In 2018 we focused on the notion of local energy collaboration. Is it possible? Desirable? Necessary? If so, what could states do to cause more of it to happen? We came up with some preliminary answers. But they needed to be clearer and simpler. So, in 2019 we put our ideas in front of some organizations and experts that engage in energy policy development. That helped. Along the way, we drew some conclusions worth sharing and confirmed others. Some big takeaways:

The US focus on “utility scale” energy supply projects leads down one path that fits the US well enough. But other paths can be opened in the US and elsewhere to accelerate progress. For example, Europe is aiming for 45% of its energy supply to come from local renewable sources by 2050. The best balance between locally produced and imported energy will differ not only from country to country but state to state and community to community.

The common presumption that environmentally sensible solutions are mostly unaffordable has been turned on its head in California by its retail solar industry’s tenacity and maturation. On-site, mostly rooftop, solar electricity is available in California and some other states at life-cycle costs that are less than half the expected long term price of grid electricity. This is very good news, especially in northern California where grid electricity prices must increase significantly in the coming years if energy services are to be put back on a stable footing.

Local solar and storage deployment is an economic win for communities but a revenue problem for energy grid owners offering commodity based rates. The resulting bad news is that deployment of local solar and storage resources still faces legislative, regulatory and inertial barriers that continue to be erected against it by incumbent electricity providers. Their concerns were and may in some cases still be valid, but policy action is needed to change a win-lose game into win-win.

Collaboration between local government and energy utilities in the US to remove barriers and enable investment in local renewable supply has been lacking. Meanwhile, many communities, states and countries now recognize and acknowledge the climate emergency. In a nautical context, the response to emergencies is “all hands on deck”. In a climate action and adaptation context, the challenges can’t continue to be out-sourced to energy utilities. They have specialized skill sets and can’t single-handedly respond to the climate emergency. They are handcuffed by monopolistic business models that provide no incentive for change and by state regulation that is as likely to punish innovation as reward it.

Local governments are also handcuffed by monopolistic business models, but their active collaboration with energy utilities can nevertheless allow for modest but timely steps toward local energy decarbonization and resilience.

In short, state governments aiming for state-wide climate action and energy resilience have a significant interest in empowering and enabling local energy collaboration.

In an all hands on deck energy future, the global fuels industry, aka Wall Street’s “energy industry”, must pull its weight. A climate advocacy push to begin shutting state level fuels industries down responds to understandable alarm but needs calibration and a plausible long term plan. A recent white paper evaluating scenarios for California’s transition highlights some important trade-offs while foregoing analysis or speculation on technology and cost shifts that could make gas utility skill sets highly relevant.

For example, zero carbon fuels like renewable hydrogen can start cost-effectively diffusing into fuel markets by exploiting niche opportunities. Solar and wind electricity costs have come down so far that production costs are no longer the biggest barrier. From an initial market foothold, renewable hydrogen production can expand to displace increasing amounts of carbon based fuel as scale economies and cost-avoidance opportunities kick in. In the longer term, renewable hydrogen will likely provide seasonal storage enabling higher and faster penetrations of variable renewable energy production in areas where other seasonal storage options are less cost-effective or unavailable.

The best imaginable local energy collaboration scenario involves natural gas utilities and their “upstream” business counter-parts bringing their hard won and irreplaceable expertise and operational capacity to the decarbonization challenge. How does it make sense to move forward without them? Their core mission is to provide reliable, resilient service, and they do it well. Why not aim for an energy transition with everyone pulling in the same direction?

Please open and read our recently published Electricity Journal article, our Energy Policy Research Conference slide deck and consider scanning through the reports and blogs we posted in 2019.

Keep us informed of your work and progress in 2020, and we’ll do the same.

Reports and White Papers

· State Policies for Local Renewable Collaboration

· Energy Sector Transformation

· Collaborative Vision for Clean Local Energy

· Clean Local Energy Trends

· Resiliency of the US Natural Gas System

· Community Solar in the US

· US On-site Solar Perspective

Blogs and Articles

· Community Choice Enabled Asset Acquisition: Pros, Cons, Rights and Responsibilities