A new report by The National Conference of State Legislatures (NCSL) chronicles energy production and usage at the state level, and provides policy suggestions to help states expand and modernize their mix of energy sources. The report — Meeting the Energy Challenges of the Future: A Guide for Policymakers — predicts that while coal and natural gas together will still account for about 65 percent of the country’s fuel supply in 2035, just as they do today, renewable energy’s share of the fuel mix will increase from roughly 4 percent today to 20 percent over that period.
Unsurprisingly, NCSL found that energy policies vary greatly from state to state. The report is the group’s attempt to compile the best policies in one place. Ohio receives several mentions in the report for its aggressive Renewable Portfolio Standard and energy efficiency requirements. Some of the report’s policy highlights:
Wind: Expedited permitting and siting
The time needed to permit a wind project varies by state, and long permit times can not only jeopardize a developer’s ability to coordinate financing but also can increase costs. To address both this issue and the challenge posed by disparate township and county siting regulations, some states have expedited permitting requirements for renewable energy proposals; state agencies must respond more quickly to proposals and permits. Some, like Wisconsin also are considering uniform wind siting standards. These standards often address tower height and setback from the property line to prevent overly burdensome city and county regulations. The rules are being established in consultation with the Wisconsin’s Wind Siting Council, which was created by the Legislature to develop uniform state siting rules.
Solar: Third-party ownership legislation
Some companies allow consumers to lease solar panels or set up power purchase agreements. These programs allow a third party to install and maintain the system and to receive compensation through lease payments or payments for the electricity produced from the rooftop solar. This means a homeowner—or nonprofit or school—can take advantage of solar with little or no up-front cost, sometimes for the same price as the normal electricity bill. Since the company that owns the solar equipment takes advantage of the tax credits to lower its costs, non-taxed entities such as nonprofit organizations and schools can use the technology. Cleveland’s Ohio Cooperative Solar is an example of a successful company using this model.
Energy Efficiency: Decoupling
Decoupling involves removing a major utility disincentive for promoting energy efficiency, which lowers electricity consumption, which can result in lower sales and lower profits. By weakening or breaking the link between revenue and sales, decoupling allows utilities to recover fixed costs and earn authorized revenue even if sales fall, which can make energy efficiency programs more appealing. California, Connecticut, Idaho, Maryland, New York and Vermont have all created market structures that decouple profits for one or more electric utilities.
Coal Technology: Carbon capture and sequestration for coal plants
- Tax incentives
Fourteen states use incentives to encourage carbon capture and sequestration (CCS) to reduce greenhouse gas emissions. New Mexico established an advanced energy tax credit worth up to $60 million for electric power plants that capture and sequester their CO2, and monitor the CO2 sequestration sites. Texas offers a sales tax exemption for components used in CCS.
A major barrier to long-term CO2 storage is ownership and liability, so states that wish to encourage carbon sequestration will need to resolve these issues. Laws in eight states concern liability of owners of pore space—the place deep underground where CO2 is injected and stored—and long-term management of sequestration sites. States could assign long-term liability to the state, the site operator or the landowner or can create joint liability for sites.
Illinois has assumed liability associated with a project’s sequestered CO2, as well as any current or future environmental benefits, marketing claims, tradable credits, emissions allocations or offsets.
In Wyoming, the sequestration site operator owns the CO2 and is liable during site operation. The owner of the pore space where CO2 is deposited is not liable for any effects of geologic sequestration.
- Transportation of carbon dioxide
Transporting CO2 from the point of capture to an appropriate storage formation will require additional pipeline construction in order for CCS to become more widely deployed in the coming years. The U.S. already has approximately 3,900 miles of CO2 pipeline, which is used primarily by the oil and gas industry for enhanced hydrocarbon recovery. Expansion of the interstate CO2 pipeline system may require modifications to existing state regulations and creation of new regulations in states without such regulations.
Transmission: Create renewable energy zones
Several states, such as California and Texas, are developing transmission plans to coordinate development of high-value renewable areas with new transmission lines. These plans identify the regions richest in renewable energy resources and suggest the most cost-effective transmission options to use these resources. Development of these regional zones harmonizes transmission and renewable development. Some states, including Colorado and New Mexico, have created transmission authorities to coordinate new transmission investment, much of it focused on supporting renewable energy.
Nuclear Energy: Expedited permitting laws
State laws to simplify the permitting process by creating a lead agency can allow construction within a shorter time frame and reduce financing costs. Due process for safety and security still are recommended. Florida’s Electrical Power Plant Siting Act is often mentioned as a good model.