Where We Are in the Energy Transition
Is the United States on Track to Meet Its Clean Electricity Goals?
Scientists agree, we must limit global warming to 1.5°C to avoid the worst impacts of climate change. To do that, we need to reduce global emissions 50 percent from 2010 levels by 2030 and reach net-zero emissions by 2050. To leave room for developing nations, the United States will need to move even faster. The electricity sector accounts for more than 30 percent of US carbon emissions and will play an increasingly central role as we electrify our transportation, buildings, and industry sectors.
With 2030 being right around the corner, we want to explore where the United States is on the electricity transition pathway. And the news is both bad and good. On the one hand, we are far behind where we need to be. But on the other hand, there are new tools, techniques, and approaches that provide us great opportunities to accelerate the transition.
From an economic perspective, we’re in a fantastic place. Wind and solar are now the least expensive forms of generation we can build in most of the country, and we know how to integrate them seamlessly into the grid. We know that we can retire one-quarter of the country’s coal plants without needing any replacement, and that clean technologies can be combined into clean energy portfolios that provide energy and reliability at lower cost than new gas.
Even though we had a lack of federal movement from the previous administration, states and cities stepped up and moved the energy transition forward. Since 2015, 150 US local governments have purchased solar and wind power. In fact, since 2015, US cities signed renewable energy deals totaling more than 8 gigawatts of generation.
And now some states are starting to plan for the tougher challenges ahead. For example, New Jersey, New York, California, and Colorado have all recently released their own studies of where they are and how they can economically achieve their clean energy goals.
Even states that don’t have ideal wind and solar resources, such as those in the Northeast, have a great resource in offshore wind. And recently the Biden administration announced a plan that would greatly expand that resource, setting a goal to deploy 30,000 megawatts of offshore wind turbines by 2030.
More than a dozen states, Puerto Rico, and 165 cities have 100 percent clean energy commitments. In fact, one-third of all Americans live in a jurisdiction that, if these areas achieve their goals, will be powered by 100 percent clean energy. One way that RMI is helping states reach those goals is through the Energy Policy Simulator, a tool that estimates the environmental, economic, and human health impacts of hundreds of climate and energy policies. Policymakers around the country are already using the tool to inform policy in their states.
US utilities are also making good progress on the transition, cutting their coal generation in half since 2005. At the same time, they’re proving that large amounts of wind and solar can be added to their grids without sacrificing reliability. This has led to an overall 30 percent decrease in emissions in the past decade and a half. However, although many US utilities have made emissions commitments, few of these commitments are aligned with a 1.5°C trajectory.
RMI’s recently launched Utility Transition Hub tracks whether utilities are on track to stay within their carbon budgets. But it doesn’t just track emissions, plant additions, and plant retirements; it also tracks the less visible forces that really matter for future emissions such as customer and community impacts, utility investments, state and federal policies, and more. And it’s more than just a scorecard on how the utilities are doing. It addresses how to accelerate the transition and where we need to put pressure in order to push the transition forward.
The good news is that from utilities to states to the federal government, we’re moving forward. “We’re running downhill toward a higher share of carbon-free electricity,” says Mark Dyson, principal of RMI’s Carbon-Free Electricity program. “But we’re not running downhill fast enough. We’re moving in the right direction but not at the speed required to mitigate the severe impacts of climate change.”
The Uphill Battle to Come
Not only do we need to move faster, we also haven’t solved all of the problems that we are going to encounter down the road when we have a higher share of renewable energy on the grid. “There is a growing consensus that we can get to a 70 to 80 percent carbon-free grid without any additional cost,” says Dyson. “But the climate requires us to get to about 95 percent carbon free in the next 15 years.”
The challenges to get to 95 percent carbon free may seem daunting on their own. But the grid will also need to supply approximately two-and-a-half times more electricity to support the electrification of other sectors such as transportation and heating.
“Utilities have doubled down on their remaining coal and built a lot of gas, now we need to turn the ship,” says RMI Principal Uday Varadarajan. In fact, over the past 15 years US utilities have retired 45 GW of coal while purchasing 17 GW of renewable assets. However, they’ve also doubled the size of the gas fleet that they own to 170 GW over that same time period. Therefore, one of our biggest challenges will be to find a replacement for gas. Much of it can be replaced with renewables and storage, but we will also need emerging technologies.
However, generation isn’t the only challenge. Once we are generating more of our electricity with clean sources, we must be able to move it around. “We will need more transmission to efficiently use the best US wind and solar,” says Charles Teplin, a principal in RMI’s Carbon-Free Electricity practice. A recent MIT study shows that doubling the transmission network will dramatically lower clean energy costs compared with relying on existing lines. “The good news is that there has been a lot of progress at the Department of Energy to encourage and facilitate new transmission,” Teplin adds.
And still another challenge comes in the form of making the transition equitable. “We haven’t developed regulation and policy that allow us to make the shift to clean energy without putting the burdens and costs of that shift on vulnerable populations,” says RMI Principal Uday Varadarajan. “Investors and utilities will be just fine. The folks who might not be fine if we transition rapidly are rate payers and coal communities.” And this is a harbinger of what’s to come as we decarbonize other sectors.
But it’s not unsolvable. RMI has five recommendations that can help support an affordable and equitable transition. These include:
- allowing renewable tax credits to be used more widely,
- shifting existing tax credits to reward companies and public entities that can do more while creating good jobs and less carbon pollution,
- providing financing to communities to ease the burdens of fossil fuel transitions,
- investing in remediation and redevelopment of fossil fuel sites, and
- allowing health insurance plans to pay claims for the fossil transition as preventative healthcare.
So although there are challenges ahead, we have tools and technologies to solve those challenges. And we also have more political will. “With the Biden-Harris administration we now have a plan from the top for capturing the near-term opportunities and solving the long-term challenges,” says Dyson. We are definitely making headway in the transition. And although we are not quite living up to the promises we’re making now, if we work to solve the upcoming challenges, and move at the speed necessary, we can achieve the transition to a clean and secure future.