A Summary of the Western Governors’ Association Initiative on Clean and Diversified Energy
by Janice Houston, Senior Policy Analyst, CPPA

Introduction

Since convening the North American Energy Summit in 2004, the Western Governors’ Association (WGA) has been working towards developing a comprehensive energy policy for its member states. According to the WGA, this policy development has focused on providing clean and diversified sources of energy for electrical generation in the West. By resolution, three goals were agreed on following the 2004 Summit.  These goals are as follows:

  • Develop an additional 30,000 megawatts of clean energy from traditional and renewable resources by 2015;
  • Achieve a 20% increase in energy efficiency by 2020; and
  • Ensure a reliable and secure transmission grid for the next 25 years.

In order to develop policy that would meet these goals, the WGA commissioned the Clean and Diversified Energy Advisory Committee (CDEAC). This committee included energy experts from the public and private sectors as well as members of the academic and environmental communities. CDEAC was charged to find technically and financially feasible ways to meet the three goals outlined above. In June 2006, CDEAC released its findings to WGA. This article provides a brief summary of those findings. To read the whole report, go to:  www.westernpolicynetwork.org/files/WGAcleanenergyreport.pdf

The Problem

Since the early 1990’s the Western United States, especially the intermountain corridor that includes Utah, Nevada, Arizona and Colorado has been the fastest growing region in the country. This rapid increase in population has required greater generating capacity than previously anticipated. Population projections indicate the region will continue to grow well into the future. Additionally, electrical generation needs for the region could require an additional 80,000 megawatts by 2020. To put this figure in perspective, one megawatt is the volume of energy needed to power 750 homes.

This increase in demand is only one aspect of the problem. There are also issues with supply and transmission. On the supply side, Western power plants are increasingly reliant on natural gas to produce electricity. However, in an increasingly uncertain energy market, the price of natural gas has skyrocketed, in some instances trebling in price, thus making electricity more expensive to consumers. Beyond these costs, though, are the barriers--some intentional, some unintended--to the entry of renewable energy sources into the market.

Finally, aging transmission infrastructure in the region hinders the flow of electricity. While energy companies have focused on constructing power plants to meet energy needs, transmission lines have been neglected due to cost and right-of-way issues. These problems need to be solved in order to ensure that the region’s future energy needs are met.

Policy Recommendations for Achieving Goals Outlined Above

The CDEAC offers WGA member states a menu of policy alternatives for meeting the above goals. A variety of alternatives are listed so that state-level policymakers can adapt these recommendations to fit the political climate of their state. However, these recommendations follow certain themes and target three key components of the energy puzzle. These components are: 1) end-use consumers, 2) developers and users of renewable energy sources, and 3) those working on advanced fossil fuel generation (for example, new coal gasification techniques). Listed below are the policy alternatives proposed by CDEAC:

  • Market incentives
  • Incentive regulation and planning
  • Transmission planning
  • Reduce the costs and risks for clean energy development

At the regional level, CDEAC strongly urges greater communication, cooperation and coordination of state policy efforts. They also recommend creating a forum through which states can set up a “trading floor” for clean energy between producer and consumer states. Finally, the Committee strongly urges greater cooperation on resolving transmission issues within the region.

Outcomes

Of the goals outlined above, the 20% increase in energy efficiency is perhaps the easiest, safest and least expensive alternative, according to CDEAC. Like water conservation, energy conservation requires nothing more than the public’s willingness to cooperate. The public service campaigns and tax incentives state and local governments could offer to consumers are significantly less costly than constructing new generating capacity. However, these efforts also require a great deal of buy-in from policymakers and the public in general. If states can generate that degree of civic cooperation, CDEAC urges WGA members to consider this route first.

If the region is successful in achieving a 20% increase in efficiency, here are some of the “rewards:”

  • 48,000 megawatts of avoided power plant construction through 2020
  • $53 billion in net economic benefits to consumers and businesses
  • Approximately 1.8 trillion gallons of water saved (reduction in hydro-electrical generation) through 2020
  • A small decline in electricity rates at the end of the period

Perhaps the greatest reward will be the reduction of needed energy from 80,000 megawatts to 32,000 megawatts. 

Providing 30,000 megawatts of clean energy by 2015 is a goal members of the Committee feel is more attainable than state and regional policymakers believe. Below is a listing of energy sources and the amount they can readily attribute towards achieving this goal.

  • Solar Energy
    • 8,000 MW with proper infrastructure
    • Additional 2,000 MW realistically available
  • Geothermal
    • 5,600 MW commercial viable
    • Total of 13,000 MW available before 2015
  • Biomass
    • Potential supply of 10,000 MW
  • Wind
    • 5,000 to 9,175 MW with minimal transmission adaptations
    • Greater than 25,000 MW as more transmission capabilities come online 
  • Combined Heat and Power (CHP)
    • 42,800 MW
  • Water
    • 3,000 MW at sites already connected to the grid

As the report points out, these numbers presented by experts in these fields of renewable energy production are the minimum each feel a particular energy source can provide given the current level of transmission capacity and connectivity to the energy grid. These experts strongly urge that WGA states work to eliminate physical and financial barriers currently in place that make it difficult and costly for alternative energy sources to participate in power generation.

Conclusion

The Western Governor’s Association has provided a blueprint through which its member states, including Utah, can conserve scarce energy resources as well as reduce dependence on non-renewable sources, such as natural gas and coal. This, in turn, could lead to lower power costs for residents of the state as well as a better quality of life.