States Stepping Up Their Renewable Energy Agenda

Renewable Energy

States Stepping Up Their Renewable Energy Agenda

Despite President Trump's withdrawal from the ​Paris Climate Change Accord, states, cities, institutions and  businesses have vowed to take their 'low greenhouse gases emission'  agenda ahead.  The unnamed group — which, so far, includes 30 mayors, three governors, more than 80 university presidents and more than 100 businesses — is negotiating with the United Nations to have its submission accepted alongside contributions to the Paris climate deal by other nations. The group is more than hopeful that they can  achieve or even surpass the plan put forward to United Nations last year to reduce America’s planet-warming greenhouse gas emissions by 26% by 2025, from their levels in 2005. 

Michael BloombergMichael Bloomberg, the former New York City Mayor who is coordinating this effort, said in an interview,"We’re going to do everything America would have done if it had stayed committed."   

Following are the some of the latest  efforts by States and businesses stepping up their renewable energy program towards transition into a low carbon world.  

California: Financing Projects With Community Choice Aggregators

California Energy Mix 2050California  requires utility companies get at least a third of their energy from renewable sources by 2020 and half by 2030. Cities and counties in California are now widely pursuing or exploring a public energy program that allows elected officials to take the authority to buy and sell power away from investor-owned utilities (IOUs) and offer consumers up to 100 percent renewable energy, usually at rates lower than the IOUs.  A report by the California Public Utilities Commission in May predicts that more than 85% of California’s retail electric load will be served by sources other than IOUs by the middle of the 2020s. By the end of 2017, the number of customers in California who get power from Community Choice Aggregators is expected to reach almost one million.

Community Choice Aggregation (CCA) is a program that allows cities and counties to buy and/or generate electricity for residents and businesses within their areas. A CCA is a legal entity, usually a joint powers authority, formed by one or more counties, cities or towns for the purpose of purchasing power on behalf of the residents and businesses within local boundaries. The incumbent utility, which no longer provides the electricity, still remains responsible for transmitting and distributing the power, as well as for billing, collections and other customer services. Laws enabling this structure have been passed in California, Illinois, Massachusetts, New Jersey, New York, Ohio and Rhode Island. 

Community choice aggregators present a huge new opportunity for developers of wind and solar projects because they are focused on purchasing renewable energy to serve customer load. 

California has seen a proliferation of CCAs since the first one launched in 2010. There are now eight operational CCAs, and at least 15 more are in various stages of planning, altogether covering 23 counties. 

New York: State Energy Agencies gear to bring renewable energy into homes 

New York Energy Mix 2050A similar mandate by New York through its New York’s Clean Energy Standard (CES), the most comprehensive and ambitious clean energy goal in the State's history, requires that 50 percent of New York's electricity come from renewable energy sources such as solar and wind by 2030, with a progressive phase-in schedule starting in 2017, thereby ensuring a diverse and reliable low carbon energy supply. By focusing on low carbon energy sources, the CES expects to bring investment, economic development, and jobs to New York State.

Pursuing the goals set by CES, The New York State Energy Research and Development Authority (NYSERDA) and the New York Power Authority (NYPA) each issued requests for proposals (RFPs) for New York State renewable energy projects on June 2nd,  the first REC procurement under CES.  The NYSERDA RFP is to purchase renewable energy credits (RECs) from renewable energy projects under contracts of up to 20 years. The NYPA RFP is to purchase a combination of energy, capacity and RECs from renewable energy projects under contracts of up to 20 years. 

Tax Credits for Energy Storage Systems in Maryland

Maryland Renewable Energy TargetsEnergy storage systems will qualify for a tax credit in Maryland under a new law signed by the governor in May 2017.  A tax credit can be claimed for 30% of the cost of new storage systems installed between 2018 and 2022. However, the credit is capped at $5,000 for a residential system and $75,000 for a commercial system. Maryland is the first state to offer a tax credit specifically for storage. Maryland became the first US state to offer a tax credit for energy storage. The tax credit is not limited to solar-plus-storage.  

Maryland renewable energy standards were strengthened when the state's Democratic-controlled legislature overrode Republican Gov. Larry Hogan's veto of a clean energy law in February 2017. Maryland is now required to get 25 percent of its power from clean energy sources by 2020. That's an increase from the previous target of 20 percent by 2022.

Traditional sources of fuel such as coal and oil are forms of stored energy. In comparison, renewable energy such as wind and solar are real energy that must be stored in order to have power available when its needed.

Variable energy sources, like renewables, are non-dispatchable due to their fluctuating nature. Also, sources of renewable generation can be rendered useless by weather conditions. Energy storage solutions are necessary to keep up the regular supply, particularly when generation cannot match consumption. 

Behind-the-meter storage systems are the widely preferred renewable energy storage mechanism. These systems are installed on the customer side of a utility meter. By drawing on the battery (stored energy) instead of the grid during periods of peak electricity use, the customer can avoid expensive demand charges. 

California, Oregon and Massachusetts have each adopted an energy storage mandate that sets mandatory storage procurement targets for utilities. In 2013, California established its energy storage mandate of 1,300 megawatts by 2020 for all utilities. Oregon followed in 2015 with a smaller-scale mandate of five megawatt-hours by 2020 per utility. In August 2016, Massachusetts passed a law authorizing its state energy commission to set a storage mandate, the actual capacity to be decided upon in July this year. A state-commissioned report recommended 600 megawatts by 2025. If the recommendation is adopted, the Massachusetts target would be the most aggressive, representing 5% of peak load, while the California and Oregon targets represent 3% and 1% of peak load respectively.

These efforts are part of a nation wide movement to sidestep an increasingly dysfunctional Federal government. While states and cities cannot be stopped, leadership at the national level would bring a level of certainty that could be a big help to markets. Ideally, Congress people will learn from the state's efforts.