NewEnergyNews

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

  • Weekend Video: How To Win Friends For New Energy
  • Weekend Video: The Electric Vehicle Highway
  • Weekend Video: Wind And The Economy
  • THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-A Deeper Look At The Heat
  • FRIDAY WORLD HEADLINE-Wind Gets Market Tough
  • FRIDAY WORLD HEADLINE-UK Gets Utility-Led Solar Plus Storage
  • FRIDAY WORLD HEADLINE-Germany’s VW Talking Its EV To China
  • THE DAY BEFORE THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, April 20:

  • TTTA Thursday-U.S. Military Affirms Climate Change-War Link
  • TTTA Thursday-Solar Plus Hydro Drive Wholesale Power Cost Sub-Zero
  • TTTA Thursday-Wind Boom Goes On Growing Midwest Wealth
  • TTTA Thursday-More Kentucky Jobs In New Energy Than In Coal
  • THE DAY BEFORE THAT

  • ORIGINAL REPORTING: Rocky Mountain compromise: Inside Xcel's landmark Colorado solar settlement
  • ORIGINAL REPORTING: Fixed charge battle looms in Texas as regulators tackle rate design reform
  • ORIGINAL REPORTING: No time to think: How utilities are handling the deluge of grid data

    AND THE DAY BEFORE THAT

  • TODAY’S STUDY: Resource Diversity And Grid Reliability
  • QUICK NEWS, April 18: Study Puts 10-Year Timer On Climate Change; The War Between Wall Street And Solar; New Energy To Power Healthcare
  • THE LAST DAY UP HERE

  • TODAY’S STUDY: The Jobs In Wind And Solar
  • QUICK NEWS, April 17: The Work Ahead On Climate Change; More Installer Bids = Lower Home Solar Cost; Why Investors Should Still Think New Energy
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    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

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    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

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  • TODAY AT NewEnergyNews, April 24:

  • TODAY’S STUDY: The Risk Of Natural Gas Vs. The Risk Of Wind
  • QUICK NEWS, April 24: The Health Impacts Of Climate Change; New Energy Is Everywhere; Study Shows LA Does Not Need Aliso Canyon

    Monday, April 24, 2017

    TODAY’S STUDY: The Risk Of Natural Gas Vs. The Risk Of Wind

    Using Probability of Exceedance to Compare the Resource Risk of Renewable and Gas-Fired Generation

    Mark Bolinger, March 2017 (Lawrence Berkeley National Laboratory)

    Executive Summary

    Of the myriad risks surrounding long-term investments in power plants, resource risk is one of the most difficult to mitigate, and is also perhaps the risk that most-clearly distinguishes renewable generation from natural gas-fired generation. For renewable generators like wind and solar projects, resource risk manifests as a quantity risk—i.e., the risk that the quantity of wind and insolation will be less than expected.

    For gas-fired generators (i.e., a combined-cycle gas turbine or “CCGT”), resource risk manifests primarily as a price risk—i.e., the risk that natural gas will cost more than expected. Most often, resource risk—and natural gas price risk in particular—falls disproportionately on utility ratepayers, who are typically not well-equipped to manage this risk. As such, it is incumbent upon utilities, regulators, and policymakers to ensure that resource risk is taken into consideration when making or approving resource decisions, or enacting policies that influence the development of the electricity sector more broadly.

    This paper presents a new framework, grounded in statistical concepts related to probability of exceedance (and confidence intervals more broadly), to incorporate resource risk into decision-making processes. This framework recognizes that the same probability of exceedance concepts that are regularly used to characterize the uncertainty around annual energy production for wind and solar projects can also be applied to natural gas price projections, allowing one to develop a probabilistic range of projections for not only wind and solar capacity factors, but also natural gas prices.

    Importantly, these probability distributions have markedly divergent characteristics. Renewable resource risk is symmetrical about the mean or “P50” projection and declines when considered over longer time horizons (due to mean reversion in the inter-annual variability of the resource). In contrast, natural gas price risk is asymmetrical (skewed towards higher prices) and increases when considered over longer time horizons (reflecting the fact that it is easier to project where natural gas prices will be three months from now than three years from now). Converting these distinctly different probability distributions into directly comparable levelized cost of energy (“LCOE”) terms reveals that even when gas-fired generation is competitive with, or cheaper than, wind and solar power on an expected or P50 basis—the basis on which these resources are most often compared—comparisons that are instead based on worse-than-expected outcomes (e.g., P25 or P1) often reach the opposite conclusion: that wind and solar are cheaper than gas-fired generation.

    Figure ES-1 illustrates this concept by comparing the 25-year LCOE of a new wind project in the United States (without the benefit of the production tax credit or “PTC”) to that of a new CCGT across P-levels ranging from P50-P1 and over time horizons ranging from one to 25 years. The range of time horizons along the x-axis warrants additional explanation to avoid confusion. Every data point shown on Figure ES-1—regardless of where it falls along the x-axis—represents an LCOE that is calculated over a 25-year period (in nominal dollars). These 25-year LCOEs are based on modeling inputs that are held constant in all cases, with two exceptions—the wind project’s capacity factor and the CCGT’s levelized fuel costs vary by P-level and by time horizon. The x-axis simply represents the time horizon (in number of years) over which these two important, but uncertain, inputs into the 25-year LCOE calculation are considered.

    For example, at year 12 on the x-axis, wind’s 25-year LCOE range reflects 12-year P50 and 12-year P1 capacity factors used as inputs to the 25-year LCOE calculation; similarly, the range of gasfired LCOE reflects 12-year P50 and 12-year P1 gas price projections that are levelized over 12 years and then used as the fuel price inputs in the 25-year LCOE calculation.

    In Figure ES-1, wind (without the PTC) is more expensive than gas-fired generation on a P50 basis over all time horizons of less than 24 years (the two P50 curves converge at 24 years). But on a P25 basis, the cost of wind falls below the cost of gas-fired generation for all time horizons longer than 15 years.

    This “break-even” point—where the wind and gas-fired LCOE curves for each P-level cross—drops to 10, 8, and 2 years for P10, P5, and P1 levels, respectively.

    In other words, Figure ES-1 presents an illustrative example where wind, without the PTC, is not ostcompetitive with new gas-fired generation (except over a 24-year or longer time horizon) when evaluated on a P50 basis as is typically done. But when considering the possibility of worse-than-P50 outcomes (i.e., higher than-expected natural gas prices and/or a lower-than-expected wind resource), wind looks more competitive—particularly the lower the P-level and the longer the time horizon—and in many cases is cheaper than gas-fired generation.

    The “wedges” that begin where the respective wind and gas-fired LCOE curves at each P-level cross and then widen over longer time horizons illustrate wind’s “hedge value,” which increases with both the level of risk aversion (assumed to be negatively correlated with the P-level—i.e., a lower P-level suggests greater risk aversion) and the time horizon.

    Figure ES-2 shows much the same story for a utility-scale solar photovoltaic project. In this example, solar (with the 30% investment tax credit or “ITC”) is always more expensive than gas-fired generation on a P50 basis, regardless of time horizon shown.

    But, as with wind, worse-than-P50 comparisons reveal solar to be more competitive: the solar and gas-fired P25 LCOE curves converge at a 25-year time horizon, while the P10, P5, and P1 curves show solar’s hedge value starting to accrue at progressively shorter time horizons.

    Another related way to interpret Figures ES-1 and ES-2 is that higher-than-expected gas prices are riskier than lower-than-expected wind or solar output. This suggests that from a ratepayer perspective, we should perhaps be more concerned about gas price risk than about wind or solar resource risk. In other words, in a case where two scenarios—one focusing on higher-than-expected gas prices and another focusing on lower-than-expected wind or solar resources—may be considered to have the same probability (i.e., the same P-level), the resulting impact of the high gas price scenario may be more harmful to ratepayers than the impact of the low wind/solar resource scenario.

    Although the discussion surrounding Figures ES-1 and ES-2 has so far focused on LCOE comparisons at distinct P-levels, by definition, each P-value has an associated probability, thereby enabling a more formal probabilistic assessment. For example, although probability of exceedance does not necessarily imply probability of occurrence, the P50 outcome can nevertheless be thought of as carrying a 50% weight, while the P1 outcome can be given a 1% weight, with all other P-values that fall in between these two extremes (e.g., P49, P48, P47…P4, P3, P2) weighted accordingly (i.e., 49%, 48%, 47%...4%, 3%, 2%). Hence, within this framework, one can easily “probability-weight” the full range of outcomes across the full P50-P1 spectrum, or even some subset thereof—e.g., perhaps just the P50-P25 range for those who are less risk averse.

    The probabilistic nature of this new framework is one of its key advantages over previously proposed approaches to account for the price stability benefit of wind and solar power. Other advantages include its fairness (recognizing that wind and solar also face resource risk), familiarity (probability of exceedance is already widely used within the energy industry), simplicity (just a few key inputs are needed to set up these comparisons), and flexibility (this framework caters to any level of risk aversion over any time horizon).

    Of course, cost is only one side of the equation (value being the other), and few if any resource decisions within the electricity sector are made based on LCOE alone. Instead, the cost of competing resources must be considered along with the value that each provides, which is most often determined by sophisticated models that endogenously assess energy and capacity value as well as integration and transmission costs—all in addition to the LCOE of the generator itself. In this sense, it should be recognized from the start that this report is focused on just one side of a two-sided coin.

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    QUICK NEWS, April 24: The Health Impacts Of Climate Change; New Energy Is Everywhere; Study Shows LA Does Not Need Aliso Canyon

    The Health Impacts Of Climate Change It’s the mother of all human health issues

    Jeffrey Delviscio, April 24, 2017 (STAT)

    “…[Human civilization as we know it today is] the product of a lucky greenhouse…[Climate change is a threat and to it that] represents a set of new risks to our health, our infrastructure, our relatively stable existence…[A]ges before humans began adding to that change, the climate system created the perfect conditions for human existence during a period called the Holocene…Agriculture started, human urbanization started because there was a remarkably] long period of time, 10,000 to 12,000 years of the Holocene, in which temperatures didn’t really move that much globally…[Climate change] could introduce some nasty disruptions…Swings in temperatures, changing weather patterns, and sea level rise could all have serious effects on human health…[producing] more heat-related morbidity and mortality…” click here for more

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    New Energy Is Everywhere The Surprising List of States Leading U.S. on Renewable Energy; New report ranks states on their recent clean energy momentum, and leaders emerge among both blue and red states, although California is No. 1 overall

    Zahra Hirji, April 21, 2017 (Inside Climate News)

    “…[Different states are leaders in New Energy and they are] led by Republicans and Democrats alike…Kansas led the nation in largest increase in renewable energy generation between 2011-15. Hawaii ranked No. 1 in residential solar power. In California, electric vehicles made up the highest percentage of new car sales last year…And in Iowa, in-state companies could most easily procure renewable energy from utilities and third-party providers in 2016…[The Union of Concerned Scientists analysis used] a dozen metrics to gauge a state's participation in the clean energy industry over time. They measured a state's existing and planned adoption of renewable energy sources, the impact of the industry on jobs and reviewed policies designed to grow the industry. Every state was ranked in each category, and overall…[California was the leader overall but some smaller states and some Republican-led states] also excelled…” click here for more

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    Study Shows LA Does Not Need Aliso Canyon L.A. County study decries state claims for need of Aliso Canyon storage plant

    Ivan Penn, March 31, 2017 (LA Times)

    “A scathing Los Angeles County study has concluded that the troubled Aliso Canyon natural gas facility isn’t needed to ensure reliability of electricity and gas service in the region this summer or the coming winter…That review sharply contrasts with the dire warnings issued last summer by state regulators, who stirred up fears of blackouts and the possibility of snuffed-out pilot lights…[According to the county’s study from EES Consulting, which NewEnergyNews is attempting to obtain, the] California Public Utilities Commission and the California Energy Commission have produced reports that…[are ‘confusing and inconsistent’ on] the need for Aliso Canyon…” click here for more

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    Friday, April 21, 2017

    Bill Maher Says Make Earth Great Again

    Bill Maher says forget about colonizing Mars and focus on making earth habitable. From Real Time With Bill Maher via YouTube

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    The Electric Vehicle Highway

    This EV highway, now on its way to becoming a reality, is another gift to the future from the Obama administration. From Futurism via YouTube

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    Wind And The Economy

    Jobs, tax revenues, boosting rural communities, lowering consumer power prices, and New Energy. It's a win, win, win, win, win. From the U.S. Dept. of Energy via YouTube

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    A Deeper Look At The Heat

    March set a remarkable new record for global warming, NOAA reports; First time any month was more than 1.8°F warmer than normal “in the absence of an El Niño episode.”

    Joe Romm, April 19, 2017 (ThinkProgress)

    “The National Oceanic and Atmospheric Administration (NOAA) reported that last month set an unusual and unexpected new record for global warming…No month before March 2017 had ever exceeded the ‘normal’ temperature (the 1981–2010 average) by a full 1.8°F (1.0°C)…in the absence of an El Niño episode…[This is important because] El Niños generally lead to global temperature records, as the short-term El Niño warming adds to the underlying long-term global warming trend…[W]hen a month sees record high global temperatures in the absence of an El Niño, that is a sign the underlying global warming trend is stronger than ever...NOAA reports that both March and the year to date (January through March) were the ‘second warmest on record’ for the world since global temperature records began in 1880. They were second only to 2016 which, of course, was a year marked by a major El Niño…It was especially hot last month in the Siberian permafrost…Bottom line: Human-caused global warming continues at a dangerous pace, and only human action to slash carbon pollution can stop it.” click here for more

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    Wind Gets Market Tough

    Unsubsidized wind energy is arriving, onshore and off...

    Sami Grover, April 18, 2017 (TreeHugger)

    “Whether it's large offshore wind farms shattering cost reduction goals, or giant turbines generating a record amount of energy in a 24-hour period, there have been plenty of developments to celebrate in the wind energy sector recently…[But renewable energy advocates would be right to worry about what short-term political] winds may mean for long-term development…[On the other hand,] Deutsche Welle reports that for the first time ever, an offshore wind farm will be built without any subsidies at all…[The "He Dreiht" project will] have a capacity of 900 megawatts…Scottish Renewables suggests that onshore wind farms could compete subsidy-free in the UK, as long as they were allowed to take part in the country's competitive auction process…[The contracts for difference (CfD)] competitive auction process does not currently include onshore wind…[That exclusion is an example of the political obstruction but there are signs of political progress. Oil giant Shell is lobbying for the Dutch government to quadruple its offshore wind target for 2030 to an installed capacity of a whopping 20 gigawatts (GW)…” click here for more

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    UK Gets Utility-Led Solar Plus Storage

    E.ON offers UK households solar panels with battery storage

    Susanna Twidale w/Elaine Hardcastle, April 19, 2017 (Reuters)

    “German utility E.ON launched a combined solar panel and battery storage product for British customers which [it said] could cut rising electricity bills by 50 percent…Britain's energy providers are under pressure from the government to help customers find ways to reduce bills after five of the country's big six suppliers, including E.ON significantly increased their prices this year…E.ON's customers in central England will be the first to be offered the new package and they will be able to input their details online to work out how much the solar panels and battery unit will cost depending on their home size...E.ON said customers with south facing gardens, using solar panels on a shade free roof combined with the battery storage units, could save around 300 pounds ($385) a year, or 50 percent on their electricity bills...The savings could rise to 560 pounds a year if customers sign up to the government's feed-in-tariff incentive scheme for renewable electricity producers…” click here for more

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    Germany’s VW Talking Its EV To China

    Volkswagen plans all-electric car for China next year

    Joe McDonald, April 18, 2017 (AP via ABC News)

    “Volkswagen, Europe's biggest automaker, plans to launch its first pure-electric car in China next year…General Motors Co.'s Buick unit and Ford Motor Co. also have announced new electric vehicles for China this year…The VW model will be the first in a range of electric vehicles in China…[and will] be produced under a new brand name with a local partner, state-owned Jianghuai Automotive Corp…China has the world's most aggressive electric car goals. Communist leaders are promoting them to clean up smog-choked cities and in hopes of taking the lead in an emerging technology…Regulators have jolted the industry with a proposal to require electrics to account for at least 8 percent of each brand's production by next year…” click here for more

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    Thursday, April 20, 2017

    U.S. Military Affirms Climate Change-War Link

    Military Experts Issue a Warning Climate Skeptics Won't Want to Hear; A gripping new documentary explores the link between climate change and violent conflict.

    Alexandra Rosenmann, March 24, 2017 (Alternet)

    "…["The Hurt Locker" meets "An Inconvenient Truth," in “The Age of Consequences,” a chilling warning for climate skeptics from] members of the U.S. military…[Retired Brig. Gen. Stephen Cheney calls climate change] “an accelerant to instability"…[The documentary film] relies heavily on [a landmark Columbia University study] linking Syria's 2007−2010 drought to its 2011 civil war…[It shows how the long] drought forced 1.5 million Syrians to leave the countryside for cities, in search of work. Former U.S. Army officer and current Truman National Security Project Executive Officer Michael Breen observes that large numbers] of unemployed young men in a major city is not a recipe for social stability…” click here for more

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    Solar Plus Hydro Drive Wholesale Power Cost Sub-Zero

    Wholesale energy prices dip below zero because of California’s solar power

    Ashley May, April 11, 2017 (USA Today)

    “…Last winter and early spring’s dependence on solar [coupled with the oversupply of hydropower resulting from the rainy winter] drove wholesale energy prices to negative prices…[In a major first, solar power in the California Independent System Operator accounted for nearly 40% of net grid power for three hours on March 11, 2017…These figures don’t translate for the consumer into retail prices, which are based on averages. But the move will likely cause energy companies to pay more attention to green energy options…Solar represented 13% of California’s power last year…[and the] nation's solar workforce grew from 209,000 in 2015 to more than 260,000 last year…[It was the fastest growth recorded in the seven years of published data]…” click here for more

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    Wind Boom Goes On Growing Midwest Wealth

    Industry report: Midwest and Great Plains lead wind energy expansion

    Frank Jossi, April 19, 2017 (Midwest Energy News)

    “Wind power represents more than 80 percent of the new electricity generating capacity built in the Midwest and Great Plains states over the past five years as the industry continues to grow…[and the Midwest/Great Plains nexus – combined with Texas — captured 89 percent of all investment in wind last year, according to the] American Wind Energy Association’s annual 2016 report…Iowa now get 35 percent of its power from wind, South Dakota now gets 30 percent, and] North Dakota, Oklahoma and Kansas produce more than 20 percent of their electricity demand from wind…Xcel Energy [will invest $2.5 billion] to purchase or build more than 1,500 megawatts of wind energy, [largely in Minnesota, South Dakota and] North Dakota…[It is projected to save] more than $4 billion in fuel and other costs…Power purchase agreements between Fortune 500 corporations and wind developers, among them Target, 3M, and Johnson & Johnson, are also helping to drive growth…A report from the Lawrence Berkeley National Laboratory showed in 2015 wind cost $20 per megawatt hour, compared to $55 a megawatt hour in 2009…” click here for more

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    More Kentucky Jobs In New Energy Than In Coal

    Trading coal for renewable energy would create jobs in Kentucky, group says

    Bill Estep, April 19, 2017 (Lexington Herald-Leader)

    “Greater emphasis on energy efficiency and on producing electricity from renewable sources would create thousands of jobs in Kentucky, reduce electricity bills and help improve the health of residents by cutting pollution, according to [a plan from Kentuckians for the Commonwealth (KFTC). An organization spokesperson says solar appears to have ‘little support’] among lawmakers…Since the organization started working on the plan in 2015, Republicans friendly to the coal and natural gas industries won control in Frankfort and Washington…[The plan reports that the country] is on the verge of lurching backwards on clean energy and climate commitments…[KFTC] said it would continue pushing for a transition to a clean-energy economy that is fair to everyone, and will look for ways to put pieces of its proposal, called the Empower Kentucky plan, into place at the local level…” click here for more

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    Wednesday, April 19, 2017

    ORIGINAL REPORTING: Rocky Mountain compromise: Inside Xcel's landmark Colorado solar settlement

    Rocky Mountain compromise: Inside Xcel's landmark Colorado solar settlement; In a summer of solar contention, Colorado stakeholders chose a path of less-resistance

    Herman K. Trabish, August 22, 2016 (Utility Dive)

    Editor’s note: Colorado stakeholders continue wrestle with the issues left unresolved in this settlement. It shows that peace is hard to make but even harder to keep.

    Colorado avoided the contentious utility-solar debates that have eroded the solar business in other states when Xcel Energy and 26 solar and consumer interest groups struck a far-reaching compromise in August of 2016 on a rate case, a controversial large-scale utility solar program, and the regular review of the state’s renewable energy plan. The final settlement included three key provisions. First, it replaced Xcel’s initial request for a fixed “grid use charge.” Instead, there will be a voluntary time-of-use (TOU) rate trial for residential customers and a voluntary time differentiated rate (TDR) demand charge pilot program for residential and commercial customers.

    Second, the settlement approves Xcel’s proposed 50 MW solar installation, allowing the utility will be allowed to market subscriptions for the output to its retail customers through a green rider program. That could put the utility into competition with Colorado’s budding private sector community solar developers, though Xcel agreed to conditions stakeholders said would help preserve a level playing field. Finally, stakeholders approved regularly-scheduled updates of Colorado’s Renewable Energy Plan (RE Plan) for 2017 through 2019. They include capacity increases for Xcel’s renewables programs and a commitment from the utility to treat all net metered solar owners equitably. In addition to the victory over fixed charges, the structure of Xcel’s green energy rider program could be an example to other states… click here for more

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    ORIGINAL REPORTING: Fixed charge battle looms in Texas as regulators tackle rate design reform

    Fixed charge battle looms in Texas as regulators tackle rate design reform; A legislative effort to chart new ratemaking mechanisms in the Lone Star State has the utility sector drawing familiar battle lines

    Herman K. Trabish, August 23, 2016 (Utility Dive)

    Editor’s note: Regulators continue to consider the proposals outlined in this story. The health of the Texas distributed resources industry is at stake.

    On orders from their lawmakers, Texas utility regulators are looking at new rate design mechanisms that could lead to new possibilities on the grid – or yet another debate about fixed charges. A review of 11 different rate design options for the Public Utility Commission of Texas (PUCT) was the basis for the larger review of utility ratemaking aimed at modifying regulatory methods to meet 21st century needs. New rate design options are currently under consideration across the U.S. to align utility business practices with the deployment and operation of third-party resources like rooftop solar and battery storage. Some say these early rate reform discussions in Texas may be headed down an all too familiar path toward contention on fixed charges, with little upside for non-utility stakeholders.

    In response to Texas Senate Bill 774, passed in May 2015, the rate design study described mechanisms that could significantly change traditional cost-of-service ratemaking in Texas. A revenue decoupling mechanism, one of the study’s central recommendations, would adjust energy prices to compensate utilities by “decoupling” revenues from electricity sales. Lost revenue adjustment mechanisms (LRAMs) make possible recovery of revenues that might be lost to efficiency and DER between rate cases so the utility can be made whole without the complications of a regulatory proceeding. A more forward-looking proposed mechanism is ratemaking based on performance. With it, the utility is rewarded for meeting any kind of performance targets established through the regulatory process, including for efficiency and DER growth… click here for more

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    ORIGINAL REPORTING: No time to think: How utilities are handling the deluge of grid data

    No time to think: How utilities are handling the deluge of grid data; The growth in smart grid tech is outpacing utility ability to analyze its data, but new software could offer hope

    Herman K. Trabish, August 24, 2016 (Utility Dive)

    Editor’s note: Subsequent events show this story to be a snapshot of things to come, things now emerging.

    As utility systems modernize, adding more distributed technologies and smart capabilities, many power providers are finding themselves outpaced by the sheer amount of new information the new grids present. Utilities used to read customer meters 12 times a year. Now advanced meter infrastructure (AMI) often reports every 15 minutes. That’s thousands of times more information, and it is just a small part of what is coming at electric utilities. The deluge also includes data on billing and workforce management, operations and maintenance, and system planning — not to mention the information generated by SCADA systems and sensors used across the transmission and distribution grids.

    Investor-owned utilities, co-ops and municipal providers across multiple regions say the increase in data — and the opportunities it presents — are significant. And greater volumes of data are expected. Smart meters and advanced sensing data will be critical to the energy industry’s transformation to a more customer-centric business. Figuring out how to manage the data could hold the key to new revenue streams and improved grid operation, if utilities can find software tools to integrate multiple grid technologies and handle ever-escalating quantities of information. The Utility Analytics Institute recently reported that over half of utilities have “very limited use” for the data they are collecting, almost 40% are “trying to figure out what to do with it,” and only 5% to 10% have “standardized data analytics tools and processes.” Recent advances in predictive technology and cloud computing may offer a way forward…

    click here for more

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    NO QUICK NEWS

    Tuesday, April 18, 2017

    TODAY’S STUDY: Resource Diversity And Grid Reliability

    PJM’s Evolving Resource Mix and System Reliability

    March 30, 2017 (PJM Interconnection)

    Executive Summary: Introduction

    Recent growth in the amount of natural gas-fired and renewable generation has raised questions about “fuel diversity” on the PJM Interconnection system. Considering the retirement of coal-fired generation and to a lesser extent the threat of nuclear generation retirement, stakeholders have questioned whether the system is losing too many resources which historically have been referred to as “base load”4 generation capability and whether the system is – or could become – so dependent on natural gas or renewable resources that operational reliability is adversely impacted. In response to those concerns, PJM conducted this analysis to evaluate fuel diversity through the lens of reliability and to identify a range of resource mixes that effectively manage reliability risk.

    This paper does not analyze market or economic impacts of fuel diversity, nor does it address public policy issues, such as environmental or job impacts of different resource mixes. The paper’s focus is on the reliability aspects of fuel mix diversity, including fuel security. The paper offers insight, from a grid operator’s perspective, for policymakers to consider when assessing the impacts of a changing resource mix and poses questions about new impacts to evaluate.

    Executive Summary: Approach and Risk Analysis

    In light of the increasing contribution of natural gas-fired generation and retirement of coal-fired generation, PJM has undertaken several natural gas analyses to assess potential system reliability implications. All the studies generally concluded that the existing and planned natural gas pipeline infrastructure would be adequate for current and future anticipated electric system needs.5

    Today’s resource profile in PJM is both reliable6 and diverse – with a combination of natural gas, coal, nuclear, renewables, demand response and other resource types. Historical events discussed in this paper highlight that a more diverse system is more likely to have increased flexibility and adaptability to (1) mitigate the risk associated with equipment design issues or common modes of failure7 in similar resource types, (2) address fuel price volatility and fuel supply disruptions and (3) reliably mitigate risk caused by weather and other unforeseen system shocks. In this way, resource diversity can be considered a system-wide hedging tool that helps ensure a steady, reliable supply of electricity.

    PJM’s assessment of the reliability services provided by different resource types builds upon work initiated by the North American Electric Reliability Corporation (NERC) and the power industry to define “essential reliability services,” which comprise a subset of generator reliability attributes. Key generator reliability attributes defined and analyzed as part of this paper include frequency response, voltage control, ramp, fuel assurance, flexibility, black start, environmental restrictions and equivalent availability factor.

    PJM analyzed each resource type’s ability to provide generator reliability attributes based on the resource type’s physical capabilities and PJM’s operational experience. For the expected near-term resource portfolio9 and future portfolios,10 PJM calculated the capability of each resource type to provide reliability services as well as the total amount of each reliability attribute available in different resource portfolios. Each potential future portfolio was assessed based on its ability to provide two components of reliability: resource adequacy and operational reliability.

    Resource adequacy addresses the amount of capacity needed to serve a forecasted peak load while meeting the required Loss of Load Expectation11 (LOLE) criterion.12 To ensure resource adequacy, each potential portfolio was tested against the LOLE criterion. The portfolios were subjected to a second LOLE test to account for intermittent output from wind and solar resources and currently limited storage capabilities. This second test ensured that portfolios with large unforced capacity shares of intermittent resource were able to serve load during hours that their outputs would be significantly lower than their capacity obligations. Portfolios that failed the second LOLE test were considered “infeasible.”

    Operational reliability addresses the grid’s day-to-day operational needs and is measured by a portfolio’s capability to provide the defined key generator reliability attributes. To assess operational reliability, PJM created a “composite reliability index” using the calculated capability of each resource type to provide the generator reliability attributes.

    The analysis used the index 1) to identify portfolios at risk of failing to provide adequate levels of the key generator reliability attributes and 2) to quantify and assess the reliability of a given potential resource portfolio across four operational states (i.e., normal peak conditions, light load, extremely hot weather and extremely cold weather).

    Portfolios with the lowest composite reliability indices were deemed “at risk” for underperformance in terms of providing the defined key generator reliability attributes. These portfolios do not exhibit, or only partially exhibit, numerous generator reliability attributes in one or more of the studied operational states.

    The paper does not identify all possible feasible resource mixes, nor does it define an optimal mix. Rather, the analysis used this risk assessment to evaluate a range of potential resource portfolios based on their abilities to provide generator reliability attributes benchmarked against the generator reliability attribute capability of the expected near-term portfolio.

    Executive Summary: Summary of Analysis Results

    Among the key findings of the analysis:

    • The expected near-term resource portfolio is among the highest-performing portfolios and is well equipped13 to provide the generator reliability attributes.

    • As the potential future resource mix moves in the direction of less coal and nuclear generation, generator reliability attributes of frequency response, reactive capability and fuel assurance decrease, but flexibility and ramping attributes increase.

    • A marked decrease in operational reliability was observed for portfolios with significantly increased amounts of wind and solar capacity (compared to the expected near-term resource portfolio), suggesting de facto performance-based upper bounds on the percent of system capacity from these resource types. Additionally, most portfolios with solar unforced capacity14 shares of 20 percent or greater were classified infeasible because they resulted in LOLE criterion violations at night. Nevertheless, PJM could maintain reliability with unprecedented levels of wind and solar resources, assuming a portfolio of other resources that provides a sufficient amount of reliability services.

    • Portfolios composed of up to 86 percent natural gas-fired resources maintained operational reliability.15 Thus, this analysis did not identify an upper bound for natural gas. However, additional risks, such as gas deliverability during polar vortex-type conditions and uncertainties associated with economics and public policy, were not fully captured in this analysis. Risks with respect to natural gas may lie not in capability to provide the generator reliability attributes but rather in these other uncertainties.

    • More diverse portfolios are not necessarily more reliable; rather, there are resource blends between the most diverse and least diverse portfolios which provide the most generator reliability attributes.

    Executive Summary: Fuel Security and Resilience

    The analysis discussed in this paper was initiated by questions about “fuel diversity” on the PJM system and whether the system could become so dependent on natural gas or renewable resources that operational reliability would be adversely impacted. Fuel diversity itself does not ensure reliability. According to the results of PJM’s analysis reported in this paper, the composition of a resource portfolio could negatively impact that portfolio’s ability to provide an appropriate level of generator reliability attributes.

    The adequate level of fuel diversity allows increased flexibility and adaptability. Nevertheless, the analysis shows that many of the potential future resource portfolios are likely to be reliable because they are likely to provide adequate amounts of the defined key generator reliability attributes. This observation holds true even for potential resource mixes that are heavily reliant on natural gas-fired generation and thus lack fuel diversity.

    For the purpose of this paper, the terms fuel security and energy security can be used interchangeably. (In addition, as mentioned previously, this paper does not focus on the economic impact of fuel security.)

    “Heavy” reliance on one resource type, such as a resource portfolio composed of 86 percent natural gas-fired resources, however, raises questions about electric system resilience, which are beyond the reliability questions this paper sought to address. Resilience is the capability of an energy system to tolerate disturbance and to continue to deliver energy services to consumers. Relying too heavily on any one fuel type may negatively impact resilience because resources do not provide generator reliability attributes equally. External drivers have impacted and could continue to impact the resource mix.

    Executive Summary: Moving Forward

    The capability of resource types to provide various generator reliability attributes may change in the future because of changes in technology or regulations. Therefore, operations, market compensation and regulatory structures may need to shift to ensure that adequate levels of generator reliability attributes are maintained in future resource mixes. PJM will need to assess diversity and security going forward and work through either existing processes and market enhancements or develop new solutions to ensure that sufficient generator reliability attributes will be available.

    PJM and its stakeholders should continue to examine resilience-related low-probability and high-impact events which can cause significant reliability impacts. PJM will continue to identify the highest risks to reliability from the anticipated resource mix changes to determine potential techniques to identify and mitigate natural gas infrastructure vulnerabilities – given the current and expected rapid growth in natural gas generation.

    Although each resource type carries with it sizable exposure to low-probability high-impact events, the ever-growing increase of natural gas as a fuel source makes continued examination of dependence on natural gas particularly appropriate. PJM also will continue to identify means to mitigate the exposure to “realistic” interruption events, which are not extreme but part of the daily physical or political landscape.

    However, unlike the reliability services used in this analysis, criteria for resilience are not explicitly defined or quantified today. Some questions PJM and its stakeholders should consider include:

    • Does PJM’s current set of business practices ensure that PJM’s evolving resource mix will result in continued reliable operations?

    o Are there reliability attributes that are missing from this analysis, and what, if any, generator reliability attributes are important but currently being undervalued in PJM?

    o During high-dependency / high-risk periods, should PJM schedule the system differently to consider fuel security concerns?

    o How can distributed energy resources and renewable resources provide additional reliability or resilience services through, for example, advances in inverter and storage technologies?

    • How could PJM’s business practices include resilience?

    o Should PJM plan for and operate to a set of extreme contingencies that maintain an adequate operating margin under normal operations? Extraordinary situations?

    o Should PJM and the natural gas pipelines coordinate, study and operate to joint electric and natural gas contingencies?17

    o Could black-start requirements and restoration strategy better consider resilience, for example, in how PJM defines black-start resources, critical load and requirements for cranking paths?

    PJM’s established planning, operations and markets functions have resulted in a PJM resource mix that is reliable. The current resource mix is also diverse.18 PJM recognizes that the benefits of fuel mix diversity include the ability to withstand equipment design issues or common modes of failure in similar resource types, fuel price volatility, fuel supply disruptions and other unforeseen system shocks. PJM will continue to leverage the proven approach of the well-developed stakeholder process both to ensure future resource mixes support continued reliable operations and to further define criteria for resilience.

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    QUICK NEWS, April 18: The War Between Wall Street And Solar; New Energy To Power Healthcare

    Study Puts 10-Year Timer On Climate Change Study: 10 Yrs. to Stop Climate Damage or Else! (as Pruitt Calls for U.S. to ‘Exit’ Paris Accord)

    Julia Travers, April 17, 2017 (EnviroNews)

    “…[I]n stark contrast with the mindset of Trump’s Environmental Protection Agency (EPA) Administrator Scott Pruitt, who on April 13, called for a complete ‘exit’ from the historic Paris Agreement…[a new study urges zero net anthropogenic emissions well before 2040] to assure the attainability of a 1.5°C target by 2100…The U.S., which is the world’s second largest contributor of greenhouse gases after China, committed to reduce emissions by between 26 and 28 percent, below 2005 levels by 2025 [in the Paris agreement]… The recent climate analysis recommends a reduction in global fossil fuel consumption from 95 percent to less than 25 percent by 2100. The report also takes carbon uptake by plants, oceans and soil into account and calls for a decrease in deforestation…[to get] a 42 percent decrease in emissions by the end of the century…If renewable energy only continues to grow at the current approximate rates of between 2 percent and 3 percent annually, the researchers estimate a 3.5°C global temperature rise by 2100…” click here for more

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    The War Between Wall Street And Solar How Wall Street Once Killed the U.S. Solar Industry… and how it could happen again.

    Robinson Meyer, April 17, 2017 (The Atlantic)

    “…[The global solar industry] is a $65-billion business, and the United States has been involved in it from the beginning…Yet North American firms produce only about 3 percent of the world’s solar panels. China and Taiwan, meanwhile, make more than 60 percent of them…Labor in East Asia is often cheaper…but that’s not the only factor…[Computer chips and solar panels were commercialized before 1980 but] the United States still leads the computer-chip industry, holding more than half of global market share for 20 years…A new paper in Science Advances argues that [enormous market changes in the 1970s and 1980s labeled ‘financialization’ drove firms to financial assets with fast-rising valuations instead of] creating new wealth for the long term…Solar’s too long-term; it’s in direct competition with fossil fuels; and it’s very capital-intensive. There has to be some kind of corporate restructuring for innovation to occur. There has to be some kind of policy that makes a break with the way it is now…” click here for more

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    New Energy To Power Healthcare Partners HealthCare enters into contract with Antrim Wind Energy

    Abby Kessler, April 17, 2017 (Monadnock Leger-Transcript)

    “…[Partners HealthCare will purchase 75 percent of an Antrim Wind Energy] wind facility’s 28.8 MW] capacity once the project is operational…[Construction is expected to begin] this year…The partnership represents the largest direct delivery renewable energy purchase in the northeast by an end user…The contract [with Antrim will enable the construction of the wind farm and] is part of Partners’ plan to become ‘net carbon positive’ by 2025…[The project] will reduce greenhouse gas emissions by 110 million pounds of CO2 per year, or the equivalent of removing 10,000 cars from the road…” click here for more

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    Monday, April 17, 2017

    TODAY’S STUDY: The Jobs In Wind And Solar

    Engine Of Growth: The Extensions Of Renewable Energy Tax Credits Will Power Huge Gains In The Clean Energy Economy

    March 2017 (Natural Resources Defense Council)

    The extensions of federal wind and solar tax credits will create more than 220,000 jobs and add nearly $23 billion to the U.S. economy this year, NRDC has found in this groundbreaking analysis. In December 2015, Congress passed bipartisan legislation to extend the federal wind and solar tax credits, providing important multi-year policy certainty for the clean energy industry. With increased power from wind and solar, the average household will save money on its monthly electric bills, and utility customers will be less exposed to potential spikes in fuel prices.

    The clean energy growth will displace fossil fuel generation that emits the pollution driving climate change and other harmful air pollutants, producing substantial climate and public health benefits. Policymakers should seize the economic growth opportunities of clean energy and implement policies that build on the foundation of the tax credits to accelerate our urgently needed transition to a low-carbon future.

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    Introduction

    The wind and solar industries have experienced remarkable growth over the past decade, thanks to a combination of falling technology costs and critical support from state and federal policies, including the federal renewable energy tax credits.1

    In December 2015, Congress passed multi-year extensions of these tax credits, providing important short-term certainty for the clean energy industry. Under the extensions, the tax credits for onshore wind are gradually phased out and expire at the end of 2019. Solar credits are gradually phased out until they expire for residential projects after 2021; for utility-scale and commercial projects, credits are gradually reduced to 10 percent of investment costs after 2021 and then will remain at that level.2 Prior to this extension, the production tax credit (PTC) for onshore wind had been allowed to lapse five times, and then had either been renewed at the last minute or retroactively, hampering the wind industry’s ability to plan and grow.3 With that uncertainty eliminated, the renewables industry is in a position to undergo a phase of sustained, rapid growth, producing significant job gains and economic expansion, cleaner air, and progress toward meeting our climate goals.

    This report presents new analysis that projects the significant environmental and economic benefits that will accrue directly from the December 2015 tax credit extensions.

    The analysis was conducted in two steps: power sector modeling and economic modeling. First, power sector modeling was performed by ICF using its Integrated Planning Model (IPM®) and relying on the underlying assumptions and scenarios developed by NRDC and M.J. Bradley & Associates for a separate analysis.

    A “No Tax Credits” scenario was developed projecting outcomes without the federal tax credit extensions for comparison with the “Tax Credits” scenario.6 The IPM projections provide an estimate of the amount of investment spurred by the renewables tax credits, as well as the impacts of those investments on the rest of the power sector. In the second step, the renewables investments and power sector impacts were used as inputs for the economic analysis, which was performed by ICF for NRDC using the REMI Policy Insight Plus model, a dynamic, economywide model of the entire United States.7,8 The tax credit extensions result in lower government tax revenues than in the No Tax Credits case; in order to maintain budget neutrality, the analysis assumed equivalent reductions in government spending to offset this loss in revenues.

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    The Tax Credit Extensions Will Help Accelerate Our Clean Energy And Climate Progress

    Multiple studies have concluded that wind and solar capacity is expected to nearly double from 2015 levels by 2021.10 This study isolates the impact of the tax credits by examining a scenario in which, all else being equal, the tax credits had not been extended. The analysis concludes that the tax credits alone will prompt the development of nearly 29,000 megawatts of additional new utility-scale wind and solar capacity by 2020, enough to power nearly eight million homes and 23 percent greater capacity than in the No Tax Credits scenario (see Figure 1).11

    Wind and solar energy can provide a range of customer benefits for households and businesses. Our analysis finds that, as a result of the tax credit extensions, average wholesale power prices and natural gas prices will be 2.2 percent and 1.5 percent lower, respectively, in 2020, compared with the No Tax Credits scenario. Increased wind and solar power reduces reliance on natural gas and provides a hedge against fuel price volatility, meaning that customers are less exposed to events such as spikes in natural gas prices.13 And, the savings on fuel and reduced future capital expenditures for the expansion of conventional fossil energy capacity outweigh the utility customers’ exposure from capital costs of building new wind and solar projects. As a result, the average U.S. household is projected to save 1.7 percent on its average monthly electricity bill in 2020, compared with the No Tax Credits case. These customer benefits are most substantial in the next several years, but persist through the next decade (see Figure 2).

    Other policies focused on renewable energy growth have been demonstrated to deliver similar benefits in practice. An analysis by the Lawrence Berkeley National Laboratory found that in 2013 alone, renewable portfolio standards across the country saved customers up to $1.2 billion from reduced wholesale electric prices and up to $3.7 billion from lower natural gas prices (as a result of lower total demand for natural gas from the power sector).14 Recent studies have also found that, over the past decade, the top 10 states in terms of investments in renewables have seen smaller retail electricity price increases than the bottom 10 states.15,16

    Growth in clean energy will also help make progress toward protecting both the climate and public health. By displacing fossil fuel generation, wind and solar power will drive down carbon emissions by 45 million tons (2.2 percent) in 2020, according to our analysis. The declines in fossil fuel generation will also result in air quality improvements, reducing harmful nitrogen oxide (NOx) and sulfur dioxide (SO2) pollution by 40,000 tons (3.2 percent) and 22,000 tons (1.6 percent), respectively, in 2020.

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    Wind And Solar Growth Will Drive Economy-Wide Gains

    Clean energy is an important and quickly growing sector of our economy. As of 2016, the wind industry supported nearly 102,000 jobs, and more than 260,000 U.S. workers spent at least half of their time contributing to the booming solar industry, according to a new report by the Department of Energy.17 Solar industry employment has nearly tripled since 2010, and the Bureau of Labor Statistics recently projected that wind turbine technician would be the fastest growing job in the country through 2024.18,19 Now that the clean energy industry has received tax policy certainty for the next several years, the wind and solar sectors are wellpositioned to continue their rapid growth.

    Our economic analysis indicates that wind and solar growth will also result in new jobs in the clean energy industry, bringing overall net benefits for the economy. The boost in clean energy production fueled by the tax credits will spur more jobs for construction workers, solar installers, wind turbine engineers, and related jobs across the clean energy industry, and will stimulate local economies across the country. Overall, the tax credits will drive a net increase of more than 220,000 jobs across the country in 2017, and an average annual employment gain of over 80,000 jobs between 2016 and 2025 above the No Tax Credits scenario.

    As shown in Table 1 and Figure 3, the states examined in this analysis are projected to see significant benefits to their economies as a result of the tax credit extensions.20 Iowa, already fourth in the country in wind jobs, is likely to see additional job creation driven by the boost in wind growth in the region, and its economy stands to gain more than 3,300 jobs each year in 2017 and 2018, our analysis indicates.21 Nevada, home to some of the cheapest solar power in the country, is projected to add more than 1,400 jobs in both 2017 and 2018. Ohio adds 9,700 jobs in 2017 and more than 10,000 jobs in 2018, and the state’s gross domestic product gets a boost of over $1 billion per year. Pennsylvania is projected to gain nearly 9,300 jobs each year in 2017 and 2018, and its GDP gets a boost of more than $1 billion per year. In Virginia, the state gains about 5,000 jobs per year in 2017 and 2018.

    The economic impact estimates reflect both direct investments and spillover effects. Wind installations in Iowa, for example, may contribute to an increase in both construction jobs in Iowa and manufacturing jobs in Michigan. The overall impacts described in this report are net effects for the entire economy, including increases in investments in renewables-related sectors as well as lower fossil fuel consumption and related supply-chain effects.

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    Policymakers Should Build On The Benefits Of A Clean Energy Economy

    The benefits of a clean energy economy are clear and growing. Tax policy has long played an important role in the energy sector, and any adjustments to the tax code should take into account the significant economic, public health, and climate benefits of clean energy. The tax credit extensions will have the largest impact over the next few years until they phase out, but additional policies to accelerate clean energy deployment beyond 2020 would most likely lead to even stronger, more persistent job gains and economic growth. Policymakers should take advantage of the tremendous economic development opportunity that clean energy represents. Federal and state policymakers alike should implement policies that accelerate our urgently needed transition to a low carbon economy.

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