricity rate* is from the Energy Information Agency (EIA), part of the US Department of Energy. EIA reports data on electricity price ($/kWh). This value takes your average monthly bill ($), divided by the average energy consumption in terms of kilowatt-hours (kWh).

Straightforward enough.

Using this average makes Southern and Western states look like they have affordable energy (Map 1). I often hear utilities and government offiicals in the South bragging how low their rates are. They’ll point to the high rates of Massachusetts, California, New York, or Hawaii for comparison.

Map 1: Average residential retail electric rates. Higher rates tend to be concentrated in the northeast, California, Alaska, and Hawaii. (EIA, 2017)

Looking at this map, California, and Northeastern states do look expensive…

But such conclusions aren’t as cut and dry as you might think.

At best, rates tell you very little. At worst, fixating on rates could mislead people into thinking electricity in some regions is more affordable than it really is.

Why?

Rates don’t reflect how much energy the average customer consumes. Bills, on the other hand, are what households pay every month.

Bills, bills, bills

Bills are a better metric on how affordable electricity is because that’s what you have to pay each month. For many struggling households, the total electricity bill plays a determining factor in how much money you’ll have to spend on other things.

And, somewhat unintuitively, bills are comparatively lower in many of the “high rates” states (Map 2). Meanwhile, the “low rates” southeastern states begin to look expensive.

When we were only looking at rates, Mississippi, Georgia, Alabama, and South Carolina all looked like they had affordable electricity. However, residential customers in those states have some of the highest bills in the country.

Why?

Low bill states tend to have policies that enable customers to lower their bills. Rooftop solar, market competition, and even rate structure can translate into savings for customers. But mostly, the credit belongs to energy efficiency.

Map 2: Average residential electric bills. Looking at bills, rather than rates, helps illuminate where customers are paying more for electricity. (EIA, 2017)

Massachusetts which had the 4th highest rates but the 36th lowest bills. Massachusetts is ranked 1st in energy efficiency by ACEEE.

California, which had the 7th highest rates but the 15th lowest bills. California is ranked 2nd in energy efficiency by ACEEE.

Louisiana has the 2nd lowest rates but only the 34th lowest bills. Louisiana is ranked 47th by ACEEE in terms of energy efficiency.

Mississippi has the 15th lowest rates but has the 10th highest bills. It was ranked 44th by ACEEE in terms of energy efficiency.

Other “low rates” states, like Alabama, Kentucky, Arkansas, Georgia, and South Carolina, all have lower than average rates but higher than average bills. These states also rank low in energy efficiency.

But even bills only tell part of the story.

Electricity burden

While the average bill in Hawaii or Connecticut is higher than the national average (Hawaii has the highest average bill, Connecticut has the 3rd highest), average household income in those states is also higher than the national average. In both Connecticut and Hawaii, the average household spends 2.3% of their annual income on electricity. The national average is also 2.3%.

Energy burden is the percent of one’s income you spend on all energy (electricity, heating, gasoline, etc.…). Electricity is one part of the energy burden (Map 3).

Map 3: Percent of pre-tax income that goes to electricity bill (Electricity Burden). Alabama, Mississippi, and South Carolina all have below-average rates—but residential consumers in those states suffer the highest electricity burden. (Pre-tax income data: US Census Bureau, 2017.)

The analysis presented here is limited to averages. The average income. The average consumption of electricity.

This analysis doesn’t account for intrastate variances in household incomes. Nor does it account for differences in electricity consumption. It is a simple comparison of the average bill as a percent of average income. Far from a perfect measure, but it’s still the next step in looking at electricity affordability.

Looking at averages isn’t to say that folks in states with lower than average electricity burden don’t also struggle to pay their bills. Yes, lower income folks do consume less but they do typically spend a higher percentage of their income on energy overall. The energy burden on low-income households is real and substantial. It is real in all 50 states and in the District of Columbia, regardless of averages.

So what good is this analysis?

The analysis does illustrate how misleading the focus on rates is.

Bills—what people actually pay—can look very different from rates. Focusing on rates distracts from the important policy question: How can we ensure that energy is affordable?

This analysis highlights that the low rates of the South are a poor indication of electric affordability in those states.

Next month I’ll be presenting at an annual conference of consumer advocates. Consumer advocates have long been focused on electricity affordability. Energy efficiency is a great step in making electricity more affordable. Energy efficiency helps avoid or defer expensive investments that utilities would otherwise have to make, which means it helps all customers save money. Energy efficiency helps consumers lower their bills. And, energy efficiency policies and programs can target efforts to make sure that all consumer groups can benefit and participate in efficiency programs.

What follows is a list of states and ranks for their rates, bills, ACEEE energy efficiency score, and percent of income spent on electricity (burden). The number in each cell reflects that state’s rank, from low to high. So, for example, Alabama is the 28th cheapest state for rates, but the worst state in terms of electricity burden.

State Rates Bills ACEEE  Burden Alabama 28 50 43 51 Alaska 50 45 41 19 Arizona 27 46 17 43 Arkansas 4 22 34 44 California 45 15 2 7 Colorado 24 3 14 2 Connecticut 49 48 5 27 Delaware 36 38 22 31 District of Columbia 31 9 12 1 Florida 18 44 23 47 Georgia 22 43 38 42 Hawaii 51 51 16 28 Idaho 3 14 26 29 Illinois 32 5 13 8 Indiana 25 28 40 37 Iowa 26 18 24 21 Kansas 35 31 46 34 Kentucky 9 29 29 45 Louisiana 2 34 47 48 Maine 42 4 15 11 Maryland 37 47 10 14 Massachusetts 48 36 1 10 Michigan 40 11 11 24 Minnesota 34 12 8 9 Mississippi 15 42 44 50 Missouri 20 35 33 38 Montana 12 7 37 25 Nebraska 13 21 45 20 Nevada 23 16 30 22 New Hampshire 47 32 21 12 New Jersey 41 17 18 3 New Mexico 30 1 36 16 New York 44 19 6 13 North Carolina 10 27 27 39 North Dakota 5 25 49 23 Ohio 29 24 31 32 Oklahoma 6 26 39 40 Oregon 7 20 7 17 Pennsylvania 38 30 19 30 Rhode Island 46 23 3 15 South Carolina 33 49 42 49 South Dakota 21 33 48 35 Tennessee 8 40 35 46 Texas 14 39 25 36 Utah 12 2 20 6 Vermont 43 8 4 4 Virginia 17 41 28 26 Washington 1 13 9 18 West Virginia 20 37 50 33 Wisconsin 39 6 32 5 Wyoming 16 10 51 41

This “rate” isn’t the same as the variable rate of your electric bill—the amount you pay for each kWh you use or the amount of money you save for each kWh you conserve. For this analysis, I’ve only looked at the retail rates and bills of residential customers.

Offshore Wind in 2018: Four Takeaways

Photo: J. Rogers

The annual US offshore wind conference last week was full of energy and enthusiasm (and people—with the largest crowd I’ve seen at one of these in quite a while). The optimism was clear and, importantly, seemed justified. Here are four big takeaways for me about what’s coming for offshore wind.

1. Wind farms are coming.

The conference included a couple different sets of projections about what projects will get built when. One was from the government agency in charge of wind off our coasts, the Bureau of Ocean Energy Management (BOEM), and one from research firm Bloomberg NEF. Both agree that a lot of offshore wind is coming:

  • 2020 – The sole project in the Americas, a 30 megawatt (MW) project off Rhode Island, gets some company. The next turbines in the water, they agree, will include a 12 MW demonstration project off Virginia.
  • 2021/2022 – The big megawatts start coming in, including the first tranche of the 800 MW Vineyard Wind project off Massachusetts whose remarkably low price is helping fuel excitement across the offshore wind sector, plus a down payment for meeting New York’s 2400 MW target, with a project east of Long Island.
  • 2025 ­– As many as a dozen projects might be powering homes and businesses in Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland, Virginia, and even Ohio. BNEF projects 3,695 MW installed by that point.
  • 2026-2030 – More megawatts and more states. BNEF projects more than 10,000 MW by 2030 (AWEA, the American Wind Energy Association, is envisioning 8,000 by 2028). And BOEM’s projections add North Carolina.

 

What may come: Worker with offshore wind blades, at a Siemens facility in Denmark (Photo: Derrick Z. Jackson)

2. There’s lots more to come.

Those expectations about projects and megawatts are for areas that have already been leased for offshore wind. But there’s a lot beyond even that.

Various speakers also talked about the West Coast. California and Oregon have some of the strongest offshore wind resources in the country, and BOEM has proposed three areas off California for consideration. BOEM has also been looking at Hawaii. (Both the West Coast and Hawaii)

Meanwhile, back on the East Coast: BOEM is looking at additional sites in the New York Bight, southeast of New York City, to join the one that in 2016 fetched the highest offshore wind lease auction price yet.

And in his brief remarks at the end of the conference, Interior Sec. Ryan Zinke brought the conversation back to Massachusetts, where the US’s offshore wind conversation started back in 2001 (with the proposed, but never launched, Cape Wind project). He announced a December date for auctioning off three additional offshore wind lease areas south of the Bay State and the existing leases.

3. Wind farms = jobs.

Jobs have always been a compelling reason for states and the federal government to push offshore wind. And unions are excited too by the prospects for steelworkers, pipefitters, electricians, and more.

At the conference, AWEA CEO Tom Kiernan said that the 8,000 MW by 2028 will bring with them some 40,000 jobs; that’s almost as many as there now are in US coal mining. Vineyard Wind alone has committed to creating more than 3,600 jobs.

States duking it out at AWEA Offshore Wind 2018

4. States want their piece of it all.

And each potential offshore wind state wants as much of that—the megawatts, the energy, the jobs, and more—as it can capture. Even for a tech guy like me, the “state of the states” closing session at the conference was one of the most interesting, as each of five states laid out the business case:

  • Virginia – John Warren, director of the Department of Mines, Minerals, and Energy, touted the state’s “deep maritime history”, a prime location (and lots of skilled veterans) in Hampton Roads, and, if things go according to plan, those next turbines in the water, with the 12 MW demonstration project.
  • Rhode Island – State Energy Commissioner Carol Grant trumpeted the Ocean State’s “unique position” in the offshore wind space: Having the sole existing offshore wind farm in the country. And she plugged the state’s location (good maritime and road access), infrastructure (two deep-water ports), and experience, including workforce-wise.
  • New York – Alicia Barton, president and CEO of the state’s energy research and development authority (NYSERDA), pointed to the state’s position as the twelfth largest economy in the world, its commitment to 50% renewables by 2030, and the big role the state sees for offshore wind in linking those pieces.
  • New Jersey – For Kathleen Frangione, the governor’s chief policy advisor, lots of factors add up to make the Garden State “uniquely situated” for offshore wind: its extensive shoreline, its workforce, its port infrastructure, and the multiple nearby offshore areas already leased out.
  • Massachusetts – Steve Pike, CEO of the Massachusetts Clean Energy Center, talked about the lessons learned during the years of battling over that first offshore wind proposal in the country—the “deep well of knowledge and expertise” that the state chalked up. Add to that a “proud seafaring tradition”, an “invaluable talent base”, and more, and it just might be too good to pass up.

All of them acknowledged, actually, that it’s as much about cooperation as it is about competition, as each figures out the role it can best play in building the US market.

“The future is bright.”

Conference speakers didn’t ignore the challenges facing offshore wind—issues around fishing, viewshed/visual impacts, navigation, wildlife, or defense, for example—but there was a real, broadly held sense that the time is right for offshore wind, and offshore wind is right for this time.

Sen. Ed Markey of Massachusetts, as enthusiastic and eloquent as always, talked about the “inexorable inevitability”—not just of climate change, but also of solutions like offshore wind. New York’s Barton pointed out the “once-in-a-generation opportunity” that offshore wind represents for establishing a new industry in the US.

And even the Trump administration sees that, and can’t resist offshore wind’s appeal (and why would it want to?). Sec. Zinke declared himself “bullish on wind”, and touted the chance to “build an energy platform in this country for generations to come.” “The future is bright,” he said.

Indeed. Offshore wind’s power, potential, and job creation promise make it easy to find stuff we can agree on.

Photo: J. Rogers

Why We Met with Andrew Wheeler—And What Happened When We Did

On Monday, I met with Andrew Wheeler, the acting administrator of the Environmental Protection Agency (EPA), accompanied by Andy Rosenberg, director of our Center for Science and Democracy, and Michelle Robinson, director of our Clean Vehicles Program. We had asked for this meeting in early July, just after Scott Pruitt resigned and Mr. Wheeler was named as his replacement. Though well aware of Mr. Wheeler’s history as a coal industry lobbyist, we hoped that he might not be personally invested in some of Mr. Pruitt’s policies, and were convinced that we should meet with him face to face and try to persuade him to change course.

Since that time, and with a few important exceptions, Mr. Wheeler has mostly dashed these hopes. During his short tenure, the EPA has drafted rules to roll back the three most significant EPA climate change policies (fuel economy and greenhouse gas emissions standards for cars and light-duty trucks, the clean power plan for CO2 emissions from power plants, and limits on methane leaks from oil and gas operations). And the EPA has repeatedly excluded independent, academic scientists from EPA advisory boards and has sought to limit the scientific information that the EPA can use when adopting new safeguards for public health and the environment.

We were scheduled for a half hour, but Mr. Wheeler graciously extended the time to make sure we could cover the three issues we wanted to raise. At the meeting, Mr. Wheeler, accompanied by Bill Wehrum, the director of Air and Radiation, and several others, was engaged, eager to defend his positions, and respectful of ours.

However, the meeting was utterly disappointing.

We focused part of the discussion on climate change. We handed them excerpts from the recent report by the Intergovernmental Panel on Climate Change (IPCC), and the Climate Science Special Report, prepared by US government scientists. We showed them a chart from the Special Report projecting the misery of lengthy heat waves across the US in just a few decades, and cited UCS’s Underwater Report estimating that hundreds of thousands of homes in the United States that would be flooded twice a month by mid-century. We stated as forcefully as we could that rolling back the modest first steps that the EPA had taken is the precise opposite of what these reports are urgently calling upon all leaders to do.

Mr. Wheeler did not attempt to dispute the science. Rather, he claimed that EPA lacked the legal authority to address it in any substantial way, particularly when it came to power plants. We pushed back hard, citing several Supreme Court opinions holding that the EPA did have such authority and pointing out that the EPA had itself created uncertainty over its authority by asking a court not to rule on a pending case on the Clean Power Plan which would have clarified the legal boundary lines. I felt the way Abraham Lincoln must have when he ruminated “If General McClellan isn’t going to use his army, I’d like to borrow it for a time.”

We also discussed the rollback of the clean car standards, and Mr. Wheeler seemed to have swallowed the argument that cleaner car standards will cause more traffic fatalities. (I know, this is hard to grasp—supposedly people will hold on to their less safe, older cars longer and drive them more because newer, more efficient cars are more expensive). Michelle pointed out that even his own technical staff’s analysis doesn’t support this argument, and let him know that we and others would refute it during the public comment period. We also discussed the proposal to rescind California’s long-standing authority to set its own stricter standards. At this point, Mr. Wheeler expressed a preference for a “50 state” solution in which the federal and state standards were aligned. We reminded him that this is precisely what we have now under the existing standards, and it is his decision to lower the federal standards that is creating a disjunction with California.

The discussion then turned to science, and Andy spoke forcefully about a pattern of removing independent, academic scientists from advisory boards, and limiting the evidence that EPA can consider when making decisions. UCS and the EPA could not even agree on what to call one of the proposals that would disallow the EPA from using studies unless it made public raw data such as private health records. We called that proposal “restricted science.” He called it “transparent science.” Whatever the name, Mr. Wheeler did recognize that his proposal had engendered fierce criticism from many quarters, but he insisted that it was misunderstood.

The meeting was coming to a close. I had been in this office before with other EPA administrators, and had experienced the exhilarating feeling of being close enough to power for my words to make a difference. The stakes for this meeting with Mr. Wheeler were so much higher—we are running out of time on climate change, and the Trump administration is doing such damage, yet I couldn’t break through.

As a last resort, I did all I could do: I implored him to read the reports we provided and summon the courage to put a hold on these reckless rollbacks. I acknowledged that this would be hard. And I said something like this: “it would be harder still to be a person in a unique position of authority and responsibility, who had the chance to steer a safer course, but chose not to do so.”

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