By Jeff Deyette
Despite the Trump administration’s ongoing attempts to prop up coal and undermine renewables—at FERC, EPA and through tariffs and the budget process—2018 should instead be remembered for the surge in momentum toward a clean energy economy. Here are nine storylines that caught my attention this past year and help illustrate the unstoppable advancement of renewable energy and other modern grid technologies.
1. California Goes All-In for Carbon-Free Electricity
In late August, California—the world’s 5th largest economy—committed to the target of fully decarbonizing its power sector by 2045. The landmark legislation also strengthens the state’s renewable portfolio standard (also known as a renewable energy standard, or RES) from 50 to 60 percent by 2030. What’s more, at the bill signing, Governor Jerry Brown signed an executive order that establishes a goal of achieving carbon-neutrality across all sectors of California’s sprawling economy by 2045, cementing the state’s place as a global leader in climate action.
2. Several States Strengthen Their RES Requirements
State-level renewable electricity standards continued to be a primary driver of new renewable energy development in 2018. In addition to California, legislatures in New Jersey (50 percent by 2030), Connecticut (40 percent by 2030) and Massachusetts (35 percent by 2030) all adopted stronger targets for renewable energy, accelerating their states’ transitions away from fossil fuels. In addition, voters in Nevada overwhelmingly approved a measure to increase their state’s RES to 50 percent by 2030 (the measure must be approved again in 2020 to officially become law).
3. Clean Energy Champions Win Gubernatorial Races
One of the bright spots in November’s election results was the number newly elected governors who campaigned on aggressive clean energy and climate change agendas. Newly elected governors in at least 10 states, including California, Colorado, Connecticut, Illinois, Maine, Michigan, Minnesota, Nevada, New Mexico and Wisconsin, have pledged to accelerate clean energy and carbon reductions in their states by supporting U.S. commitments to the Paris agreement, joining the U.S. Climate Alliance and/or calling for renewable energy targets of 80 to 100 percent. These election results demonstrate the widespread support for greater investments in renewable energy and signal the push for even stronger clean energy policies in the coming year.
4. Record Low Prices for Renewables
Innovation, growing economies of scale and attractive financing continued to drive the costs down for renewables in 2018. Power purchase agreements for wind and solar projects in states like Arizona, Nevada, Colorado, Kansas, New Mexico, Oklahoma and Texas have reportedly ranged between $20 to $30 per megawatt-hour, well below the cost of natural gas generation—and the technologies are positioned for further cost reductions to continue to be low-cost options even as federal tax incentives change. What’s even more exciting is that the many of these low-priced projects also include energy storage components, increasing their value to the grid.
5. Major Utilities Commit to Low-Carbon Portfolios
Earlier this month, Xcel Energy became the first major utility to commit to a completely carbon-free electricity supply across the eight states it operates in. In doing so, it joins a growing number of utilities that are committing to phasing out their use of coal and transitioning to substantially lower carbon energy portfolios. Also this year, both Consumers Energy in Michigan and NIPSCO in northern Indiana announced plans to phase out coal generation and utility giant American Electric Power announced a goal of reducing its carbon emissions 80 percent by 2050. What’s especially exciting about these utility actions is that they are driven primarily by economics, clearly demonstrating the competitiveness of clean energy technologies.
6. Corporate Renewable Energy Purchases Keep Growing
Low renewable energy prices continue to attract major corporations looking to save money and achieve ambitious sustainability goals. As a result, direct corporate purchases of renewable energy have become a major driver of renewable energy deployment. In 2018, the Rocky Mountain Institute reports, corporate renewable energy purchases—led by companies like Facebook, Walmart, ATT and Microsoft—reached more than 6.4 gigawatts (GW). The number of corporations investing in renewables expanded at a record pace this year as well, with nearly two-thirds of Fortune 100 and nearly half of Fortune 500 companies now having set ambitious renewable energy goals.
7. Offshore Wind Moves Forward
While no new offshore wind projects came online in the U.S. this year (the next project—off the Virginia coast—is scheduled for 2020), the industry did take some big leaps toward becoming a major player in the nation’s power supply. For example, the winning bid for Massachusetts’ first request for offshore wind proposals to help meet the state’s offshore wind requirements passed in 2016 went to an 800-megawatt project from Vineyard Wind at a shockingly low price of about 6.5 cents per kilowatt-hour. In addition, the latest U.S. Bureau of Ocean Energy Management auction for leasing parcels of water for future projects resulted in 11 bidders and $405.1 million in winning bids, both smashing previous records. And strong state policies, including new offshore wind requirements in New Jersey and elsewhere, mean that there’s a lot more action to come.
8. Storage Steps Into the Spotlight
Once a fringe player in the electric power sector, the energy storage industry is quickly emerging as a game changer in the transition to a clean energy economy as a tool for integrating much higher levels of renewable energy. In 2018, the pipeline for new storage projects doubled to nearly 33 GW as more utilities are investing in the technology thanks largely rapidly falling prices and growing support from state policies. While California has led the nation in storage deployment to date, New York recently established the strongest storage requirement in the country at 3,000 MW by 2030. Earlier this year, New Jersey set an ambitious storage target of 2,000 MW by 2030 and Massachusetts significantly increased its storage requirement to 1,000 megawatt-hours by 2025. At the federal level, the Federal Energy Regulatory Commission issued Order 841, which directs regional grid operators to set market rules that allow energy storage to participate on a level playing field in the wholesale energy, capacity and ancillary services markets.
9. PG&E Turns Down the Gas With Storage and Renewables
In one particular sign of what’s to come in 2019 and beyond in terms of how these technologies fit together to displace fossil fuels, one of the most exciting regulatory decisions I saw this year was the California Public Utility Commission’s approval of PG&E’s plan to use energy storage to replace retiring gas generators. One of the key barriers to fully transitioning to a carbon-free economy is replacing natural gas generation and the ancillary services they provide to the power grid. This decision, which marks the first time a utility will directly replace power plants with battery storage, should spur many more similar projects to move forward in California and across the country and open the door for integrating much higher levels of renewable energy onto the power grid.
These nine stories are just a sampling of what occurred in 2018 to further the clean energy transition. As the year comes to a close, UCS will continue to work hard to keep up the clean energy momentum in 2019.
Jeff Deyette is the director of state policy and analysis at the Union of Concerned Scientists.