The trend of states targeting 100 percent clean electricity has gone viral. Last month, New Mexico targeted 100 percent clean by 2045. The Maryland legislature recently passed a bill targeting 50 percent renewable by 2030 and looking into the viability of 100 percent by 2040. Illinois might pass a 100 percent target soon. Of course California and Hawaii already have, to say nothing of more than 100 US cities (most recently Chicago).
A step-down approach to decarbonizing
The bill sets three targets for the state’s utilities, ramping up in stringency over time.
By 2025, they must completely get rid of coal power (it currently supplies about 14 percent of state electricity, most of it imported).
By 2030, they must be 100 percent carbon-neutral. Eighty percent of their power must come from “nonemitting electric generation and electricity from renewable resources.” (This language is significant: It leaves room for nuclear, natural gas with CCS, or other nonrenewable, non-carbon-emitting sources. In other words, this is a clean energy bill, not a renewable energy bill.)
The other 20 percent of the obligation can be satisfied in one of three ways:
- Renewable energy credits (RECs), i.e., vouchers certifying that someone else generated clean energy
- An administrative penalty based on tons remaining uncovered (which effectively amounts to a $100 per ton carbon tax)
- Energy Transformation Projects (ETPs)
The third is interesting. ETPs are “projects that provide energy-related goods and services other than electricity generation and result in a reduction of fossil fuel consumption and a reduction of GHG emissions, while providing benefits to the customers of a utility.” They include such things as electric car infrastructure, weatherization, or renewable natural gas (RNG — natural gas drawn from, for example, landfill or agricultural waste) projects.
These are things utilities can do to reduce their customers’ consumption of fossil fuels, but they haven’t traditionally had any way to get paid for them, so they lacked incentive. Now, if they partially decarbonize and are finding the last 20 percent difficult or expensive, they can meet their obligations with ETPs. It’s a clever way to incentivize such projects.
Over time, the required level of self-generated clean electricity rises steadily, until 2045, when all utilities must be self-generating 100 percent clean energy.
