Policy also enables long-term planning for infrastructure. The regional grid operator, known as the Midcontinent Independent System Operator (MISO), approved $5.2 billion of new transmission projects in 2011, specifically to enable the fulfillment of RES targets in the region. This marriage of state energy policy with regional transmission planning was a breakthrough, and became the basis for a national order from the Federal Energy Regulatory Commission, known as Order 1000. The order establishes regional utility planning to help integrate renewable energy into the system, expand the grid, and incorporate public policy goals such as RES laws.
The prosperity created by this new industry, in rural income and urban manufacturing jobs, has built support across the political spectrum, breaking down partisan divides around energy and climate. Karl Rove, former deputy chief of staff to President George W. Bush, told a wind power conference in 2012, "We need conservative Republicans who can say, ‘This means jobs to my district,' ... and we need Democrats to say, ‘This is a way to expand the range of options that we have in this country for energy.'" According to the American Wind Energy Association, 76 percent of all members of Congress currently have operating wind projects, wind-related manufacturing facilities, or both in their districts.
The Midwest is a national power base for this support. Some of the strongest national champions for renewable energy are from the Midwest, like Senator Chuck Grassley of Iowa and Governor Sam Brownback of Kansas, both Republicans.
Coal, Gas, Clean Energy: From Opposition to Integration
Wind power isn’t the only success story in the Midwest. Energy efficiency funding is also soaring in the region. The Midwest Energy Efficiency Alliance projects $1.8 billion in annual funding for electric and natural-gas efficiency programs in 2015 — a 15-fold increase over 2000 levels. Much of that growth has been since 2007, and primarily for electric efficiency. State energy efficiency resource standards (EERS), comparable to an RES, have helped boost these improvements. The EERS sets long-term savings goals, which drive utility spending on efficiency programs. Seven Midwestern states have adopted EERS laws, out of 25 nationally.
Energy efficiency policies also create jobs. Johnson Controls, headquartered in Milwaukee, Wisconsin, was born with efficiency: founder Warren Johnson invented the thermostat in 1885. The company now provides energy efficiency services, building and refrigeration controls, and automobile components and advanced batteries, and has expanded to 500 branch offices in 150 countries. Last year Johnson Controls building efficiency services earned revenues of $14.7 billion.
The region’s power system is undergoing a rapid transition away from coal. In the 12 Midwestern states, there are 499 coal units with a total capacity of 111,000 MW — and an average age of 46 years. As aging coal plants face new competition from cheaper options like energy efficiency, wind, and gas — plus stricter environmental regulations — their owners are deciding their best option is to shut them down. Utilities have announced as much as 58,000 MW of coal retirements in the next three years, with potentially 18,000 MW in the Midwest.
Meanwhile, natural gas is rapidly growing. Directional drilling and hydraulic fracturing, known as “fracking,” has driven down gas prices 60 percent since 2008, making natural gas power cheaper than coal. The gas revolution has been a mixed blessing for the growth of the cleanest power sources: While low-cost gas has helped push coal out of the market, it has made efficiency and renewables less competitive. Moreover, significant questions remain about the environmental impacts of fracking, such as water pollution and methane leakage.
All of these factors are contributing to a future power system that will be more diverse and less dependent on a single fuel. It will be more flexible, more reliable, and more efficient, saving consumers money, making industry more competitive, and reducing environmental damage.
Every new wind turbine manufactured and every efficiency program successfully completed helps to build the political base for new energy as part of a continuing cycle of progress: Political support leads to policy, policy spurs the growth of industry, industry creates jobs and prosperity, and prosperity generates still more political support.
Making the Midwest the Leader
Just as 1993’s Powering the Midwest presaged today’s renewable energy present, the National Renewable Energy Lab has described a future that takes it to the next level. The Renewable Electricity Futures study lays out a number of scenarios where the U.S. grid is powered by up to 90 percent renewables by the year 2050. In a central 80 percent scenario, Midwestern states account for 8 of the top 10 spots for wind energy production, and 9 of the top 10 for biomass power.
But more must be done to realize this vision. America’s Power Plan, a project of the Energy Foundation and Energy Innovation, taps 150 experts to develop a policy roadmap for a clean power system.
America’s Power Plan recommends that the U.S.:
“The moment is approaching when our nation must decide how it's going to power the future,” says Kansas Governor Sam Brownback. “The importance of renewable energy to the nation becomes clear… as we examine the importance of true energy independence and security more closely, and as we continue our work on rebuilding the economy and job creation.”
“We, as a nation, have been waiting for the moment when a true balance between environmental concerns, economic benefits and energy needs is in view. I believe that moment has arrived.”
The Midwest is starting to achieve a vision of clean energy security: a domestic energy supply, local economic development, and low carbon emissions. The region can lead the transition to smart energy policies that benefit people, businesses, and communities across the nation.
Ben Paulos is the principal of PaulosAnalysis, an energy consulting firm, and was formerly Program Director for Renewable Energy at the Energy Foundation. Eric Heitz is the CEO and Co-Founder of the Energy Foundation, and Gregg Ander is the Vice President of the Power Program.
This essay originally appeared in the Energy Foundation's 2012 Annual Report and is being redistributed with the foundation's permission. America’s Power Plan is curated by the Energy Foundation in partnership with Energy Innovation.
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