In The West, Clean Energy Rising

Credit: Jenny Hager, NREL

Part of NRDC's Year-End Series Reviewing 2016 Energy Developments        

It’s been another banner year for clean energy across the west. The year saw big policy gains, falling renewable energy prices, and utility investments shifting from coal to clean energy. All of this means that the gains and momentum of clean energy will not be easily undone in the region.

My colleague Alex Jackson will soon be writing specifically about California’s climate progress this year. Here are a few of the big clean energy wins that I will be toasting from the rest of the region as the year comes to a close:

Oregon doubled its renewable energy standard and set a deadline for its utilities to get off coal. The Oregon legislation was groundbreaking: when fully implemented, the state will get 70 percent to 90 percent of its electricity from carbon-free sources. Oregon and Utah also gave utilities the chance to invest in charging electric cars- and go head-to-head in competition with Big Oil.

Investments in energy efficiency are saving customers billions of dollars in the region: the Northwest reached record levels of savings, and set plans to go even further in the coming years. Washington state’s utility commission continued the trend toward aligning utility financial incentives with helping save customers money on their bills. Meanwhile, Arizona utilities are now among the countries top achievers of energy savings, with annual targets above 2 percent of their sales.

The march away from coal continued, with new closure announcements from two of the four units at Montana’s biggest coal plant, Colstrip, as well as two plants in Colorado, among others. Utilities are increasingly walking away from coal because it can no longer compete with clean energy. Recent analysis showed that Colorado’s largest utility could trade much of the state’s older coal plants for 2000 megawatts of new wind power at a net savings for customers. The utility, Xcel, started down that path by getting approval for 600 megawatts of wind at the new Rush Creek facility.

Developing new large renewable energy projects got easier and less likely to bring about conflicts across the west in 2016, as the federal government prioritized zones in public land for clean energy development. The federal government also recognized it was shortchanging taxpayers with below-market coal mining leases and set the stage for a national conversation about better protection of public land and a fossil-leasing program that reflects the real resource costs.

The regional energy imbalance market (EIM) (an EIM helps grid operators meet short term shortfalls in power generation by automatically using the lowest cost and cleanest resources available over a wide geographic area)  operated   by the California Independent System Operator (CAISO) piled up over $115 million in cost savings for participants (utilities in AZ, NV, OR, WA, ID, WY, and Utah) while   making renewable integration easier.  Better still it has attracted interest from both investor-owned and public utilities from across the West. Efforts to initiate a more comprehensive regional “day-ahead” market , which selects the lowest cost generation resources to meet expected demand in every hour of a given day - seen as essential for facilitating the very deep penetrations of renewable energy needed to make 2050 climate goals--also advanced. Most western states have joined a conversation about how such a market might evolve from the existing California-only market run by CAISO.

Clean energy economics

The economics of clean energy is another big story in 2016: utility contracts for new wind and solar facilities hit new record-low prices. New wind is now coming in at 2 cents per kilowatt hour; new solar fell below 4 cents. At those prices, it’s likely that most of the remaining coal plants in the west are no longer cost-effective to operate, and new (and also polluting) natural gas plants doesn’t make sense, either.

The region also saw an historic, and precedent setting, Joint Proposal to replace an aging baseload nuclear plant, Diablo Canyon, with clean energy- in a way that protects the workers, local communities, and ensures environmental gains. The owner, PG&E, determined it was cheaper to close California’s last remaining nuclear plant than to continue to operate it after its federal licenses expire in 2024 and 2025. I am hopeful we will see similar agreements as the region’s coal plants age out of competitive operation, as well.

Low prices of renewable energy are also changing the politics, and making further state commitments to clean energy look more attractive.  As a result, we should see even more advances in 2017: Arizona’s utility commission opened a new docket this fall considering doubling its renewable energy standard to require even more electricity come from renewable resources like wind and solar. Legislation to expand renewable energy standards is also being discussed in Nevada and New Mexico. The momentum will be particularly welcome in Nevada--where customer solar investment opportunities were unreasonably and unnecessarily shut off last year with a decision on how utility customers are compensated for sending excess generation back to the grid. A settlement this fall protected customers that have already invested in solar, but more is needed.

As the year comes to a close we can celebrate a year of clean energy victories in the west--and look forward to more of the same in the years to come-- even in the face of an incoming administration flunking its first tests and packed with friends of polluters. Clean energy is more cost-effective than ever--and has real momentum that will be hard to stop.

Related Blogs