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This week, we begin with a report on how well states are helping us to cut energy use, and we end with a gigantic wind turbine. In between, some news from Xcel Energy’s transition in Minnesota.

I’m Dan Gearino, your guide to the clean energy economy. Send questions and news tips to dan.gearino@insideclimatenews.org, and thanks for reading!

— Dan

The Cheapest Form of Clean Energy Is ...

Our transition away from fossil fuels is a gigantic challenge, and we need all the help we can get. One of the most cost-effective tools is to expand programs that entice people to use less electricity.
 
This is why I take a close look each year when the American Council for an Energy-Efficient Economy, or ACEEE, releases its state scorecard and analysis of energy efficiency programs.
 
The new edition, released Tuesday, shows $6.6 billion was spent last year on utility programs to reduce electricity use (about the same as in 2017).
 
That led to savings of about 27 million megawatt-hours of power, which is about 1 percent of electricity sales. The savings have a cumulative effect. With the ongoing benefits from prior years, based on an assumption that savings last an average of about 10 years, the cumulative saving is about 259 million megawatt-hours, or 7 percent of electricity sales, the report says.
Maryland stands out as one of the most aggressive states in expanding its initiatives, adding to Republican Gov. Larry Hogan’s reputation for being forward-thinking on clean energy.
 
Energy efficiency is about more than just utility programs that help people use less electricity. As the report makes clear, there also are building codes, transportation rules and appliance standards, among many other ways that states can take action. For example, California, Maryland and Texas were among the states that adopted more stringent building codes.
 
The authors hosted a conference call to go over the report, and reiterated that reducing energy use is a bargain in terms of maintaining system reliability and reducing emissions.
 
This is an essential point in any discussion on climate solutions, so I’ll go a little deeper about the costs. A report last year from Lawrence Berkeley National Laboratory did a deep dive and found that the average cost for utility energy efficiency programs was 2.5 cents per kilowatt-hour saved in 2016.
 
The country’s average electricity price last year was more than 10 cents per kilowatt-hour, which includes homes, businesses and transportation.
 
Spending 2.5 cents to save 10 cents is a good deal, and states are showing each other how to produce those savings more effectively.
 
The outcome is a double benefit of reducing electricity bills and emissions. The decrease in emissions is because there is less demand for electricity, which reduces the market price of electricity and puts pressure on older and less efficient plants to shut down. It also means there is less demand to build new power plants compared to if the efficiency measures were not in place.
 
Steve Nadel, ACEEE’s executive director, said in a statement that energy-saving measures can be used to reduce greenhouse gas emissions by 50 percent by 2050. This would require an economy-wide shift to zero-energy homes in new construction, retrofits of existing buildings and an overhaul to industrial energy practices, among other steps.
 
“We commend the top states for their clean energy leadership and urge states that are lagging to implement the strategies laid out in this report so they can deliver energy and cost savings for their residents,” Nadel said.
 
So, why are some states not taking aggressive steps to increase their standards? The most common answer is that utilities don’t want to see increases in standards because their incomes remain tied to the volume of electricity that they sell. This was the sentiment that led to the elimination of efficiency programs in Ohio and Kentucky in 2019 and 2018, respectively, and contributed to those states getting dismal marks in the report.
 
The states with the most effective programs show how to get around this: Create incentives so that utilities’ interests will be more closely aligned with the interests of reducing energy use. The report lists Massachusetts, Rhode Island and Vermont as states on the leading edge of providing such incentives, which are usually in the form of payments that the utilities can receive for hitting certain targets for energy savings.
 
Most of the news coverage of this report focuses on ACEEE’s ranking of states, with Massachusetts ranked at the top for the ninth year in a row.
 
I’m not going into detail about the rankings because they are often subjective and the methodology gets updated almost every year. Also, many of the states are clumped together in a way that makes the rankings overstate small differences.
 
That said, the bulk of the report is hard numbers that are valuable for getting an idea of what’s happening in the states.
 

Minnesota Regulators Reject Xcel Gas Plant Plan. What Does That Mean?

The Minnesota Public Utilities Commission has rejected a proposal from Xcel Energy to buy a natural gas plant, a decision that has implications for how the company will move forward with its closely watched plan to get to net zero carbon emissions by 2050.
 
Xcel wanted permission to spend $650 million to buy Mankato Energy Center, a new natural gas plant that was developed by Atlanta-based Southern Company and went online this summer. In a statement, Xcel explained that the move “supports our drive to achieve an 80 percent reduction in carbon emissions by 2030.”
 
Last December, Minneapolis-based Xcel became the first large utility in the country to commit to going to net zero carbon by 2050. The company has said it needs natural gas plants to replace coal and nuclear plants that are shutting down or may shut down, but some environmental and consumer groups say the company wants more gas capacity than it needs.
 
This argument gets to the heart of a big question as utilities move to cut emissions: How large of a role should natural gas play in the transition?


Joseph Pereira, regulatory director for the Minnesota Citizens Utility Board, told me that regulators made the right choice because Xcel’s proposal had some big flaws.
 
“Nowhere on the record was there evidence that the company gave any consideration to any renewable alternatives first,” he said.
 
His organization’s biggest concern was that Xcel customers would be bearing the costs and risks for decades, including the costs of eventually decommissioning the plant.
 
Here’s where things get complicated: The 760-megawatt plant continues to operate, and Xcel continues to have a long-term contract to buy power from the plant from Southern Company.
 
And, in response to regulators’ decision, Xcel said it still intends to buy the plant, only through an unregulated subsidiary company instead of through the regulated utility. The key difference is that the company is assuming the financial risk instead of its consumers.
 
Pereira says the bottom line is that the commission has made clear that proposals to buy or build natural gas plants will face rigorous review.
 
“Consumers have a huge win,” he said.
 
He also thinks this clarifies Xcel’s path to net zero emissions. Since the plant will not be a customer-backed utility asset, the utility and regulators have more flexibility to consider other options, such as moving more quickly to expand the use of renewable sources, he said.
 
I will keep you updated as Xcel moves forward with its transition. The next big step is when Minnesota regulators consider the company’s plan for meeting its power plant needs through 2034. Xcel issued a proposal in July, and regulators will begin reviewing it in earnest later this year.
 

Supersized Wind Turbines, Coming Soon to a Coast Near You

GE Renewable Energy is showing that there is indeed market demand for an offshore wind turbine that is notably larger and more powerful than the turbines currently in use.
 
The company says it has received its second order in two weeks for the Haliade-X, a 12-megawatt turbine that can produce enough electricity to serve 16,000 European households. This is just two months after GE marked the model’s debut at an unveiling of some of the giant parts at a factory in France.
 

The Haliade-X reaches about 850 feet. It would dwarf the Statue of Liberty.

The first order came from Ørsted, the world leader in offshore wind power, which says it will use the turbines in two U.S. projects: Ocean Wind (1,100 megawatts) off of New Jersey and Skipjack (120 megawatts) off of Maryland.
 
The second big order is from the Dogger Bank projects (3,600 megawatts), a series of three wind farms in UK waters of the North Sea being developed by Equinor, another leading offshore wind developer.

 
GE is trying to establish a foothold in an offshore wind turbine market dominated by Siemens Gamesa and MHI Vestas, as reported here by Greentech Media.
 
The Haliade-X is larger than its super-sized rivals, such as the MHI Vestas V164, whose largest size is now 9.5 megawatts, with a 10-megawatt version in development.
 
The rollout of the Haliade-X is the most recent of many indications of how just about every aspect of offshore wind development is getting larger. This is good in that it means more clean energy and greater efficiency. But it also increases the likelihood of objections from people with waterfront homes who don’t want to see turbines in the distance.
 
And it makes me wonder, how much bigger can these things get?

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