Co-director of ILSR and Energy Democracy initiative director John Farrell and research associate Marie Donahue sat down before the winter break to reflect on what they are describing as the “Year of 100” — a landmark year for 100 percent renewable energy commitments in 2018.
In this special year-end episode of the Local Energy Rules podcast, Farrell and Donahue recap the many ambitious renewable energy commitments made by states, utilities, and cities, this year. The two discuss what we can learn from these resolutions and how to ensure benefits from the clean energy transition remain both local and equitable.
Tune in for highlights from 2018 and a lively discussion about what is on horizon for local, renewable energy in 2019. Find a transcript and summary of the conversation below.
|Marie Donahue:||States, utilities and cities across the US are making big resolutions to shift to 100% clean energy. In 2018, we saw California, Xcel Energy, and Portland, Oregon, become a few, of many, important players who are taking bold steps to transform our energy system in the coming years.
In this very special New Year’s episode of the Local Energy Rules podcast, John Farrell and I, Marie Donahue, from the Institute for Local Self-Reliance’s Energy Democracy team, sat down to discuss what we’re calling the “Year of 100.” We cover year-end reflections about what we can learn from the numerous 100% renewable energy commitments that were made this year and what’s on the horizon for local renewable energy in 2019.
|John Farrell:||Welcome to a special year-end edition of Local Energy Rules. I’m John Farrell, director of the Energy Democracy initiative at the Institute for Local Self-Reliance. This podcast shares powerful stories about local renewable energy. With me today is Marie Donahue, research associate on our Energy Democracy initiative.
|Marie Donahue:||Thanks, John.|
|John Farrell:||For me, I want to say that this seems like the “Year of 100.” I want to start off by just talking about a few of the things that are going on that are related to 100. The first thing is 100% renewable energy. We’ve got a lot of states that are starting to look more seriously at this. Hawaii has already made a 100% renewable commitment in prior years. California just made a 100% renewable commitment this year. Five new governors who were elected during the 2018 midterms are also committed to getting to 100% renewable energy, in Colorado, Connecticut, Illinois, Nevada and Maine.
It’s been pretty impressive to see both how this has affected the elections, but also how states are really starting to move on this policy.
|Marie Donahue:||Yeah. I’m curious to dig into that a little bit more, John, to see your take on what led us here — what are the states that have made these commitments, [and] how did we get here?|
|John Farrell:||I think really what it comes down to, more than anything, is simply the economics of renewable energy. That for years and years the idea of a commitment to renewables was really more of an environmental motivation, although the cost had been coming down. And certainly for wind power, for at least the last decade, wind has been very competitive. Now solar power is competitive. We saw bids for Xcel Energy, a utility based in the Midwest, for renewable energy that was cheaper than any kind of fossil fuel energy electricity you could generate. In fact, it was cheaper than existing fossil fuel power plants. I think that’s really what’s in the driver’s seat more than anything, but it’s a great opportunity for folks who do have environmental commitments who want to see economic growth around clean energy to merge those together in state policy.|
|Marie Donahue:||Yeah, no, that makes sense. I think what was interesting to me as I learned more about these commitments and the change in momentum that they’re taking on at the state level, to also see because of those economics that there are individual choices being made, not just at the state level, but really from the bottom-up.
We were able to put together this map, in California especially, to understand that they might be getting closer to that goal and at a more rapid pace because residential customers are really taking on the responsibility of implementing solar.
We mapped out solar projects that are happening across commercial and residential locations statewide. We see this rapid growth over the years, to close to 800,000 projects in California. That sort of speaks to this momentum of these commitments and just the ways in which I think decisions that are being made on the ground are affecting states’ abilities to be able to make these commitments and hopefully follow through on them.
|John Farrell:||What I hear you saying is not only are these states like California making a commitment at the state level through the legislature, but all these customers, you said 800,000 over a decade, are already making the choice to go renewable, to put solar on their rooftop.|
|Marie Donahue:||Mm-hmm (affirmative). Yeah, we’re seeing that rapid growth. Because of that, there have been new policies in California as well to be able to support residential solar that passed this year.|
|John Farrell:||What else is happening along with these 100% commitments? How are states debating this? Maybe what other states are considering this, or what other factors should we be thinking about as states are talking about 100% renewable energy?|
|Marie Donahue:||Well, I’m interested in … that map shows the sort of bottom-up approach that I think can be taken with just customers individually making decisions, but I think as we think about communities coming together and thinking about the collective actions they can take, I’ve been inspired. Minnesota, for example, is thinking about … that there are folks at grassroots level across the state coming together to start a 100% campaign in Minnesota. I think those grassroots efforts of communities to push state legislatures, to push for more policy change and more of these commitments is gonna be really interesting to watch and see how those campaigns evolve, [and] really drive change at the state policy level.|
|John Farrell:||Are there any like yellow flags or anything like that in terms of what states should think about when they’re talking about 100% renewable energy?|
|Marie Donahue:||Yeah. It’s interesting you raise that. So, actually, just this month we released this report about how there is a dirty secret in state renewable goals and standards. Oftentimes, in state renewable portfolio standards, we see the definitions of renewable energy are really important. Whether states are making commitments to renewable energy or carbon-free, there are nuances to these definitions. This new report that we released this month in December on the number of states that actually count waste incineration as part of their renewable goals. Unfortunately, I think, John, you would agree with me, that waste incineration, which is a combustion process, it’s taking municipal solid waste, one of those byproducts of that process is the production of steam or energy, but it’s a very highly polluting source of energy.
We have 23 states that we found in this report that are classifying waste incineration as renewable. And therefore in direct incentives or just by virtue of them being subsidized in that way, this dirty form of energy is being supported and bolstered by renewable goals. I guess it’s just a cautionary tale of how we can think about the definitions of renewable and how important it is to get into some of the nitty-gritty details when these commitments are made, holding states and utilities and other leaders accountable to what those definitions of renewable are, and what they’re including, and what isn’t being included, and where we’re directing generally limited resources to support renewable power. In that incineration report we argue, certainly, that solar and wind should be what we’re investing in and not more dirty forms of energy.
|John Farrell:||I wanted to just make a plug. I think one of the great things about that report is that we also touch on the more economical and even energy-friendly alternatives to burning waste in terms of waste management, how cities can create recycling and composting programs. Probably not gonna go into that too much here, but I think really important to realize that there are these spillover effects, so making a poor choice about qualifying it as renewable energy means we also actually distort the market for managing our waste stream.|
|Marie Donahue:||Yeah, I would agree with that. It’s interesting to think about the implications of these state goals and the commitments that are being made that are forward-looking in thinking about 100% renewable, and then, yeah, what would it count toward those commitments. State policies have implications for how the larger system of energy and utilities [work] and where we’re getting that energy from. I’m curious, John, what the implications of those state policies are on utilities working in this space with this big push toward renewables?|
|John Farrell:||Yeah. Well, I find it fascinating that not only is this the year of 100 in terms of the way that states are looking at renewable energy, it also is the year of 100 for utilities. In particular, we’re talking about a utility that got in the news a lot just in the past few weeks here at the end of the year, Xcel Energy. It’s a Midwest utility. It serves Minnesota, parts of Wisconsin, Colorado and New Mexico. They announced that they’re gonna go 100% carbon-free by 2050 and 80% carbon-free by 2030. These are pretty monumental goals. It’s following on similar commitments, and in fact in some ways more aggressive commitments that have been made by public utilities, like municipal utilities. Georgetown, Texas, which we’ve covered in a podcast previously, for example, already gets 100% of their energy from wind and solar, renewable resources not just carbon-free resources, which can include nuclear power under the definition that Xcel Energy is using.
It is really monumental to have an investor-owned utility, a shareholder-owned utility make this commitment. It hasn’t happened before. It really, I think, sets the stage for a lot of other utilities to potentially make similar commitments. What I did raise, though, and I think it’s sort of in the same way we have a cautionary tale about 100% renewable commitments by states, is that we also have to have a cautionary tale about 100% carbon-free commitments by utility companies, because sometimes there are some questions that we might want to answer about how that’s going to be reached. I raised three questions, actually, it’s a blog post that we put out right after that announcement, that we need to think about as we’re doing this.
One is who’s gonna carry the risk of these commitments? An investor-owned utility like Xcel has a monopoly in all of the states where it serves its customers. It’s the only utility that’s allowed to sell power to them, which means it has pricing power. It is generally able to charge whatever it wants as long as it can get approval from public regulators. Xcel Energy was at the legislature in Minnesota last year looking for a handout for shareholders and to cover their risk for keeping their nuclear power plants open. Carbon-free is great, but this is a big concern about who’s gonna carry the risk of these investments, and to what degree are those choices and those costs gonna be shifted on to customers instead of on the utility shareholders.
|Marie Donahue:||Before you get into your other questions, I do want to dig into some of that, those behind-the-scenes work that Xcel was doing at the state legislature and have you describe a little bit about that story about the nuclear power plant, and what Xcel might say in public, and what they might be doing behind-the-scenes to change the rules around these issues.|
|John Farrell:||Yeah. I mean, I think more than anything it was really a strategic blender for Xcel to do what it did last year, which was to come to the legislature with a bill that pretty clearly said, “If we blow the budget on our nuclear plant like we did four years ago on a repair and retrofit to keep the plant operating for longer, customers will carry all the risk and shareholders will still get a profit no matter how much we spend.” It was pretty blatant. There was bipartisan resistance. There was a lot of resistance from Xcel’s biggest customers who would’ve carried the biggest portion of the risk, from ordinary customers. There were really not a lot of people who were big fans of this. I think a lot of people looked at it as we understand you want to try to keep these power plants open.
For many legislators, they were fine with that. They don’t have … they are willing to overlook the environmental implications of nuclear power and the waste generation. They’re even willing to overlook the fact that it’s not terribly economical. In fact, Xcel’s nuclear power plants are rated among the least financially sound among those in the country. Now, it’s not in a competitive market, so that doesn’t mean a whole lot necessarily in terms of where they’re at, but it does have implications for … to meet that carbon-free goal, for example, that Xcel is now made this year, are those nuclear plants going to be the most cost-effective tool? I think that’s really the question that we tried to raise.
We sort of had two questions. One is we framed their request and tried to make it clear to people that it was a blank check. They were essentially saying, “Whatever it’s gonna cost for us to do this, this law will give us a blank check to meet those costs and to pass them on to customers.” That’s the biggest danger, is to make sure that customers are not gonna be left holding the bag for investments.
… Investments that are not necessary or that are unnecessarily expensive. That, unfortunately, is like even a bigger danger now. Xcel’s made this very bold carbon-free commitment, for which they should be applauded, and yet now they’re gonna go to the legislature again this year. I would suspect they will introduce a similar bill, and they will now be able to introduce it in the context of we made this landmark climate change related commitment. I’m a little concerned that we’ll see progressive legislators look at that and say, “Well, that’s the price that we have to pay.” Or even other advocacy groups.
For me, what it is, what I think is the most important is that we say we’ve made these carbon-free commitments, which is terrific, what’s the most economical way to get there that really supports our communities, that creates jobs, et cetera? There is plenty of evidence. In fact, we have written about this, Tweeted about a little bit. There’s a smarter grid study that came out this year in Minnesota. What it essentially said was we can definitely lower our costs as we reduce carbon emissions on the grid system, but we can actually create a lot of community wealth and keep costs low by doing it in a local strategy, which is to say to build lots of rooftop solar to generate a lot of our energy within our communities.
|Marie Donahue:||One of your second questions to Xcel, right, was around how can we community scale instead of thinking about these really expensive investments in nuclear or other centralized power plants?|
|John Farrell:||Absolutely. I’m glad you brought that up. Yeah, the second major question I had was, how does this change the utility’s perspective on distributed customer-owned energy? Because generally speaking, Xcel and many other investor-owned utilities have been fairly hostile, and for good reason. The business model they operate under, the state laws they operate under, they make a profit when they build stuff themselves. If lots of customers, like you mentioned in California, 800,000 customers are building their own solar arrays, well, the utility shareholders don’t make money from that. In fact, the utility actually then collects less revenue, in addition to not getting to build the power plants. There’s been a very strong tension. Xcel even put out a video four years ago saying essentially if we build solar, we should do it right, which means we should do it in a utility-owned fashion. They’ve been pretty clear about that. I think it’s important for advocates who care about the economic opportunities from clean energy to understand that that’s one of the things that’s at stake.
I’ll just quickly wrap up by saying, the last question I had for Xcel and for any utility that makes this commitment is, are you serious? Because at the same time Xcel is making this commitment, they’re actually offering to buy a new natural gas power plant with which they will have a relationship, presumably, over the next 30 to 40 years. It’s going to be pretty hard to be 100% carbon-free in 2050 if you have a gas plant you’re still operating, unless you make some pretty generous assumptions about the ability to do carbon capture. That’s not proven very economical, but also then you have the same waste problem that you have with incinerators or with nuclear power plants, such as what do you do with the leftovers? What are you gonna do with that carbon? We don’t really have an answer to that.
At any rate, it is a big commitment. It’s something I think that is worthy of generating a lot of great conversation about how we get to where we get. I think it also, the last thing I would say, is this commitment by Xcel also really highlights what you were talking about first, Marie, about what states were doing, because we’ve kind of mapped out and have published a timeline of the states where Xcel does business, Minnesota, Colorado, New Mexico, were all pretty fast out of the gate more than a decade ago, requiring the utility to invest in renewable energy.
Xcel is taking it further than state law is requiring them to right now, but the thing that got them started was even 20 years ago when Minnesota first told them in exchange for allowing them to store more nuclear waste in this state, start buying wind power. They did that and found out that it was a very good deal. That’s why last year even you heard their CEO saying, “We’re swapping steel for fuel. We’re gonna build renewables instead of fossil fuels,” generally speaking. A noteworthy commitment. Something we hope other utilities emulate, but some good questions to keep in mind as you look at that.
|Marie Donahue:||Stay tuned for the rest of this episode after a short message from our Energy Democracy initiative director, John Farrell.|
|John Farrell:||Hey, thanks for listening to Local Energy Rules, if you’ve made it this far, you’re obviously a fan and we could use your help for just two minutes, as you’ve probably notices, we don’t have any corporate sponsors or ads for any of our podcasts, the reason is that our mission at ILSR is to reinvigorate democracy by decentralizing economic power. Instead, we rely on you, out listeners, your donations not only underwrite this podcast but also help us produce all of the research and resources that we make available on our website and off of the technical assistance we provide to grassroots organizations.
Every year ILSR’s small staff helps hundreds of communities challenge monopoly power directly and rebuild their local economies. So please take a minute and go to ILSR.org and click on the Donate button, and if making a donation isn’t something you can do, please consider helping us in other ways, you could help other folks find this podcast by telling them about it or by giving it a review iTunes, Stitcher, or wherever you get your podcasts. The more ratings from listeners like you, the more folks can find this podcast and ILSR’s other podcasts — Community Broadband Bits and Building Local Power.
Thanks again for listening, now, back to the program.
|John Farrell:||Now, we’ve talked about states and utilities, but I think the other exciting thing in this year of 100 is what cities are doing. Could you talk a little bit more about the kinds of commitments that cities are making around 100% renewable energy?|
|Marie Donahue:||Yes. I’m excited to talk about that. So, I think that there are now, as of this fall, over 100 cities that have committed to going 100% renewable through this great grassroots [effort], and sort of bottom-up campaigns, largely from allies at the Sierra Club, for example, from their Ready For 100 campaign. And some other types of places, I mean, you mentioned Georgetown, Texas, for example. Cities are realizing that these investments are economical, that the tide is rolling in on renewable energy. What’s interesting, I think, from our perspective, and it speaks to that last question that you were talking about, utilities being serious when they’re making these commitments. With more than 100 cities now having committed to goals, we’re curious what’s next. How are cities thinking about the ways in which they’re making these commitments and following through on them? How will they source their energy?
Cities have a range of different tools at their disposal. Cities in different places have different types of strategies. I think through that, through seeing these commitments come out and then really wanting to know what’s next, we were talking with these cities and wanted to dive into those questions of how cities can reach their goals. Will it come from local, more community-scaled investments, or will it just be sort of by buying from big utility-scale models? There are some options and real choices cities can make when they make these commitments.
What I was excited about to take on as a project that ILSR worked on this year is — hopefully our podcast listeners are now aware if they’ve been listening to the series — this “Voices of 100%” podcast that we rolled out to really highlight the voices of leaders in communities that have made commitments. To ask them what they’re thinking about, what their cities are thinking about with these goals, and where they plan to go next. We’ve highlighted a number of these communities.
Yeah, I’m excited to dive into telling those stories, continuing to tell those stories. I think, in addition to just sort of at a high level, what choices cities are making, it’ll be fascinating to see the strategies, what strategies and cities can take to fund initiatives to go renewable. John, I know you’ve written a bit about a really fascinating ballot initiative that was on a city election this fall in Portland [Ore.], for example, and then there are some other strategies that I know you’re very familiar with that cities can take to finance clean energy and renewable energy locally. Could you talk a little bit about that ballot initiative story?
|John Farrell:||Yeah. I’d be happy to. I’ve been really excited to follow the ways that cities are following up and following through on these 100% commitments. I’m really glad that you didn’t have a case of Midwestern modesty and fail to mention this “Voices of 100” podcast. Marie has been doing a terrific job of producing these podcasts with cities where we’re really asking them not only how did they get to making that commitment, like what kind of organizing happened on the ground in order for them to formally make those commitments, but how do they intend to get there.
A couple of cities provide really interesting stories around that. One is Minneapolis, which is where Marie and I both work in our Minneapolis-based office, and where the city has raised its utility franchise fee. We’ve actually done some writing about this, and I have included some more lessons learned from this in our community power toolkit which you can find on our website. It’s an interactive toolkit for things that cities can do. We hope that cities that are making these commitments are able to use that tool.
Minneapolis said, “Let’s raise this utility franchise fee by about $2 to $3 million a year and dedicate those funds to helping us reach our climate action goals, to reach our 100% renewable energy commitment.” A lot of focus is on basically how do we help people who have not been able to participate in the clean energy economy, participate. I think the one that you mentioned, though, that was a ballot initiative, so Minneapolis was able to do that just through a city council measure. It was a power that they had negotiated with the utility about five years ago, to allow them to increase this fee, which is a city-based fee on utility bills.
Portland [Ore.] Did something I think even more monumental. We come back to these midterm elections resulting in a lot of clean energy commitments. Portland put in 10 times more money. They’re gonna have a fund of about $30 million a year in order to support clean energy efforts across the city. They’re really saying seriously that they want to make this happen, and they want to use city-based resources in order to make those investments.
I just want to hand it back to you, Marie, because you’ve been studying Portland and other cities that have come up during our “Voices of 100” series. I think what’s really exciting about what Portland is talking about is equity is at the center of this pot of money, that it’s not just about how do we build a solar array on City Hall but about how do we make sure that everybody in Portland can benefit from trying to achieve this commitment.
|Marie Donahue:||Right. Yeah. I think in talking to Alan Hipólito from one of the main groups, it was a collaborative effort from my understanding, to get this ballot initiative on the ballot, and then really a ton of local organizing across intersections of racial and economic justice of social and renewable energy advocates really pushed for that broad coalition to ultimately be successful in passing the measure. I think that diversity of organizations coming together, the real focus on communities of color and low-income coalitions from neighborhoods across the city to be able to have that … to set the table to be able to be involved in the process was just able to steer the conversation to really make equity an important part of that campaign were really central.
I think it’s interesting to think about the ways the mechanism of that fund that’ll be developed to also put in the lens of some of ILSR’s work on corporate concentration and this growing wealth-gap in the US because it’s the mechanism of the fund is going to be a tax on big corporations that aren’t reinvesting in the communities, that aren’t supporting the communities in Portland. It’s just an interesting case, I think, to dig into more. I’ll point folks to that longer episode.
|John Farrell:||I’m curious, can you tell me about … Portland is obviously this really powerful example, but it’s not the only place that you’ve discovered in our podcast interviews and whatever that has been talking about equity as an important part of the 100% campaign.|
|Marie Donahue:||Right yeah, I think, it’s just fascinating to me how many cities how important it is to start talking and thinking about equity really at the center. Racial equity, economic equity. And I think in cities — because cities sort of deal with this day to day — they’re working on understanding communities across their cities who are benefiting from decisions made at the municipal level [and] who is involved in those decisions.
I think, it just really lends itself at a city level, when we’re having these conversations around energy, to bring equity into the conversation. And yeah, it was great to hear and really dig into how cities are thinking about making 100% renewable commitments and doing so equitably in places like Atlanta and as diverse as Pueblo, Colorado. There are small and large cities, All thinking about equity in really a sort of central sense in these commitments. So, I think it’s both a part of making energy more affordable to communities. Making sure that community groups and as broad coalitions like in Portland are all at the table. So, yeah it’s been exciting to just see some of that follow up in all different types of places.
|John Farrell:||So we’ve kind of covered our “Year of 100” 2018. I was hoping to take a couple minutes at the end here to talk about what we see coming in 2019. So I want to toss it to you first, Marie. What do you see coming in 2019 that is going to follow on this of “Year of 100”, this discussion of 100% renewable energy?|
|Marie Donahue:||Yeah so another thing that I think came up quite a bit in our cities conversations, but I think also is certainly being discussed at state levels too and within utilities, is this idea of community-owned renewable energy. And the model of being able to think about ways that we invest, not just in the solar on our rooftops as individuals but the mechanism to share a community-owned array has equity implications — in that renters, other groups that might not have access, can access community-owned renewables.
And so thinking about just the growth in that… We’ve seen — John, you are very aware of Minnesota’s program and do a great job tracking that on a monthly basis — just the growth in community-shared renewables and policies across states that are enabling those models.
But I think it’ll be interesting to see how those programs are funded. Whether there are… I mean we’ve been involved in some regulatory processes where there’s sort of the fine-tuning of of how these programs are being run across different states. I know I’m gonna be looking into both existing financing mechanisms for enabling community solar and then what maybe creative solutions there might be to that local ownership in the states that do allow community solar.
Yeah, so that’s one thing for me. I’m curious on what is on the horizon for you, John, in making you sort of look ahead to 2019 and get excited about what new work we might do.
|John Farrell:||Well, one of the things I’m excited about is something we actually talked about already this year. We had a report out called “Reverse Power Flow” where we looked at sort of the implication of energy storage becoming economical at a distribution level. So, those 800,000 customers in California that have gone solar already, what happens if they start to add energy storage or if folks who are adding new solar to their homes are able to add storage because it’s cost effective?
I just want to emphasize I think that’s what’s so exciting about this is in a utility system, in a grid system, that for over 100 years has really been centrally planned, we are now having this opportunity for people to make individual economic decisions whether by themselves or collectively as you mentioned with community renewable energy, to get their power from a less expensive source. And to coincidentally be doing that from also an environmentally friendly source. And in a way that brings a lot of community wealth and benefits because ti’s now keeping the dollars that would have been spent and sent to the utility company in the community. So you know we previewed in our report as soon as five years from now across many states, as 40 states, that solar and energy storage would be competitive with retail energy prices and so we’re gonna continue to watch that. You know GreenTech Media has already reported that 2018 was a banner year for on site residential energy storage. I expect there to be continued strong growth as long as that remains economical.
The other thing that I’m really interested in is this whole notion of gas for power generation.
|Marie Donahue:||You’ve mentioned Xcel investing in [a new gas plant] …|
|John Farrell:||Yes, exactly. And there have been some other instances, not just in Minnesota but other places. One of the things we discovered in this report we were doing on energy storage was that even at a large scale … so to small scale energy storage and solar is becoming competitive with retail power, but at a large scale renewables and energy storage are pretty much beating out any kind of fossil fuel. And especially in Southwestern states where you have high energy demand in the afternoon, so when the sun is shining, and you have a need to meet that demand. Solar plus energy storage is competitive or better than natural gas power plants, gas power plants.
What I’m really interested to see is are we gonna see an end to new gas power plant investment? So you know we track and, Marie, you’ve done a quarterly update on new power plant capacity. We’ve been doing that now for the past several years. Generally renewables have been leading, but there’s still a substantial amount of utility investment in gas power plants. And whether it’s the threat of carbon regulation or the fact that the fuel prices could rise very significantly, there’s a big danger I think that these power plant investments don’t pan out the way utilities expect. And so I’m really interested to see if regulators and legislators start paying more attention to the risks inherent in investing in gas at this point in time, especially the cost risks for fuel priced volatility because while prices are low right now the tendency and history of natural gas prices is for a lot of volatility and a lot of really intense rise and fall in costs.
|Marie Donahue:||I know the plants themselves are expensive. I mean I remember talking with Larry Atencio in Pueblo, Colorado, and there was a new gas plant that had gone in and just like the implications of that on the ratepayers.|
|John Farrell:||Yeah and the nice thing about solar and energy storage is you can be very incremental in building them without it being terribly expensive. So you know you could just plop in five Megawatts and kind of meet your incremental needs incrementally rather than building one big thing all at once and then potentially having made a bad bad whether it’s on the side of the facility or on the fact that fuel’s gonna be very expensive.
So the partner to that conversation is really about hedge that risk whether it’s continued investment in solar and storage or with electrification, you know? So we use a lot of gas, not just for power generation increasingly, but we use it to heat homes. We use oil, which is sort of the buddy of gas when it comes to extraction, in vehicles and in both these cases we have electric alternatives now. We’re talking about electrification.
So, I’m really interested to see the way in which states start thinking about risk mitigation. You know we can make our economy more resilient to volatile fuel prices by electrifying things because our electricity subsystem is increasingly reliant on resources, solar and wind, that have no fuel costs, that have no volatility. We have a really interesting opportunity there and that’s something that we’re definitely gonna be looking at in 2019 and beyond.
Thank you, everybody, for listening to a little bit longer than ordinary podcast for our Year in Review, but I think we wanted to cover a lot of really exciting things that were happening.
Marie, thanks for joining me.
|Marie Donahue:||Thanks, John. It was great to be here.|
|John Farrell:||And we hope that you’ll continue to listen. We’ll have more of our Voices of 100 series episodes coming out in 2019 as well as a number of episodes from communities that have created community choice energy programs as both a way to pursue renewable energy goals and to give more opportunity for local renewable energy development. Our first interview will be with Jessica Tovar from East Bay Community Choice Energy in Oakland, California. But we’ll have a number of more of those episodes coming as well so thanks all for listening and we’ll see you in 2019.|
|Marie Donahue:||Thank you so much for listening to this 2018 Year in Review episode of Local Energy Rules where our host, John Farrell, and research associate, Marie Donahue, share their reflections about what we can learn from a landmark year of 100% clean energy commitments in states, utilities and cities, across the country.
To learn more we encourage you to check out other episodes in this podcast, including those produced as part of our cities-focused Voices of 100% series. And to explore ILSR’s Interactive Community Power Map, available at ILSR.org. While you’re at our website, you can also find more than 50 past episodes of the Local Energy Rules podcast. You can sign up for one of our newsletters and connect with us on social media.
We encourage you to tune back into the program in 2019 for new podcast episodes every three weeks. Happy New Year, everyone. Until next time, keep your energy local and thanks for listening.
States Push for 100% Renewable
In 2018, California joined Hawaii as the second state to set a 100 percent renewable energy commitment, Farrell explains. Hawaii’s goal had been approved by regulators in 2017. In addition, five new governors have indicated moving forward such commitments in Colorado, Connecticut, Illinois, Nevada, and Maine.
As the economics of energy shift in favor of renewables, Farrell points to just how competitive wind and now solar have both become in an increasing number of states. This trend has enabled more residential and commercial customers to shift to solar in California. Donahue explains how the sum of individual decisions from these customers will help keep California on track to reaching its new target.
As illustrated in the animation below, almost 800,000 individual solar installations have come online in California over the last decade, through the second quarter of 2018.
Learn more about this map of growth in California’s solar market here. Read about another landmark policy California passed in 2018, which will require solar on new residential developments starting in 2020, here.
In the coming years, more states will follow California and Hawaii’s lead. Donahue argues the states to watch, like in Minnesota with its burgeoning #100PercentMN campaign, are those with grassroots efforts that will push state legislatures and leadership to set commitments that center equity and promote distributed generation that will keep benefits local.
Yet, there remains a “dirty secret” that Farrell and Donahue discuss regarding statewide goals and how they define what counts as “renewable” or “clean” energy. Pointing to a new report by ILSR published earlier this month, Donahue explains how costly and dirty waste incineration has been subsidized by existing renewable energy goals.
“We have 23 states that … are classifying waste incineration as renewable,” explains Donahue. “It’s a cautionary tale of how we can think about the definitions of renewable and how important it is to get into some of the nitty-gritty details when these commitments are made.”
Read ILSR’s full report, “Waste Incineration: A Dirty Secret in How States Define Renewable Energy” to learn more about the costs of waste incineration and our recommendations for alternative solid waste and local energy practices.
“We have 23 states that… are classifying waste incineration as renewable,” explains Donahue. “It’s a cautionary tale of how we can think about the definitions of renewable and how important it is to get into some of the nitty-gritty details when these commitments are made.”
Investor-owned Utilities Follow Suit, But Are They Serious?
In December, Xcel Energy became the first investor-owned utility in the country to commit to reaching 100 percent carbon-free generation by 2050.
While acknowledging how “monumental” it is for a shareholder-owned utility to make such a commitment, Farrell points out that this story was in fact years in the making and largely enabled by aggressive and forward-thinking state legislation in Minnesota and Colorado. In addition, while Xcel received much praise for its announcement, municipally-owned public utilities like those in Georgetown, Texas, and Rock Port, Mo., have been operating on 100 percent renewable energy for years.
“It’s going to be pretty hard to be 100 percent carbon-free in 2050, if you have a gas plant you’re still operating,” Farrell points out about Xcel Energy’s recent commitment.
Farrell and Donahue discuss three important questions utility customers and state leaders should ask of investor-owned utilities like Xcel, as more start making commitments to carbon-free or renewables in the coming years: 1) Who carries the risk? 2) Does this impact the company’s perspective on distributed, customer-owned energy? And 3) Are they serious?
Read the blog that John Farrell wrote following the announcement by Xcel Energy to reduce carbon emissions to zero by 2050, here. Learn about and watch a parody video released by ILSR in March 2018, that lampooned Xcel Energy’s ask for a “Blank Check” from the Minnesota Legislature, here.
Farrell asks whether Xcel Energy is serious about their carbon-free commitment. He notes how at the same time that Xcel made its commitment, the shareholder-owned utility has been in the process of buying a new natural gas power plant that could be in operation for decades.
“It’s going to be pretty hard to be 100 percent carbon-free in 2050, if you have a gas plant you’re still operating, unless you make some pretty generous assumptions about the ability to do carbon capture,” Farrell notes, “What are you gonna do with that carbon? We don’t really have an answer to that.”
City Voices Take the Lead on Funding an Equitable Transition to 100% Local, Renewable Energy
As 2018 comes to a close, an astounding 100 cities across the U.S. have made 100 percent renewable energy commitments.
Farrell and Donahue discuss the stories behind novel ways in which cities — including Minneapolis and Portland, Ore. — are helping fund a transition to local, clean energy. They also highlight ILSR’s ongoing Voices of 100% podcast series, which interviews local leaders to understand how communities plan to reach their goals.
In Portland, Ore., specifically, the recent Portland Clean Energy Initiative, which passed in the November 2018 elections, will generate as much as $30 million per year for equitable, local investments in clean energy. This story was also highlighted in a recent Voices of 100 episode interview with Alan Hipólito: “Will Portland Voters Opt for New Equitable Clean Energy Fund?”
Locate places that have made 100 percent renewable energy commitments and explore local and state strategies to advance clean energy goals, using ILSR’s interactive Community Power Map. Learn more about the Sierra Club’s instrumental Ready For 100 organizing efforts to pass 100% renewable energy commitments in cities across the country.
In addition to funding, Donahue notes how important an equity framework, which includes the lenses of racial and economic justice, has been to many of these commitments at the local level. Cities are uniquely positioned to broaden who is involved in energy decisions and who stands to benefit, she argues.
“Because cities… deal with this day to day, they’re working on understanding communities across their cities who are benefiting from decisions made at the municipal level [and] who is involved in those decisions,” Donahue notes.
Looking Forward to 2019
To wrap up their discussion, Farrell and Donahue discuss what is on the horizon for local, renewable energy — and their work with ILSR’s Energy Democracy initiative — in the new year.
One area that Donahue thinks will be ripe for growth is in shared or community renewable energy programs and related funding mechanisms. As ILSR continues to track programs in leading states like Minnesota, regulators will continue to “fine-tune” how solar developers finance these projects, with implications for future expansion, Donahue explains. In addition, a new year may bring creative financing strategies for local and cooperative ownership, which the team will track. ILSR will also continue to highlight new community solar and shared renewable policies in states, via our Community Power Map.
In addition, Farrell highlights two developments that he believes will be important to follow into 2019 and beyond. First is the continued growth of energy storage — soon to be economical everywhere, as highlighted in ILSR’s recent Reverse Power Flow report and the map below.
Second, due to increasing risks associated with the volatility of fossil fuel prices, Farrell predicts electrification — including through heat pumps and electric vehicles — powered from renewable energy will be increasingly important in our local energy systems.
“We can make our economy more resilient to volatile fuel prices by electrifying things because our electricity subsystem is increasingly reliant on resources, solar and wind, that have no fuel costs, that have no volatility,” Farrell explains. “We have a really interesting opportunity there and that’s something that we’re definitely gonna be looking at in 2019 and beyond.”
Indeed as we close out this “Year of 100” with a growing number of states, utilities, and cities taking the plunge to all-in on renewable energy, electrification and local distributed generation have a bright future.
“We can make our economy more resilient to volatile fuel prices by electrifying things because our electricity subsystem is increasingly reliant on resources, solar and wind, that have no fuel costs, that have no volatility,” Farrell explains.
Want to hear more stories of local, clean energy in the New Year?
Stay-tuned for new episodes of the Local Energy Rules podcast every three weeks throughout 2019 — including new episodes in our Voices of 100% series and the rollout of a new series of episodes on how cities can take control of their energy future by implementing community choice energy programs.
For concrete examples of how communities can meet their ambitious renewable energy goals locally, including setting 100 percent renewable energy commitments and using community choice aggregation, explore ILSR’s Community Power Toolkit.
Locate places that have made 100 percent renewable energy commitments and explore local and state strategies to advance clean energy goals, using ILSR’s interactive Community Power Map.
Photo Credits: Marie Donahue (featured image)