As a cap-and-trade bill was weaving its way through Congress in 2009, Washington, D.C. seemed to be the center of America’s climate and clean energy agenda. But when the bill failed, it fell to states to take action.
Reflecting this shift, two charitable groups just announced they will provide $48 million in grant funding to accelerate the transition to clean energy at the state level. Bloomberg Philanthropies and the Heising-Simons family are donating equal amounts to the fund that will be dispensed to a broad range of stakeholders over the next three years.
The Clean Energy Initiative is intended to help states implement the U.S. EPA’s draft rule to reduce carbon pollution from the power sector by 30 percent below 2005 levels. If implemented, the Obama administration’s proposed power plant rules will put more responsibility on states to mitigate carbon emissions. If the regulations survive legal challenges from coal companies and other industry actors, they could prompt a significant restructuring of the electricity sector.
Even without the rule in place, low natural-gas prices and tumbling costs for renewable energy and energy efficiency technologies are pressuring utility reform. Solar has seen some of the most dramatic cost declines, with system costs dropping between 33 percent and 50 percent across all market segments, according to GTM Research.
“With the price of clean power falling, and the potential costs of inaction on climate change steadily rising, the work of modernizing America's power grid is both more feasible and urgent than ever,” said former New York Mayor Michael Bloomberg in a statement. “These grants will help states meet new federal clean power requirements in ways that save money and lives.”
According to the EPA, the proposed power plant rules will produce climate and health benefits worth an estimated $55 billion to $93 billion in 2030, while avoiding 2,700 to 6,600 premature deaths.
California-based donors Mark Heising and Elizabeth Simons believe carbon pollution is among the world’s most pressing concerns. “New technologies ensure that the solutions to climate change can be cost-effective,” said Heising.
Rather than support state governments, the $48 million will go to a variety of groups informing states as they create their clean energy strategies. Grantees are expected to include national groups, such as Environmental Defense Fund and the Natural Resources Defense Council, as well as state and local organizations.
In addition to money, the initiative will provide technical guidance on grid optimization and opportunities to deploy renewable energy and energy efficient technologies.
The entire country is seeing price declines in advanced energy technologies and new business models to support energy management and customer-owned generation, said Dan Scripps, president of the Institute for Energy Innovation in Michigan. But action is really happening at the local and state levels based on specific energy needs, available resources, regulations and political frameworks.
Michigan, for instance, paid $22.6 billion to import energy from other states and countries in 2009. “It’s in our best interest as a state with good wind potential, that’s home tosolarmanufacturing companies and imports almost all of our energy, to do more to generate our own energy and waste as little as we can,” said Scripps.
A big part of the challenge is getting state agencies to think about new energy technologies as alternatives to fossil fuels, as opposed to traditional environmental solutions like scrubbers and pollution controls for power plants, he added.
With support of the new Clean Energy Initiative, EPA rules and other state policies could drive a rapid increase in renewable energy capacity and efficiency savings. But in addition to overcoming technical and regulatory barriers, the initiative will have to counter attacks clean energy policies from right-wing political groups with wealthy backers, including the Koch brothers.
Brian Urbaszewski, director of environmental health programs for the Respiratory Health Association in Chicago, doesn’t see clean energy and cutting air pollution as partisan issues, however. In Chicago at least, Republican Governor-elect Bruce Rauner has committed to achieving the state’s renewable portfolio standard and maximizing energy efficiency. Republican Governor Rick Snyder of Michigan and others have made similar commitments.
“When a Republican governor says [clean energy] is important -- that should tell people this isn’t a partisan issue, especially in the Heartland,” said Urbaszewski.