Despite efforts in Washington to roll back climate progress, many states remain committed to lowering emissions and achieving their clean energy goals. The main way states can act is through changes in the electricity sector. New York is one state leading the way, having made news last summer when it rolled out a plan to draw half of its electricity from clean energy sources like wind and solar by 2030. To talk about this plan, other actions across the country, and the challenges ahead, EPIC hosted a conversation with the person spearheading the effort for New York, Richard Kauffman, and premier energy expert Susan Tierney. EPIC Senior Fellow Pete Ogden moderated the January 26 discussion.
To set context, EPIC affiliate and Assistant Professor at the UChicago Harris School of Public Policy Steve Cicala kicked off the event with an overview of the U.S. electricity system, it’s history and some of the key challenges. One of the largest challenges is the insertion of distributed energy into a grid not built to support it.
“The wind is only going to blow in specific places, and if we’re going to economically make our way towards using renewables, it’s going to require shipping it over a transmission grid,” Cicala explained.
Cicala highlighted the immense role states play in shaping the electric system. Tierney, a former assistant secretary for policy at the U.S. Department of Energy, state cabinet officer for environmental affairs, and state public utility commissioner, agreed.
“Electricity is a place where there is a lot of action at the states because the historical development of the industry was one in which states had a premier role,” Tierney said. Because of this, she said this “is one of the most disrupted periods in the electric industry.”
Tierney explained that the U.S. electricity mix is fundamentally changing. Most of our electricity used to come from coal. Now, because of the shale gas revolution, natural gas is cheaper and driving out coal. Nuclear plants are also having trouble competing. Meanwhile, state renewable policies have made clean energy sources cheaper, so sources like wind and solar are slowly on the rise.
But, while some sources of energy are getting cheaper, the overall cost of maintaining the old system keeps increasing, according to Kauffman.
“So as the cost of traditional generation continues to go up, the cost of distributed sources of electricity – solar, wind – continue to decline,” Kauffman said.
One reason for the increasing costs is that the infrastructure itself was never intended for distributed generation. But the policies needed to force a change are largely not present.
“That’s the reason we’re not building the grid of tomorrow,” said Kauffman, which he described as a hybrid grid that would still have power plants and long-distance transmission but would also have distributed capabilities and electrons flowing in more than one direction. “That’s the kind of grid we’re supposed to have. And yes, there are technical challenges. But the fundamental reason why we’re not building that grid is because of policy.”
New York is leading the way in changing this approach through an effort known as Reforming the Energy Vision (REV), which Kauffman leads. The program is providing financial incentives for utilities to adopt new technologies and new methods of doing business.
“What REV aims to do is change the policies to drive capital to build this grid of tomorrow as opposed to just rebuilding the grid of yesterday,” he said.
Tierney explained that New York is on the forefront because of a strong “appetite for innovation and change.” Other states are making such changes more incrementally, driven by forces happening on the ground like homes and businesses installing solar roofs.
“Renewable portfolio standards, tax credits, net metering are all meant to push technologies forward,” Tierney said. But what needs to be determined is “how we structure a politically-acceptable, economically well-designed, and effective policy to sustain a grid.”
Each state is doing that differently, and at various degrees of success. But Tierney and Kauffman agreed that the electricity system is undergoing a vast change. How long it will take to transition to the grid of the future is anyone’s guess.
Despite uncertainty on climate policy in Washington, many of the largest states and municipalities across the United States remain committed to achieving their clean energy goals and working to fulfill our international climate commitments. New York is one state leading the way, having made news this summer when it rolled out a plan to draw half of its electricity from clean energy sources like wind and solar by 2030. To meet these goals, New York, California and other states and municipalities with similar goals must contend with a host of challenges: How will President-elect Trump’s proposed federal policy changes impact them? How will they integrate distributed sources into the grid? What incentives and payment structures should be used?
Join EPIC for a conversation with the person spearheading this effort for the state of New York, Richard Kauffman, and a premier expert in energy policy and economics, former Department of Energy Assistant Secretary Susan Tierney. The conversation will be moderated by EPIC Senior Fellow Pete Ogden.
Bethel Haile: email@example.com