Despite important progress in recent years, the power sector in the US is still a major source of emissions—both the air pollution that hurts public health and the heat-trapping emissions that cause climate change. The power sector is also important because electrification is an essential tool for getting off fossil fuels in other sectors of the economy—transportation and heating, for example (think electric vehicles and heat pumps).
Embedded in the Biden Administration’s new American Jobs Plan is a powerful, proven tool for cleaning up the power sector—and the economy as a whole—driving job creation in energy, and dramatically improving public health. Here’s what a clean energy standard is, and how it could help us make serious progress on climate change, and much more.
What is a CES?
A clean energy standard (CES, also called a clean electricity standard) sets increasing targets for transitioning the power sector away from polluting sources, either by increasing the portion of electricity that power suppliers must provide from no- or low-carbon power sources, or by increasing targets for reducing carbon emissions from power plant fleets. The policy defines the targets, and the power providers covered by the policy figure out how to meet them.
And with suitably ambitious clean energy targets, a CES can have technologies, projects, and companies competing to deliver clean electricity at the lowest cost, and can drive innovation and further cost reductions.
CESs are state-proven
One strong thing the CES has going for it is that 30 of our laboratories of democracy, the states, have over the past three decades put in place versions of it, or a renewables-only equivalent (a renewable electricity standard/RES, also known as a renewable portfolio standard). Those 30 states, plus Washington, D.C. and Puerto Rico, with RESs, CESs, or both, cover more than half of electricity use in this country.
And state after state has strengthened its targets as the policies have borne fruit, the benefits have become obvious, and the need for a rapid power sector transition has become even more evident. Renewable energy happening under state requirements have added up to 45% of growth in renewables generation over the last two decades, and state RESs have been a key driver of renewables development in the US.
Laboratories of democracy—and clean energy policy—at work
Those renewables have made a difference. An analysis by the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory in 2016 quantified the benefits of complying with existing state renewable standards. The study found that renewable energy provided an estimated $32 to $165 per megawatt-hour (with a central estimate of $75/MWh) in health and environmental benefits from reducing carbon emissions and other air pollutants. It also found that by reducing wholesale electricity prices and natural gas prices, the renewables would save consumers $1.3 billion to $4.9 billion, or $13-49/MWh of new renewable generation.
Now, an increasing number of states (at least eight right now, plus DC and Puerto Rico) have set their sights on 100%/zero-carbon—often by increasing near-term RES targets and combining them with a CES for the longer term.
Federal CES proposals
Congress has paid attention to the state experiences. The House and Senate have each passed national RESs multiple times (though never in the same session).
And the CES itself is not a new idea at the federal level. UCS has been helping shape CES proposals in Washington for years. (See, for example, colleagues’ thoughts on a 2012 Senate proposal that UCS helped design, and more recent pieces here and here.) The proposals have continued to evolve, and the targets have strengthened as the magnitude of action required to limit the worst of climate impacts has become clearer.
Congress’s last session included several takes on a CES. Those included the Clean Energy Standard Act of 2019 (Sen. Tina Smith, MN, and Rep. Ben Ray Luján, NM), the Clean Energy Innovation and Deployment Act (Rep. Diana DeGette, CO), the CLEAN Future Act from Reps. Frank Pallone (NJ), Bobby Rush (IL), and Paul Tonko (NY), and the Renewable Electricity Standard Act (then-Sen. Tom Udall, New Mexico). See here for a useful side-by-side of some of the bills. Expect to see some of those proposals re-introduced in the current session of Congress.
What difference can a CES make?
Because of the large role that electricity plays—and can play—in our economy, a well-designed, well-executed, and ambitious CES can make a huge difference in terms of emissions reductions across the economy.
The power sector accounted for almost a third of US energy-related emissions in 2020, so substantial reductions in emissions related to our electricity generation would really matter.
And the effects will get even bigger as we drive electrification at the same time. That would eventually raise the bar for what clean energy we’d need to install—potentially substantially, in later years. But it would also substantially reduce emissions in transportation and buildings; transportation was the largest contributor to energy-related emissions in 2020 and accounts for more than 30% of total net US emissions.
A recent analysis showed dramatic effects with an 80%-by-2030 CES paired with “accelerated transportation electrification,” potentially as the first stage of a more ambitious 100% standard and as a core component of achieving economy-wide net-zero emissions. The study (here and here), from the University of California, Berkeley, Energy Innovation, and GridLab, projects that hitting the 80% target would involve scaling up renewables, incorporating only existing nuclear (currently 20% of our electricity supply), adding no new fossil fuel capacity, and retiring all coal by 2030.
Under that scenario, installations of solar and wind would average around 95 gigawatts (GW) a year. That’s almost three times what the US accomplished in 2020 (itself a record year for both wind and solar), so not to be taken lightly—but it’s also feasible. And all the while it creates a serious opportunity for driving local investments and the need for workers across the supply chains.
And the study projects benefits across the economy, the country, and the globe:
- in public health, with the clean-up of the power sector and the transportation electrification combining to “reduce exposure to fine particulate matter and reduce nitrogen oxide and sulfur dioxide emissions by 96 percent and 99 percent, respectively,” in the US—potentially saving “$1.7 trillion in health and environmental costs, including 93,000 avoided premature deaths, through 2050”
- in carbon emissions, with that 80% clean electricity mix and transportation electrification reducing CO2 emissions from 2005 levels 84% in the power sector, 33% in transportation, and 40% economy-wide
- for job creation, with the study authors suggesting that an 80% CES paired with the high labor standards that Pres. Biden has called for “will drive significant investments that will create opportunity in every region of the country”
- in investments: “$1.5 trillion in clean energy capital investments and $100 billion in transmission capital investments,” meaning tax revenues for communities across the country, and a chance to counterbalance falling revenues from declining coal and gas activity.
- in terms of electricity costs, with the analysis finding that the CES would not increase wholesale costs “and may even lower consumer electricity bills.”
UCS’s own analysis of a 2019 RES (50% renewables, and more than 60% low- or zero-carbon in total, by 2035) projected that compared to the status quo, such a policy would drive hundreds of billions of dollars in new capital investments, and power tens of billions in net savings for consumers by 2035.
Great benefits, if we get the policies right.
CES details matter
For getting it right, details matter. Here are a few dimensions:
- How far it takes us – A rapidly cleaned-up power grid is an essential component of any robust climate action plan, enabling the simultaneous reduction of emissions from the power sector and the electrification of—and therefore cleaning up—much of the rest of the economy, too. CES targets need the ambition to match that pivotal, and urgent, need.
- Who’s covered – True decarbonization, and the increasing importance of the power sector across the economy, mean that a national CES needs to cover the whole of the power sector—every power provider, every utility/muni/coop, every generator.
- What counts – Some technologies are virtual slam dunks for including in a CES, like solar, wind, geothermal, and low-impact hydro. Others are more controversial, such as nuclear, biomass, waste-to-energy, and natural gas or coal plants fitted with carbon capture and storage. A CES can keep the focus on the former by setting (high) minimum targets for renewables, as California (60% by 2030), New York (70% by 2030), New Mexico (80% by 2040), and other states have done—each strengthening their RES targets as they made their 100% CES commitments. The policy can also be designed to remove incentives for new natural gas infrastructure, account for upstream methane leakage, and keep coal from sticking around longer than it otherwise might.
- How states can keep doing their thing – A national CES should be a floor for climate action, not a ceiling, and states should be allowed to set more ambitious and stringent requirements if they want to; states need to be able to continue to lead, when and as they’re able and willing.
- Who’s making the decisions – A well-designed CES won’t be the product of solely a top-down process. A lot of people are affected by the power sector in so many ways—from where coal or uranium mining or natural gas extraction take place, to where the power projects and smokestacks are situated, to what happens to waste products, like coal ash. The policy will be much better, and much stronger, the more people and communities have access to a robust stakeholder process to talk about how, and how quickly, we move toward lower-impact solutions and better health outcomes.
CES plus
That last point also underscores the need to have the CES as one piece in a larger policy puzzle; a CES won’t alone do everything we need to accomplish in the power sector.
A range of complementary policy tools can help—directing benefits and opportunities to communities who have disproportionately borne the brunt of the costs of fossil fuels, broadening which households have direct access to clean energy (think rooftop solar), driving energy efficiency to make sure we can do more with every kilowatt-hour, driving the build-out of the transmission grid to get the clean energy where we need it, fueling innovation through research/development/deployment for the development of new, even-cheaper carbon-free technologies, and speeding up the clean-up of remaining pollution sources.
But when designed well, this powerful, proven policy can be brought to bear to get our electricity sector in shape to be what we need it to be: a low-impact tool for powering our homes, businesses, and communities, and the core of a strong, decarbonized US economy. A well-designed national clean energy standard can be an important next step toward a stronger, cleaner power system for this country.