Thanks To Your Local Economy, Renewables Aren’t Going Anywhere (Episode 15)

When I said at the beginning, “We need to take a deep breath about what’s happening here.” That’s for two reasons. One is that because it was a fairly complex rule there’s a process for walking it back. I heard one commentator on the radio say, “Creating the rules was like walking up a set of stairs and undoing them means you have to walk down the same set of stairs.” Changes in the rules will take some time.

The second thing is that for states that were agreeable to the Clean Power Plan, which is to say they wanted to do something anyway, they’re going to go ahead and find ways to implement those rules or find other ways of meeting those greenhouse gas emissions regardless.

I think we have two hopeful elements here. One is that it will take a while to undo this and the other is that many states will move ahead, whether or not the federal government is continuing to compel them to do so.

Fracking is, I think, a great and instructive example of this. Certainly that compounded the shift away from coal and that had nothing to do with the policy that we’re talking about here today. The bottom line is that nothing is going to save coal from these economics. Even if natural gas gets more expensive, renewables remain on a trajectory that makes them increasingly accessible and attractive.

When Karlee’s talking about the economics being in the driver’s seat here, in the wake of the Clean Power Plan or it’s reversal, like you said, the folks informing the investors, the investment banks, are essentially saying put your money in renewables. That’s the cheap stuff.

In the past couple, three, four years, all of a sudden there are these big bars of orange and red, which represent large-scale and small-scale solar. It is really adding up. Although, on an annual basis, the amount of total energy, electricity that we get from that is still relatively small, it’s growing very quickly. It shows up first in these charts around capacity, in the next couple of years we’ll start to see that in terms of how much energy we get on an annual basis.

You take Iowa, for example, regardless of its politics, it has an incredible wind resource and in fact, the policy that got its wind industry started expired 10 or 20 years ago. All of the development in wind power in Iowa, which is one of the nation’s leaders on a per capita basis, is because wind simply is a really cheap resource for supplying electricity needs because wind blows a lot in Iowa.

On the other hand, you have states like Minnesota or Colorado or California or New York, where we’ve enacted policies that are pushing utilities toward renewables. Of course the analysis shows, in retrospect, that that was a very cost-effective choice. You’re also seeing advances in places like Arizona or Nevada or Texas, where it’s not really policy driven, it’s just economics.

In West Texas you have tens of thousands of megawatts of wind power, because it’s a very good wind resource but increasingly solar. Excellent solar resource in Arizona and Nevada and New Mexico, driving a lot of solar adoption there.

What I think has happened now is that we need to figure out ways to maintain competitive markets. For example, a 1978 federal law called PURPA, has required utilities to buy electricity from competitive sources ever since the late 1970’s. It came out of the oil crisis and the desire to find more economical power sources. Well that law is still enforced in all 50 states, requiring us to look at economical sources and utilities, now that they are facing competition from renewable energy resources produced by non-utility participants, are saying, “Hey, we want to get rid of that law.”

There are still ways in which the entrenched interests, whether it’s monopoly utility companies, or the fossil fuel industry, are trying to push back against renewables and we need to hold firm on market access on the basis of cost competitiveness.

He’s a very interesting guy. He was making the case that he felt like the Clean Power Plan would have been really bad for Wisconsin. It would have cost, in his words I think, billions of dollars in extra costs to rate payers and would have been therefore bad to business. I’m just curious how you would respond to that. I think it looks like Karlee is all ready to offer some context.

A lot of the economical opportunities that we have for renewables, though, aren’t from the utilities. They’re from the bottom up. They’re from consumers putting solar on their own households. They’re from community solar, like we have in Minnesota or New York or Maryland. They’re from distributed energy production that could use that 1978 PURPA law to sell power competitively to the utility company.

I think one of the potential costs that, I don’t know if this is what Charlie Sykes was getting to or not, but I think one of the potential problems with the Clean Power Plan was the fact that this top down kind of bureaucratic solution would have made it difficult for some of those things to come to market that might be much more cost-effective than asking utilities to turn the ship.

There is a recognition in that question that we are moving away from fossil fuels. Despite that, you see in the recent news here about the Clean Power Plan, this assumption that we’re going to somehow roll back these regulations and it’s going to allow these, in particularly, coal mining and coal jobs to come back.

The truth is, in the last 50 years, employment in the coal mining sector has dropped by about two-thirds even as production has more than doubled. That has nothing to do with renewable energy because there weren’t renewables on the system in the sixties and seventies and eighties and even the early nineties.

I think the crux of this then, is that in the same way that some people say well the Stone Age didn’t end because we ran out of stones, that the Coal Age is going to end, not because we run out of coal but because we have cheaper ways to produce our energy than we did before.

Ultimately, the issue here is, what is that we can do? What is a reasonable approach to our energy system that accomplishes these goals of environmental sensitivity, meeting our energy needs and respecting fossil fuel power plant workers and fossil fuel workers? The Clean Power Plan reversal does none of these things. It doesn’t mean that we will get environmentally friendly energy, in fact it undermines a regulation in favor of it. It doesn’t really help us, in terms of cost-effective energy either.

In fact, the biggest winners being talked about in the news here are coal mining companies, which will be able to sell more coal to existing power plants perhaps, at the expense of the workers for whom often end up being on the losing end of bankruptcy filings, for example, where they lose their pensions and their healthcare and everything else.

What can we do? There were a number of things that we actually outlined, that we wrote about on our website, in light of Ken Bone’s question at the debate and there were a couple of things. One is, as I have said earlier, reinforcing the access for renewable energy to the market.

Number two is figuring out how we can retrain people from the fossil fuel sector to work in those jobs and to make sure those are good jobs. Whether that’s helping unions organize in that area, like they have the fossil fuel industry, whether that’s coal mining jobs or power plant jobs or just making sure that we have a way to transition folks into those jobs that are generally good paying.

The third thing is we just have to admit that the fossil fuel jobs are going away. There’s nothing that we can do, from a federal regulation perspective, other than maybe something like Wyoming tried to do recently, which was to pass a law prohibiting utilities from building renewable energy power plants. It would be incredibly expensive and have all these adverse, societal effects from pollution and on down. It might keep them working for at least a little bit longer. Maybe, except that as the cost of energy went up from the utility company, people are going to put solar on their rooftop and stop buying it from the utilities.

There’s really no saving those jobs. How do we have a just transition? How do we help those folks?

The second one is that we have that retraining assistance but it might also include relocation assistance because it may be that the jobs for renewable energy are not in Appalachia like the jobs were for coal mining or for working in a power plant.

A similar issue actually came up recently in Minnesota about the potential closure of a coal power plant in Becker, a small rural community. Another thing that we have to consider too is not just the outcome for these workers but the outcome for the communities. These big power plants are a sizeable portion of a community’s property tax revenue and a sizeable presence in the community. What can we do for those communities?

In Minnesota, we had a bill passed that said we’ll build a new power plant there to replace that. It’s a billion dollar rate payer subsidy for a town of 2,000 people in order to maintain that town’s character. There are probably less expensive ways we can do that. We outline a couple of them in our research. It comes from some very good, very thorough work done by the American Prospect.

I wanted to end with a question of hope, which is we talk around the office a lot about whether things are heading in a direction that’s one of despair or not. I’m curious, when you look at this, and we’ve elected someone that I think no one in this office supports as president, who’s doing a lot of damage to the things that we care about and yet it seems to me like it’s actually maybe he can’t do that much damage because we have local leadership and that sort of thing. I’m just curious what you take away from it Karlee?