Decarbonizing the Electric Grid
In electricity policy, “decarbonization” is in the air. As the name implies, decarbonization entails shifting the fossil fuel mix towards less intense producers of carbon dioxide together with reduced reliance on fossil fuels for electric generation over time. Scholars and think tanks have explored the possibility of rapid, deep decarbonization, demonstrating that it is at least technically possible. Indeed, the rate of decarbonization of the electric generation mix seems to be accelerating accordingly, driven by market forces particularly relating to low natural gas prices and declining cost of renewables, improved methods for integrating renewable energy into the electric grid, and a growing list of federal, state and local policy incentives. The latter category comprises a smorgasbord of old and new policies, including (i) the EPA’s Clean Power Plan and mercury rules, (ii) new, more aggressive renewable state clean energy standards like the “50% by 2030” renewable energy goals established recently by the states of New York and California, (iii) even more aggressive clean energy goals adopted by some municipal governments, and (iv) attractive financial incentives for the adoption of rooftop solar and other zero-emission, distributed energy alternatives. Even in the absence of aggressive state and local policy incentives, the low marginal costs of wind and solar generation (combined with federal tax credits) have facilitated the growth of those technologies in competitive wholesale markets.
The speed of this growth trajectory for renewables poses evolving challenges for grid managers, regulators and industry participants alike. The 7th Annual Austin Electricity Conference, April 20 & 21, 2017, will explore economic, engineering, legal and policy issues posed by these changes.