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Reshaping the Electric Grid, Remaking the Country

2021-04-21T15:29:16-05:00

A shift is underway in the nation’s energy infrastructure, and it is poised to accelerate.

“We’re going to power our economy with clean energy,” announced new National Climate Advisor Gina McCarthy at a White House press conference on January 27, 2020. “We’re going to do that in a way that will produce millions of American jobs that are going to be good-paying, that are going to be jobs that have the opportunity for workers to join a union.”

That sounds good—and vital for the fight against climate change. The generation of electricity is responsible for a hefty percentage of humanity’s overall greenhouse gas emissions. In the US, generating electricity produces more than a quarter of the country’s overall emissions. But reducing those emissions is more than an environmentalist’s dream – it is also an economic opportunity. A shift away from fossil fuels and toward renewable energy can not only contribute to emissions-reduction goals, but also create new jobs. With the right mix of technical innovation and economic imperatives, along with government regulation, the country’s so-far modest moves toward a more sustainable energy system can rapidly accelerate.

Shifting Landscape Supports Renewables

A combination of federal and state regulation and market forces are tilting the energy landscape in favor of renewables.

In the US, the percentage of overall greenhouse gas emissions attributable to electricity generation has been dropping slowly, largely due to a steady decline in the use of coal. From 2010 through 2019, plants constituting almost a third of the nation’s coal generating capacity were retired. Though some of the change was driven by federal regulation of mercury emissions and state-level requirements for renewable energy, market forces had an impact, too, as cheap natural gas and a surge in the development of renewable electricity eroded coal’s former price advantage.

Despite President Trump’s promises to “bring back coal”, coal-fired power plants continued to shut down during his tenure, while the coal mining industry lost about 43,000 jobs between 2012 and 2020—almost half of the 2012 total. Already another 62,000 megawatts of older coal plants—enough to power tens of millions of homes—are scheduled to be retired in the next decade, and that rate could increase quickly if the Biden administration follows through on pledges to clamp down on utility-generated emissions.

President Biden remains committed to eliminating carbon emissions in the country’s power sector by 2035. His administration has already implemented a temporary ban on new drilling permits on federal land, limiting the further use of fracking to extract natural gas, and has pledged to consider a permanent drilling moratorium. It is also cracking down on natural gas leaks, which constitute a potent source of greenhouse gases.

Anticipating this shift in federal regulation, Investor’s Business Daily reported last year that a combination of political, financial, technological, and geological impacts were weakening enthusiasm for further extraction of natural gas. In particular, the report noted that the best sites were already tapping out and investors were unwilling to take on the inherent risks of additional investment. The report also pointed out that solar and wind power were growing faster than experts had predicted.

Renewable sources, from hydropower to wind and solar, already produce almost a quarter of the nation’s electricity. Wind farms, in particular, have proliferated; in 2019, for the first time, they produced more electricity than all the nation’s dams put together. With the price of electricity from solar dropping 89% in 10 years, and onshore wind prices falling 70%, prospects for continued growth of power production by renewables are good.

States and territories with renewable energy standards or targets

In the nation’s capital, there are signs that the power industry’s political influence is shifting. Fossil fuel companies suffered huge losses during 2020, while renewable energy companies are going strong. Shortly before Biden’s inauguration, a former wind energy trade association announced that it was broadening its scope to become the American Clean Power Association, which will lobby for renewable-friendly policies and legislation. The new association’s new director, Heather Zichal, told the Washington Post that the group’s members are prepared to invest a trillion dollars in new projects in coming years to help the Biden administration meet its decarbonization targets. “We see nothing but opportunity,” she said.

Renewables’ Indispensable Partner: Storage Systems

Breakthroughs in battery technology have enabled utilities that have long relied on fossil fuels to install renewable power plants directly tied to large-scale battery systems. Largely thanks to the booming electric car industry, which relies on efficient lithium-ion batteries, costs of such batteries have dropped by more than 70% since 2015, and the National Renewable Energy Laboratory projects that they will drop by another 45% by 2030.

These decreased costs have allowed utilities to plan and build plants at a scale hardly imagined only a few years ago. Just south of California’s Bay Area, energy developer Vistra is installing 400 megawatts’ worth of battery storage capacity in a former natural gas power plant. Once completed, that will be enough to power at least 300,000 homes throughout the evening using solar and wind arrays in the region—at the time of day when renewables themselves typically aren’t generating much energy.

The Vistra plant may not be the nation’s largest battery storage facility for long. Florida Power and Light is planning a larger facility, tied to an existing solar array just south of Tampa Bay. And smaller, more dispersed facilities are in the works too. In sunshine-rich Arizona, Tucson Electric Power will this spring begin buying electricity from a solar-fed battery array, currently under construction, that will serve over 20,000 homes. The US Energy Information Administration projects the addition of at least 6,900 megawatts of utility-scale battery storage in “the next few years.”

Utilities have been pushed to build such plants in part due to new state renewable energy standards. In California, for example, legislators passed a law in 2018 that requires 50% of the state’s energy to be renewable-generated by 2026, and 100% by 2045. And in Arizona, regulators recently mandated that the state transition to a carbon-neutral electricity budget by 2050, though Republican state legislators have proposed a law that would strip this decision-making authority from the commission that regulates the state’s utilities.

Developers are also building the plants now because they also make economic sense. For utilities, evening hours have long posed a challenge, for increased residential energy demands require them to supply lots of electricity in a short time. Production levels in giant coal or nuclear power plants cannot quickly be adjusted up or down, so many utilities have met this need with natural gas plants, which can be revved up or slowed down much more swiftly. Now, lower prices for both battery storage and for the solar arrays and wind farms that can feed them are for the first time allowing direct competition for this lucrative market—for utilities often charge more for their electricity during times of peak demand.

The Human Calculus: Shifting to Renewables Means Jobs

According to the sheer numbers, the jobs component of making the nation’s electricity system all-renewable ought to be easy math in line with Gina McCarthy’s prediction. The Political Economy Research Institute at the University of Massachusetts–Amherst has projected that losses of fossil fuel jobs will average about 12,000 a year over the next decade, with annual losses of up to 34,000 jobs in the two decades after that. The same study projects that fully building out a renewables-centered economy can create more than two million jobs a year.

Some of those projected jobs are already represented by boots on the ground. The quick-swelling surge in renewable electricity is supporting the creation of many new jobs—though most of the immediate jobs created through the development of new projects are short-term. The construction of the new solar/battery plant in Tucson, for example, is estimated to support 250 short-term jobs, while the new Black Rock wind project in West Virginia, featuring 23 giant wind turbines, is employing an estimated 200 construction workers.

Just as with the construction of pipelines—such as the Keystone XL pipeline just cancelled by the Biden-Harris administration—such projects do have an important if short-term impact on local communities. The High Country News reports that as COVID-19 decimated county and municipal budgets in Wyoming last summer, the city of Cheyenne experienced an upsurge in sales tax revenues that was linked to a major wind-farm construction project nearby.

But in rural areas such short-term construction jobs often go to non-local itinerant workers. And once installed, solar and wind projects require only a relative handful of technicians to keep them running. That has raised concerns that the accelerating shift from fossil fuels to renewables will leave rural communities that currently rely on longer-term extraction or power plant jobs high and dry—and, at the same time, may constitute a substantial political hurdle to the Biden-Harris administration’s climate policy goals.

In Wyoming, for example, the state’s Economic Analysis Division estimated that 2020 saw the loss of 6,000 mining jobs, most of them related to coal, oil, or gas. Along with the jobs lost, governments at the local, county, and state level saw an associated decline in tax revenues—such as a 41% or $4 million decline in coal- and oil-rich Campbell County in the state’s northeast.

Transitioning straight from fossil-fuel jobs to the renewable energy economy is not necessarily easy. Many fossil-fuel workers lack the often more high-tech skills needed for many solar and wind maintenance jobs. Without significant retraining programs and government assistance, there is likely to remain a yawning political and cultural gap between fossil-fuel workers and communities, and the administration’s ambitious goals.

That concern is the impetus for new programs, so far primarily implemented at the state level, that focus on what advocates call a “just transition”—meaning policies that ensure that fossil fuel workers are not left behind as their jobs vanish. Colorado passed a model policy of this sort in 2019; the law created a state Office of Just Transition, and promises that state funding will be available to workers to make up for the projected difference between high-paying coal or gas jobs and the likelihood of lower-paying jobs in the new energy economy. The Colorado bill served as the model for a similar law in New Mexico, and legislators elsewhere are emulating it as well.

A new analysis by the Brookings Institution provides evidence that geographic and perhaps even political factors might aid the transition. Researchers assessed the potential for new wind and solar projects and compared it to regions that are hotspots for fossil fuel industry jobs. While solar energy is predictably most reliable in the Sunbelt, wind energy tends to be most reliable in a broad north-south swath running from North Dakota to West Texas. Fossil fuel extraction jobs show a similar pattern, leading the researchers to posit that workers no longer able to extract fossil fuels might find renewable energy jobs in the same area. Wyoming’s Campbell County, for example, has high potential for both wind and solar.

Like deep-red Campbell County, the majority of the top fossil fuel-producing counties are represented by Republicans in Congress. “For Republicans representing counties and states that have cost competitive renewable-generation potential,” the study concluded, “a clean energy economy could make their district more economically competitive and help its existing and prospective workers.” That will happen only if the federal government plays a role in worker retraining programs and research investment, the researchers wrote—but with that help, the link between renewable electricity and economic development might become evident even in current fossil-fuel hubs.

Problem Addressed: Climate Change

Written by Peter Friederici

Published on March 18, 2021

Feature image: Photo by Appolinary Kalashnikova on Unsplash

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