Western States Poised to Slash Carbon Emissions

September 26, 2016/ Kevin Steinberger / Climate, Conservation, Lands, Natural Resources Defense Fund, North America, Resources

Published by the Natural Resources Defense Fund

The transition to a clean energy future is accelerating all across the country, and this shift has been particularly apparent in the west. From Nevada to Colorado to Montana, power companies across the region are taking advantage of record low prices to invest in clean, affordable renewable energy and are moving away from more expensive, dirtier resources. As a result, the region will be well-positioned to meet the targets of the Clean Power Plan, which sets the first-ever limits on carbon pollution from the power sector. The D.C. Circuit Court of Appeals will hear challengers’ arguments against the Clean Power Plan tomorrow, but many power companies are not waiting for the courts to resolve the legal challenges. Instead, they are already cutting carbon emissions and accelerating the shift to clean energy.

There’s never been a better time to double down on climate progress all across the country. As one industry executive put it, “the fundamentals for the North American renewables market have never been stronger.” Let’s look at a few of the reasons why:

Dennis Schroeder / NREL

All of that good news is translating directly into benefits for customers in the region and across the country. With prices this low, wind power is the cheapest source of new electricity generation in many regions and can save money for customers, even when compared to buying electricity from existing, fossil-fuel fired power plants.

Many states and power companies are taking advantage of this opportunity and doubling down on clean energy policies and investments, while transitioning away from higher-emitting resources. Those that are doing so are also positioning themselves well for achieving the carbon pollution reduction goals of the Clean Power Plan, and as a result, all across the country the power sector is even better positioned to meet the CPP targets than was anticipated when the rule was finalized.

Perhaps the most news in the west has been generated by the ambitious clean energy policies in California and Oregon. But while groundbreaking, that is just the tip of the iceberg. In Colorado, the state’s existing wind fleet has already saved customers more than $20 million in fuel costs, and Xcel estimates that its proposed 600 megawatt wind project would save its customers more than $400 million over 25 years. In Nevada, utility-scale solar projects have been contracted at record-breaking low prices—in July 2015, NV Energy announced that it had received power purchase agreement (PPA) bids for solar power at under 40 dollars per megawatt-hour.

A draft Executive Order from Governor Hickenlooper in Colorado, made public by Politico, would require the state’s power sector to achieve carbon pollution reductions of 25 percent below 2012 levels in 2025, strengthening to 35 percent cuts in 2030. Colorado’s power companies are well-positioned to make these cuts through smart investments in clean energy like wind, solar, and energy efficiency. Achieving the reductions will be facilitated by the recent decision to retire nearly 600 megawatts of coal in Colorado. Recent analysis from Climate Policy Initiative has also found that Xcel may be able to replace a total of roughly a quarter of its coal generation (6,000 gigawatt-hours) with 2 gigawatts of new wind projects, all while saving money for its customers. The analysis also indicates that the utility could do so while maintaining reliability and benefitting its own bottom line.

Oregon passed an ambitious increase in its renewable portfolio standards, requiring that the state get 50 percent of its power from clean energy by 2040, and coupled that standard with a requirement that its largest power companies phase out the use of coal power. Ironically, PacifiCorp, which is one of the two largest utilities in Oregon, is not yet taking advantage of the dropping wind and solar prices, and is still suing to prevent new pollution standards in Utah from affecting its aging coal fleet.

In Montana, Talen Energy and Puget Sound Energy recently made the decision to retire Colstrip units 1 and 2. If generation from the units is replaced by taking advantage of Montana’s significant untapped wind potential, this decision would drive carbon emissions in the state to 25 percent below 2012 levels—meaning that the state’s power sector as a whole would already be in position to meet the early year targets of the Clean Power Plan, and within striking distance of compliance through 2030. Montana’s power companies could achieve the remaining cuts by further ramping up investments in low-cost energy efficiency.

Across the western United States, states and power companies are accelerating their transition to a clean energy future and moving away from higher-emitting resources. The region is poised to bring on even more clean energy—and achieve stronger emissions cuts—than anticipated under the Clean Power Plan, and should continue to double down on climate progress in the years to come.