Oregon's transition to clean energy: Cutting coal, building a renewable future

This blog was co-written with Angus Duncan, Oregon Global Warming Commission Chair.

Oregon's Senate will soon consider the "Clean Energy and Coal Transition Act" to end imports of coal-fired power into Oregon by 2035, and commit the state's two largest utilities, Portland General Electric and Pacific Power, to meeting at least half of their customer energy needs from new renewable generation. Add in the state's enduring hydropower resources, and Oregon's electricity should be 70 to 90 percent carbon-free by 2040.

Oregon has already had great success as a leader on clean energy and this bill (HB 4036) ensures the momentum is maintained--and Oregonians aren't stuck paying for aging, dirty coal plants indefinitely.

The Clean Energy and Coal Transition Act passed the Oregon House of Representatives on a 39-20 bipartisan vote Monday. It would set Oregon on a firm and committed trajectory away from aging coal plants belching into the nation's air to make power to keep the lights on for Oregonians and toward more renewable energy.

Some myth-busting is necessary because critics of the bill are advancing flawed arguments to try to torpedo the bill. Here's what's really going on:

(1) The carbon reductions from this bill will be real, measurable and substantial. Some have claimed that the bill wouldn't reduce coal burning by out-of-state plants, just redirect their output to other electricity markets and therefore result in no net reduction in carbon emissions. But this perspective is misleadingly narrow. Oregon can refuse to take dirty power from these aging, out-of-state coal plants. And Oregonians can protect themselves from shouldering the costs of keeping these dinosaurs afloat. While Oregon can't reach across state borders to directly shut them down when they're in other states (as Oregon did with its only in-state coal plant, which stops burning coal in 2020), shutting off markets for coal and creating market demand for clean energy is likely to lead to reductions in coal consumption.

  • Closing off west coast markets to coal may not keep plant owners from offering their output to other markets, but California's experience has been that such plants retire in rough proportion to divestiture by California utilities. Technically the power could be re-dispatched; practically, it isn't. This makes sense: the coastal states are home to most of the population and most of the energy demand in the western United States. When west coast states cut out carbon-intensive resources, it shifts the market for energy in the whole region.
  • Furthermore, the legislation requires that Portland General Electric (PGE) and Pacificorp supply 50 percent of their power from new renewable resources by 2040. That zero-carbon energy will displace and avoid currently planned commitments by Oregon utilities to hundreds of megawatts' worth of new baseload (and polluting) gas turbines.
  • The Clean Energy and Coal Transition Act is also critical to meeting Oregon's transportation carbon reduction goals by plugging our new fleet of mostly electric cars and trucks into a clean grid, not a fossil-reliant one.

(2) Expected costs of energy under this bill are projected to be modest, mostly deferred to after 2030, and by then are as likely to instead be cost savings for Oregonians.

  • While renewable energy may have higher upfront costs, it has far lower (near zero) operating costs compared to gas or coal generation.
  • Every credible natural gas forecast is projecting higher gas costs in the future--with many spikes and valleys in between as has historically been the case.
  • Wind and solar installed costs have dropped dramatically in just the last five years - by 60 percent and 80 percent, respectively - and they keep coming down. Credible studies are finding that power from these technologies is cost-competitive now with new natural gas and coal resources.
  • These same studies see wind and solar costs continuing to decline through 2030 in absolute terms and in comparison to gas. The same is true with new energy storage technologies. When the higher Oregon Renewable Portfolio Standard begins to kick in after 2025, ultimately requiring 50 percent of Oregon's electricity mix to come from renewable energy , the costs of firm, reliable energy from wind and solar will look pretty attractive.
  • Globally and in the United States, climate denial is not a winning strategy for either the planet or the energy business. It's no accident that coal companies are going over the bankruptcy cliff almost daily. States that have stayed too long at the coal party will pay a higher price than those that have invested steadily in low-carbon energy efficiency and renewables. Oregon is on that better path and should continue for the good of our wallets, our air and our planet.

(3) The bill was developed in good faith negotiations involving the affected utilities, environmental groups, and consumer advocates, and it's getting a full and fair public vetting in the legislature. Like most policies of significance, involving many interests and stakeholders, this bill emerged from negotiations among stakeholders. How often do you see two large electric utilities with big fossil fuel holdings, five respected regional and national environmental groups, and the state's principal defender of ratepayer interests coming together on a core environmental goal? The successful discussions reflect a broad, growing consensus that it's time to move away from coal and accelerate the clean energy economy. The process that led to the Clean Energy and Coal Transition Act is very much like the one that produced the 2010 Boardman power plant retirement compromise. That agreement - which was also subject to thorough public scrutiny -- avoided years of carbon emissions and millions of dollars in plant emissions retrofits. This one will, too.

Time to move to clean energy

The Clean Energy and Coal Transition Act is good public policy and good carbon policy. It is also a reasonable balance of cost management, power system reliability, and carbon reduction. Being subject to scrutiny and approval by legislative and executive branches of state government, it emerges from a process as credible as for any other Oregon state law or policy. This week's House vote reflects Oregon's growing consensus for moving away from coal and forward to clean energy. The Senate should follow suit.