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Oregon Has an Uphill Battle to Achieving 2040 Climate Goals

The state recently passed a clean energy package that will require the two largest utilities to provide 100 percent clean electricity by 2040. But the utilities don’t have a plan as to how they will achieve the ambitious goal.

(TNS) — Oregon just passed an ideologically and technically ambitious clean energy bill that directs its two largest utilities to deliver 100 percent clean electricity to customers by 2040 and prohibits new or expanded natural gas-fired power plants in the state.

The new law makes Oregon the eighth state to commit to 100 percent clean electricity, and along with New York, it now has the most ambitious timetable in the nation to get there. Utilities have signed on to the plan, which mirrors some of the targets to which they had already committed. And social justice and renewable energy advocates who helped structure the bill are also claiming a victory as the legislation includes minimum wage and apprenticeship requirements for developers, funding for community renewable energy projects, and a forum that will give them an ongoing voice in the utilities’ clean energy plans.

In reality, however, no one, including the utilities, knows how they will achieve the bill’s most ambitious targets, which stairstep from 80 percent clean electricity by 2030, to 90 percent percent by 2035 and 100 percent by 2040.

“If you go out to 2030, we think we can hit that,” said PacifiCorp Senior Vice President Scott Bolton. “We were pretty clear though, beyond that we don’t have a plan that shows we can get there.”

Likewise, Brett Sims, a vice president at Portland General Electric, says the company had done a robust analysis showing it can meet the 2030 target by eliminating coal, operating its natural gas fired plants to serve peaks rather than base load demand, and adding substantial wind, solar, storage and demand reduction strategies to its resource mix.

The 2040 target, he said, remains aspirational.

Indeed, making “100 x 40” a reality will require major advances in technology, structural changes in energy markets and fundamental shifts in the way transmission is coordinated and sold. Even then, some believe there’s a hefty dose of wishful thinking in House Bill 2021.

“This kind of legislation, while desirable from a carbon reduction standpoint, brings with it an enormous set of challenges that we haven’t addressed yet,” said Randy Hardy, an energy consultant and former administrator of the Bonneville Power Administration, the Portland-based federal power marketing agency that sells hydropower from dams in the Pacific Northwest and operates three quarters of the high voltage transmission system.

“You’re betting on the come with technology,” Hardy said. “It makes your planning significantly more complex, and the potential for error is that much higher…A significant portion of folks are underestimating the complexity and the cost.”
HB 2021 allows “pauses” in meeting targets if the pace would cause reliability problems or become an economic hardship for ratepayers. And while the law prohibits new or expanded gas plants, it doesn’t require utilities to shut down their existing plants.

While advocates have trumpeted the economic benefits and jobs that will flow from the bill, developers and other experts suspect the bulk of the renewable energy projects that result will be built out of state, where the reliability and economics of wind and solar are better.

Either way, customers and clean energy advocates are demanding that utilities decarbonize the grid. And with climate change visiting the whole of the west in the form of drought, wildfire and extreme weather events like last month’s heat wave, the need is becoming more pressing, even as it complicates the task by placing increased demands and new risks on the grid.

Nicole Hughes, executive director of the advocacy group Renewable Northwest, acknowledges the revolution that needs to take place on many fronts to achieve a carbon free electricity grid by 2040. Still, she doesn’t like the term ‘aspirational.’

“I prefer ‘inspirational,’” she said. “We’ve solved harder problems than this before.”

Building Out Wind, Solar

In 2019, gas and coal-fired plants still furnished more than half of Oregon’s electricity supply, though the total is likely somewhat lower today with the retirement of Portland General Electric’s coal plant in Boardman. Replacing that capacity will require a vast buildout of wind and solar capacity. To increase reliability of those intermittent resources, that fleet needs to be geographically diverse and backed up by storage capabilities.

Oregon lawmakers included $50 million in funding for community based renewable energy projects in HB 2021. But in the scheme of things, that’s a rounding error. And because Oregon’s wind regime isn’t as reliable as in Wyoming or Montana — and the sun doesn’t shine like it does in California or Utah – experts say much of that development is likely to take place out of state.

Witness the shortlist of renewable energy proposals that PacifiCorp recently submitted to regulators to meet renewables mandates and replace retiring coal plants. It included wind farms in Wyoming and Idaho and a huge chunk of solar in Utah. But out of the entire 3,250 megawatts of capacity, only 210 megawatts of solar, about 6 percent of the whole package, were in Oregon.

Oregon does have prospects. A recent study of how to decarbonize Oregon’s electricity grid sponsored by a coalition of renewable energy advocates suggested the potential for as much as 20,000 megawatts of offshore wind projects in Oregon, about half of the peak demand that California’s grid operator saw during a heat wave two weeks ago.

The Bureau of Ocean Energy Management, the federal agency that issues leases for offshore wind projects, has begun a multi-year scouting process in Oregon, collecting data on the best potential sites, environmental impacts and other risks. Because of deep waters off Oregon coasts, much of that development would be floating turbines, still a nascent sector of the industry. And the regulatory, permitting and financial obstacles are high.

“Is it offshore wind?” asked David Brown, co-founder of Lake Oswego-based Obsidian Renewables, primarily a developer of solar projects. “Maybe, but the first ones will be a really long approval process. We’re years before anyone starts putting steel into the ocean.”

Oregon isn’t alone. California, Washington, Nevada, Idaho, Colorado and New Mexico are all pursuing similar goals, either through statewide mandates or individual utility plans. They’re all chasing new sources of clean energy, and many of the utilities can afford to pay more for power than Oregon’s because they charge more for it.

“If you add up all the policies passed, it adds up to an amazingly large buildout of renewables to meet them,” said Ben Kujala, director of power planning at the Northwest Power and Conservation Council.

And that has significant implications for the way the grid operates today.

A major buildout of solar in California, for example, could displace demand for hydropower generated in the Northwest and even bring a flood of cheap solar power into the region. While that sounds good – more carbon free energy available here – operators are heavily constrained by fish requirements in how they run the dams, so they can’t simply shift power production to when its needed. And Kujala says such a shift in the import/export dynamic would fundamentally change Bonneville’s economics, potentially not for the good.

Transmission Expansion

Then there’s the contentious prospect of building new transmission lines to move all that far-flung renewable energy to distant cities. In Oregon, that means more capacity to import power from states to the east, as well as additional capacity into California. Then you have to get the power the east side of the Cascades to population centers along the I-5 corridor.

Transmission lines are expensive, controversial and have a long lead time. In 2017, BPA cancelled an 80-mile, $1.2 billion transmission line dubbed the I-5 reinforcement project that would have run from Castle Rock, Washington to Troutdale. That came after seven years of study, and opposition from residents along the route concerned about the visual and noise impacts, the impact on their property values and easement negotiations.

Likewise, the $1.2 billion Boardman to Hemingway transmission line, which would run through eastern Oregon and Southwest Idaho, has been more than a decade in the making and generated deep opposition among farmers and conservationists.

Such pushback is virtually assured for any substantial new line, but utilities and renewable developers insist the clean energy transition won’t happen otherwise. The existing pipes are getting full.

The federal government could help. The infrastructure bills being debated in Congress are likely to include direct support or tax credits for inter-regional transmission and potentially an extension of the production tax credit for renewables projects.

That raises another fundamental barrier to reaching the clean energy targets: the lack of a unified west-wide transmission system operator to coordinate and control a multi-state grid. Today, there are 34 so-called balancing authorities in the western United States, according to the U.S. Energy Information Administration — a balkanized hodgepodge in which each utility plans to meet their own customer needs.

Renewable energy developers like Brown say they face multi-year lead times for utilities to complete studies of how they might interconnect new projects because there is no central repository of the knowledge. It’s unclear if existing lines are being fully used because of the way transmission is contracted today, and no one is assigned to make it work for everybody.

Having one or two entities manage the grid, experts say, would allow utilities to access a much wider spectrum of complementary renewable energy resources, avoid duplicative investments in power generation and transmission, reduce grid congestion, and theoretically, enhance reliability at the lowest cost.

Previous proposals, however, have fallen flat in the Northwest amid fears California would big-foot other states and public utilities’ worries that such a system would shift costs to them.

The region’s investor-owned utilities have taken small steps in that direction, participating in an energy imbalance market run by California’s grid operator that gives them access to a real-time energy clearinghouse to maintain moment to moment balance between electricity supply and demand. BPA plans to start participating in the market next year.

“You need to take advantage of the incremental measures underway and stairstep your way to a full-scale (regional transmission organization),” said Hardy, the energy consultant and former BPA administrator. “It’s an enormously complicated project that you can’t make happen overnight. Likely it’s a post-2030 event.”

Other Technologies

Getting to 100 percent clean will lean on a variety of resources, not just wind and solar. PacifiCorp is exploring a small-scale nuclear reactor in Wyoming, though such plants remain expensive and controversial.

PGE talks of converting the turbines at its existing natural gas plant in Boardman to burn hydrogen, or a blend of hydrogen and natural gas. Both are unproven, potentially expensive, and have their own pollution problems.

Likewise carbon sequestration, where operators capture a plant’s greenhouse gases and inject them into long-term storage, is an unproven science experiment.

One consequence of greater reliance on intermittent renewable resources is the need for more – and better — energy storage technologies. Many of today’s wind and solar farms include battery storage to smooth their output when the wind stops blowing or the sun goes down.

But with today’s technology, even large battery arrays can only supply a limited amount of power for a few hours. During a winter cold snap or a west-wide heat wave, that won’t cut it.

One viable alternative is pumped storage, which moves water into a higher-elevation reservoir during low demand and prices — typically at night — then taps the power during high demand periods by running the water downhill through hydroelectric turbines.

There are several pumped storage projects on the drawing board in the Pacific Northwest, but they haven’t penciled out financially. The federal infrastructure bill may include production tax credits for pumped storage projects, which would make them more viable, though some face considerable environmental and tribal opposition.

Utilities also say they will rely heavily on so-called demand response — voluntary programs that offer incentives for industrial, commercial and residential customers to reduce energy use during peak demand. Larger customers are offered discounted rates throughout the year in exchange for allowing their utility to reduce their consumption during peak events. Residential customers can participate in peak pricing programs or give the utility the ability to adjust their thermostats when demand is high.

PGE said 130,000 residential customers have signed up for such programs today. During last month’s heat wave, when electricity demand hit a record, it was able to shave its load by 63 megawatts, enough to power 21,000 homes. Two-thirds of those savings came from residential customers.

The company is seeking to increase that potential to 200 megawatts by 2025, and more than 500 megawatts by 2030, about 15 percent more power than the peak output of its gas-fired plant in Boardman.

Getting anywhere near 100 percent clean electricity will also require a sustained commitment to residential and commercial energy efficiency, green buildings, more solar panels on homes and a host of other technologies.

All of this comes at a cost. And for many, it still leaves a fundamental question whether utilities could meet their customers’ energy needs under all scenarios. It’s a question no one can fully answer today.

“You can run the grid in almost any way you want if you’re willing to spend a lot of money,” said Kujala with the Northwest Power and Conservation Council. “You can do almost anything. You can be resource adequate. But it has cost implications.”

©2021 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.
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