With the Clean Power Plan and enhanced tax policies in place, Ohio could see up to 90 percent growth in its capacity for combined heat and power (CHP) and waste heat to power (WHP), based on modeling work done for a new report from the Pew Charitable Trusts.
The report, issued today, highlights the nationwide growth of distributed generation and industrial energy efficiency, especially for CHP and WHP.
At the same time, the Pew report stresses the need for policies that promote those technologies, saying they save money, curb pollution and promote resiliency as central power plants grow more vulnerable to failure.
The Pew report stands in contrast to one issued by an Ohio lawmakers’ committee last month, which would indefinitely freeze or suspend the state’s renewable energy and energy efficiency standards.
As debate continues on Ohio’s clean energy standards, the Pew report also includes a policy recommendation for federal clean energy standards — a step that could remove that uncertainty.
‘Cleaner and cheaper’
The U.S. electric system is already shifting away from coal and nuclear power, the Pew report notes, due to flattening demand for electricity, less volatility in natural gas prices, improved distribution technologies and increased competition from renewable energy.
Concerns about cost, climate change and pollution play a role as well, said Jessica Lubestky, a program officer with Pew’s clean energy initiative. “Right now there’s a big push for cleaner and cheaper sources of electricity.”
According to the report, as environmental requirements for coal and oil-fired power plants increase, there will be a “premium on deployment of cleaner sources of electricity, such as natural gas and renewables.”
“Communities are looking more to reliable, resilient power” too, Lubetsky stressed. According to the report, power outages in the United States increased almost sixfold from 2000 to 2014 and cost businesses as much as $150 billion annually.
“Although there is no doubt that aging, antiquated power infrastructure contributes to the increased number of outages, the rise in the number and intensity of weather events is also a major contributing factor,” Pew reported.
Distributed generation can help provide resiliency and continued access to power, even when large central power plants have outages.
‘Policy matters’
To promote distributed generation and energy efficiency, Pew recommends a variety of technical, research and financial incentives.
Among other things, Pew urges Congress to pass the proposed Power, Efficiency, and Resilience (POWER) Act, S. 1516 and H.R. 2657. The bill would extend the federal tax credit for qualifying investments in clean energy and put CHP and WHP projects on an equal footing with other types of projects.
Pew also supports the federal Clean Power Plan, which calls for states to reduce their greenhouse gas emissions from power plants.
With both of those policies in place, “Ohio would see as much as a 90 percent increase in capacity gains for WHP and CHP,” Lubetsky noted. “It’s one of the bigger states that would see an increase,” based on modeling results included in the report.
Beyond that, the Pew report recommends adoption of a national clean energy standard to “provide the long-term certainty that innovators, investors and manufacturers need to spur invention, mobilize capital, and scale production.”
“Certainty is always really important for business,” particularly when it comes to planning and investment, Lubetsky said. “We believe that if there were to be federal policy across the board, states would have more certainty in what those policies are and be able to make good long-term decisions.”
As things stand now, renewable energy standards exist for only about 60 percent of the states, and only about 40 percent have energy efficiency standards. Even where standards exist on the books, there’s no guarantee that those standards will continue.
“Look at what has happened in Ohio,” Lubetsky said.
After about two years of debate, the state legislature passed Senate Bill 310 last year, modifying Ohio’s clean energy standards and suspending any additional requirements under them for two years.
During those debates and in the wake of SB 310, Ohio saw a dramatic drop in investments in its clean energy sector, Pew reported earlier this year.
“Ohio has put their policies on hold,” Lubetsky said.
But that’s not all SB 310 did. “When one state changes its mind, it starts affecting other states’ markets,” she continued. Pennsylvania, for example, saw a decline in its solar energy growth because the market for renewable energy credits was regional, she observed.
Late last month, a majority of lawmakers on a committee formed under SB 310 recommended continuing the freeze on Ohio’s clean energy standards, with no end point in sight. That recommendation has come under widespread criticism from Gov. John Kasich, Ohio EPA director Craig Butler, environmental advocates and others.
That state committee report also recommended various additional changes, which critics have classified as “giveaways” for industry and utilities.
At the same time, the Ohio report recommends that the state “further incentivize” CHP.
In Lubetsky’s view, a desire to expand distributed generation and CHP is “definitely encouraging.”
However, she added, “If utilities are allowed to shut out these sorts of systems by raising interconnection or standby rates, that challenges the economics of installing these efficient systems. That’s a problem.”
As Pew and others urge action at the federal level, debate over the future of Ohio’s clean energy standards will continue.
As Lubetsky sees it, no single “silver bullet” can deal with all the issues presented by America’s complex and evolving electrical power system. “All policy matters,” at both the federal and state levels, she said.
“I think a lot of states are looking to Ohio to see what’s going to happen there,” Lubetsky added.
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