Friday, November 17, 2017

Solar Tariff Case May Throw Shade on Growing Solar Industry: Part II

By Lev Blumenstein, Energy Fellow
Image by Tai Viinikka

Back in September, the United States International Trade Commission (ITC) unanimously found that domestic manufacturers of crystalline silicon photovoltaic (CSPV) cells were harmed by imports of cheap solar panels. The  Commission recently delivered its findings and recommendations to President Donald J. Trump triggering sixty-day period for the President to act. Although the full report has not yet been made public, the Commission has released its recommended remedies.

Legal Framework for ITC Remedies


Under Section 201(a) of the Trade Act of 1974, the President may act to protect domestic industries from serious injury caused by large increases in imports of goods. The President is only to take such actions where the economic and social benefits outweigh the costs. Section 203(e) of the Act limits the initial duration of any imposed remedy to four years. The President may, at a later point, extend the duration of the remedies by up to an additional four years if certain conditions are met. The total duration of the imposed remedies cannot exceed eight years. Section 203(e) imposes other restrictions on potential remedies: they cannot be punitive; an imposed tariff cannot exceed 50% of the value of the goods; and imposed cap on imports should not exceed the average imports of the prior three years; and the remedy, if it is imposed for longer than one year, should be phased down annually.

Proposed Remedies


Although the four members of the Commission were not able to agree on a single set of remedies, they all agreed that a remedy should be imposed for the maximum four years and applied to a number of Free Trade Agreement countries, including Mexico and South Korea.
ITC Commissioners David S. Johanson and Irving A. Williamson proposed a 30% ad valorem tariff on imported CSPV modules. This tariff would decrease by five percentage points per year. Individual CSPV cells are treated differently. In the first year, the Commissioners would exempt the first gigawatt (GW) of imported cells from tariffs. Imported CSPV cells above the exemption would be subject to the same tariff as imported CSPV modules. The exemption amount for imported CSPV cells would increase by two hundred megawatts (MW) per year.

ITC Chairman Rhonda K. Schmidtlein’s recommendations were more stringent. For imported CSPV modules, she proposed a 35% ad valorem tariff that would step down one percentage point per year. Instead of allowing an amount of CSPV cells to be imported tariff-free, she proposed that the first five hundred MW of imported CSPV cells be subject to a 10% ad valorem tariff. CSPV cell imports above the five hundred MW quota would be subjected to a 30% ad valorem tariff. The below-the-quota tariff would decrease by one-half of a percentage point per year and the above-the-quota tariff would decrease by one percentage point per year. The Chairman also recommended that the remedy should be applied to imports from Canada.

The final proposal from ITC Commissioner Meredith M. Broadbent is the closest to the recommendations of the Solar Energy Industries Association (SEIA). As noted in an earlier blog post, SEIA opposed the trade case filed by Suniva and SolarWorld. The Commissioner proposed a combined quota of 8.9 GW for imported CSPV cells and modules. The quota would increase by 1.4 GW per year. Mexico would have its own quota of 0.72 GW in the first year. Mexico’s quota would increase by approximately 0.12 GW each year. The quotas would be administered by selling licenses to import the products. Commissioner Broadbent anticipated that licenses would cost one cent per watt. No, CSPV cells or modules could be imported into the United States from certain countries without a license. The Commissioner estimated that the sale of licenses would bring in at least $89 million in the first year. That amount would step up by at least $14 million in each subsequent year. These funds would be used to assist the domestic CSPV manufacturing industry.

Setting aside for a moment the wisdom of imposing any tariff, Commissioner Broadbent’s proposal is the least likely to distort the market for CSPV installations. Unlike the other two ITC recommendations, Commissioner Broadbent does not introduce a cliff at the end of the remedy period. A cliff would cause severe distortions at the end of the remedy period by incentivizing companies to hold back imports of products until the day after the remedy period expires. Furthermore, the combination of high tariffs and low quotas in the other two proposals would stifle the growing solar market at a critical juncture.

If President Trump decides to accept the ITC’s findings and impose tariffs, he should adopt Commissioner Broadbent’s proposal because it will adequately compensate domestic manufacturers while not egregiously distorting the market for CSPV. 

Wednesday, November 15, 2017

American Prosperity and the Role of Environmental Regulation: Part I

By Natascha Smith, Energy Fellow
U.S. National Archives

Recently, Scott Pruitt announced the EPA’s plans to 'withdraw' the Clean Power Plan. While this step is receiving a lot of attention from the media, the Clean Power Plan is just one of 52 environmental rules that President Trump has sought to reverse since he took office in January. During a visit to the EPA in March, President Trump signed an executive order instructing regulators to rewrite many environmental regulations, stating: “We’re ending the theft of American prosperity and rebuilding our beloved country.” These rollbacks of environmental regulations should come as no surprise, since during Trump’s presidential campaign he made clear that he would like to abolish the EPA.

Since several of the EPA regulations on the chopping block concern critical environmental issues, such as climate change, there are a few questions we should be asking ourselves. First, what benefit do we get from the EPA and environmental regulations? Second, why is the Trump Administration pushing to dismantle federal environmental protections? And third, what kind of impacts can we anticipate if Trump succeeds in significantly rolling back environmental protections? This post is part one of a three-part series that aims to consider these issues in further detail.

Part I: The Benefits of Federal Environmental Protections


To fully evaluate the benefits of the EPA, one must consider what our country was like without it. To glimpse what the U.S. environment looked like before the EPA protections, check out "Project Documerica," a photo project commissioned by EPA at its founding to document the state of the environment at the time and the agency’s efforts to improve environmental conditions. This was an era where rivers in industrial areas caught on fire, and where both republicans and democrats agreed that environmental regulation was necessary.

Since its formation in 1970, the EPA has implemented a series of successful regulations, including those prohibiting use of the pesticide DDT, significantly reducing air emissions that cause acid rain, removing lead from gasoline and paint, and regulating asbestos as a pollutant. Despite false and misleading claims by opponents, data indicates that the benefits of environmental regulations far outweigh the costs and supports job creation. EPA regulations have eliminated dangerous toxins from out daily live while simultaneously promoting economic growth and adding social value.

Environmental Regulations Help Create Jobs


A 1994 Economic Policy Institute study reported that “environmental spending has actually boosted aggregate employment.” Moreover, a 2008 study published in the Journal of Environmental Management found that employment in environmental protection industries increased from 700,000 jobs in 1970 to 5 million jobs in 2003. This study concluded that environmental regulations have a positive net effect on employment. While environmental regulations create jobs on an economy-wide scale, localized job losses may occur. However, we can reduce potential negative employment impacts through implementation of policy solutions, such as retraining workers for jobs in cleaner industries. The overall impact of environmental regulations on employment is positive. Similarly, these regulations have positive effects on economy at large and lasting create social benefits.

Environmental Regulations Promote the Economy and Add Social Value


From 2001–2010, the Office of Management and Budget (OMB) conducted a cost-benefit analysis for 106 major regulations. OMB determined that the combined value of these regulations far exceeded their combined costs; in fact, the value of the estimated benefits was seven times the costs associated with these regulations. The OMB study noted that clean air regulations have one of the highest benefit-to-cost ratios. For example, for every dollar of cost associated with the 1990 Clean Air Act Amendments, $25 dollars of benefits accrued. With billions of dollars in economic benefits added to the economy annually, the cost effectiveness of environmental regulations makes them vital for both the environment and the economy.

Another way in which environmental regulations promote the economy is by keeping workers healthy. As a result of the 1990 Clean Air Act Amendments, the U.S. added 13 million days of work and productivity to the economy in 2010. Even more important than the economic impact of the amendments is the social value added. In 2010, the 1990 Clean Air Act Amendments saved an estimated 160,000 lives. By the end of 2011, the estimated number of total lives saved by the amendments will reach approximately 2 million people. Additional societal benefits include 86,000 fewer emergency room visits and 1.7 million fewer asthma attacks. With results like these, it is hard to ignore the benefits of environmental regulations.

So, what benefits do we get from the EPA and environmental regulation? Well, we increase employment, receive benefits that far exceed the costs expended to achieve them, we increase worker productivity, we protect public health, and last but not least we save lives. With pronounced benefits such as these, why would the Trump administration push for rollbacks of environmental regulations? Part two of this series will explore Trump’s motivation for eliminating environmental protections.

Thursday, October 26, 2017

The Bipartisan Case for Transitioning to a 100% Renewable Energy Grid

By Casille Systermans, Policy Extern 

Combatting climate change is an urgent issue that requires immediate action. To that end, the United States should commit now to transitioning to a 100% renewable energy grid. However, climate change remains a divisive political issue that almost inevitably divides people along party lines. Therefore, it is unlikely that the need to act on climate change is going to bring about a national commitment to renewable energy any time in the foreseeable future. Renewable energy proponents urgently need to find a way to reach across the aisle and build broad bipartisan support for a 100% renewable energy grid.

Conservatives view fossil fuels as an economically beneficial means of preserving jobs in rural America and providing the United States with cheap and reliable electricity. Luckily, a renewable energy transition can provide the United States with these same benefits. Climate change is only one of many reasons why the United States should commit to transitioning to a 100% renewable energy grid. Burning fossil fuels contaminates America’s air and water and has negative effects on public health. Additionally, fossil fuels are a finite resource and therefore cannot meet America’s energy needs indefinitely. Continuing to rely on fossil fuels leaves America dependent on foreign imports, and thus vulnerable to changing international circumstances. Transitioning to an entirely renewable energy electric grid will bring opportunity and jobs to rural and urban America and can provide the United States with sustainable energy that will almost certainly be cheaper than fossil energy in the long run because renewables have no added fuel costs. Additionally, transitioning to a renewable energy grid will improve the health and wellbeing of all Americans by dramatically reducing pollution-related health impacts and mitigating the devastating and expensive impacts of climate change. Building a 100% renewable energy grid will not be easy; however, renewable energy is best for the United States, its people and the world, and the first step toward achieving a 100% renewable energy grid is committing to the goal.

An Unproductive Conversation

The conversation around what to do about climate change and the associated impacts from America’s energy system has traditionally focused on how, when, and if fossil fuels should be regulated. During the 2008 campaign, then-candidate Barack Obama declared: “If somebody wants to build a coal plant, they can – it’s just that it will bankrupt them.” Environmental groups like the Sierra Club campaign to move ‘Beyond Coal.’ In response to the environmental push to drive coal out of business, conservative groups have accused environmentalists and the Obama administration of waging a “war on coal.” However, each side in the partisan debate about America’s energy future is missing the point.

Proponents of regulating coal and other fossil fuels are well intentioned, yet they often diminish or dismiss conservative concerns about the costs regulations impose directly on businesses and indirectly on consumers. However, focusing exclusively on the potential cost of fossil fuel regulation and not on the larger issues associated with burning fossil fuels is also short-sighted and ultimately worse for consumers. Burning fossil fuels for electricity has negative impacts on public health that are not reflected in the cost of electricity. Research shows that the hidden health costs associated with burning fossil fuels in the United States are as much as $886.5 billion annually. Transitioning to a 100% renewable energy grid will reduce pollution-related health impacts and save all Americans money. This will be particularly beneficial for rural America, because rural areas are far more likely to lack access to affordable, high-quality health care.

While each side on the debate about if and how to regulate fossil fuels is well-intentioned, fossil fuel regulation alone is an incomplete strategy for securing America’s energy future. Regulations on fossil fuels can help to protect public health and reduce environmental degradation; however, regulation alone cannot ensure that the U.S. will achieve an efficient transition to a clean and reliable renewable energy grid. Additionally, focusing on regulating the negative effects of fossil fuel consumption, rather than focusing on how to most effectively and economically transition away from fossil fuels, bolsters the conservative argument that regulations are bad for business. Assuring a secure, reliable and clean energy future for the United States requires committing to a long-term goal that everyone should be able agree on: transitioning to a 100% renewable energy grid.

Re-Focusing the Conversation

Regulatory uncertainty is bad for business and can cause consumer prices to go up, particularly in the energy industry, where planning to meet customer’s future energy needs is essential. The dramatic shifts in U.S. energy policy that the country has experienced recently make it hard for businesses to plan for the future. For example, the Trump administration’s ongoing efforts to repeal the Clean Power Plan create substantial uncertainty regarding the regulation of greenhouse gas (GHG) emissions at the federal level. Businesses understand that even if the Clean Power Plan is repealed, it is highly likely that a future presidential administration will prioritize regulating GHG emissions at the federal level. This uncertainty encourages utilities to make reactionary financial decisions, rather than strategic investments, because any decisions made under the current regulatory conditions could be undermined after the next national election.

Transitioning to an entirely new energy grid will require planning and commitment. Committing to a 100% renewable energy transition creates certainty, and therefore is better for businesses and consumers. When utilities create their integrated resource plans and determine how to best meet their customers’ energy needs, there will be no need to account for the constant threat of major policy shifts; instead, the policy will already be in place, so utilities can focus on the task of reaching the ambitious goal of a 100% renewable energy grid.

Committing the United States to transitioning to a 100% renewable energy grid is good for businesses, communities, and consumers. The most common argument conservative politicians use to justify their opposition to clean energy is the potential cost to consumers, in the form of increased energy bills. However, coal is becoming less competitive on its own because of the proliferation of cheap natural gas-fired electricity, and the price of renewable energy has gone down significantly in recent years. Indeed, some renewable energy sources have already achieved price parity with traditional fossil resources.

The economic arguments that conservative opponents of clean energy use to justify continuing to subsidize and prefer fossil resources are outdated, short-sited, and a disservice to America. America has been and should continue to be a world leader, and innovation and hard work are key to the nation’s continued success. If the United States commits to transitioning to a 100% renewable energy grid, it can be done.

Renewable Energy and Conservative Values

The so-called ‘war on coal’ is sometimes characterized as a war on Appalachia or on ‘coal country,’ which is made up primarily of predominantly conservative rural communities. For decades, these areas have been dependent on coal for economic success, and therefore conservatives have come to view any regulations designed to reduce coal consumption as an attack on these communities and their way of life. However, a renewable energy transition can offer new economic opportunity to these areas and can revitalize rural communities. The solar industry employs far more people than the coal industry, and the solar and wind energy industries are creating jobs at a rate 12 times faster than the rest of the U.S. economy.

Utility-scale solar and wind power facilities must be located where sunlight and wind are most abundant, which is often in rural communities. Therefore, adding large amounts of wind and solar power to the U.S. electric grid will require investing in rural communities, thereby creating more rural jobs. Additionally, transitioning to an entirely renewable energy grid will require investment in new transmission lines to connect remotely located utility-scale renewable projects to the cities that they need to power. Depending on state law, the development of new transmission lines can bring significant economic benefit to rural communities.

Additionally, transitioning to a 100% renewable energy grid will require significant investment in distributed generation technology. Distributed generation, like roof-top solar, is located at or near the site of consumption and therefore can bring jobs and economic benefits to communities throughout the United States, including communities in Appalachia and in depressed urban areas.

A renewable energy transition can and will bring benefits to communities throughout the United States, whether they are urban, suburban or rural communities. By creating good, stable, and high-paying energy jobs throughout the country, the renewable energy transition will help rebuild struggling communities and foster strong community spirit.

Conclusion

America should commit to transitioning to a 100% renewable energy grid. Making this commitment now will create regulatory certainty, and therefore will benefit the energy industry moving forward. The transition to a renewable energy grid will revitalize communities across the United States by creating jobs and economic opportunities. Additionally, the transition will reduce pollution and therefore will help protect people from pollution-related illness. In turn, the increase in high-quality jobs, stronger energy security, and reductions in pollution-related illnesses will strengthen American families. Committing to a 100% renewable energy grid will ensure that America has a sustainable and reliable energy future and will benefit the American people, no matter what side of the political aisle they are on.

Monday, October 23, 2017

Recapping GEI’s Re-Energizing the West Conference

By Lev Blumenstein, Energy Fellow

On October 7, 2017, GEI hosted Re-Energizing the West: the Western Clean Energy Future, a conference on clean energy development in the western United States. It was a full day of interesting panels with great participants. The conference began with welcoming remarks from Wim Wiewel, President of Lewis & Clark College, and Melissa Powers, Professor of Law at Lewis & Clark Law School and Director of GEI. Professor Powers set the stage for the conference by describing her post-college attempt to bicycle from Berkeley, California, to Tierra del Fuego, Argentina, which she ultimately failed to complete due to poor planning.

After the welcoming remarks, the first panel discussed the opportunities and challenges associated with shifting to a zero-carbon grid. After United States Senator Jeff Merkley provided opening remarks, Tarika Powell of the Sightline Institute led a discussion featuring Senator Jeff Merkley; Mike Garland, CEO of Pattern Energy, and Arthur Haubenstock, General Counsel and Vice President of Government and Regulatory for 8minutenergy. The panel’s discussion focused on shifting residential energy demands away from fossil fuels and upgrading transmission systems to increase efficiency, reduce bottlenecks, and geographically diversify renewable resources. The panel also noted that the shift towards cleaner energy has been enabled by consistent, large decreases in the price of solar panels and that the price of solar panels is expected to continue declining.

The second panel discussed the conservative case for low-carbon energy. Sarah Hunt, Director of the Center for Innovation & Technology at the American Legislative Executive Council, led a discussion between California Assemblymember Rocky Chávez and Scott Bolton, Senior Vice President of External Affairs and Customer Solutions at Pacific Power. The panelists lamented the politicization of climate change and green energy, noting that climate change is occurring and poses serious long-term threats. The discussion highlighted that there is a strong conservative case for low-carbon energy these days, both economically and philosophically. However, much work must be done to cut through the political noise.

The third panel turned to transportation. Eileen Wenger Tutt, Executive Director of the California Electric Transportation Coalition, led a discussion featuring United States Representative Earl Blumenauer, a staunch advocate for bicycling and sustainable transportation, and Steven Douglas, Senior Director of Energy and Environment for the Alliance of Automobile Manufacturers. The panel engaged in a lively discussion of the mechanics of decarbonizing the transportation sector. One highlighted issue was the complex role time-of-use pricing plays in a consumer’s decision to purchase an electric vehicle (EV). The complexity makes it hard for salespeople and consumers to provide an accurate operational-cost comparison between electric and internal-combustion engines.

After lunch, the fourth panel discussed the role California has played in leading the transition to greener energy. Michelle Romero, Deputy Director of Green for All, led a discussion featuring United States Representative Jerry McNerney and Tom Starrs, Senior Vice President of SunPower. The panel’s discussion focused on the factors that enabled California to become a leader in low-carbon energy and how its model might be exported to other states in the west.

The fifth panel was led by Kelly Hall, the Washington Policy Manager for Climate Solutions and featured Commissioner Megan Decker of the Oregon Public Utility Commission; Barbara Hins-Turner, Director of the Pacific Northwest Center of Excellence for Clean Energy; and Ruchi Sadhir, Energy Policy Advisor to Oregon Governor Kate Brown. This panel focused on the role of states in implementing a low-carbon energy future. One subject discussed was the role that states can play through public education to ensure that there is an available workforce capable of executing the shift to a low-carbon future. Another subject was the role that public utility commissions can play in facilitating the shift to cleaner energy.

The sixth panel focused on opportunities and challenges associated with developing regional energy markets. Don Furman, Director of Fix the Grid, led a discussion between California State Senator Bob Wieckowski; Elliot Mainzer, Administrator of Bonneville Power Administration; and Matt Baker, Environmental Program Officer for the William and Flora Hewlett Foundation. This panel focused on the regulatory challenges standing in the way of greater regional integration of the electricity markets. At its heart, the problem seems to be a lack of trust between various governments and regulators. The panel discussed how governments and regulators have been slowly building trust through cooperative projects, such as the western Energy Imbalance Market. The panelists were optimistic that the western energy market can become more fully integrated over time, resulting in a more efficient and lower-carbon energy market.


The conference concluded with a call by Professor Melissa Powers and Don Furman for a more strategic approach to decarbonizing the electricity and transportation sectors, and transitioning to a renewable energy system in the West. This closing discussion emphasized that while western states have succeeded in adopting a variety of policies to reduce carbon emissions and promote renewable energy and EV deployment, western states (with the exception of California) have failed to commit to mandatory carbon reduction targets, and the vast majority of states have yet to complete a comprehensive pathways analysis to identify the most promising emissions reduction strategies for various economic sectors or develop strategic plans outlining  comprehensive strategies to reduce emissions and transition to clean energy sources over the coming decades. The panelists emphasized the moral and ethical imperatives to reduce the region’s climate change impacts and noted that while many interim tactical policies have the potential to reduce emissions from certain sources, without state-wide strategic approaches incorporating a comprehensive plan to achieve carbon targets, we will likely to fail to achieve our long-term climate and energy goals. 

Monday, October 16, 2017

Solar Tariff Case May Throw Shade on Growing Solar Industry

By Lev Blumenstein, Energy Fellow
Department of Energy


In April, the United States International Trade Commission began an investigation under section 201 the Trade Act of 1974 into whether U.S. manufacturers of crystalline silicon photovoltaic (CSPV) cells were being harmed by imports of cheap solar panels. CSPV cells and panels are the most common commercially available type of solar cells and panels. The impetus for the investigation was a petition filed by Suniva. The company, which manufactures CSPVs cells in the United States, filed for bankruptcy shortly before filing its petition. In May, SolarWorld, another U.S. manufacturer, joined Suniva’s petition. On September 22, 2017, the Commission unanimously found that the two manufacturers were harmed by imports of cheap solar panels.

The Commission’s next step is to determine possible trade remedies. The remedies sought by Suniva would double the cost of imported CSPV cells and panels. The Commission is scheduled to present its findings and recommendations to President Trump by November 13, 2017. The Trump Administration will then have sixty days to issue a final decision.

This represents one of the Administration’s first opportunities to put its protectionist tariff rhetoric into practice. The Administration should think long and hard before reflexively imposing tariffs that would double the cost of CSPV cells and panels. This decision, like most decisions involving international trade, does not fall neatly into a United States vs. the World dichotomy. Nor does this issue neatly divide the solar industry between manufacturers and installers. Opposition to the tariffs cuts across partisan and sectoral lines. Numerous manufacturers, utility holding companies, and even the American Legislative Exchange Council have declared their opposition to the complaint filed by Suniva and SolarWorld.

Over the past several years, the American energy industry has undergone large shifts. The solar industry employs an estimated 373,807 people in the United States. That is twice as many jobs as the coal industry and roughly equal with the entire natural gas industry. Two percent of all new jobs in the United States are in the solar industry. Over 50% of those jobs involve the installation and repair of solar panels. Solar manufacturing employs about 15% of solar related jobs. An analysis by Greentech Media estimates that the increased cost of CSPV cell and panels would reduce the amount of solar installed in the United States by over half. The solar industry estimates that such a reduction in demand would cost the American economy 88,000 jobs.

President Trump has expressed a strong desire to impose taxes on foreign goods and promote American energy. However, imposing the tariffs sought by Suniva and SolarWorld would result in immediate harm to American workers, including many from states that voted for him. He should exercise his authority and decline to impose the sought after tariffs.

Tuesday, October 10, 2017

Hurricanes Harvey, Irma and Maria Teach America a Lesson it Should Have Learned Years Ago: It is Time to Invest in a More Resilient Electric Grid

By Casille Systermans, Policy Extern
Image: Energy.gov

Three major hurricanes hit the United States this year. About 300,000 Americans lost power because of Hurricane Harvey. Utility companies estimate that 16 million Americans in the Southeast lost power because of Hurricane Irma. In Puerto Rico, 3.4 million Americans are without power and are unlikely to have it restored for months because of Hurricane Maria. This is not the first time that millions of Americans have been left without power for weeks because of a major hurricane, but it should be the last.

For coastal states and territories, major hurricanes are an inevitability. Additionally, future storms are likely going to be more powerful because of rising ocean temperatures caused by climate change. Powerful hurricanes are expensive. Hurricane Katrina, currently the costliest hurricane on record, caused $108 billion dollars in damage, and that doesn’t include the economic impacts, like lost wages and disruption of trade and other economic activity, associated with the recovery period. The total cost associated with Harvey and Irma has not been determined yet; however, they both have the potential to surpass the damage costs associated with Katrina. Additionally, the impacts of hurricanes are more than just economic. For example, in Hollywood, Florida, 11 senior citizens died when their nursing home lost power during Hurricane Irma.

The damage caused by major hurricanes can be mitigated if utilities invest in building a more resilient electric grid. First, utilities should start investing significant resources into distributed generation and storage systems, which can keep power running during and after major storm events. Any investments in distributed generation and storage should be grid connected and have the ability to provide power to other homes or businesses in the area. Additionally, wherever feasible, power lines should be moved underground. In Longboat Key, Florida, about 60 percent of the power lines are buried underground, and the areas with buried power lines did not lose power for any significant period during Hurricane Irma. In areas where is not feasible to move powerlines underground, utilities should invest in strengthening power lines by, for example, switching to steel power lines. Even with steel power lines, trees can still represent a threat to power lines during wind events. Therefore, utilities and local governments should invest in keeping trees near powerlines well-trimmed. Finally, since it is impossible to ensure that power will never be disrupted, utilities should maintain a disaster response plan to ensure that when power outages do occur, the power is restored as quickly and efficiently as possible.

There is no one-shot solution to building a more resilient electric grid, and therefore utilities should employ an all of the above strategy when planning to upgrade the electric grid. Cost is often cited as the primary obstacle to large-scale investment in upgrading the electric grid. The long-term benefits of investing in a more resilient energy grid far outweigh the short-term costs associated with that investment. For example, last year Longboat Key voters elected to borrow $50 million to bury all existing powerlines underground; however, it is much cheaper to put new power lines underground. Florida Power and Light (FPL) customers are currently paying a special charge to cover $318.5 million in Hurricane Matthew clean-up costs. Hurricane Matthew hit Florida in 2016 and is currently the ninth-costliest hurricane on record. However, even with the lowest cost estimates for Hurricanes Irma, Maria and Harvey, Matthew is projected to become the twelfth-costliest hurricane on record. FPL customers are destined to receive another special charge for Hurricane Irma recovery. By investing more money upfront to strengthen the electric grid, utilities can cut down on future recovery costs for inevitable future hurricanes.


The recent storms that have devastated Texas, Florida and Puerto Rico highlight the need to update the grid and underscore the simple truth that cost should no longer be used as an excuse to avoid investing in a resilient electric grid. America has experienced large-scale devastation from hurricanes before, and while it is certain that America will be hit by more hurricanes in the future, it is possible to avoid large-scale damage and prolonged power outages if America begins preparing for future storms now. The first step is investing in a more resilient electric grid throughout the east and gulf coasts and the Caribbean.

Monday, October 2, 2017

Similar Cost, Less Risk: The Argument for Solar Photovoltaic as a Preferred Resource

By: Natascha Smith, Energy Fellow


Since solar photovoltaic technology became popular in the 1950s, many critics have questioned the economic viability of solar energy. For decades, utility-scale solar generation failed to reach grid parity, or the point at which the levelized cost of solar energy matches the market price of electricity, without the need for subsidies or incentives. Luckily, recent investments in solar research and development have yielded substantial benefits to this growing energy sector. The Department of Energy’s SunShot initiative announced on September 12th that the cost of utility-scale photovoltaic power reached its 2020 goal of $0.06 per kilowatt-hour three years early. This means that utility-scale solar energy is now at a price point that is market-competitive with traditional forms of electricity.

Achieving grid parity has done more than allay the concerns of solar critics; it has also set up solar to take on a new role as a preferred generation resource in the integrated resource planning process. An Integrated Resource Plan (IRP) acts as a roadmap for how a utility plans to meet its long-term energy needs, with the end goal of identifying the best mix of resources to provide a reliable supply of energy at the least cost and risk to the utility and its customers. To achieve this goal, the Oregon Public Utility Commission, which oversees and approves IRPs developed by Oregon’s investor-owned utilities, requires utilities to examine all environmental compliance costs associated with energy resource options, including state and federal energy policies.

Now is arguably solar energy’s chance to shine. Having reached a competitive price point, utility-scale solar generation has similar costs as fossil-fuel resources, but with fewer risks. With solar, utilities can evade the lengthy and often expensive process of meeting pollution control standards, plus they avoid the risk that the external costs of carbon may be internalized by future regulation. For Oregon utilities subject to the coal-to-clean bill, which the state adopted in 2016, solar has the added benefit of helping utilities meet the requirement of producing at least 50 percent of electricity from renewable sources by 2040. When determining what mix of resources will help it meet its long-term needs, utilities cannot ignore that solar’s cost competitiveness and low risk gives it a leg up on traditional generation resources, namely coal and natural gas plants. The IRP process is sure to show that utility-scale solar is a key component of a least cost/ least risk resource portfolio.


With Oregon utilities required to complete an IRP every two years, utility-scale solar should be playing a larger role in Oregon’s electricity generation in the relatively near future. The solar industry has done its part to reach grid parity; now it is time for the utilities and Public Utility Commission to do theirs by ensuring that utility-scale solar is treated as a preferred generation resource in utility resource plans.