Standard Energy

It’s no secret that coal is the dirtiest fossil fuel, and any effort to clean up the US energy grid is going to have to limit the use of coal in the energy mix. However, coal also provides most of the baseload power in the US. Most renewables are either to expensive or too intermittent to provide this power, but thanks to a massive over-investment in gas in the early 2000s and the recent shale gas boom, there is a huge amount of excess gas capacity in the US grid. This gas power can be switched in to baseload generation in order to provide a clean transition from coal to true renewables without a huge increase in electricity prices. Using EIA generation data, we can see that this is possible – just not everywhere. Gas power is widespread, but available gas (accounting for the need for excess capacity to meet peak demand) is concentrated in a handful of states, as shown below (darker states have more available gas)

blue map 

Importantly, gas is largely concentrated in states that already have limited use of coal power. If every state were to replace coal with gas as the source of baseload power, many states would still rely heavily on coal. Calculating the remaining coal by state yields the following results (darker states demand more coal):

red picture

This suggests that a one-size-fits-all national policy (for example a single nationwide renewable energy standard) would be a pretty bad idea, as it would reward certain states and punish others. This distribution also shows how politically unfeasible such an approach would be – the states that would have the hardest time complying include Texas, Ohio, and Pennsylvania, hardly throwaway constituencies. While regulatory action from the executive branch (the current approach) shows promise when it comes to seeing results now, it is hardly a sustainable or democratic approach.

Luckily, some regional players are starting to take notice. Last week, Great River Energy Cooperative, the second largest power provider in the state of Minnesota, called for just such a regional approach.  Their report, supported by a report from the Brattle Group, calls for regional rather than state-level clean energy standards or regulations. They propose taking advantage of the wholesale power markets, administered by Independent System Operators (ISOs) to coordinate generators and fuel choices. The thinking is that, because these organizations already play a key role in electricity market coordinate, they are better equipped to efficiently coordinate a clean energy standard than state level regulators. Additionally, because electrical markets don’t typically adhere to state boundaries, regional ISOs are better able to coordinate actors across multiple jurisdictions.

It’s a bold proposal, and one that is sure to attract its fair share of criticism. But, it is new thinking, and it is backed by clear analysis and a number of powerful market players. Time will tell if it gains any traction.

Image Credit: Steven Bradley


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