As momentum builds for a clean energy standard, utilities trade group engages – with push for partial gas credits

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Policy proposals requiring utilities to generate a certain share of their electricity through zero-emission sources by a certain date are gaining momentum at the federal level, and utilities have started to board preemptively instead. than to be left in the dust. Crucial to their case for a clean energy standard? A place for natural gas.

The Edison Electric Institute, which represents all power companies owned by U.S. investors, is actively pushing for a standard that covers all zero-carbon energy resources (including existing nuclear and hydroelectric power generation), clears the news technologies as they become available and grants partial credits. for the production of natural gas.

At a minimum, a clean energy standard “or some other policy tool must create short-term space for natural gas production to continue to play a critical role in integrating more renewable production,” Emily said. Fisher, General Counsel and Senior Vice President of EEI. for clean energy. “Utilities and their customers cannot be penalized for maintaining system reliability as we work to meet our clean energy goals. ”

An exclusion of natural gas is controversial, as the gas is by no means zero carbon. “It’s not a clean energy standard if it includes a credit for gas,” said David Pomerantz, executive director of the Energy and Policy Institute. “At a fundamental and definitional level, the goal is to achieve zero emissions. “

But EEI’s adoption of what it calls a “well-designed” clean energy standard marks a shift in the way utilities talk publicly about the transition, as they vie for a seat at the table for ongoing conversations. An analysis of recent investor appeals by advocacy group Evergreen Action found that major utilities (including those currently relying heavily on natural gas) have expressed support for a clean energy standard (NextEra Energy Inc.) and more broadly the climate plans of President Joe Biden (Public Service Enterprises Group, Edison International).

Rebecca Kujawa, CFO of NextEra Energy Inc., explicitly endorsed a standard “that accelerates the decarbonization of the electricity grid” during the company’s call in May. A morning consultation To analyse Carbon emissions and the company’s 2020 resource mix revealed that NextEra produced 73% of its electricity from natural gas, with an average emission rate of 663 pounds of carbon dioxide per megawatt hour.

This industry enthusiasm comes as utilities grapple with an entirely different regulatory environment than the relatively unencumbered Trump years. Assuming some federal standard passes, this is their opportunity to avoid the regulatory boost and confusion resulting from patchwork state regulations; according to the Clean Air Task Force, at least 14 states since 2017 have moved to establish some kind of clean energy standard.

As Biden pushed Congress to adopt a clean energy standard through multiple potential pathways, a recent note two advisers said the White House plans to use the reconciliation process to move it forward alongside other climate proposals in a second infrastructure bill. The Biden administration has maintained its stated goal of a carbon-free electricity sector by 2035.

However, the implementation of the policy could be complicated by the Byrd rule, preventing the consideration of non-budgetary matters through reconciliation. Samuel Thernstrom, chief executive of the Energy Innovation Reform Project, said he doesn’t think the reconciliation strategy for a clean energy standard “has a real chance of success,” but his proposal sends the message to those invested in climate action that the White House is taking the issue seriously.

During this time, several alternatives have emerged in Congress. Last month, EEI approved a bipartite Invoice proposed by Reps David B. McKinley (RW.Va.) and Kurt Schrader (D-Ore.), marking the first time the organization has publicly supported clean energy standards legislation.

The bill takes a “technology neutral” approach to decarbonizing the electricity sector, with the aim of reducing emissions by 80% by 2050. It provides partial credit for natural gas production .

When the McKinley-Schrader bill was originally introduced in the closing days of the 116th Congress, it did not receive the endorsement of the IEE; Fisher said the industry group’s thinking on the bill has evolved in the meantime, as its members “consider their long-term clean energy trajectories.” But with its reintroduction, which comes as momentum for a clean energy standard builds from the Biden administration, EEI member company Xcel Energy Inc. has also signed on.

American Electric Power, Duke Energy Corp. and Southern Co. – which Evergreen Action says have historically opposed policies favoring renewable energy – approved the December 2020 bill and its latest iteration.

Thernstrom argues that passing a stand-alone bill is preferable to passing a standard through reconciliation, because to be “lasting” and not overturned by a subsequent Congress, a standard must be bipartisan. He said such a bill would likely end up looking like something between McKinley-Schrader and the CLEAN Future Act, referring to the giant proposal proposed by the leaders of the House Energy and Commerce Committee, which contains a clean energy standard linked to Biden’s 2035 target.

While the timelines and targets for the two bills are different, unpublished modeling by the Thernstrom organization indicates that the McKinley-Schrader target would require a transformation of the grid to around 95% zero-emission generation of by 2050.

Correction: The original version of this story incorrectly stated that the McKinley-Schrader Bill did not provide partial credit for natural gas production.


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