NewEnergyNews: 09/01/2022 - 10/01/2022

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

  • FRIDAY WORLD HEADLINE-New Energy Boomed With World 2021 Power Demand, Emissions
  • FRIDAY WORLD HEADLINE-Collaboration Can Cut Cost To Beat World's Climate Crisis
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT WEDNESDAY,:

  • TTTA Wednesday-ORIGINAL REPORTING: Trying To Make Arizona’s Just Energy Transition More Just
  • TTTA Wednesday-Solar Prices Keep Getting Better
  • THE DAY BEFORE THE DAY BEFORE

  • Monday Study – New Insights On The Impacts Of Electricity Costs
  • THE DAY BEFORE THAT

  • Weekend Video: Diversity Commitment Growing In New Energy Industries
  • Weekend Video: Next-Gen Geothermal
  • Weekend Video: New Energy For New Build Housing
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-Earth’s Numbers Show Record-Breaking Heat
  • FRIDAY WORLD HEADLINE-New Energy Could Save $$$Millions
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    Founding Editor Herman K. Trabish

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • WEEKEND VIDEOS, October 1-2:
  • The Light From Solar Power
  • New Energy’s Delivery Needs
  • Think About Power To The Plug

    Friday, September 30, 2022

    New Energy Boomed With World 2021 Power Demand, Emissions

    Wind And Solar Top 10% of Global Power Generation For First Time

    September 21, 2022 (Bloomberg New Energy Finance)

    “The world’s wind and solar projects combined to meet more than a tenth of global electricity demand for the first time in 2021…[but Bloomberg BNEF found the economic recovery from COVID also drove up overall electricity demand, production from coal-fired power plants, and emissions…[Wind and solar’s nearly 3,000 terawatt-hours of electricity] accounted for a combined 10.5% of global 2021 generation…[Wind’s contribution was] 6.8% while solar climbed to 3.7%. A decade ago, these two technologies combined accounted for well under 1% of total electricity production…

    …[Including hydro and nuclear generation,] 39% of all power produced globally in 2021 was carbon free…Every year since 2017, wind and solar have accounted for the majority of new power-generating capacity…[Total] zero-carbon power accounted for 85% of all new capacity added…Solar was half of all global capacity added, at 182 gigawatts…[But enormous work remains] for the power system to address its role in climate change…[E]lectricity demand surged 5.6% year-on-year, putting new strains on existing infrastructure and fossil fuel supply chains…

    …[Because of lower-than-expected production from hydro plants and higher natural gas prices,] coal plants set records by jumping 8.5% from 2020-2021…One small bright spot: the speed at which new coal is being added to the grid is slowing…[Nonetheless, the result was a] 7% spike in global CO2 emissions from the power sector in 2021 compared to 2020. Power-sector emissions set a new high at 13,600 mega tons of CO2…” click here for more

    Collaboration Can Cut Cost To Beat World's Climate Crisis

    International "collaboration gap" threatens to undermine climate progress and delay net zero by decades

    20 September 2022 (International Energy Agency)

    “…[The first annual International Energy Agency Breakthrough Agenda Report] aims to align countries’ actions and coordinate investment to scale up deployment and drive down costs across five key sectors…[Together, the power, road transport, steel, hydrogen and agriculture] sectors account for nearly 60% of global greenhouse gas (GHG) emissions today and could deliver the bulk of the emission reductions needed by 2030 in a pathway that would make a significant contribution to limiting global warming to a maximum of 1.5°C, in line with the Paris Agreement goals…[The report’s 25 recommendations] include…

    …Demonstrate and test flexible low-carbon power systems…Create new cross-border supergrids this decade…Set up new international centres of expertise to channel finance and technical assistance…Agree a common definition and target dates by which all new road vehicles will be net zero…Mobilise investment in charging infrastructure, including prioritised assistance for developing countries and harmonise international charging standards…Standards to boost the recyclability of batteries and supercharging research into alternative chemistries for batteries…

    …Government policies and private-sector purchase commitments to drive demand and deployment of low-carbon and renewable hydrogen…Public and private commitments to purchase near-zero emission steel…Investment for agriculture technologies and farming practices that can cut emissions…International standards for monitoring and reporting on the state of natural resources on which agriculture depends…[W]ithout international collaboration, the transition to net zero global emissions could be delayed by decades…” click here for more

    Wednesday, September 28, 2022

    ORIGINAL REPORTING: Trying To Make Arizona’s Just Energy Transition More Just

    Stakeholders, Utility Unite in Face-Off with Regulators Over Arizona Just Energy Transition

    Herman K. Trabish, April 28, 2022 (California Current)

    Editor’s note: While calls for energy justice and equity rise across the U.S. and around the world, Arizona’s regulators continue to avoid a decision.

    Arizona Public Service (APS) raised the national standard for a Just Energy Transition with its $144.45 million settlement with affected communities and tribal peoples in late 2020. The money was for assistance to communities impacted by the already-closed coal fueled 2,409 MW Navajo Generating Station and planned 2031 closures of the 2,270 MW Four Corners Generating Station, and the 1,129 MW Cholla Generating Station. Navajo supplied and the Four Corners’ supplies power to California.

    The urgent need for the proposed APS investment to rectify the coal plants’ decades-long destructive impacts was emphasized April 27 in the first of several April-May town hall meetings on the ACC ruling. Chaired by Commissioner Anna Tovar, the citizens of Joseph City, Arizona, testified to coal generation’s pollution of local air, water, health, and economics.

    Endorsed by environmental groups and tribal peoples, the coal plant settlement included $128.75 million for the Navajo Nation, $12 million to Cholla communities, and $3.7 million to the Hopi Tribe. But the plan required Arizona Corporation Commission (ACC) approval. The commission objected to APS’s proposal to recover almost $120 million from ratepayers and sharply cut the amount to be recovered through rates.

    That investment would support “a solid economic transition,” Navajo Nation President Jonathan Nez told this reporter at the time of the agreement. It would “electrify homes, increase renewable energy projects, and promote economic development” and could make Navajo Nation lands “a renewable energy epicenter,” Nez said.

    As Western utilities close uneconomic coal facilities, affected communities and advocacy groups are pushing for economic justice in the transition to clean energy. Landmark efforts include Washington state’s $55 million in 2011, New Mexico’s $40 million in 2019, and the April 26, 2022, agreement for closure of Xcel Colorado’s Comanche facility, which could approach APS’s proposed expenditure.

    The APS plan would likely be the biggest just transition utility expenditure in the U.S. to date, according to APS and Arizona State University Just Energy Transition Center Co-Director Amanda Ormond. The ACC disrupted that ambition. In its final decision late last year, concerned about costs to APS’s 1.2 million Phoenix and central Arizona customers, the commission reduced the proposed $119.25 million ratepayer share of the Just Energy Transition payment to $10 million… click here for more

    Solar Prices Keep Getting Better

    US installs record solar capacity as prices keep falling; It's often cheaper to build and run solar than to buy gas for an existing plant.

    John Timmer, September 21, 2022 (Ars Technica)

    “…The annual Energy Department analysis found solar energy was nearly half of new U.S. 2021 generating capacity partly] because costs have dropped by more than 75 percent since 2010…[and] it's now often cheaper to build and operate a solar plant than it is to simply buy fuel for an existing natural gas plant…[Incentives and tax breaks in the Inflation Reduction Act] should expand solar's advantages…[Over 12.5 gigawatts of new utility-scale capacity was built] last year, bringing the total installed capacity to over 50 gigawatts…

    Combined with residential and other distributed solar installations, solar alone accounted for 45 percent of the new generating capacity added to the grid last year…[The] expansion has largely been driven by falling costs…[T]he price of building a solar plant has been dropping by an average of about 10 percent a year…[Prices averaged] about $1.35 for each watt of capacity in 2021. Large-scale plants benefit the most, with projects over 50 megawatts costing about 20 percent less…

    …[It is] becoming increasingly economical to install large facilities in states that don't get as much sun…[making the median capacity factor of solar plants in the US was 24 percent…[With the drop in construction costs, solar’s LCOE without federal tax incentives has dropped 85 percent since 2010, from $230/MWh to $33 per MWh] and utility-scale and distributed solar growth is forecast to] triple by the end of the decade, reaching about 75 GW in 2030, and continuing to grow from there…” click here for more

    Monday, September 26, 2022

    Monday Study – New Insights On The Impacts Of Electricity Costs

    Paying for Electricity in California: How Residential Rate Design Impacts Equity and Electrification

    September 2022 (The Energy Institute at UC Berkeley’s Haas School of Business via Next 10)

    EXECUTIVE SUMMARY

    California has ambitious goals to fight climate change while also ensuring that energy is affordable for all of its residents. Unfortunately, the current structure of residential electricity prices in the state makes achieving these goals much harder. Electric utility rates feature high volumetric (i.e., per kilowatt-hour) prices that are designed to recover many costs beyond the direct incremental cost of providing electricity. These high volumetric prices make electrification less attractive to consumers while simultaneously distributing the burden of paying for electricity in a way that is quite regressive.

    In this report, the authors analyze detailed billing data from over 11 million California households served by the state’s three large investor-owned utilities (IOUs)—Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E)—in order to characterize the implications of the current residential electricity prices for equity and for electrification of vehicles and homes. The authors then discuss potential reforms that could simultaneously improve equity while fostering decarbonization by removing barriers to electrification.

    This report builds on a prior companion report that established key facts about retail electricity pricing in California.1 First, the initial study showed that IOU customers face prices that are two to three times higher than social marginal cost (SMC), which is defined as the going-forward cost to the utility of providing additional electricity to an existing customer, inclusive of pollution costs. Second, the initial report also found that the reason that retail prices are so far above the efficient SMC benchmark is that retail prices are used to recover non-incremental costs of electricity supply along with other programs that have been integrated into bills. This method of cost recovery has generated a large, and rapidly growing, gap between retail electricity prices and social marginal costs. The report authors refer to this gap as the effective “electricity tax.”

    This report explores the consequences of this effective electricity tax on equity and efficiency and ultimately finds that reforms could better align electricity rates with the state’s climate and clean energy goals. Using the detailed billing data, the residual cost burden for each customer—defined as the difference between the amount the customer pays on their bill and the incremental cost to the utility of providing that household with power—is calculated under the current rate system. The distribution of those residual cost burdens across the income distribution is then characterized.

    Customers do not see their bill broken into “incremental costs” and “residual cost burden,” so the drivers of escalating retail prices are opaque to the typical customer. A primary goal of this analysis is to bring to light essential facts about the current system—who is paying for California’s electricity system today? and how is that determined by specific features of current rates?—in order to better inform public discussion. Household & Equity Impacts: This report offers a firstof-its-kind analysis for California that demonstrates how residual cost increases for customer electricity bills are impacting households and how that impact varies across households with different abilities to pay.

    The analysis presented in this report finds that:

    • Overall, customers across the three IOU service territories contribute $678 per year on average toward the residual cost burden. For PG&E and SDG&E customers, residual cost burdens are more than twothirds of their total bills, whereas SCE customers pay slightly more than half of their bills towards residual costs. As a result, how California chooses to recover these costs is the primary driver of electricity costs.

    • Residual cost burdens vary widely across households. As of 2019, a quarter of households were contributing less than $220 per year, while the quarter of households with the highest usage contributed more than $850 per year.

    • California’s current electricity pricing regime assigns a greater share of residual costs to higher-income households, but lower-income households pay much more as a fraction of their annual income on average, so much so that the effective electricity tax is more regressive than the state sales tax. Figure ES.1 summarizes these data for 2019: it shows the estimated average residual cost burden by income category for each household (in solid lines, which rise with income), as well what fraction of average income this represents (in dashed lines, which decline with income).2

    • Net metering for rooftop solar makes the effective electricity tax substantially more regressive. This is because wealthier households are much more likely to have rooftop solar. The effect is strongest in SDG&E, where rooftop solar in 2019 already provided over 20 percent of residential electricity under net metering, thus offsetting a majority of the cross-subsidy created by the California Alternative Rates for Energy (CARE) program.

    Impacts on Decarbonization Efforts:

    The state’s strategy for decarbonization includes plans for widespread electrification of buildings and rapid electrification of personal transportation. Relying entirely on the effective electricity tax to recover residual costs, however, implies that customers considering electrification face much higher operating costs if they electrify than they would if prices were set equal to social marginal cost. The authors refer to this increase in operating costs as the “electrification cost premium.” Related to this issue, this analysis finds that:

    • For California households considering purchasing an electric vehicle (EV), the effective electricity tax raises the annual operating cost of an EV by around $600 per year on average. Recent research suggests that this could be reducing EV adoption by somewhere between 13 and 33 percent. Figure ES.2 shows the average annual electrification cost premium for EVs across the utilities. The premium is close to $900 for the average SDG&E customer.

    • For households considering electric heating in lieu of natural gas, the effective electricity tax raises the annual cost of doing so by around $600 per year. Recent research suggests that eliminating this tax could increase the fraction of new homes that are built with electric heating by around one third. Figure ES.2 shows how the electrification cost premium for home heating varies across the utilities, with the highest annual burdens, around $850 on average, in PG&E.

    Fortunately, there are ways that residential electricity rates could be reformed in order to foster electrification (by lowering volumetric prices), while simultaneously improving equity outcomes. Some of these possible reforms were discussed in the previous related report,3 but with the detailed billing data available for this report, the authors are now able to examine their impacts much more closely. They find that:

    • Moving some costs that contribute to the residual cost burden onto the state budget, to be funded by increases in the sales or income tax, would increase equity and improve efficiency because it would reduce the effective electricity tax. A variety of costs that might be moved are discussed, including public purpose programs, legacy costs and costs related to wildfires.

    • Introduction of income-based fixed charges would similarly increase equity and efficiency at the same time. As an example, the authors consider a system of income-based fixed charges that would mimic the progressivity of the state’s sales tax, showing the rates needed and the distribution of bill changes it would induce.

    • Minimum bills, which have been suggested as a potential source of funds to cover the residual cost burden, would be both ineffective and highly inequitable. The report authors conclude that minimal bills are more regressive than even the current rate structure, as more than half of the added revenues from a minimum bill would be paid by households with below-median income. In addition, minimum bill levels that have commonly been discussed in the current debate, such as $30 per month, would make an extremely small contribution to covering the residual cost burden.

    Some of the challenges with rate reforms are discussed in this report. The authors also note that, even where it is possible to pursue rate reforms that are equitable on average across income categories, their analysis of the billing data makes clear that there would be a wide distribution of resulting winners and losers—which could make it more difficult to reach political consensus on reform.

    In this report, the authors take as given the amount of revenue that utilities need to recover. Another important policy direction is to identify and reduce any costs due to inefficiency or unnecessary expenditures, but that is not pursued in this report. Also, this report focuses exclusively on residential electricity rates. Commercial and industrial electricity rates are also used to cover costs above SMC, raising many of the same issues around electrification, as well as different concerns over equity and business climate in California.

    Given this context and these complexities, this report is first and foremost aimed at providing useful facts and outlining possible paths forward, guided by the twin objectives of fostering decarbonization and improving equity. All possible reforms create some manner of trade off, and as such should be debated in the broader policy context in the state.

    1 Borenstein, Severin, Meredith Fowlie, and James Sallee. Designing Electricity Rates for An Equitable Energy Transition. Next 10 and the Energy Institute, February 23, 2021. Available at: https://www.next10.org/publications/electricity-rates. 2 This report focuses primarily on 2019 data, because they are pre-pandemic and the most recent available when data were requested from the utilities. But it is clear that the residual cost burden has continued to expand since 2019. 3 Borenstein, Severin, Meredith Fowlie, and James Sallee. Designing Electricity Rates for An Equitable Energy Transition. Next 10 and the Energy Institute, February 23, 2021. Available at: https://www.next10.org/publications/electricity-rates...

    Saturday, September 24, 2022

    Diversity Commitment Growing In New Energy Industries

    Details of diversity efforts here from Heather Zichal, a longtime leader in bringing opportunity to women. From American Clean Power Association via YouTube

    Next-Gen Geothermal

    The next generation of geothermal is called “enhanced” and it has real potential to enhance the world’s New Energy capability. From U.S. Department of Energy via YouTube

    New Energy For New Build Housing

    For $10,000 more in total cost, there is essentially no power bill for the life of the house. From CNBC Television via YouTube

    Friday, September 23, 2022

    Earth’s Numbers Show Record-Breaking Heat

    Earth had its 6th-warmest August on record; Antarctic sea ice set record low; Northern Hemisphere saw its 2nd-hottest summer

    September 14, 2022 (National Oceanic and Atmospheric Administration)

    “…The average global land and ocean surface temperature in August was 1.62 degrees F (0.90 of a degree C) above the 20th-century average of 60.1 degrees F (15.6 degrees C), making it the sixth-hottest August in the 143-year global climate record…North America and Europe both had their hottest Augusts on record as Asia recorded its fourth-hottest August. South America, Africa and the Oceania region all had warmer-than-average Augusts but none saw a top-10 warm August…

    …The season was Earth’s fifth warmest on record — tied with 2015 and 2017 — at 1.60 degrees F (0.89 of a degree C) above the 20th-century average. The five warmest June-August periods on record have occurred since 2015…[There is now] a greater than 99% chance that 2022 will rank among the 10-warmest years on record…For the third consecutive month, Antarctica set a record low sea ice extent (coverage) since records began in 1979…The globe saw nine named storms in August: Four of the nine named storms reached tropical cyclone strength (74 mph or higher), including Super Typhoon Hinnamnor, the first Category 5 tropical cyclone of 2022…” click here for more

    New Energy Could Save $$$Millions

    Switching to renewable energy could save trillions – study

    Jonah Fisher, 13 September 2022 (BBC News)

    “Switching from fossil fuels to renewable energy could save the world as much as $12tn (£10.2tn) by 2050, an Oxford University study says…Gas prices have soared on mounting concerns over energy supplies…[and] going green now makes economic sense because of the falling cost of renewables…

    …[Historic price data for renewables and fossil fuels show] the price of renewables will continue to fall is based on ‘probabilistic’ modelling, using data on how massive investment and economies of scale have made other similar technologies cheaper…Wind and solar are already the cheapest option for new power projects, but questions remain over how to best store power and balance the grid when the changes in the weather leads to fall in renewable output…[but the] likely costs have been over-estimated…[and the transition to renewables is likely to have] a net economic benefit…” click here for more

    Thursday, September 22, 2022

    ORIGINAL REPORTING: New Ways To Bring Distributed New Energy

    Breakthroughs in generation and system integration are driving the utility of the future, analysts say; The new technologies will reverse the supply-demand equation and bring competitive procurement and a transaction platform to merge the bulk power and distribution systems.

    Herman K. Trabish, January 31, 2022 (Utility Dive)

    Editor’s note: The policy fight to bring new technologies onto the system gets easier as the innovations to integrate them become more accessible.

    Decarbonization goals driving the growth of renewable generation along with customer demand for distributed energy resources (DER) are reshaping what electric utilities can be.

    For the emerging utility of the future, the flexibility of DER will protect reliability and lower customer costs by balancing renewables’ variability, utility representatives and power system analysts said.

    Flexible customer demand is moving utilities “from a world where we forecasted demand and scheduled supply to a world where we will forecast supply and schedule demand,” said Mike Hogan, senior advisor to the non-partisan Regulatory Assistance Project (RAP). Utilities can learn to “forecast supply, price energy appropriately, and allow demand to respond to it.”

    But electricity providers must also learn to take advantage of these new dynamics and the proactive customers that are also producing electricity, also known as “prosumers”, power system stakeholders agreed.

    “Utilities have been providers of a commodity called electricity, and there have been few options to get it elsewhere,” said Bryan Hannegan, president and CEO of Colorado electric cooperative Holy Cross Energy. But with new technologies and policies that allow generating and storing electricity at home and managing it with smart devices, “utilities must find ways to remain relevant.”

    Two breakthroughs — divesting generation ownership and integrating system operations — are transforming today’s electricity providers while protecting reliability and affordability, utility representatives and system analysts said. But the evolution to a “utility of the future” will only be completed by how utilities respond to still-emerging technologies, changes in policy and new customer demand, they added… click here for more

    U.S. Schools Going Solar

    Report finds 1 in 10 of all K-12 schools have gone solar

    Kelsey Misbrener, September 15, 2022 (Solar Power World)

    “Schools across the country are rapidly switching to solar power to meet their energy needs while gaining significant cost-savings, STEM learning and climate resiliency benefits, according to [Brighter Future: A Study of Solar on K-12 Schools]…Since the start of 2015, the amount of solar installed by U.S. K-12 schools has tripled…[and] over six million students now attend more than 8,400 schools nationwide that utilize solar power.

    The growth of solar energy on schools has reached 1 in 10 (9%) of all K-12 public and private schools in the United States…[N]early half (47%) of the public schools with solar are eligible for the Title 1 Schoolwide Program, which serves a large population of low-income students…Schools with budgets of all sizes are going solar…[with 87% using third-party partnerships that remove the barrier of upfront costs and help schools see immediate energy cost savings…[T]he remainder was purchased and owned directly by schools…

    …[High school students can] begin preparing for employment as solar installers…[which] is expected to become one of the country’s fastest-growing occupations over the next decade…Schools are also combining solar with battery storage to manage their energy consumption from the grid and provide back-up power to their buildings…The top five states for solar capacity at schools — California, New Jersey, Arizona, Massachusetts and Illinois — helped drive national growth…” click here for more

    Monday, September 19, 2022

    Monday Study – The Big Impacts Of The Biden Climate Legislation

    Updated Inflation Reduction Act Modeling Using The Energy Policy Simulator

    Megan Mahajan, Olivia Ashmoore, Jeffrey Rissman, Robbie Orvis, Anand Gopal, August 2022 (Energy Innovation)

    EXECUTIVE SUMMARY

    On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. The IRA’s $369 billion in funding for emissions-reducing climate and clean energy provisions run the gamut from clean energy and electric vehicle (EV) tax credits to large-scale investments in domestic clean technology manufacturing to advancing environmental justice. The IRA also requires auctions for oil and gas on federal lands and waters prior to auctions for renewable energy projects and requires completion ofseveral 2022 lease auctions that were previously canceled.

    Energy Innovation Policy & Technology LLC® modeled the IRA’s impact on emissions reductions, job creation, and public health, using our free and open-source U.S. Energy Policy Simulator (EPS). 1

    Our updated modeling finds that the IRA is the most significant federal climate and clean energy legislation in U.S. history, and its provisions could cut greenhouse gas (GHG) emissions 37 to 43 percent below 2005 levels. With additional executive and state actions, the U.S. can realistically achieve its nationally determined commitments (NDCs) under the Paris Agreement.

    Further, for every ton of emissions generated by IRA oil and gas provisions, at least 28 tons of emissions are avoided by the other provisions. i

    Under a business-as-usual (BAU) scenario (i.e., including all enacted federal and state policies to date) our modeling forecasts the U.S. would reduce emissions 25 percent compared to 2005 levels by 2030.

    In other words, the IRA would enable the U.S. to close 49 to 71 percent of the emissions gap between BAU and the NDC in 2030.

    In absolute terms, U.S. emissions in 2030 are projected to be 2,500 million metric tons (MMT) to 2,800 million metric tons lower than 2005 levels. The IRA provisions could also generate enormous public health and jobs benefits, preventing up to 4,500 premature deaths from air pollution in 2030 and creating up to 1.3 million jobs in 2030. Finally, the IRA could increase U.S. gross domestic product (GDP) by 0.65 to 0.77 percent in 2030.

    INTRODUCTION

    The final IRA legislative text includes $369 billion in funding for climate and clean energy provisions. These emissions-reducing provisions include clean energy and EV tax credits, large-scale domestic clean technology manufacturing investments, and environmental justice measures. The IRA also requires several auctions for oil and gas on federal lands and waters prior to auctions for renewable energy projects and requires completion of several 2022 lease auctions that were previously canceled.

    To help understand its net effect, Energy Innovation® modeled climate and energy provisions of the IRA using the U.S. EPS, an open-source and peer-reviewed climate policy model that estimates climate and energy policy impacts using publicly available data.

    Our findings confirm that passing the IRA will reduce GHG emissions an estimated 820 to 1,200 MMTs of carbon dioxide equivalent (CO2e) in 2030 despite the oil and gas leasing requirements. Those reductions would reduce U.S. emissions 37 to 43 percent below 2005 levels and make significant progress towards achieving the 2030 U.S. NDC of 50 to 52 percent below 2005 GHG emissions.

    The IRA could create up to 1.3 million new jobs in 2030 concentrated in the manufacturing, construction, and service industries. Through greater clean energy deployment, the bill could avoid up to 4,500 premature deaths and up to 119,000 asthma attacks annually by 2030.

    While this analysis covers the vast majority of the IRA’s climate and energy provisions, including all those that could significantly affect GHG emissions, it is not entirely comprehensive. Some provisions or funding mechanisms were excluded from the modeling due to difficulty translating certain spending categories or incentives into emissions reductions. These programs could likely yield small additional GHG reductions beyond what we have modeled. They may also yield important public health benefits that are not captured here.

    RESULTS AND KEY FINDINGS

    The results in this updated research note include policy scenarios updates reflecting final text of the IRA, along with improvements to the methodologies and assumptions used in our earlier research note.ii

    Our modeling includes four core scenarios: A Business-as-Usual (BAU) Scenario that holds current policy constant, along with Low, Moderate, and High Scenarios that make different assumptions about the efficacy of certain provisions within the IRA, such as the share of projects or sales that qualify for bonus credits, leverage ratios for private sector dollars, and the evolution of supply chains throughout the decade.

    More information on data sources is available online at https://us.energypolicy.solutions/docs/. A full description of our provision-by-provision methodology is included in Appendix A, including how our assumptions varied across scenarios. A full description of our methodology for the oil and gas leasing calculations is included in Appendix B.

    Our model results are discussed below, including emissions projections, changes in clean electricity and zero-emission vehicle (ZEV) deployment, and oil and gas supply changes, along with impacts on public health, jobs, and the economy.

    Greenhouse Gas Emissions

    Our modeling shows the IRA could help reduce 2030 U.S. GHG emissions 37 to 43 percent below 2005 levels, while emissions would fall only 25 percent below 2005 levels under a BAU Scenario. This means the IRA will enable the U.S. to close 49 to 71 percent of the emissions gap between BAU and the U.S. NDC to reduce emissions 50 to 52 percent in 2030—representing a major down payment on our Paris commitment…

    Clean Electricity

    The IRA includes many incentives and significant funding to deploy clean power and reduce emissions. Provisions include investment and production tax credits (which become technology neutral in later years), a tax credit for existing nuclear power points, a new U.S. Department of Energy (DOE) loan program (section 1706), and funding for rural utilities, among others. The tax credits also have bonus provisions that increase their value if certain project conditions are met, such as using unionized labor, meeting minimum domestic content requirements, and siting within certain communities.

    To model the impacts of the clean energy tax credit provisions for clean electricity, we partnered with Energy Transitions AI, an external consultant group running the ReEDS capacity-expansion model. We coupled the results of these modeling runs with estimated impacts of funding programs to estimate the combined impact of the programs on clean electricity deployment. Table below highlights our findings. In our BAU Scenario, clean electricity represents 49 percent of electricity generation in 2030, corresponding to 413 gigawatts (GW) of cumulative renewable capacity. In our IRA scenarios, the share of clean electricity ranges from 72 to 85 percent, corresponding to a range of cumulative solar and wind capacity of 795 GW to 1,053 GW.

    It is important to note these findings do not account for important barriers that could limit clean electricity deployment. In particular, the modeling assumes that necessary transmission will be built, interconnection delays are addressed, supply chains provide the necessary materials to deploy these levels of clean electricity, and a sufficient workforce can supply the labor.

    Each of these represents a potential barrier to scaling electricity deployment at the rates our modeling envisions. However, each barrier is being actively addressed by federal and state policymakers. The Federal Energy Regulatory Commission (FERC) is addressing transmission planning and interconnection processes through several current rulemaking proceedings, likely to be concluded in late 2022 or early 2023. Infrastructure Investment and Jobs Act (IIJA) of 2021 provisions could strengthen DOE authority to site and financially support transmission lines, and could bolster manufacturing facilities and supply chains to support new transmission. President Biden has also invoked the Defense Production Act to ramp up domestic production of critical materials and clean energy manufacturing to address supply chain concerns.

    More work is needed to understand how much each barrier might constrain deployment as well as the impact of current and future policy actions to address them.

    Zero-Emission Vehicles

    The IRA also includes new tax credits for personal and commercial clean vehicles. The commercial clean vehicle tax credit provides an incentive of up to $7,500 for vehicles under 14,000 pounds, and up to $40,000 for vehicles 14,000 pounds and over, depending on the vehicle cost and comparative cost of a similar internal combustion engine vehicle.

    The vehicle tax credit is much more complicated for personal vehicles, and includes the following elements:

    • The credit is split into two pieces: a $3,750 credit for meeting increasingly stringent domestic battery assembly requirements and a $3,750 credit for meeting increasingly stringent critical minerals requirements.

    • The credit contains a manufacturer’s suggested retail price (MSRP) cap of $55,000 for cars and $80,000 for all other vehicles, and all cars must be assembled in North America to qualify for the credit.

    • An additional adjusted gross income (AGI) cap limits the tax credit to individuals earning less than $150,000 a year or households earning less than $300,000.

    • Restrictions on which vehicles qualify as clean begin in 2024, notably removing vehicles that use materials from “entities of concern,” which includes Chinese companies, in the battery and for any of the mineral sourcing or processing starting in 2025. It remains to be seen how restrictive this language will be on limiting the ability of vehicle manufacturers, but it could significantly limit qualifying vehicles, at least until the industry has time to find alternative sources of materials and establish the relevant supply chains. However, IRA manufacturing incentives, especially when coupled with incentives in the IIJA and the Chips and Science Act, create a very strong incentive to grow the necessary minerals processing, battery, and semiconductor industries in the U.S.

    Given the complexity of each requirement, our modeling of the personal vehicles evaluated a range of possibilities. In our Low Scenario, we assume no manufacturers qualify for the credits once new restrictions on the “entities of concern” kicks in. In our High Scenario, we assume a gradually increasing share of new vehicles qualify, such that by 2030 all new vehicles would qualify. Our Moderate Scenario falls between the Low and High Scenarios. We also account for the MSRP cap, AGI cap, the made in North America requirement, the ability of manufacturers to use batteries assembled in North America, and their ability to source the critical minerals from qualifying regions.

    Our findings in Table 3 and Table 4 show changes in sales and stock in 2030 resulting from tax credits and other provisions affecting vehicle sales, and highlight the large range of uncertainty for the personal vehicle tax credits.

    As is reflected in these tables, even higher sales shares drive a smaller change in the vehicle stock by 2030, which reflects limitations related to transportation sector stock turnover. Put another way, because only a fraction of the total stock of vehicles is replaced each year, it can take many years to realize deep sectoral reductions, even with high shares of clean vehicle deployment. This highlights the importance of strong ZEV incentives in the next decade, as waiting runs the risk of missing climate goals due to slow stock turnover. It is also worth noting that transportation emissions reductions in 2035 or 2040 will be significantly greater than in 2030 given the stock turnover dynamic.

    Oil and Natural Gas Leasing Provisions

    In oil and natural gas markets, demand drives prices, which in turn drive supply. Therefore, we expect changes in demand for oil and natural gas to be the primary driver of U.S. production changes. Considering significant natural gas demand reductions from the IRA and moderate decreases in petroleum product consumption, we would most likely see a decrease in production of oil and gas, as is suggested by modeling from the Rhodium Group, not an increase.2

    Nevertheless, we choose a potential worst-case scenario because oil and gas infrastructure has a long life, and any production that might result from the IRA could continue to operate beyond 2030. We modeled upstream and downstream U.S., as well as rest-of-world emissions from the additional oil and gas production on federal lands and waters which could result from the IRA provisions, assuming those lands go into production.

    Our methodology is as follows (see Appendix B for a full discussion of our methodology):

    1) We developed two baseline cases of oil and gas lease auctions in the absence of the IRA. In our Low Case, we assume a leasing ban through the end of the decade without the IRA. In our High Case, we assume lease auctions continue based on the actions of the Biden administration to date.

    2) Next, we develop our IRA Case. This reinstates the cancelled 2022 lease auctions as required under the IRA and assumes 60 million acres of offshore land and 2 million acres of onshore land offered at auction every year to the end of the decade.

    3) To determine how much land is leased at auction, we used historical data covering multiple administrations. The share of land that is leased at offshore auctions is very low on average, around 2 percent. For onshore auctions, approximately 30 percent of acreage offered is leased.

    4) From there, we then developed production profiles using historical data:

    a. For offshore, we used Bureau of Ocean Energy Management data on the timeline of well completions for a given area of development. On average, an increasing number of wells are drilled for the first 15 to 20 years, followed by a decreasing number through years 30 to 35, resulting in a production profile of about 50 years.

    b. For onshore, this data was not available, and we simply assumed land goes into production at average production to area values once the land is leased at auction.

    5) For offshore, we then applied production profiles to the wells that reflect the varying amount of product produced over the lifetime of the well. For example, around 50 percent of a well’s total product is produced in the first year after it is drilled, with diminishing output after.

    6) We then assumed that 30 percent of the new production on federal lands was offset by decreases on private lands, based on data from Brian Prest at Resources for the Future.3

    7) Next, we developed price elasticities of supply using data from the U.S. Energy Information Administration (EIA) and we estimated the percent change in the U.S. price of natural gas, crude, and petroleum products using these values.

    8) We fed the increased production and the changes in prices into the EPS, which captures the emissions associated with production, processing, transmission, and distribution and the subsequent change in downstream consumption and emissions from the price impacts. iii

    9) Finally, we estimated the leakage of emissions internationally using values from Brian Prest’s paper.

    Our estimates assume that decreases in natural gas consumption as well as incremental supply can be exported via liquified natural gas export terminals and international pipelines. Between our Low and High Scenarios, U.S. natural gas demand decreases by roughly 18 to 27 percent relative to the BAU Scenario, equivalent to 6.2 to 9.3 trillion cubic feet (TCF) of natural gas. Incremental natural gas domestic consumption from the oil and gas leasing provisions in 2030 totals 0.10 to 0.23 TCF. In our BAU Scenario, based on EIA data, the U.S. exports about 9 TCF of natural gas, 5.4 TCF of which is liquefied natural gas (LNG), in 2030. Based on the latest FERC data, under construction, approved, and proposed LNG terminals total 19.4 TCF of capacity, though many of these projects do not have an estimated completion date.4

    Nevertheless, if a significant share of the under construction, approved, and proposed terminals are completed by 2030, they could create sufficient capacity to export gas from reduced domestic demand and incremental production. It is unclear whether sufficient demand for U.S. exported gas exists to support this much export capacity, as well as the likelihood that all these facilities will be completed by 2030, or completed at all.

    Our revised approach to estimating lease auction impacts has several notable improvements on our prior approach and related estimates. First, it correctly accounts for switching between federal and non-federal lands, which was ignored in our earlier estimates. Second, it better estimates the time profile of when extraction occurs from a given piece of land by looking at empirical data rather than assuming all production starts in a single year. Finally, it correctly accounts for changes in U.S. prices and consumption relative to international consumption and allows us to distinguish between the two. For these reasons, the revised approach generates more accurate results.

    The findings are still conservative, as they do not account for potential decreases in domestic demand for oil and gas resulting from the IRA that would likely reduce total U.S. production. The approach also assumes that developers are able to obtain necessary drilling permits.

    The updated approach generates estimates that are lower than, but of the same magnitude as, our earlier estimates. As shown in Figure 4, we estimate the oil and gas lease provisions could add 17 to 29 MMT CO2e to global emissions, represented by the orange dots, the vast majority of which occurs outside the U.S. In our Moderate Scenario, we actually find emissions decreases domestically from changes in energy prices, which is why that scenario is lower than either the Low or High Scenarios

    The global increase in 2030 is relative to U.S. reductions of 820 to 1,200 MMT reductions in 2030. In other words, based on the updated methodology, for every one ton of global emissions increases caused by oil and gas leasing provisions, at least 28 tons of emissions are avoided by other IRA provisions in the U.S. Thus, despite the potential for increased oil and gas extraction, the IRA overwhelmingly reduces emissions.

    While increased extraction could occur on public lands, the vast majority of it would occur offshore, and would be associated with decreases in production on private lands, it is important to note that increased extraction could lead to an increased pollution burden in communities where oil and gas is processed and transported.

    Methane Emissions Reduction Program…Carbon Capture, Utilization, and Storage…Public Health and Climate Impacts…Jobs and GDP…Deployment of Capital and Spending on Energy…

    Saturday, September 17, 2022

    The Power System To Reverse The Climate Crisis

    Step by step to net zero emissions. From GreenBiz via YouTube

    California’s Transportation Electrification By 2035 Law

    From PBS Newshour via YouTube

    New Energy In Lithium Valley

    The need for lithium in New Energy and EVs is likely to soon create another California boom. Sources of other minerals needed for New Energy are also emerging. From Yale Climate Connections via YouTube

    Friday, September 16, 2022

    Russia May Be Losing The Energy War

    Russia is facing defeat in Putin’s gas war against the European Union

    Aura Sabadus, September 11, 2022 (Atlantic Council)

    “…Russian energy giant Gazprom suspended gas exports to Germany via Nord Stream 1 and Russian President Vladimir Putin threatened to cut remaining supplies, but] Putin may have overplayed his hand and could be about to lose his gas war against Europe…[Prices remain very volatile and well above average but have dropped] more than 40% since reaching record highs at the start of September…[and] markets are finding solutions…[S]torage facilities are now at 82% of capacity, already exceeding an 80% target figure for October 1 set by the EU …[even though] Russian supplies to Europe are now less than a quarter of what Gazprom exported a year ago…

    …[Record high prices have prompted large industrial consumers to curb demand] nearly 22%…The EU has recommended a 15% demand reduction over the five-year average between August 2022 and March 2023…In August alone, overall household demand appears to have dropped some 10%, while European consumers are rushing to install solar panels, heat pumps, or stockpile firewood… Europe has decisively turned to global supplies of liquefied natural gas with imports of LNG now at record levels…These volumes are set to soar further…

    Two floating storage and regasification units (FSRUs) have already docked in the Netherlands…[Germany is] expecting to set up three FSRUs until March 2023…[and] another three by the end of 2023…[Estonia and Finland FSRUs] could be in operation as early as December 2022…[and a Poland pipeline could] start bringing Norwegian gas by the start of October 2022…[France has offered] to swap natural gas for electricity in case of shortages this winter…EU policy-makers are currently under tremendous political pressure…but Europe must ultimately ensure that Russia is disarmed for good.” click here for more

    New Jobs Around The World In New Energy

    Global energy employment rises above pre-Covid levels, driven by clean energy and efforts to strengthen supply chains; IEA provides first ever assessment of energy jobs worldwide by region and technology, offering vital analysis in the context of the global energy crisis and clean energy transitions

    September 8, 2022 (International Energy Agency)

    “…[The first World Energy Employment Report found energy jobs worldwide have increased above the pre-pandemic level by] over 65 million people, or around 2% of the total labour force…[It was driven] by hiring in clean energy sectors…[The oil and gas sector] has yet to fully recover…[Clean energy jobs were over 50%] of total energy employment, with nearly two-thirds of workers involved in building new projects and manufacturing clean energy technologies…[New jobs and projects under development in oil and gas are growing,] notably new liquefied natural gas (LNG) infrastructure…

    Policy responses to the pandemic and Russia’s invasion of Ukraine, including the US Inflation Reduction Act, will continue to add to new hiring demand and to shifting the status-quo of global energy supply chains…[A third of new jobs are] in energy fuel supply (coal, oil, gas and bioenergy), a third in the power sector (generation, transmission, distribution and storage), and a third in key energy end uses (vehicle manufacturing and energy efficiency). More than half of energy employment is in the Asia-Pacific region…China alone accounts for 30% of the global energy workforce…

    …[C]lean energy employment is set to grow, outweighing declines in fossil fuels jobs. In the Net Zero Emissions by 2050 Scenario, 14 million new clean energy jobs are created by 2030, while another 16 million workers switch to new roles related to clean energy…[Locations and skills may change,] requiring policy makers to focus on job training and capacity building to ensure that energy transitions benefit as many people as possible…Around 45% of the world’s energy workers are in high-skilled occupations, compared with about 25% for the wider economy…” click here for more

    Wednesday, September 14, 2022

    ORIGINAL REPORTING: Federal Regulators Seek Reliability Solutions From Customer-Owned Resources

    Reliability concerns drive need for energy market design reforms, but regions diverge in FERC proceeding; Different changes can provide the flexibility needed to serve each region's rising variable resources, load and costs, stakeholders say.

    Herman K. Trabish, April 11, 2022 (Utility Dive)

    Editor’s note: Reliability remains under threat and central to regulators’ thinking across the country.

    Industry and resource provider responses in a Federal Energy Regulatory Commission proceeding this February on U.S. power system supply-demand uncertainties revealed two important things about the nation’s accelerating energy transition.

    First, rising penetrations of variable and distributed generation make reliability a growing concern for regional market operators governed by FERC, the FERC proceeding showed. Second, no single solution for affordably enhancing reliability seems adequate to the diverse needs of solar-rich California, the windswept heartlands, and the Northeast’s emerging offshore wind and distributed generation portfolio, representatives of clean energy developers, investor-owned utilities and market operators agreed in proceeding filings.

    Current energy market rules were issued by FERC in the 1990s based on “the inflexibility of large, central generators, which made up the large majority of energy supply” then, reported the American Clean Power Association in a Feb. 4 filing on behalf of renewables and transmission developers. New market rules allowing “flexible system operation” are needed for emerging generation and load variability, the group said.

    “Changes” to the energy and ancillary services markets being reevaluated in FERC’s docket can allow operators to “reliably operate the system,” the Edison Electric Institute agreed in a Feb. 4 filing on behalf of member IOUs. “Competitive wholesale energy markets should provide accurate price signals, in both the day-ahead and real-time markets,” it added.

    Despite widespread agreement that market design changes are needed to affordably protect reliability as renewables penetrations rise, proposed solutions vary significantly, stakeholders told Utility Dive. Regional power system dynamics are specific to local technologies, resources, weather and power demand. But FERC guidance can be crucial to each market operator’s efforts to meet its energy transition complexities, the stakeholders added.

    Every day, complex regional market operations allow customers to have electricity simply and instantaneously. Qualified generation can bid into a grid operator’s integrated markets under FERC-approved protocols and tariffs, Southwest Power Pool Manager of Market Design Gary Cate told Utility Dive. A single, computer-based market clearing engine with every “knowable characteristic” of supply and demand co-optimizes bids and prices for each operator’s market, Cate said.

    Adequate resources are bid and committed for energy, for ancillary services, and for contingency needs at the lowest price that protects reliability for the day ahead. The “very complex calculation” done by operators’ engines are “proposed solutions” that are “reproduced and finalized every five minutes for their real-time markets,” Cate said. “But there may be real-time events not in the available forecast data that will be addressed by operator procurements from outside the market.” Though renewables offer cleaner, lower-cost power, their variability is increasing the need for those costly out-of-market actions, he added… click here for more