An Energy State in Transition: Pennsylvania Can Be a Renewable Energy Leader
In many ways, the Keystone State is the epicenter of the energy transition underway in this country. Historically an important coal producer, Pennsylvania remains the fifth largest coal-producing state, accounting for 5 percent of the nation’s total coal production in 2013. And the state is on the front lines of the booming Marcellus shale gas production. But how far along is the state in transitioning to cleaner energy, and how much farther could it go in developing renewables?
An energy state of flux
As an exporter of not only coal and natural gas, but also electricity, Pennsylvania is clearly an energy state. But one that is in a state of transition. Pennsylvania coal production has trended downward in recent years, falling from about 74 million short tons in 2001 to 51 million short tons in 2013, a decline of about 31 percent.
Natural gas production, on the other hand, has soared due to widespread use of hydraulic fracturing, and experienced a nearly 24-fold increase in the same time period, with most of that growth happening after 2008. That growth can’t be expected to continue indefinitely, however, since natural gas is an extractive industry subject to the same boom and bust cycles as the coal industry. And for a number of economic, environmental, and public health reasons, there is a real risk of an overreliance on natural gas.
Pennsylvania’s fossil fuel production is in a state of transition. Note separate scales for coal and natural gas. (Source: EIA)
Pennsylvania’s electricity mix
Pennsylvania, home to the country’s very first nuclear power plant, ranked second in electricity from nuclear power in 2013. The vast majority of Pennsylvania’s electricity comes from coal, gas, and nuclear.
In contrast, non-hydro renewable energy made up only about 2.5 percent of the state’s mix in 2013. Still, it’s growing slowly, but steadily, largely due to Pennsylvania’s Alternative Energy Portfolio Standard (AEPS), which requires that the state’s utilities generate 8 percent of their electricity from renewable sources by 2020. Pennsylvania’s standard also requires a solar set-aside of 0.5 percent by 2021; the state ranks 12th in installed solar.
The state also has an Energy Efficiency Resource Standard (EERS), now in its second phase, which sets modest energy savings requirements for large investor-owned utilities.
How do Pennsylvania’s renewables stack up?
NREL (the National Renewable Energy Lab) has documented the state’s tremendous renewable energy technical potential far beyond today’s levels: for biomass, rooftop PV, utility-scale PV, wind, and other technologies.
Energy efficiency is another clear opportunity for Pennsylvania, which currently ranks as only the 20th most energy efficient state. Efficiency instead of new generation would be an easy, cost-effective way to reduce negative impacts from electricity generation in the state and save ratepayers money. Experience from leading states suggests that states could be improving their efficiency by 1.5–2% every year—building on the state’s progress so far under the EERS.
The EPA’s Clean Power Plan
The EPA’s proposed Clean Power Plan is a clear, near-term opportunity to align Pennsylvania’s energy goals with its need for safe, reliable, and clean power—while simultaneously providing important economic, health, and environmental benefits. Source: EIA
Pennsylvania would be required to reduce its emissions rate (of carbon dioxide) by about 31 percent. However, worth noting is that the state would get credit for things it’s already doing—like retirements of old coal plants and meeting the renewable standards laid out in the AEPS, which together would move the state more than a third of the way toward meeting its target.
Strengthening the targets in both the AEPS and the EERS is an obvious way to move the ball even further down the field. Our own analysis found that Pennsylvania could do even better in terms of developing its renewable resources—from 4% of electricity sales in 2013 to at least 19% by 2030—just by committing to grow renewable energy at the same rate that other states have demonstrated is achievable and affordable.
Pennsylvania has also recently undergone a political transition—a new governor was sworn in last month. During his campaign, Governor Tom Wolf explored the idea of Pennsylvania joining the Regional Greenhouse Gas Initiative (RGGI), a nine-state partnership of northeastern states that established a market-based mechanism for reducing carbon emissions. Multi-state cooperation is the most cost-effective way of cutting emissions and meeting the EPA’s carbon reduction targets.
Importantly, joining such a system would generate revenue for the state. RGGI states have used auction revenue generated by the program to invest in their states—notably energy efficiency programs, assistance to low-income communities, and renewable energy development. For Pennsylvania, auction revenue could be used in part for workforce development in coal communities that have been hit by the shift from coal to gas.
The key for the Keystone State
Pennsylvania leaders should strengthen policies that send strong, consistent signals to prioritize renewable energy and energy efficiency, and by doing so, prepare the state to submit a strong compliance plan for required carbon emission reductions. Investing in renewables and efficiency would also help the state avoid betting its entire energy future on natural gas; a more balanced portfolio will help Pennsylvania cut emissions further and minimize the consumer and environmental risks of an overreliance on natural gas.