When the U.S. Environmental Protection Agency issued its final Clean Power Plan rules last week, the carbon emissions reduction goals for the nation were higher than expected – even more so for Montana.
The overall goal is a nationwide carbon emissions reduction of 32 percent below 2005 levels, by 2030. Depending on how carbon pollution is calculated, Montana is responsible for cutting carbon emissions from our energy sector by 33-47 percent, by 2030. These goals are necessary to combat climate change and reduce harmful pollution in the nation’s air. Through heat rate improvements at coal plants, energy efficiency measures and renewable energy deployment, Montana can achieve the goals in the Clean Power Plan and position the state to benefit from the national shift towards cleaner energy.
In order to ensure Montana maximizes the potential benefits from the Clean Power Plan, the state – under Gov. Steve Bullock’s leadership – will need to develop our own implementation plan for meeting our carbon reduction targets. Some more knee-jerk reactions to the Clean Power Plan have suggested we shouldn’t develop a state implementation plan and instead let EPA apply its one-size-fits-all federal plan to Montana. Such an approach would be a mistake.
Montanans are already experiencing the shift from coal power to other energy sources, first to low-cost natural gas, and now to renewable energy sources like wind and solar, which make up 65 percent of all energy capacity additions in the U.S. so far this year. Coal plant operators are caught between declining costs for energy alternatives and increasingly reluctant buyers of coal electricity.
For example, Washington state Gov. Jay Inslee has committed to end “coal by wire” imports to serve Washington homes and businesses, a major consumer of Montana coal electricity. The Clean Power Plan, which encourages all states to develop and file implementation plans, is a big opportunity to gain regional agreement around the ongoing energy transition. If we choose not to engage in implementation planning we will miss an opportunity to shape and bring certainty to the state’s energy sector.
Montana’s clean energy developers will also benefit from the certainty of a state-developed compliance plan. Montana has one of the best wind energy resources in the nation. We have already developed about 670 megawatts of wind energy in the state, creating hundreds of jobs, and millions of dollars in rural county tax revenues and landowner payments. But that development is a mere fraction of the wind energy potential that is economically viable in Montana.
Unfortunately our wind energy resource has been held back from greater development by an inability to precisely match energy demand with new energy transmission, a particularly tricky problem for expensive and time consuming transmission projects. In order to successfully develop our wind energy resource we will need greater cooperation, creativity and openness to Montana wind from the region’s largest transmission provider, the Bonneville Power Administration.
The EPA’s Clean Power Plan could both spur much more demand for Montana wind in the region and help address the challenges of matching electricity demand with transmission development, as each state publishes long-term implementation plans.
Nationally, installed wind energy already reduced carbon emissions by five percent in 2014 and is capable of doing much more, particularly because wind energy is affordable. Wind energy costs have fallen by more than 65 percent since 2009. According to data from the Department of Energy the average price for a long-term contract of wind energy in 2014 was just 2.4 cents per kilowatt-hour. That’s cheap power. To provide some context, the energy supply rate on NorthWestern Energy’s system is about 6.7 cents per kilowatt-hour.
Combine the low prices with our outstanding wind resource and the national push towards clean energy and Montana could see a big boom in our renewable energy industry, bringing jobs and economic investment.
If we commit to approaching the Clean Power Plan earnestly and pragmatically we can help Montana and the nation achieve a cleaner, lower cost and more price stable energy future, while at the same time benefiting economically by developing our renewable energy resources.