TODAY’S STUDY: FROM THE HEARTLANDS, FOR THE HEARTLANDS

The earliest U.S. New Energy action was in California. Off-grid solar and utility-scale wind drove those sectors in the early 1980s. But eventually other states realized they had resources and opportunities, too.

Texas now leads the U.S. in wind and Iowa, though well behind, is coming on fast.

New Jersey is second in the nation in solar, proving that everybody has enough sun but not everybody has the right policies and incentives.

The heartlands are rich in wind, sun and biomass resources. They have an underutilized manufacturing base anxious to go to work building New Energy hardware. And they have a grid that has already begun modernizing for efficiency.

As reported in the study highlighted below, the landmark Midwest Governors Association commitment of 2009 called for the coalition of ten states to move to a New Energy economy in two crucial ways. They aimed at instituting of Energy Efficiency measures to reduce the Heartlands’ electricity consumption 2 percent per year by 2015 and every year afterwards to 2030. And they aimed at obtaining 30 percent of the Midwest’s power from New Energy sources by 2030.

According to the highly authoritative Union of Concerned Scientists, these aims are entirely achievable and the benefits would be enormous.

The Energy Efficiency would lay the groundwork for all that followed in two ways. The $2-to-$4 saved for every dollar invested would pay for building New Energy and modern transmission infrastructure. And modernizing the grid would prepare the region for battery-powered vehicles, a transition that would expand its ability to use electricity instead of oil for transportation.

The New Energy-generated power would be from the heartlands for the heartlands, creating job opportunities at the resource sites and at the manufacturing sites where the tools to capture and transmit the power would be built. And with the shift to battery-powered vehicles, the Midwest’s New Energy could be used to fuel the personal transport sector, freeing the hundreds of millions of dollars a day that leave to region to buy imported oil for greater investment in the homegrown economy.

Getting to the projected future will require a big investment but there is no better way to use money. What is a better investment than a rejuvenated future economy that grows local jobs and liberates the heartlands from (1) dependence on imported oil, (2) concerns about the security of the energy supply and (3) the spewing of climate change-inducing greenhouse gas emissions?

The birth of a New Energy economy in the heartlands is also likely to help the entire nation find its way toward once again being young at heart.

A Bright Future for the Heartland; Powering the Midwest Economy with Clean Energy
Claudio Martinez, Jeff Deyette, Sandra Sattler and Anne McKibbin, July 2011 (Union of Concerned Scientists)

Vision for a Clean Electricity Future in the Midwest

From the manufacturing centers, to the corn and soybean fields, to the major finance hubs, to the leading research universities, Midwest states have long served as an economic engine for the United States. Yet the region is still struggling to fully recover from a recession that has made it difficult for families to pay bills and for businesses to prosper and sustain job growth.

At the same time, the Midwest’s energy system is not sustainable. The region’s electricity supply is dominated by coal—largely imported from outside the region—which poses serious risks to public health and the environment, and leaves consumers vulnerable to price increases.

Practical and affordable solutions are available to help revitalize the Midwest economy and ensure a clean, safe, and reliable power supply. Energy efficiency technologies and renewable electricity resources, such as wind, biopower, and solar, offer a smart and responsible transition away from polluting fossil fuels to the new innovation-based economy of the twenty-first century. Investing in a clean energy economy can help spur entrepreneurship, create jobs, and keep the Midwest globally competitive, while enabling it to move toward greater energy independence and conserve resources for future generations.

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The threat of rapid climate change adds urgency to this transition. Climate change is driven primarily by a buildup in the atmosphere of heat-trapping emissions from burning fossil fuels and other human activities. Failure to reduce these emissions will have significant consequences for the Midwest, including scorching summers, dangerous storms, more severe flooding, and greater stress on agriculture (Hayhoe et al. 2009). The Midwest is one of the biggest U.S. contributors to global warming pollution, with just 22 percent of the nation’s population accounting for 27 percent of its heat-trapping emissions (Mackun and Wilson 2011; World Resources Institute 2011).1

Fortunately, the region is home to some of the best renewable resources in the world, particularly wind and biomass. It also has a world-class manufacturing base and a skilled labor force that can support and benefit from the deployment of renewable energy and energy efficiency technologies. This gives the Midwest the unique ability to turn a challenge into an opportunity to spur economic growth and become a leader in the clean energy sector while reducing global warming emissions.

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Midwest states can and must accomplish the transition to a robust and clean energy economy. A Bright Future for the Heartland focuses on the electricity sector, and assesses the economic and technological feasibility of achieving the recommendations of the Midwestern Governors Association (MGA), a collaboration of 10 states working on key public policy issues (Figure 1.1). The MGA’s targets include reducing electricity use by 2 percent annually by 2015 and thereafter, and supplying 30 percent of the region’s electricity from renewable sources by 2030 (MGA 2009).

The Union of Concerned Scientists (UCS) focused on the nine Midwest states—Illinois, Indiana, Iowa, Michigan, Minnesota, North Dakota, Ohio, South Dakota and Wisconsin—covered by the Midwest ISO and PJM, the region’s two independent transmission system operators. We analyzed electricity use and trends in the region, as well as energy technologies, policy initiatives, and sources of emissions, to develop a comprehensive course of action for affordably and effectively meeting the MGA goals. A Bright Future for the Heartland provides a path for reducing dependence on fossil fuels from the electricity sector, revitalizing local and regional economies, and cutting heat-trapping emissions and other pollutants.

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The Energy Roadmap of the Midwestern Governors Association

In 2009, an MGA Advisory Group released the Midwestern Energy Security and Climate Stewardship Roadmap (Energy Roadmap), which recommends targets for renewable energy and energy efficiency for the region’s electricity system (MGA 2009):

• Midwest utilities will rely on wind, biopower, solar, and other renewable energy sources to generate 10 percent of their electricity by 2015, and 30 percent by 2030.

• Retail power providers will rely on improvements in energy efficiency to reduce annual sales of electricity by at least 2 percent annually by 2015 and thereafter.

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Our analysis focuses on these two high-priority recommendations, which we model as a renewable electricity standard (RES) and an energy efficiency resource standard (EERS). An RES is a flexible, market-based policy that requires electricity providers to gradually increase the amount of renewable energy used to produce the power they supply. An EERS similarly requires utilities to meet specific annual targets for reducing the use of electricity. While the region will need other policies to overcome specific market barriers to clean energy, the RES and EERS have proven to be effective and popular tools for advancing renewable energy and energy efficiency at the state level. As of April 2011, eight Midwest states had adopted an RES (among 29 states nationwide, plus Washington, DC). Five of those states also have an EERS (among 26 states nationwide). However, while these are important steps, most Midwest states must go further to reach the targets established by the Energy Roadmap.

Many of the region’s governors are newly elected, and therefore did not help develop those targets. However, a diverse group of bipartisan stakeholders crafted them to address the serious risks to public health and the environment of the region’s existing power system.

The MGA Targets Create Jobs, Save Consumers Money, and Cut Climate Change Emissions

We used a dynamic energy forecasting model to examine the effects of the renewable energy and energy efficiency targets in the Energy Roadmap on the Midwest economy and environment through 2030…We modeled several scenarios to analyze how to meet the targets under a range of conditions and available technologies. Our findings show that investing in clean energy is a smart and responsible course that will help Midwest revitalize their economies while leaving future generations with a clean, reliable, and sustainable power supply.

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Meeting the MGA’s renewable energy and energy efficiency targets would spur innovation, inject capital into the regional economy, and create tens of thousands of jobs in big cities, small towns, and rural communities across the Midwest. Cuts in power use and downward pressure on electricity prices stemming from gains in energy efficiency and competition from renewables would provide families and businesses much-needed savings on energy bills.

Tapping the Midwest’s wealth of wind, biopower, solar, and efficiency resources would diversify the power supply, making it more reliable and secure. That path would also move the region away from its overdependence on coal, which would improve public health and reduce the dangers of global warming.

While this report focuses on the transition to a low-carbon electricity sector, it does not include every step the Midwest must take to address climate change. That will require the participation and cooperation of local, state, regional, federal, and international leaders.
Under such a partnership, state and regional leaders can push for comprehensive federal legislation while also enacting policies that can reduce emissions and spur innovation and clean energy economic development in the Midwest.

Chapter 2 explores major renewable energy and energy efficiency solutions available today, identifying their potential, challenges in reaching widespread use, and the policy approaches that can help overcome those challenges. Chapter 3 explains our modeling approach and major assumptions. Chapter 4 presents the overall results of our analysis, and Chapter 5 provides recommendations to policy makers and other stakeholders.

Our report also includes fact sheets showing key findings for each state, as well as a Technical Appendix that allows readers to delve more deeply into our methods, assumptions, and results. All materials are available online at www.ucsusa.org/brightfuture.

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Opportunities and Challenges for Renewable Energy, Energy Efficiency, and Other Low-Carbon Technologies in the Midwest

Coal now dominates the Midwest power supply, accounting for 68 percent of the region’s electricity generation…Midwest states depend far more on coal than the nation as a whole—about 45 percent of U.S. electricity comes from this polluting fossil fuel—and the region must import much of its coal supply.

In 2008, Midwest states imported 190 million tons of coal from outside of the region—63 percent of their total coal use—at a cost of $7.5 billion. Every state in the Midwest was a net importer of coal that year, and seven states had to import all or nearly all the coal their power plants burned (Deyette and Freese 2010). Coal-burning power plants in the Midwest are the single-largest source of carbon emissions in the region: they account for 44 percent of the region’s emissions, and 10 percent of total U.S. carbon emissions (EIA 2010a).

Midwest states could greatly reduce their reliance on coal to generate electricity by moving to renewable resources such as wind, sustainable forms of biopower, and solar. These homegrown energy sources are widely available in the Midwest, and ready to be deployed today. They are also increasingly cost-effective for producing electricity (Freese et al. 2011; Goossens 2011), and they create jobs while reducing pollution (UCS 2009b).

Midwest states also have the potential to reduce electricity use by improving the energy efficiency of their buildings and industries (Stratton and York 2009). This chapter describes the current status and future prospects for using local renewable energy and energy efficiency to provide a growing share of the Midwest’s electricity needs.

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Renewable Energy Technologies and Their Potential in the Midwest

The Midwest is rich in renewable energy resources. Wind, solar, and biopower together have the technical potential to generate more than 18 times the amount of electricity the Midwest needs today.3

Economic, physical, and environmental limitations mean that not all of that potential can be tapped. Issues such as potential land-use conflicts; the higher short-term costs of some resources; constraints on ramping up their use, such as limits on transmission capacity; barriers to public acceptance; and other hurdles place limits on how much of this resource the Midwest can tap over the short and medium term. However, after accounting for many of these factors in our analysis, we find that renewable energy can provide a significant share of the Midwest’s current and future electricity needs.

More than 20 comprehensive analyses over the past decade have found that using renewable sources to provide at least 25 percent of U.S. electricity needs is both achievable and affordable (Nogee, Deyette, and Clemmer 2007). For example, a 2009 UCS analysis—using a modified version of the model we used in this study—found that a national renewable electricity standard of 25 percent would lower electricity and natural gas bills a cumulative $15.2 billion in the Midwest by 2025, by reducing demand for fossil fuels and increasing competition among power producers (UCS 2009b).

A 2010 UCS analysis examining how the United States could reduce heat-trapping emissions by 80 percent by 2050 found that renewable energy could affordably and reliably supply 40 percent of the U.S. electricity mix by 2030—after reductions in energy demand stemming from energy efficiency and the use of combined-heat-and-power systems (Cleetus, Clemmer, and Friedman 2009). Other analyses have found that expanding the share of renewable energy in the Midwest in line with the Energy Roadmap targets is feasible (ELPC 2001). In many of these analyses, Midwest states were key in deploying the renewable energy capacity needed to achieve those goals…

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Wind Power…Biopower…Solar Power…Distributed Energy and Combined Heat and Power…
Transmission and Other Infrastructure Challenges…

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Energy Efficiency Technologies and Their Potential in the Midwest

Energy efficiency technologies allow the use of less energy to get the same—or higher—level of production, service, and comfort. We can still light a room, keep produce fresh, and use a high-speed computer, but we can do it with less energy. Energy efficiency is less expensive than any form of electricity generation, and does not require transmission lines (Friedrich et al. 2009; Lazard 2008).

Measures such as more building insulation, improved lighting systems, more efficient air-conditioning, and improved water-heating systems also dominate the list of cost-saving solutions for reducing for demand for coal-based power and cutting global warming emissions (Pers-Anders, Naucler, and Rosander 2007). Creating a highly energy-efficient economy requires the deployment of these technologies, as well as policies and programs to overcome the entrenched barriers that prevent businesses and consumers from using energy wisely and efficiently…

The Midwest has made strides in adopting energy efficiency policies over the last six years. Seven of the Midwest states examined in this report have energy efficiency resources standards in place: Illinois, Indiana, Iowa, Michigan, Minnesota, Ohio, and Wisconsin. Missouri has adopted an integrated resource planning process that incorporates energy efficiency into the utility planning process.

While utilities and regulators are just beginning to implement these policies, they are already saving consumers money and creating jobs. As a result, states are gaining momentum toward the Energy Roadmap target of 2 percent annual savings for electric utilities by 2015 and each year thereafter. In the Midwest, budgets for ratepayer-funded energy efficiency programs reached $443 million in 2009 (Molina et al. 2010), and are projected to increase to $1.2 billion in 2011 (MEEA 2011).

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Potential for Greater Energy Efficiency in the Midwest

Analysis from the Energy Center of Wisconsin, performed with the American Council for an Energy-Efficient Economy (ACEEE), found that the Energy Roadmap’s 2 percent annual energy efficiency target is aggressive but achievable (Stratton and York 2009). In fact, a majority of the studies reviewed in the analysis showed the potential for achievable efficiency gains of 1.9 percent or more each year…

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Policy Recommendations: Setting a Course for a Midwest Clean Energy Future

Placing Midwest states on a sensible and attainable path toward a clean energy future can help solve several of the region’s challenges: creating jobs, boosting the economy, cutting dependence on coal, and reducing the heat-trapping emissions that cause global warming.

Our analysis shows that meeting the renewable energy and energy efficiency targets in the Energy Roadmap would provide significant economic and environmental benefits for the Midwest. Investing in clean energy will spur innovation and entrepreneurship, help revitalize the manufacturing sector, and create tens of thousands of jobs. These investments will make energy more affordable for families and businesses, boost local economies, and help keep the region globally competitive. Tapping the region’s ample renewable energy and energy efficiency resources will position the Midwest as a clean energy leader, and confer distinct advantages over other regions should the federal government implement policies that limit carbon emissions.

This chapter details some of the critical renewable energy, energy efficiency, and climate policies that would help the Midwest transition to a clean energy future…

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Conclusion: A Vision for a Midwest Clean Electricity Future

From the strong winds of the Great Plains, to the agricultural lands of the Corn Belt, to the sun shining bright from Cleveland, Ohio, to Rapid City, South Dakota, the Midwest is home to some of the world’s best renewable energy resources. The region is also endowed with a strong industrial base and leading research universities, where a tradition of hard work and innovation has long served as an economic engine for the entire nation. Few areas of the world have this ideal mix of resources, industrial capacity, and knowledge. These advantages give the Midwest the tools to turn the challenges of a stalled economy and an unsustainable, polluting energy system into an opportunity for economic prosperity, job growth, and a healthy environment.

Achieving the renewable energy and energy efficiency targets set forth in the Energy Roadmap would provide significant economic benefits to the Midwest. Meeting those goals would spur innovation and create tens of thousands of jobs in big cities and small towns across the Midwest. That effort would also provide much-needed savings for families and businesses on their energy bills, and a more diversified, reliable, and secure power supply. Such an endeavor would also move the Midwest away from its dependence on coal, improving public health and reducing the dangers of global warming and toxic emissions.

Fully capturing these important economic benefits and removing key market barriers will require smart policy solutions. Many Midwest states have already taken important steps to promote clean energy, and they must not retrench. Instead, each state can go further to strengthen or enact policies that at least match the Energy Roadmap targets, and that support local, regional, federal, and international efforts to promote renewable energy, energy efficiency, and cuts in carbon emissions.

States can benefit from enacting these policies individually, but they will benefit even more by acting together. With each state doing its part to promote renewable energy and energy efficiency, all Midwest states will collectively reap many important benefits today while building a clean and sustainable economy for future generations.