Repowering chicago: accelerating the cleaner, more resilient and more affordable electricity market transformation
For Chicago, how Illinois seeks to achieve Clean Power Plan compliance makes a difference
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| For Chicago, how Illinois seeks to achieve Clean Power Plan compliance makes a difference. Investments in solar energy developments and in energy efficiency retrofits of buildings in Chicago to achieve Illinois’ Clean Power Plan compliance inject capital, create local jobs and benefit the Chicago economy. Moving to a more distributed energy system creates many installation jobs especially in light of the large number of controls companies in the Chicago region. (Energy consultant Bob Zabors points out the electrical workers training program at Kennedy-King College likely produces among the highest wage jobs in any Chicago-area community college.)
On the other hand, capital investments in retrofitting coal plants and new natural gas plants located elsewhere in Illinois pull money out of the Chicago economy, and the operating costs – particularly for coal and natural gas fuels – likewise drain money out of the Chicago economy. The more distributed solar generation and energy efficiency infrastructure system should result in a much greater percenter of electricity capex and opex staying in Chicago. Chicago’s policymakers and business and civic leaders should strategically focus on Clean Power Plan compliance strategies that are good for Chicago’s economy and good for Chicago’s environment. Finally, as explained above, solar energy, energy efficiency and battery technological improvements, policies and installations are moving fast. Much can happen in the rapidly-changing electricity services market in the seven years between the U.S. EPA’s August 2015 issuance of the federal Clean Power Plan and the 2022 interim date for initial carbon pollution reductions. The United States stepping up with the federal Clean Power Plan is a big step forward for national progress and for credible United States leadership to advance global climate change solutions. In Illinois, the cost per ton of carbon pollution reductions might be much lower than expected, however, and the importance of the Clean Power Plan for influencing change in the electric power section might be less than the impacts of savvy public policies, new financing structures and rapid technological advancements in clean energy development. CONCLUSION Chicago is on the cusp of fundamental changes in which the 100-year old centralized electricity system will shift to be more decentralized and distributed with solar energy providing a greater share of electricity supply, battery storage facilitating more solar use and reliability, and energy efficiency technology improvements and policies significantly reducing electricity demand while Chicago’s overall economy continues to grow. The electricity market of the future will be driven by more pro-competitive and pro-environmental policies, combined with accelerating technological innovations, and lower regulatory barriers to new market entrants who will compete with the current utility monopolies on both price and services. This more distributed and decentralized energy system is less vulnerable to extreme weather events and other disruptions, cleaner and less polluting, and developed in more flexible sizes and locations with more community control, local economic value and job creation. Chicago can and should be a national and global leader in seizing the opportunities to accelerate transformation of the electricity sector and transfer innovative technologies and approaches here that can be models for other cities and can help to solve our global climate change problems. Smart public policies drive electricity markets. Technological innovations and strategies developed and applied here, and then transferred to developing countries, can help save the world. Effectively advancing sustainability principles and practices in Chicago can be replicated and help change the way that people live and businesses operate throughout the world. Howard A. Learner September 12, 2015 - Draft v.3B 16,875 words
1 Howard A. Learner is a public interest attorney who serves as the President and Executive Director of the Environmental Law & Policy Center, the Midwest’s premier public interest environmental legal advocacy and eco-business innovation organization, and among the nation’s leaders. www.elpc.org He is also an (Adjunct) Professor at the University of Michigan Law School and at Northwestern University Law School, teaching advanced seminars in energy and environmental law, climate change policy and sustainable development law. J.D., Harvard Law School (1980); B.A., Political Science (Honors), University of Michigan (1976). Mr. Learner appreciates the research and analytical assistance of the Environmental Law & Policy Center’s Research Coordinator John Paul Jewell (M.B.A.) and Economic Policy Associate Jesse Buchsbaum (B.A., Economics) on the energy efficiency sections of this White Paper. 2 Environmental Law & Policy Center, Illinois Clean Energy Supply Chain report (March 2015), 3 For electric utility bills, the fuel charges are embedded in the electricity supply charges. For natural gas utility bills, the fuel charges are directly passed through to consumers. 4 http://www.solaredge.us/ and https://enphase.com/en-us; https://www.ise.fraunhofer.de/de/downloads/pdf-files/aktuelles/photovoltaics-report-in-englischer-sprache.pdf at Slide 35 (showing 98%+ efficiencies). For an overall perspective more than two years ago, see, e.g., Sustainable Energy Group, Ray Darby, Technology Breakthroughs? The Silent Progress Of the Solar Inverter (July 3, 2013) “Ten to fifteen years ago, solar inverters were 80-85% efficient. They also had to be installed with large batteries as part of the system, which added to the cost and drained the efficiency. Then, the “battery-less” inverter was introduced and the 90% efficiency threshold was crossed, resulting in a cheaper inverter, cheaper installation costs and more power output. Fast forward to today, and improvements over the last 5 years now allow us to install inverters that are 95%-97% efficient!” http://www.sustainableenergygroup.com/technology-breakthroughs-the-silent-progress-of-the-solar-inverter/ For a contemporary discussion of “solar inverter companies to watch in 2015,” see http://www.greentechmedia.com/articles/read/6-Solar-Inverter-Companies-to-Watch-in-2015 5 Lawrence Berkeley National Laboratory, “Tracking the Sun VIII: The Installed Price of Residential and Non-Residential Photovoltaic Systems in the United States” (August 12, 2015). http://emp.lbl.gov/publications/tracking-sun-viii-install 6 http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/ 7 http://www.pewinternet.org/data-trend/mobile/device-ownership/ 8 http://www.greentechmedia.com/research/report/us-residential-solar-financing-2015-2020?utm_source=blast3&utm_medium=GTMREmail&utm_campaign=USRSF15; 9 http://ipa-energyrfp.com/download/supplemental_pv_spring_2015/June%202015%20Supplemental%20Photovoltaic%20RFP%20Results.pdf Bids for the City of Austin’s much larger solar RFP were much lower: under $40 per REC, http://renewables.seenews.com/news/austin-energy-gets-solar-bids-below-usd-40-mwh-482566 10 http://www.eia.gov/todayinenergy/detail.cfm?id=20172 11 http://www.anl.gov/energy/batteries-and-energy-storage 12 http://www.epa.gov/airquality/cpptoolbox/illinois.pdf 13 The U.S. EPA’s final Clean Power Plan rule states that the Energy Information Administration’s (EIA) forecasts “do not reflect the decline in cost and increase in performance that have been demonstrated by current projects,” and as a result, the 2030 goal for renewable generation increases from 22% to 28% of U.S. capacity. 14 http://www.chicagotribune.com/business/chi-landlines-survey-20140708-story.html 15 http://time.com/2966515/landline-phones-cell-phones/ (July 14, 2014). 16 “Get Ready” by William “Smokey” Robinson Jr., 1966. 17 Hat tip to “You Know It Don’t Come Easy” by Ringo Starr, 1971. 18 Jim Handy, FORBES, “Moore’s Law vs. Wright’s Law” (March 25, 2013) (using example of “80% Learning Curve: [solar PV] Module price decreases by 20% for every doubling of cumulative production”) http://www.forbes.com/sites/jimhandy/2013/03/25/moores-law-vs-wrights-law/ 19 Full and obvious disclosure: the author is the Executive Director of the Environmental Law & Policy Center, which is very engaged in many of the energy issues discussed in this White Paper. The author is an advocate, not a “neutral” third-party, on many of these issues, but stands by his analysis expressed herein as fully supported by facts and law. 20 http://www.greentechmedia.com/articles/read/Utility-Exelon-Trying-to-Kill-Wind-and-Solar-Subsidies-While-Keeping-Nukes 21 http://www.awea.org/resources/statefactsheets.aspx?itemnumber=890&navItemNumber=5067 and http://awea.files.cms-plus.com/FileDownloads/pdfs/Illinois.pdf 22 http://elpc.org/newsroom/publications/?slug=illinois-clean-energy-supply-chain 23 https://www.illinois.gov/ipa/Documents/IPA-June-2015-SPV-announcement.pdfhttps://www.illinois.gov/ipa/Documents/IPA-June-2015-SPV-announcement.pdf 24 http://ipa-energyrfp.com/download/supplemental_pv_spring_2015/June%202015%20Supplemental%20Photovoltaic%20RFP%20Results.pdf 25 Office of the Mayor, City of Chicago, Press Release, “Mayor Emanuel Announces Launch of Chicago Solar Express to Drive Solar Development and Create Green Jobs: Reforms Will Reduce Costs and Reduce Permit Wait Time to Encourage Solar Development Among Residents and Developers” (October 21, 2013). 26 Email from Robert Zabors to Howard Learner, November 3, 2013. 27 See, e.g., Greg Hinz, Crain’s Chicago Business, “Poll finds Chicagoans willing to pay more for clean electricity” (October 9, 2012): “[A]new poll from a local environmental group says Chicagoans are more than willing to pay more for electricity if comes from clean sources like wind and solar power. Asked if they'd favor or oppose "receiving your electricity from clean, renewable sources if your electric bill would rise by approximately $2 a month," 73 percent replied yes. That's according to a survey of 600 registered Chicago voters conducted for the Environmental Law & Policy Center by GBA Strategies, a pollster that has worked for Mayor Rahm Emanuel and others. Just 23 percent disagreed — only 13 percent strongly — according to the poll. Voters also indicated they're inclined to go a little higher than two bucks, though by a lesser margin. Asked if they'd be willing to pay an extra $7 a month, 57 percent said yes, and 39 percent no.” http://www.chicagobusiness.com/article/20121009/BLOGS02/121009770/poll-finds-chicagoans-willing-to-pay-more-for-clean-electricity The full poll results are available, upon request, from the Environmental Law & Policy Center. 28 “The Commission rejects the Companies’ claim that customer charges must be raised to ensure cost recovery. The Commission finds that SFV based rates that assume that non-storage demand related distribution costs should be allocated on a per customer basis are inconsistent with the public policies of attributing costs to cost causers, encouraging energy efficiency and eliminating inequitable cross-subsidization of high users by low users of natural gas.” Peoples Gas Light and Coke Company, Proposed general increase in gas rates, Illinois Commerce Commission, Case No. 14-0224, Final Order, p. 176 (January 21, 2015). 29 Multiple solar panels at ground level are commonly referred to as a “solar brightfield.” Urban “brownfields” are former commercial and industrial properties that have some contamination, or were contaminated prior to a cleanup operation, typically located in lower-income areas. Remediating these sites to enable public presence and activities can be very costly, and most large Midwest cities have many sites covering hundreds of acres. These sites can be viable for B2B development projects. 30https://www.misoenergy.org/Library/Repository/Meeting%20Material/Stakeholder/SAWG/2014/20140206/20140206%20SAWG%20Item%2004%20OMS-MISO%20Survey%20Update.pdf 31 Exelon’s announcement of its Second Quarter earnings for 2015, states for Commonwealth Edison: “Total retail electric deliveries decreased 3.8 percent in the second quarter of 2015 compared with the same period in 2014. Weather-normalized retail electric deliveries decreased 1.2 percent in the second quarter of 2015 compared with the same period in 2014.” EXELON ANNOUNCES SECOND QUARTER 2015 RESULTS (July 29, 2015) See http://www.exeloncorp.com/performance/investors/overview.aspx 32 http://www.worldbusinesschicago.com/wp-content/uploads/2015/07/Chicago-ByTheNumbers_072115.pdf at page 2 (July 21, 2015) (2014 est. v. 2013, GRP in Chicago MSA) 33 EnergyWire, “The 'Nest of Europe' comes to America” (August 11, 2015). 34 Commonwealth Edison’s Smart Ideas® Central Air Conditioning Cycling program offers residential consumers two options: (1) A $5 monthly bill credit during the four summer months for allowing cycling of their central air conditioners for a 15- minute maximum every half hour, if needed, on weekdays between 11 a.m. and 8 p.m.; and (2) A $10 monthly bill credit during the four summer months for allowing cycling of their central air conditioners for one continuous three-hour period during any weekday between 11 a.m. and 8 p.m. https://comed.opower.com/ei/app/tip/tip110_summer_ac_cycling 35 http://www.ikea.com/ms/en_US/img/ad_content/100112_IKEA_LED_lighbulbinfo.pdf 36 Email from Alicia Gauer, Senior Manager, Communications – North America Professional Solutions (NPS) GE Lighting, to Jesse Buchsbaum, Environmental Law & Policy Center, July 10, 2015. 37 GE Presentation, 2013: http://www.ge.com/sites/default/files/ge_webcast_presentation_03212013_0.pdf 38GE Presentation, November, 2014. http://www.ge.com/sites/default/files/GE-Bernstein-Energy-Efficiency-Conference-GE-Lighting-11-18-2014_0.pdf 39 Robert Van Den Oever, Wall Street Journal (April 2012) http://online.wsj.com/article/SB10001424127887324874204578438142815033594.html 40 Stephen Lacey, Greentech Media, April 2012. http://www.greentechmedia.com/articles/read/The-Path-to-an-80-Percent-Market-Share-for-LED-Lights 41 U.S. Department of Energy, 2014. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/energysavingsforecast14.pdf 42 U.S. Energy Information Administration, 2015. http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_1 43 U.S. Energy Information Administration, 2015. http://www.eia.gov/tools/faqs/faq.cfm?id=96&t=3 44 U.S. Department of Energy, 2012. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/2012_residential-lighting-study.pdf 45 Exelon, 4th Quarter 2014 Earnings Release and tables, http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTUxODIyMjZ8Q2hpbGRJRD01Njk1ODk= 46 Chicago-specific data is not readily available so for the purposes of this White Paper, the author has used Commonwealth Edison data for its entire Northern Illinois service territory. The author is seeking to obtain more granular, Chicago-specific data. 47 Opinion Dynamics, 2013 Wasted Energy Study: http://ilsagfiles.org/SAG_files/Meeting_Materials/2013/March%2019-21,%202013%20Meetings/March%2020,%202013%20Meeting/ComEd%20End%20Use%20Saturation%20Study%20(Bill%20Norton,%20Opinion%20Dynamics).pdf 48 EIA Annual Energy Outlook 2015, http://www.eia.gov/beta/aeo/#/?id=4-AEO2015 49 Equation: .71 switch (by 2025, minus 3% already LED) x .85 increased efficiency x .786 incandescents and other non-CFL bulbs as part of average HH use x .062 of overall electricity consumption. 50 Equation: 27% electricity savings potential from LEDs in C&I x 12.3% C&I lighting electricity usage as a share of overall electricity consumption across all sectors in ComEd territory = 3.32% reduction in overall electricity usage in Northern Illinois. The reason why the electricity savings potential is lower in C&I is because LEDs will be replacing linear fluorescents, which are already much more efficient than incandescent bulbs. Navigant estimates that T5s and T8s together are about 90% of C&I lighting in 2015. T5s have an efficiency of 84-90 lumens per watt, while T8s are 78.5 lumens per watt. As a comparison, incandescents are 11.7 lumens per watt, while the LEDs in C&I are currently around 90 but approaching 100 lumens per watt. So while LED penetration in C&I and residential will be about the same by 2025 on a lumen-hour basis, the LEDs are replacing very different baselines. 51 McKinsey & Company, “Lighting the Way: Perspectives on the Global Lighting Market” (2012). 52 U.S. Department of Energy, 2012. Page 66. http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl_energy-savings-report_jan-2012.pdf 53 Mark Halper, SmartPlanet, 2012. http://www.smartplanet.com/blog/intelligent-energy/philips-ceo-well-cut-prices-on-led-bulbs/12652?tag=search-river 54 http://www.appliance-standards.org/product/central-air-conditioners-and-heat-pumps and http://www.appliance-standards.org/sites/default/files/1009hvac_fact.pdf 55 https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx?productid=84 56 Mauer, et al., ACEEE Report at p. 6, 2013. http://aceee.org/sites/default/files/publications/researchreports/a132.pdf 57 Environment News Service, “California’s New TV Energy Efficiency Standards Highest in the World” (January 2013). 58 Tom Eckman, “Progress on Improving Television Efficiency,” 2013. http://www.nwcouncil.org/media/6865207/p3.pdf 59 U.S. Department of Energy announcement at http://www.appliance-standards.org/documents/asap-press-releases/set-top-box-agreement 60 http://www.anl.gov/energy/batteries-and-energy-storage 61 GTM Research and Energy Storage Association, “U.S. Energy Storage Monitor, Q12015: Executive Summary,” (May 2015). http://www.eenews.net/assets/2015/05/28/document_cw_01.pdf; and Climate Wire, “Sales of energy storage batteries take off as utilities try to smooth power demands on the grid,” (May 28, 2015). 62 Sandia National Labs, “Energy Storage for the Electricity Grid: Benefits and Market Potential Assessment Guide,” (February 2010). http://www.sandia.gov/ess/publications/SAND2010-0815.pdf 63 Clean Energy Group, Seth Mullendore, “Energy Storage and Electricity Market” (August 2015). http://www.cleanegroup.org/assets/2015/Energy-Storage-And-Electricity-Markets.pdf 64 ClimateWire, “Following Tesla, Daimler enters the at-home battery space” (June 11, 2015). 65 http://www.sungevity.com/news; http://www.prnewswire.com/news-releases/sungevity-and-sonnenbatterie-announce-partnership-to-offer-home-energy-storage-to-customers-in-the-us-and-europe-300074077.html 66 http://www.epa.gov/airquality/cpptoolbox/illinois.pdf 67 Directory: wp-content -> uploads -> 2015 2015 -> Police Militarization 2015 -> 2015 ihbb championships: hs history Bowl Round 4 – Prelims First Quarter 2015 -> Wrtp/big step · 3841 W. 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