NEW ENERGY EVERYWHERE

Energy Self-Reliant States
John Farrell and David Morris, October 2009 (The New Rules Project)

SUMMARY
There is no reason for any state in the union to resist transition to the New Energy economy on the grounds it lacks resources to profitably participate and successfully compete. They can and that is clearly demonstrated in Energy Self-Reliant States, by John Farrell and David Morris.

The study looks at New Energy potentials in each state. It estimates not technical potentials but commercial potentials. It concludes that all of the 36 states that now have Renewable Electricity Standards (RESs) or New Energy goals can meet them with their own in-state resources. 64% of those states could meet their entire electricity needs with in-state resources and 14% more could meet 75% of their electricity needs with in-state resources.

A cost-benefit analysis suggests regional and local generation of New Energy is the most efficient way to transition to a New Energy economy, especially when the impact of New Energy development on local and state jobs and revenues is added to the calculation.

Dan Juhl, Minnesota community wind developer: "I live out on the Buffalo Ridge...I look out my window and I see hundreds of wind turbines. When I look at those turbines I'm happy and I'm sad... Most of those turbines are owned by our friends, the foreign multinationals. Out of two counties in Minnesota we export about 80 million dollars a year to France, Florida, Italy, Portugal, Spain. All of our energy future is going out the door when we could be turning that into something real for us."

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COMMENTARY
Some argue that the key to fully developing U.S. New Energy potential is a national high voltage New Energy transmission superhighway to deliver resources from the remote regions where New Energy is abundant to the urban load centers where there is a virtually insatiable appetite for energy.

Only such a national New Energy transmission superhighway, they argue, can deliver the Southwest’s sun, the Midwest, Great Lakes and Offshore Atlantic coast winds, the Mountain West’s geothermal and the Pacific Coast’s ocean power to cities around the nation.

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It is true that energy-abundant regions generate power at the lowest costs. PV-generated electricity in Nevada is 20% cheaper than PV-generated electricity in Iowa and 35% cheaper than in Pennsylvania. North Dakota wind generated electricity is 30% cheaper than Ohio wind generated electricity.

Most of the time, however, these price variations smooth out when the cost of transporting the electricity is included in the calculation. Example: The cost of North Dakota wind generated electricity to Ohio ratepayers – after including the cost of constructing new transmission and the cost of electricity losses during the 1,000-mile transmission – is the same as or higher than the price of locally generated electricity with minimal regional transmission upgrades to deliver it.

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Over 40 states plus D.C. could meet 25% of their electricity needs with rooftop solar photovoltaic energy. Most of those states can produce even more of their electricity from solar with ground photovoltaic arrays and have more than adequate land to do so.

The advent of the widespread use of battery electric vehicles represents both a higher level of demand for electricity and the potential to add abundant distributed storage capacity that will further facilitate the use of intermittent wind and solar energy generated electricity.

The need in the area of transmission may not be a national system but upgraded regional transmission, subtransmission and distribution systems.

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State and local programs are leading the way toward innovation. Efficiency Vermont has proven the efficacy of aggressive conservation. Berkeley has developed a breakthrough finance program for rooftop solar PV.

Many state programs acknowledge the importance of keeping New Energy development local. Ohio’s RES requires half of its mandate to be met by in-state production. Colorado and Missouri credit in-state generation 1.25 times toward the meeting of their standards. Minnesota’s New Energy plan incentivizes local wind development. Washington state incentivizes solar projects using in-state manufactured panels and has increased incentives for community-based solar development.

No state has yet achieved more than 10% of its generation from New Energy sources and it very well could be some time before even the states with the capacity to generate 100% of their power from their New Energies can build the infrastructure to reach 10%, much less 100%. Besides building solar panels, wind turbines, wave-tide-current installations and drilling geothermal plants, the development of regional transmission upgrades and making real the potential for large-scale storage will likely be necessary.

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~12 states have adequate New Energy commercial potential to EXCEED their own energy demand.

31 of the 50 U.S. states have adequate commercial New Energy potential to entirely meet their electricity demand.

10 other states can meet at least half of their electricity demand with their own New Energy.

Southern states from Kentucky to Louisiana have the least commercial New Energy potential. Yet even those states could meet 25% or more of their electricity needs with their New Energy resources.

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Onshore wind dominates the Northwest, Midwest and New England. Solar PV is the most abundant New Energy source in the inland Southeast and Southwest. Offshore wind is the biggest source in the mid-Atlantic states.

The report’s authors describe their estimates as “conservative” because there are technologies that are available but were not included in the calculations, like ground mounted PV, concentrating solar power plant technology, and low temperature geothermal.

Of those who misunderstand New Energy’s potential, many also fail to realize how significant a reduction in energy demand the implementation of effective Energy Efficiency will make. Energy Efficiency is a necessary and inevitable adjunct to the building of a New Energy infrastructure and the emergence of a New Energy economy.

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By assuming the implementation of Energy Efficiency, the report can legitimately assume no increase in electricity consumption despite economic and population growth. A very aggressive efficiency program at the state and local levels could even reduce total energy demand.

If every state simply matched California’s electricity intensity (electricity use per dollar of GDP per person), most would get overall reduced demand, at least in the short-term.

Will all this cost too much?

Using available state specific cost data for wind and rooftop solar and “reasonable” estimates for the other New Energies and Energy Efficiency implementations, the report makes a “very rough estimate” of the costs of electricity self-reliance.

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Things to know about the cost calculations:
1-While the report assumes very aggressive Energy Efficiency implementation and a 20% drop in demand, overall energy demand reductions are actually rare (though it has happened in this recession as well as consistently in California, New York and D.C., where aggressive policies were implemented).
2-The report assumes states will choose the lowest cost new generation but they may pursue supply diversification or other ends.
3-The estimated prices assume present federal incentives and could change with changing future policies.

Included in the cost estimates:
1-Capital and financing,
2-Operations and maintenance,
3-Fuel costs, and
4-Federal tax credits.
5-Levelized costs without profit margins intended to approximate wholesale electricity prices.

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Most notable conclusions about costs:
1-Western states will have the lowest costs for transition because they will implement greater efficiency gains and they have adequate conventional geothermal and onshore wind to be fully self-sufficient.
2-California will lead the transition because it has long had the most aggressive Energy Efficiency in the U.S. (since the 1980s) as well as some of the best New Energy resources.
3-Arizona will follow close behind California because of its abundant solar PV resource.
4-Cost will be low in the Midwest because of abundant onshore wind.
5-The Southeast will encounter higher costs in getting to energy self-reliance because it must develop offshore wind to do so.
6-The Northeast will likely only get to self-reliance through the aggressive development of solar PV.
7- Outliers: Indiana, Vermont, and Maine have greater onshore wind resources than their neighbors and will therefore get to energy self-sufficiency at lower costs.

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In its conclusion, the report asserts that energy self-sufficiency is “well within the technical and financial capability of most states” through the use of solar PV, wind, geothermal and other New Energy resources as well as the ingenuity of ever-increasing efficiency.

States have been and are expected to continue being the driving force behind the transition to energy self-sufficiency. Their role going forward will in part be driven by the pursuit of their share of the $1 trillion expected to be invested in developing New Energy infrastructure over the next 2 decades. That money will produce “profound economic and social benefits.”

Example: Plains states that can expand their wind power to provide 20% of their electricity will create nearly 158,000 jobs, 20,000 of which will be permanent wind project jobs, and over $1.6 billion a year in local economic benefits.

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Widely distributed energy self-sufficiency will serve as a safety valve preventing an event like the 2003 East Coast blackout in which a tree branch fell on an electric line in Ohio and 12 states were in the dark for days.

In addition, local ownership of the energy infrastructure confers responsibility and self-reliance on project owners which tends to motivate higher levels of efficiency and innovation.

Finally, the transition to energy self-sufficiency must begin with a shift in federal and state energy policies to reflect the shift in priorities.

Example: For the next 10 years while the New Energy infrastructure is built, according to the report authors, policy would be more effective if it is aimed at maximizing Energy Efficiency and conservation and effectively using existing transmission, subtransmission, and distribution lines and incentivizing the development of distributed New Energy generation instead of aiming at the immediate development of a New Energy superhighway, .

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QUOTES
- From the study: “In 2009, the nation is involved in a vigorous and far reaching debate about the scale of future energy systems. As we shift from fossil fuels to renewable energy a new question looms before us. Will we embrace a centralized renewable energy future characterized by greater federal involvement in planning, or will we meet local and state needs with local and state-based strategies? The ubiquitous nature of renewable energy argues for a decentralist energy approach…”
- From the study: “Even as FERC and Congress and environmental groups, spurred by independent renewable power producers (some of the biggest of whom are subsidiaries of regulated utilities) rush to pre-empt state authority and accelerate the construction of a new $100-200 billion interregional transmission network, the case for state-focused planning has never been stronger.”

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- From the study: “For it is at the state, not the federal level, that comprehensive, least cost energy planning is used. It is at the state – not the federal or multi-state regional level – that efficiency, demand reduction, distributed generation and other commercially available strategies are often evaluated together. It is at the local level that new technologies like smart grids, electric vehicles, distributed storage, and rooftop solar will have their major impact…”

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- From the study: “…Perhaps the most important reason to make states the principal actors in energy planning is that their collective economic self-interest is consistent with the national interest Every state could create thousands of new jobs and hundreds of millions, perhaps billions, of dollars in economic development through a vigorous strategy of energy efficiency and renewable energy.”
- From the study: “The potential is clear – most states can be energy independent by relying on homegrown, renewable resources. At least thirty-one could satisfy 100 percent of their electricity needs from in-state renewable energy (assuming sufficient distributed storage or distributed generation capable of generating on demand). At least 40 states could satisfy supply half their electricity with domestic renewable resources…And significant improvements in energy efficiency could significantly increase these numbers…