Keep It Clean And Cooperate: New PJM Report Shows How States Can Maximize Benefits While Cutting Carbon

Originally posted by NextGen Climate America

 

Photo: NextGen Climate America

 

The Clean Power Plan will finally end the era of unlimited carbon pollution and will be a vital tool in moving our country towards a smarter, safer electricity system. Now, a report from the world’s largest power market operator (“PJM,” which stands for Pennsylvania, New Jersey, and Maryland, but extends into 14 states in the mid-Atlantic and Midwest) confirms that it can be done cheaper, cleaner, and right on schedule.

 

In order to maximize these benefits, PJM examined many different pathways to achieving states’ Clean Power Plan targets, and identified the options with the lowest cost and with the fewest disruptions to consumers. Two strategies emerged as the clear winners for all 14 states in the PJM footprint: scale up clean energy and cooperate with neighboring states.

 

Keep It Clean

 

Energy efficiency is already the cleanest, cheapest way to meet our energy needs, and renewable resources such as wind and solar power see their price tag fall every year as they continue to grow. So it should come as no surprise that PJM found that, when states deploy more of these clean resources, they can cut carbon pollution faster and at far lower cost than if they rely more on resources such as natural gas to replace the dirtiest generation in the state.

 

The report found that the cheapest compliance options focused on meeting regional RPS-levels of renewables and scaling up efficiency to the levels EPA has projected in developing the Clean Power Plan targets. PJM did not examine any scenarios more aggressive than this, but it is likely that going beyond these levels of renewables would further lower overall compliance costs.

 

There are two main reasons why efficiency and renewables such as wind and solar are so useful for cutting carbon cheaply. First, these technologies do the most to reduce carbon pollution because they don’t rely on burning fossil fuels. Other lower-carbon sources, such as nuclear power or burning fossil fuels with carbon capture and sequestration, are far more expensive and carry long-term security and environmental risks that efficiency and renewables do not.

 

Second, the installed price of wind and solar is steadily falling, and this trend is projected to continue, especially in a carbon-constrained world. What’s more, efficiency, wind, and solar have no fuel costs. Gas and coal prices are highly volatile, and both are likely to rise over time.

 

So it is only natural that as states look for ways to cut the most carbon at the lowest price, efficiency and renewable power prove to be the best options.

 

Cooperate

 

When states cooperate everyone is able to maximize the benefits of cutting carbon where and when it is most efficient. Linking with neighbors provides states with an additional source of reductions they can call upon when needed.

 

So if, for example, one state were to find that getting the last few pollution reductions it needs to reach its target might be harder than expected to achieve or would take longer than the state had planned for, that state could use other states as a hedge: a neighboring state may still have some low-hanging fruit that the other state does not. When cutting pollution within the state borders is harder than cutting pollution somewhere else, states can benefit from mutual recognition of pollution reductions that occur where pollution is easiest to reduce.

 

For example, a large solar project in one state may cut emissions more quickly than the Clean Power Plan requires for that state. At the same time, another state that may need another year or two to get its own renewable energy projects up and running. In the meantime, the state that needs more time can buy compliance credits from the state that is already ahead of the game.

 

PJM also found that the positive effects of ramping up renewables and efficiency and of states working together reinforce each other, resulting in benefits for all electricity customers in the region. The overall effect is that electricity costs stay lower for everyone.

 

When states cut carbon in the most efficient way, and when energy services are provided with low cost resources or resources with zero fuels costs (such as energy efficiency, wind and solar) the natural result is that wholesale electricity costs are also lower across the region. Wholesale prices don’t translate directly into the bills customers pay, but they are a factor. So when wholesale prices are lower, on average, customers will see lower bills as well.

 

As I’ve stated before: States have a lot o

 

f options for how best to implement the Clean Power Plan. Now PJM has shown that the lowest-cost options are also the cleanest.

 

 

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