September 29, 2014
Over the course of the late nineteenth and twentieth centuries, the United States’ electricity system was largely built by investor-, municipally-, and cooperatively-owned utilities using generation from centralized power plants, servicing single territories. At the time, this was the most efficient method of production and distribution of electricity, and regulatory bodies were formed to ensure that ratepayers were protected in the absence of a competitive market. However, as we progress into the twenty-first century, the ways we are able to generate, transmit, distribute, and consume electricity are also advancing and evolving.
In the midst of these changes, the Environmental Protection Agency has proposed a suite of regulations (the “Clean Power Plan” or CPP) that could significantly reshape aspects of the United States’ electricity system well into the twenty-first century. The CPP is complex and raises many questions; our electricity system is complex and current changes are raising tensions within the old operating paradigm. To discover a practical, optimal path forward, we will need data-rich discussions to dispel misconceptions and provide stakeholders and decision makers with the information they need to make wise choices. As our contribution to these discussions, ASU LightWorks is pleased to launch the Arizona Clean Energy Online Forum. Through this forum, Arizona State University will offer a wealth of resources for Arizona to take advantage of, including straightforward facts and statistics on the electricity system and the CPP, discussions of the main challenges and opportunities associated with the CPP, plus deep analysis of potential scenarios for Arizona as it seeks to meet the CPP.
This forum will look at the CPP through four main lenses:
- What are the potential socio-economic and socio-cultural costs, benefits, tradeoffs, and opportunities, in the short (3-7 yrs), medium (7-15 yrs), and long term (20-30 yrs)? What are the costs and benefits to society? How are different members of society involved and impacted? How are these costs, benefits, etc., calculated? Which industries or sub-industries would likely be most involved and most impacted? How could these impacts be mitigated or exacerbated? How would these shift over time? What are the business opportunities and risks associated with the changes?
- What are the potential impacts and opportunities on future energy resources use in the short, medium, and long terms in the U.S. and specifically in AZ? Which resources and technologies would most likely be impacted? How will new energy technologies be effectively developed? Which geographies would most likely be impacted? How would the impacts to the resources, technologies, and geographies shift over time? How would these impacts and shifts be calculated? How could the impacts be mitigated or exacerbated?
- What are the potential impacts on our electricity generation infrastructure, grid planning, and operations across the U.S and specifically in AZ in the short, medium, and long terms? What opportunities, challenges, and tradeoffs does the CPP provide for the build-out of our infrastructure? What new tools and models will be needed? What impact will significant reduction in coal have on the reliable operation of the electric grid? How can significant amounts of renewable energy technologies be integrated onto a reliable grid?
- What are the potential public policy, jurisdictional, and legal issues that arise out of the CPP? What are the international implications of the EPA’s proposal? What state policies in AZ support the creation of a state plan and which ones hinder it? How will the EPA and state agencies across the US resolve issues of federalism and enforcement? How will AZ approach various aspects of its implementation plan such as governance and monitoring and reporting outcomes.
A report by the Ceres group estimates that within the next two decades $100 billion will be invested in our electricity system, and that by 2030 the electricity industry will have invested nearly double the net invested capital that is currently invested in the electricity system. In other words, our future investment opportunities are significant. It’s likely that the CPP will direct much of that investment. ASU intends to ensure that Arizona has abundant, accurate data in order to make the best energy investments for its future. We look forward to presenting the views and commentary of ASU’s most experienced researchers and professors in the Arizona Clean Energy Online Forum, and to providing a space for interaction with others on this important and wide-reaching proposed policy.
In conclusion, I also want to establish some basic ground rules for this forum on behalf of the LightWorks team. First, we presume that each state will be required to meet emissions targets that are largely similar to what the EPA has proposed. We recognize that there will undoubtedly be changes and possibly legal challenges. However, our primary intention is to help Arizona and other states explore the options available to meet the present challenge and to understand the impacts of different courses of action within their State Implementation Plans. Second, we do not intend to spend time discussing the science or politics of climate change. After carefully studying the body of evidence on this matter, it is my firm belief that the risks posed by climate change are real, are already occurring, and require us to act swiftly. At this time, further debate on those issues only serves to distract from the task at hand.
Written by Gary Dirks, Director, LightWorks and Director, Julie Ann Wrigley Global Institute of Sustainability