Retiring 90% of our Coal Power Plants would Save Money - Michelle Solomon, Energy Innovation - Climate Money Watchdog

Episode Transcript
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Greg Williams (00:10):
Thanks for joining us for another episode
of climate money watchdog wherewe investigate and report on how
federal dollars are being spenton mitigating climate change and
protecting the environment.
We're a private, nonpartisan,nonprofit organization that does
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(00:30):
watchdog.org To learn more aboutus and consider making a
donation. My name is GregWilliams, and I learned to
investigate and report on waste,fraud and abuse in federal
spending while working at theproject on government oversight,
or Pogo. 30 years ago, I learnedto do independent research as
well as to work withconfidential informants or
whistleblowers to uncover thingslike overpriced spare parts,

(00:53):
like the infamous $435 hammers,and expensive military weapon
systems that didn't work asadvertised. I was taught by my
co host Dena razor, who foundedPogo in 1981, and founded
climate money watchdog with melast year, Dina has spent 40
years investigating andsometimes recovering millions of

(01:14):
dollars wasted by the DefenseDepartment and other branches of
government at Pogo, as anindependent journalist, as an
author, and as a professionalinvestigator. David, would you
like to say a few more words,before we introduce our guests?

Dina Rasor (01:30):
Yes, I'm really glad that we're going to be talking
what I consider a reallyfascinating thing. I mean, I
told someone who's in theclimate, nonprofit, when I had
lunch with today that the numberabout 99% of the coal, you know,
the coal plants could bereplaced, and by by renewable

(01:51):
energy, and he did have like adouble take. And it's what's
surprising everybody is I think,what's how fast wind and solar
price came down. And that hasmade it so that all these other,
you know, all of the be above,like Obama used to say, are all
the contingency things we have.
And all that kind of stuff isstarting to fade away because it
could Oh, capitalism, it can'tcompete. And so that's what

(02:14):
Michelle Solomon's going to talkabout today. And so, I think
this is extremely importantbecause it gives it takes the
another excuse away fromcontinuing to burn coal.

So Michelle, Solomon is a Senior Policy
Analyst in the electricityprogram at energy innovation,
working to accelerate transitionto a clean, affordable and
equitable electricity sector inthe United States. Prior to
joining energy innovation,Michelle earned her PhD in
material science and engineeringat Stanford University, where

(02:51):
she studied nanoparticles withapplications in purifying
chemicals for use in medicineand the environment. During
graduate school, she alsopursued an interest in energy
policy and spent a summerworking on electric vehicle
policy at the California EnergyInstitute. After graduating, she
transitioned full time intopolicy as a congressional

(03:11):
science and engineering fellow.
As a fellow, she had the chanceto work on Energy and
Environment Policy for SenatorEd Markey focusing on a wide
range of issues spanningenvironmental justice, to
electric vehicle charging. Sowe've invited Michelle de to
join us tonight, in part due toour interested in, in a series

(03:34):
of papers or reports, called thecold cost crossover, which is in
its third iteration. And what Ienjoy, particularly about those
publications is addressing thecost of transition and
investigating energy production,not sort of in the abstract, but

(03:57):
in specific geographies withattention paid to grid
interconnects and other thingsthat often are sort of lost and,
and the details but at the endof the day, are very important
detail. So welcome to show.

Michelle Solomon (04:14):
Thanks so much for that great introduction. And
I'm really excited to chat withyou both today.

Dina Rasor (04:20):
Okay, to start out, let's let's go to the very first
thing, because people will sayyour organization, Energy
Innovations, it sounds great,but what is it? What is?

Yeah, so we're a nonprofit, nonpartisan climate
policy think tank. And what wedo is we provide objective
analysis and policyrecommendations to policymakers
at both the federal and statelevels, as we all tackle the
climate crisis, and we reallyhave an emphasis on tackling the
biggest emitting sectors in thebiggest emitting countries. And

(04:51):
so for me, I'm on theelectricity team at energy
innovation so we focus on the USelectricity sector.

Dina Rasor (05:00):
Okay, so let's, it's interesting because it isn't
just that a solar and wind isgoing down, but the cost of
keeping these older existingcoal power plants is going up.
And so it's, you know, down andup thing rather than just a

(05:21):
renewables going down. Soexplain to us why existing coal
power plants are going up thecost to run them.

Yeah, so there's a few reasons that are
causing the cost of coal torise. One is, of course, just
that plants are getting older.
We haven't really been buildingnew coal fired power plants in
this country for a while. And sothe existing fleet is just
aging. Another reason is thatthey're operating much
differently than they were firstintended to operate. So coal for

(05:47):
a long time was this, you know,really consistent source of
electricity in the country. Butnow coal is being run for a lot
less time, and it's being rampedup and down instead of just held
online. So what that does is itcauses a lot more fatigue on the
plants, which leads to higheroperations and maintenance
costs, and then the cost of fuelis increasing as well.

So say a little bit more about that, that up and
down process, are these plantsbeing converted to so called
peaker plants? Or why are theyyou know, suddenly going in and
out of Operation instead ofoperating consistently?

Yeah, that's a good question. So part of it is
that, you know, one of the bigreasons why coal has kind of
become a smaller share of ourelectricity system is not just
due to the rise of renewables,but mainly due to the rise of
gas. And so it tends to becheaper to operate gas plants.
And so the gas has kind of takenup more of that electricity

(06:51):
generation, and the coal justisn't needed as much. And so it
only really comes online whenyou have kind of a capacity
crunch to some extent in a lotof places. So when you're
experiencing really highelectricity demands, that's when
the coal will come online. Andso it's a little bit more due to
that kind of seasonal variation,as opposed to kind of daily

(07:14):
peaking that we see in a lot ofgas plants.

Would you still consider it baseload or
somewhere between peaker andbaseload?

Yeah, so the average capacity factor, I
think, across our whole fleetwas around 46%. And we kind of
in general, are not reallytrying to think of resources as
providing baseload poweranymore, since there's, you
know, becoming a more diverseset of resources that kind of

(07:49):
operate at different times ofthe day. So I think it's, I
guess, I would say, it's moretoward that kind of peaker
aspect than the previousbaseload power, I think, to be
closer to what used to bebaseload power would be more
like an 80% capacity factor,which we do see at a couple of

(08:09):
plants, but the vast majorityare operated much lower than
that percentage of time.

So capacity factors are really important
concept that some of ourlisteners may not have at the
tip of their tongues. What didyou explain what that is?

Yeah, it's really just the percentage of
time that the coal plant isoperating, essentially. So to
get the capacity factor, we justlook at the total energy
generated, versus the totalpossible energy generated by
that plant based on its capacityor size. So if a coal plants
capacity factors, 46%, thatmeans it's operating 46% of the

(08:45):
time,

or, you know, perhaps a larger percent of the
time at less than its maximumcapacity. Yes, yes. So this is
also important in the context ofwind and solar, which, of
course, cannot operate when thewinds not blowing and the sun
isn't shining. So can you giveus a sense of how that 47%
capacity factor compares totechnologies like wind and

(09:10):
solar?

Yeah, I don't have the average kind of
capacity factor of wind andsolar off the top of my head.
But, you know, if you thinkabout solar solar panel, you
know, in, say, in thespringtime, we have 12 hours of
sunlight, so you know, you andyou're not getting the full

(09:33):
capacity of that solar panelover the entire course of that
sunlight, because the strengthof the Sun varies over the
course of the day. So first ofall, you're going to be
generally lower than 50% of thecapacity factor, whereas in the
winter, that'll be lower and inthe summer, that might be a
little bit longer. Right.

Dina Rasor (09:55):
Okay, well, now the one of the things that one of
the factors has been of course,So there's this, there's been
several bills that bring in ahuge amount of money from the
federal government for climate.
And one of them is called theinflation Reduction Act. That's
because was part climate andpart Reduction Act, stuff, Ira.
So it doesn't sound like it hasanything to do with climate, but

(10:17):
it does. But your your reporthas talked about how the IRA has
money has shifted the economicscale more towards wind and
solar. And if you could explainthose new investment
opportunities in areas withexisting coal plants, and what
is the 10% tax credit boost forprojects and local compliment,
explained that sort of wholepush by the federal government

(10:41):
to get these have reasons toshut these plant coal plants
down?

Yeah, absolutely. So the inflation
Reduction Act is very, verylong. But there are a few
programs in it specifically,that can have a really big
impact on this kind of economicdynamic between coal and
renewables. One is the kind ofextension and expansion of two
tax credits called theinvestment tax credit and the

(11:09):
production tax credit, whichhave which have been in
existence for some time. Butwhat the inflation Reduction Act
does is it gives them a full 10year length. Whereas over the
last several years, we've kindof had tax credit some years and

(11:30):
not had tax credits the otheryears, and what those tax
credits are. So for theinvestment tax credit, it's kind
of you know what it sounds like,for every dollar you invest in
renewable energy technology, youget a credit back up to a
certain percentage. So with theinflation Reduction Act, those

(11:52):
tax credits are up to about 30.
Well, the kind of base taxcredit there is 30%. So for
every dollar you invest in windor solar, you could get 30 cents
back. The production tax creditis not tied to the investment
value, but instead tied to theamount of energy you produce. So
for every unit of energy yougenerate, you get, you get some

(12:17):
money back. And so for renewableenergy, kind of developers and
owners, those tax credits can bereally, really beneficial. And
especially as we've seen, thecosts of wind and solar dropped.
So significantly, the value ofthat investment tax credits,

(12:39):
since it's tied to the amountthat you invest, has kind of
gone down. So there's been a lotof interest in moving to a
production tax credit, whereeven though the investment is,
you know, relatively cheap, youcan get money back for kind of
over the course of the lifetimeof that project. And so for

(13:00):
solar in particular, where costshave really come down, that,
that creation of the productiontax credit for solar has been
really well, or we hope will bereally beneficial for for new
solar projects. And in ouranalysis, we generally found
that their production tax creditended up being we kind of
evaluated both the potential touse the investment tax credit

(13:23):
and the production tax credit,and their production tax credit
tended to be a bit morelucrative. So in addition to
kind of creating that productiontax credit option, extending the
tax credits for 10 years, thereare also some updates made in
order to allow entities thatdon't generally have huge tax
liabilities to take advantage ofthose tax credits, without

(13:45):
losing as much of their value.
And then, as you mentioned,Dina, there's a 10% tax credit
boost for projects located inenergy communities. And so what
an energy community is,according to the inflation
Reduction Act? Well, it's apretty broad definition, but it

(14:06):
includes communities that aresurrounding retired fossil fuel
plants, or who depend heavily onfossil fuel jobs. So that would
encompass, you know, most of thecommunities are really all the
communities surrounding the coalplants that we're looking at.
And so not only do you get that30% tax credit, or, you know,

(14:27):
the equivalent production taxcredit, but you get an
additional 10%. So, whereasbefore, you might have looked at
what your available renewableresources might be. And you
might have said, Oh, the sun is,you know, a lot stronger if we
just move a little bit furtheraway, because you know, that we

(14:49):
can get better weather and it'sjust generally sunny here so
that solar could be morevaluable. But now, it kind of
shifts the narrative because Doyou get an extra bonus for
citing a project in a community,you can kind of deal with the
slightly less kind of productionfrom that, you know, solar panel

(15:10):
or wind turbine economically,and it might make it more
lucrative to put a projectcloser to a community where it
can start to provide jobs andtax revenue to that community.

Dina Rasor (15:21):
So that, that, and people want to think well, well,
you know, what does that matter?
You know, well, it's not alleven, okay, when you go to
Arizona, or California, youknow, any place like that, where
there's low humidity, you get inan intense sun, and you get a
lot of sun, and you get a littlerain, you go to someplace up in
Ohio, Kentucky, Michigan. Yeah,you can still do solar, it still

(15:43):
works, but there's just there'sjust less of it, or less wind
someplace and more windsomeplace else. So this kind of
if you are, if you're if youlived in one of these, that they
could sometimes call themsacrifice zones, where these
coal plants have been. This isgoing to help you actually
transition over to the renewableenergy, even if it's not

(16:05):
optimum. And that's because youYou sacrificed basically your
your ecology, do you have thisboth coal plant and your kids,
you know, your kids lungs, youhave this coal plant puking out
all these years, and now you'regonna get an extra boost? So you
can compete? Is that

Yeah, exactly.
So you know, you might need tobuild a few extra solar panels
to get the same amount of energyin Ohio than you would in
Arizona. But now, because ofthat additional boost, you can
afford to do that.

Dina Rasor (16:42):
Alright, walk us through the cost comparisons
between the coal renewableenergy and explain why they
found an astonishing 99% of allcoal fired, fired power plants
are more expensive to operatethan the cost of replacement
with renewable energy projects.
In other words, there's just 1%of coal plants left that can

(17:06):
even compete with renewables.
Because it's, I found that a lotof people have found that really
surprising. I'm sure you getthis a lot. Because what it
basically means is thatrenewables are clearly the more
effective and cheaper way to go.
Yeah, whether you worry aboutthe planet or not, it's just

(17:26):
cheaper. Go ahead.

Yeah. Yeah. So what we looked at to kind of get
to this conclusion was, wecompared the marginal cost of
coal energy, which is, you know,the cost that is required to
generate every unit of powerfrom that coal, kind of the
going forward costs, and whatgoes into that is the cost of

(17:49):
fuel the cost of operations andmaintenance, and then kind of
the going forward capitalexpenditures necessary to keep
your plant running. So wecompare that that marginal cost
of coal to the cost of buildingentirely new renewables. So
that's called the levelized costof energy. And it takes in all
of the capital costs, as well asoperations and maintenance, over

(18:13):
the entire lifetime of theplant. And then of course,
there's no fuel costs forrenewable, so we don't have that
in there. But so we did that forevery plant in the country using
publicly available data from theEnergy Information
Administration, and thencalculated what that levelized
costs for renewable energy wouldbe in the nearby region using

(18:35):
using a model from enrol. That'salso open source. And what we
found is that you could replacethat energy generation from the
coal plants with energygenerated from renewables at a
cheaper rate for almost allplants. And what was really
interesting that we found wasnot only are these renewables
much cheaper, are not only arethey cheaper in almost all the

(18:58):
plants, but they're muchcheaper. So at I think it was
something like over 75% of theplants, it would be 30%, or more
cheaper to replace the energygeneration with renewables. And
then one point to kind of add onhere is that energy generated
from renewables is notnecessarily the same as energy

(19:20):
generated from coal, because aswe've discussed, you know,
renewables are variable, theydon't generate energy at all
times of the day. So there'scertain times of the day when
you when you need energy to beavailable. And so what we looked
at in addition to just addingrenewables to generate energy,
we also looked at the potentialto use those savings that you

(19:43):
would get by generating yourelectricity renewably. How much
for our battery storage thatcould pay for and so we found
that not only could you replacethe energy generation with
renewables, but you could alsoI'm at a really significant
portion of battery storage tohelp integrate those renewables

(20:05):
into the grid and kind of gettheir energy to the time of the
day when you need it. So wefound that over 60% of the
capacity of the coal fleet couldbe replaced with for battery
storage, in addition toreplacing the generation with
renewables. And just kind of onepoint on that is that it's not,
um, there's no exact number forwhat ratio of solar plus

(20:29):
storage, you need to kind ofreplace that sort of time of day
value of a coal plant, and it'sgoing to be different for every
plant. So this number is juststarting to say, you know, hey,
not only is it a lot cheaper togenerate energy here, but for
those planners, those utilities,those grid planners, starting to

(20:51):
look, you're replacing coalplants with solar plus storage
is becoming a really economicoption as well.

So help us understand why four hours is a
relevant measure. I mean, ifyou're talking about solar, you
need, you know, anywhere fromyou know, 12 to 18 hours of, of
storage to cover the full 24hour cycle. So, why four hours?
You know, is it still economicalif, if you need, you know, four

(21:20):
or five times that those kindsof things?

Yeah, so we looked at for battery storage,
primarily, just because it'sreally commercially available
right now, you know, we wantedto compare to commercially
available technologies. longerduration, storage is definitely
something that would be great topair with renewables as well. We

(21:44):
just didn't look at it, becauseit's, you know, a little bit
more of an up and comingtechnology at this point.

Dina Rasor (21:50):
And why one of the things I want to add for the
listeners is the the challengeof a podcast is you have no
visuals. And so there are theyhave with this report, a
fantastic group of graphics,showing all the different coal,
the coal plants across thecountry, and all the things and

(22:11):
all the different statistics wetalk about. And they have that
on their blog. And on theirwebsite, however, what we're
going to do, if you come tolisten to this podcast on our
website, we'll put those, we'llput that group of fantastic
graphics that go with thereport. So as you're listening
to the podcast, you can thenpull up that and see just the

(22:34):
same way, when you're reading,you'd be flipping over to look
at the graphics. So we alwaysmake sure that the listener has
something to look at, in a wall,we're talking.

Yeah, I was gonna mention that. I think one way in
which we are very, veryfortunate in the United States,
and a way in which our democracyis still very much alive and
healthy, is the amount of publicdata that that's available,
either through the government ornonprofit organizations is
really tremendous. And a bigpart of our goal with this

(23:08):
podcast is not so much to makethe podcast itself, the entirety
of the information, theaudience's is expected to
absorb. But rather, each one ofthese, each one of these
episodes is meant to be thebeginning of somebody finding a
subject interesting, and a fewmaterials for them to carry
their their research and theireducation to the next level. And

(23:30):
so that's why those links, andthose additional materials are
so important to us.

Yeah, and I'll just add on, in addition to the
report, we also have aninteractive data visualization
that, you know, has all of thecoal plants that we looked at
mapped out. And if you scrollover them, you can see all of
kind of the cost comparisonsthat we were able to make. And
we're able to do that because ofall of this publicly available

(23:58):
data. And again, that's anotherreason why we kind of focus on
commercially availabletechnologies is because we have
that data available to look atas well.

Dina Rasor (24:08):
Okay, so this this sounds, you know, I want to read
the headline of this and starteddigging the report, I sort of
got a holy cow. And so withthis, there's so other climate
people that I've talked tobecause, you know, you expect
maybe 60 70%? Well, that'spretty good, but 99% of the

(24:28):
points. I mean, did you guyshave that kind of reaction when
the numbers were finally poppingout of your Mathcad and your
Excel charts that this is reallya giant leap?

Yeah, we definitely were surprised by by
this jump, you know, we've we'vedone this report two times in
the past based on 2017 and 2019data and now we did 2021 data.
And when we looked at the 2017data we saw 62% of the plants
were or which were cheaper ifyou use renewables instead of

(25:04):
coal. And then, in 2019 data, wesaw that it was up to 72%. So
this jump in two years from 72%to 99%, was definitely bigger
than expected, and very muchoutpaced kind of the Yeah, what
we had been predicting. And itwas really due to the inflation

(25:26):
Reduction Act, and those thosetax credits that are now
available. Right.

Dina Rasor (25:31):
Okay. So you know, as all scientists do, once you
hit a milestone, and you've madea big accomplishment, you say,
how can we do better? What canbe done to speed up the
transition to coal to cleanenergy is if the 99% number is
not enough?

Yeah, so certainly, despite this coal
cost crossover, as we call it,where the cost of renewables
become cheaper than the cost ofcoal, we're not necessarily
seeing all coal plants goingoffline immediately. And that's
because there's a lot ofbarriers to both retiring those
coal plants and gettingreplacement energy available to

(26:11):
the grid. So kind of one of thethe first big barriers, of
course, you know, I think it'sbeen spent in the news, I think,
probably a lot of people willhave heard about the kind of
delays in in connecting newrenewable resources to the grid.
So just to kind of put that incontext, in sort of the Midwest

(26:32):
region of the United States, thesystem operator there, the grid
operator there, they have threetimes the capacity of renewable
resources waiting to connect totheir grid as they have coal
capacity on their system. So thedesire to get renewables out
there is is high, but they'renot they're not coming online.

(26:56):
And that's because of, well,it's because of a lot of
reasons. One is that thetransmission system is kind of
at capacity in a lot of ways.
You know, we can't, it's kindof, you know, if you think of
the highway system, there's alot of traffic on the
transmission highway of theUnited States, and it's getting
tough to fit more cars. Yeah,

Dina Rasor (27:22):
so like, when Eisenhower built the inner inner
state growth of highway system,there was a whole heck of a lot
less people a traffic jam,probably that you've got five
cars near you. Now. It's bumperto bumper and I, we've we've
actually done podcasts on that.
And everything else, I wanted toadd one thing I just suddenly
popped in my head on these costcomparisons, I have gone to coal

(27:44):
plants. And I have stood on theone of the biggest disasters
around all of these old coalplants is the coal ash. And I
have stood on coal ashmountains, I have looked over
coalesce lakes, I've seen themseeping into the Ohio River, you
know, and so does. When is youris your cost comparison, I'll

(28:08):
have to do also with thepossibility of cleaning up the
toxic mess that's left behind ina coal plant? Or is this just to
tear it down and build the othernew and not looking at any kind
of environmental mitigation forthis? Disastrous coal ash is
disastrous material?

Yeah, yeah, we don't we don't include the costs
of cleaning up the coal siteinto kind of the cost that it
would take to switch over to adifferent system. There's
there's several things we don'taccount for, we don't account
for kind of the health benefitsthat you would get and the cost

(28:49):
of those those health issuesthat come from coal plants,
asthma attacks, deaths, all ofthat. We also don't account for
the what the customers arepaying on the kind of remaining
plant balance for these coalplants. So when utilities make

(29:11):
an investment in a coal plant,they kind of take out debt,
essentially, to finance thatcoal plant, and then they're
paying back that debt over thelife of the plant. So 30 years
or longer, and they're doingthat with customer money, that
that that cost is going down tocustomer bills. So we're not

(29:32):
even including kind of thatamount of the customer bill
that's going towards paying offthat capital expenditure. So
yeah, just to say that this wasa very kind of simple analysis
of just the operating costs ofthe two. But certainly when you
retire a coal plant thatenvironmental mitigation is

(29:53):
needed. Yeah.

Dina Rasor (29:57):
That might get you up to 100 right away. It is a
gigantic problem. Go ahead,Greg.

Yeah, yeah, I just I think it's worth saying a
few things about just howutility prices work, it's
generally speaking, a costrecovery enterprise, where
instead of being a competitivemarketplace, you know, like the
ones where we buy gas or food orany number of other things,
generally speaking,traditionally, there has been

(30:24):
one utility provider where youhave your home or your business.
And for that reason, thegovernment has to, you know,
carefully regulate what pricesthey charge and what costs are
likely to incur. And intrinsicto that is a system where the
utility provider goes to thegovernment says, I would like to
build this kind of plant, that'sgoing to cost me this much. And

(30:48):
I think that justifies, youknow, this increase in utility
rates for this customer base.
And that's all agreed to byutility regulatory Commission's
in the different states and inmunicipalities, and that's what
you know, creates this, thearrangement that you described,
where you build a plant, and youhave a certain amount of time

(31:09):
over which you, you the utilityoperator, expect to recoup
those. Those expenses?

Dina Rasor (31:20):
Yeah, I mean, Michelle, you want to comment on
that?

No, I think that was a really, really great,
Greg's really

Dina Rasor (31:27):
good, you know, we love to get in the weeds on
here. But our most importantthing is it doesn't do us good
to get into the weeds in here.
If we can't educate the public,like talking about, you know,
you always have to compare it tosomething people understand the
interstate highway, you know,when it first was built an
overcapacity very nice, youknow, you're going along in your
1950s car. And, you know,there's not a whole lot of

(31:48):
traffic, and then thepopulation. And so what has
happened in the United States iswe have not invested in the
grid. So yeah, do you want towhen you do you make these great
transition, and then you can'thook it to anything? One of the,
one of the areas that I'm veryconcerned about, because it's
just so frustrating, is, andI've, I've actually seen it in,

(32:10):
in real situations, there arecommunities and they're being
filled by, they don't realizeit, but it's what you know, it's
what they call astroturf,they're being fueled by dark
money, that they, the a solarcompany comes in, and they've
got a bunch of, you know, eitherbrownfields or fallow fields

(32:32):
that are not going to be able togrow anything but bad hay, and
you know, just as noteconomically good anymore. And
they say, Hey, let us do solarpanels, leases this land or, you
know, on your farm, and we canput these up, and it's not going
to take away from yourproductivity because you're not
using it anyway. Or maybe you'vedecided that, that the the up

(32:52):
and downs of food pricing meansthat the agricultural land that
you own, which is an optimum,and you can't compete with corn
in Iowa, or something like this,you know, it'd be much better
use to lease for solar panels,and, or wind. And there, there
was a community in Ohio, in avery rural area with, you know,

(33:16):
not the most optimum land. Andthere were all kinds of farmers
like yeah, sign me up, you know,I ancestors just basically bled
this this land dry, and we can'tand we can't come like we can't
compete with the agri big agrifarms, let's put solar on
that'll help the planet and allthat. But then they come in, and
they start talking. And they youknow, they have these ringers in

(33:40):
these town halls or thesecouncil meetings, and they get
up and say, oh my gosh, they'retrying to do this so that we
can't grow enough food for thefor not not just the world but
for ourselves. And, and youknow, we aren't going to we
aren't going to a way of farmingis going to be gone. Yeah,
you're not going to have to workas hard to sit in the sunshine.
But there's there's a lot ofmisinformation that comes in

(34:03):
there. And it actually there'sthis giant solar farm and a bad
part of Ohio where they reallycan't farm anymore. I know
because I you know, I lived inOhio for a while. And these wish
would have been really, reallygood for the communities. The
communities aren't have nothing,they can't bring in industry.
They can't bring anything butthey've got this bad land nobody
wants to use except the solarpeople or they've got wind. And

(34:25):
what do you do about somethinglike that? And I know this is a
little bit more into thepolitical science than rather
than the physics science of it.
But I can see I can see that,that kind of thing. And they

(34:45):
voted it down. You know, theyvoted it down. So here was a
series of thing where you'retrying to do economic justice in
rural areas and through puremisinformation and vide is the
town there's always a holearticle about how they sat on
opposite sides of the churchbecause there were the pro solar
and the anti solar people andthey wouldn't talk and their

(35:07):
lifelong friends. What do you doabout that kind of
misinformation that is obviouslybeing funded by people who don't
want solar to work and peoplewho want to keep fossil fuel
going?

Yeah, that's a great question. And definitely a
big issue that we're seeing kindof across a lot of the US right
now. And I don't know if there'san easy answer to that question.
You know, I think that we'veseen a lot of kind of really
productive messaging around theenergy transition and framing it

(35:41):
as kind of industrial policy andthe potential to revitalize
communities. And I think that'sbeen really positive and has
worked in a lot of places. Youknow, in our analysis, we saw
that the biggest investmentopportunities for these projects
are in red states, because, youknow, of course, that's where a

(36:02):
lot of the coal plants are. So,you know, I think, obviously,
trying to get to communities andeducate them kind of, before
some of this misinformationcomes in is crucial. And then
also just kind of emphasizingthe benefits of this is a really

(36:23):
big investment potential foryour community, this could bring
a lot of jobs, you know, thebenefits of clean air and clean
water? I think people do wantthat. And I don't know, I think
all we can do is try toemphasize those benefits as much
as possible, because thebenefits are really real, and
now include lower cost. So

Dina Rasor (36:46):
yeah, well, I actually just thought of
something that I had read that,you know, look, the weather's
getting hotter, most placesgetting hotter. And what's
happening is that crops thatused to do well are frying, and
there's not as much rain and youknow, this kind of stuff. And
actually, there's been somesolar farms where they put the
solar panels, exactly. tractorwith Pollard. And they grow,

(37:11):
they grow, you know, they growcrops between the solar panels,
but they also grow certain kindsof crops under the solar panels,
because the solar panels providethe shade, they still get the
sun, but the provide the shade,and so it's actually overcoming
the increase in the heat. Byprotecting the, you know, they
can put in more more exotic and,and touchy crops, that will

(37:35):
bring them more money becausethey've got a natural, they've
got an F canopy. So I, you know,I found that really fascinating,
but I think that's maybe well,here, we're talking about a
political science problem. Butif you could go to them and say,
this is going to make you yieldmore crops and more a mixture of
crops, so you're not at the atthe market forces creaming you.

(37:56):
And it's going to make it sothat you can go more different
kinds of food and make theenergy for it. So there, you
know, my father was a PhDphysicist, and he said, for
every social power problem,there is almost always a
scientific answer, if they willtake about. So what do you think
about that you think thatinnovation like that would be

(38:17):
the kind of thing that wouldhelp with at least with the
current CRN that we're using upour farmland?

Yeah, I mean, I think those potential, the
potential for kind of thecombination of agricultural land
and combining it with renewablesis a really seems like a win win
for farmers and, and theelectricity system. So and I was
actually just talking tosomebody who mentioned a group

(38:48):
in the West, called the Westernway, I believe, that is really
focused on this idea actually,of trying to combine
agricultural land and, andrenewable. So I think there's a
lot of potential there. I think,also what you said, just at the
beginning of our conversationabout, you know, this is just

(39:13):
good old capitalism. And youknow, one of the reasons why we
did this study is because thecost story is there. And at the
end of the day, people reallymake decisions based on their
wallets. And this is somethingthat could save people money.
So, yeah, I think that's anotherbig benefit. And one of the
reasons why we wanted toreevaluate things after the

(39:36):
inflation Reduction Act isbecause it has health benefits,
it has climate benefits, but ithas cost benefits. And at the
end of the day cost benefits is,you know, what really matters in
people's day to day a lot oftimes,

though, something I alluded to in the introduction
that I want to make sure that wecover is the notion of the
scarcity of interconnects to thegrid, and that's something that
that your report addressespretty directly. And a lot of
that has changed over the last20 or 30 years with utility
deregulation. Give our listenersan introduction to how these

(40:15):
interconnects are accessed, whocontrols them? How do you get
access to them? You know, ifyou're contemplating some kind
of renewable energy project, howdo you get connected to the
grid?

Yeah, so it definitely varies by kind of
region, I'm in the sort ofMidwest region and the Mid
Atlantic region, and the kind oflike northeast region, there are
these entities calledindependent system operators or

(40:49):
regional transmissionorganizations who kind of have
purview over the grid. And bythat, I mean, the transmission
lines essentially. And so if youwant to connect to the grid,
those entities need to kind oftake a look at the big picture
and figure out if you know, youconnecting to the grid in a

(41:10):
specific spot is going to, as wewere talking about the analogy
with traffic before, if youconnecting in a specific spot is
going to come in and create abig traffic jam, or if this is a
relatively unpopulated area, andyou'll be able to connect
easily. So they have to studythat process for you to
interconnect and figure out ifyou can, and sometimes, if

(41:34):
there's too much traffic, they,the need for somebody new to
interconnect will trigger theneed for a much bigger upgrade
to the grid. So imagine if youwere kind of like merging onto
the highway, and the personoverseeing the highway saw you
coming in, and they said, No,there's too much traffic, we

(41:56):
need to build a whole new lane.
And that cost is going to fallall onto you, because you are
the person that we're trying toget onto the highway at the
time. So that's kind of what'shappening to renewables right
now. And a lot of these regions.
So and it's largely due to thefact that we haven't been
building out a lot of newtransmission in the last kind of
several years. And we haven'tbeen doing it in a very kind of

(42:19):
coordinated manner. So rightnow, one of the kinds of
solutions that's being worked onis the Federal Energy Regulatory
Commission is doing kind of aprocess around making those
regional transmissionorganizations and kind of in
general, the transmissionsystem, have better planning
processes, so that we're firstable to relieve a lot of the

(42:43):
current congestion as well asplanned better, so that we can
continue to build out renewablesin the future without
experiencing the same levels ofcongestion. Another thing that's
really exciting, because thoseplanning processes take a long
time and, you know, it's notlikely that we're going to be
able to build new transmissionovernight, there's actually new

(43:07):
materials that you can maketransmission lines out of that
can take on a larger amount ofelectricity in them. So you can
increase kind of the ability ofthe transmission lines to carry
electricity without having tobuild entire new lines. That's
something called reconnectingthose transmission lines. And so
that's something that in theshort term, is a really good way

(43:32):
to be able to add more lanes tothe highway as it were, and get
renewable projects on faster.

So all of this seems to imply that there's a
very strong advant advantage tobeing an incumbent. Once you
have that interconnect. It's notsomething you sort of have to
pay for. Again, it's notsomething that anyone can compel
you to give up. And I wonder towhat extent do you attribute the
persistence of all of these coalplants, despite cheaper,

(44:04):
renewable alternatives?

Yeah, so that's a really good point.
Because not only once you havethat interconnection, do you
have it, but sometimes youcannot, under our current rules,
reuse it actually, for a newgeneration resource, or at
least, you can't do it in kindof just a really quick process.

(44:28):
And you might have to go throughthat whole process of going to
the regional transmissionorganization and having them
study and see, you know, whatthe impacts might be. So
actually, in in the Midwestregion of the United States,
where the grid operators, themid Continental, independent
system operator, they actuallyhave a process for generator

(44:52):
replacement at aninterconnection. It's kind of a
process that's outside of thatnormal line to do I connect to
the grid. So they have a processin place for you to be able to
reuse that existinginterconnection but have a
different source of generation.
So that's actually one of thebig policy recommendations in
our report is for other regionsto look at how they can kind of

(45:15):
add this, this kind of parallelprocess so that when you're
reusing the sameinterconnection, you don't need
to wait as long. So that thatcould be something that could
really speed up the potential toget get new renewables on the
grid at these coal plant sites.

Dina Rasor (45:37):
Okay, Greg, do you have another comment on that?

Nope, I don't think so. Okay.

Dina Rasor (45:42):
All right. Now we're gonna get in the weeds. Because,
and what I'm gonna do is I'mgonna ask you the question,
Michelle, you can answer it. Andthen we'll have Greg come back
and do what Greg and I try to dothem all time is put it back in,
pull, pull apart that the the,the geek stuff, we all love the
good stuff, good stuff, so thatthe average person who doesn't

(46:02):
really know about this stuff,but in your report, it said
there was a problem with thecost numbers and competitive
procurement. Were plansoverestimate renewable costs? So
what what is that about? And whyis it so? And can you make the
comparisons more accurate? Andwhy would the IRA program make
this over estimate even higher?

Yeah, so that's a great question.

Dina Rasor (46:28):
Explain the whole thing, because I'm sure people
saying what, what did she justsay?

Okay, so let's see, when utilities are figuring
out what they're going to do, inkind of the next five years or
so they put together something,something called an integrated
resource plan, oftentimes, whichfigures out how they're going to
what their demand will be forelectricity in their service
territory, and how they can meetthat with collection of

(46:56):
electricity generationresources, and how they can do
that cost effectively as well.
And then they take that plan totheir regulator, and the
regulator either approves it, orit tells them that they need to
adjust it. And so because all ofthat plan is going to determine
what the costs are going to beto the electricity customers. So
when regulators are looking atthose plans, they're really

(47:18):
looking at the costs. And if theutility is proposing something
that's really expensive, thenthe regulator isn't gonna want
to approve it. So generally,utilities try to, you know, go
for resources that are going tobe least cost. So if you're not
having accurate cost assumptionsin those plans, then you're
going to favor resources thatmaybe you shouldn't be favoring.

(47:40):
So in this case, a lot of timesthose assumptions are favoring
the fossil fuel resources,whether it's coal or gas over
wind and solar. And one of the,I guess, more generous reasons
for why utilities might do thatis because models have
continually kind of underpredicted how quickly the costs

(48:03):
for wind and solar will decline.
So it's been really hard forutilities to accurately predict
what the costs are going to befive years out. And so one, one
thing that we talk about a lotof energy innovation, is using
kind of what's called technologylearning rates to make models

(48:25):
more accurate. So some of youmay have heard of Moore's law,
which is this idea that, as youknow, we improve our knowledge
of computer chips and how tomake them the kind of capacity
of information that you can fiton a computer chip with double,

(48:46):
you know, every so often, andthat learning rate is really
just due to kind of likeproduction of, of the computer
chips. And so that same sort oflogic applies to wind and solar
as well. And so historically,models have not really taken
into account those technologylearnings, which are really

(49:09):
driving down costs. So that'sone thing is improving the
models. But given that utilitiesare just using the models that
are available to them, it'sreally important that they
reevaluate those costsassumptions, and that the
regulators are being really areusing a lot of scrutiny around
those cost assumptions. Andespecially since the inflation

(49:31):
redact just happened, you know,there's some utilities who are
coming out with their they don'tdo these integrated resource
plans all the time. So someutilities were already scheduled
to do them after the IRAanyways, and so that's been
really great to see because someof those utilities have come
back and said, Oh, actually, weare going to close our coal

(49:52):
plants earlier because the costof renewables are cheaper. So in
Michigan, there's a utility thatI can't remember exactly. When
their plan came out, but it wassometime in the fall, and they
accelerated a lot of theirretirements. And so I think the
advocates expect to see thathappen with several other
utility plans that are comingout. But for those utilities

(50:13):
that did them just before theIRA passed, they won't be doing
them again for a while. And soone recommendation that we have
in our report is to haveregulators, you know, really
push utilities to redo thoseplans in the wake of the IRA in
order to make sure that theircustomers are getting the least
cost resources possible.

Typically, how many years are there between the
renewal of these plants? Is itthree years? Five years? 10?
years?

That's a good question. I don't know off the
top of my head.

Dina Rasor (50:52):
Okay, well, that yeah, that's, that's fine. I
think I think that's reallyimportant though, because it
gets a sort of a little bit of alearning thing is the old rules,
the old formulas don't reallycan't be used as an assumption,
because it was a whole differentindustry, you pumped it out or

(51:13):
dug it out of the thing, youburned it, and went into the
air, and renewables are such,renewables are so much simpler
thing than any kind of, youknow, coal, coal plant or coal
mining and oil drilling. And sothat's there's, it's simpler.
And so as a result, you can'tbut of course, the fossil fuel

(51:36):
companies are going to want touse the old formulas, because
that they've, they've been kingfor so long. And so that's the
always gonna have to sort of acautionary tale, you have to not
make the assumptions. And I, youknow, the Senate can May says
that some of these companies whodon't want to close the coal

(51:57):
plants down quickly, are even ifit even if it's cheaper, you
know, they're just wedded toit's like, getting rid of your
old beat up car, you know, it'snot efficient anymore to me, but
you don't want to do it. And sothey could, they, those old
formulas that have been aroundforever and been in regulatory,
and the regulatory process andeverything else, they may try to

(52:21):
keep the old rules and becauseit still gives them hanging by
their fingernails, so you know,as an advantage that they aren't
going to get to the 99% pointand fall off. Is that right? I
mean, is that that kind of isthat saying a good thing that we
you can't make assumptions onthe old formulas?

Yeah, yeah, I think that's right, and just
updating updating theassumptions to the new numbers
that in and of itself can canhave a really big impact so
that's like a really kind ofsimple thing that can be done
that doesn't require buildingwhole new transmission lines. So
it would be really reallybeneficial for for utilities to

(53:03):
make sure that they have themost updated most updated cost
assumptions both for theirbalance sheets and for their
customers. So

Dina Rasor (53:12):
write that so I you you agree that the the idea that
that producing cold digging,digging it out, transporting it,
putting it in to coal plants,removing the coal ash trying to
do it right, and then have theoutput scrubbers on the on the

(53:34):
smokestacks, you know, all thesedifferent things. It's much more
complicated than putting in asolar grid or a wind grid, it's
more to consider you know, withsolar and wind there's not big
factories sitting there not bigturbine, the big factories
living there, it's, you know,the electricity is being made
there and immediately lessmoving parts in my right with

(53:56):
that assumption.

Yeah, I think that's right. Um, and yeah, I
think you know, it's somethingthat's really better in every
way for communities of course,communities that are set up
around coal plants right now thetransition is not

(54:18):
straightforward, but if we canmake that transition while
retaining jobs and tax revenue,then you know, not having that
huge industrial site not havingto track in cold not having to
pollute pollute the waters withcoal ash. You know, it's it's
can only be a benefit.

Dina Rasor (54:40):
But the other thing that I I'm sure everyone's sort
of finding out is you begin tolook at should I get an electric
car, and I have friends thathave electric cars, I have a
hybrid so but electric cars,there's so much less stuff. The
motor oil, the pistons,anybody's in the sparkplug
business now better Get out, youknow, I mean, when you go and

(55:02):
look at it, the electric carsare so much simpler than having
little explosions, with gasolineand, you know, fuel filters and
all this stuff. I'm just sort ofamazed how much simpler electric
cars are, of course, you know,they've got to have to have the
big battery and all that. And,but since the electric cars, and
it's amazing to me that as wemake our transition, and we all

(55:26):
go down and throw up the hood ofan electric car versus the hood
of, you know, an old ice car,you just say, wow, there's just
so much less to mess with. And Ithink that's probably true with
a lot of renewables, becauseyou're not really making a
factory.

Yeah, yeah, I think that's right. That's they
definitely have lower kind ofoperational costs and all of
that.

So what are you looking forward to with? Coal
cost crossover? 4.0? Are thereexternalities, you're you're
going to try to, you know, bringback internal to the model to
have more complete story. Howsoon is 4.0 going to come out?
And others? What are you lookingforward to in terms of your,
your next step, contributing tothis conversation?

Dina Rasor (56:11):
Let's next

Yeah. So I think one thing, you know,
obviously, at some point, youknow, maybe we'll do maybe we'll
do another one that's notcurrently in the works. What
right now, we're really focusedon making sure that kind of
utilities and regulators knowabout the benefits of the

(56:35):
inflation Reduction Act and knowhow to access those both via
those tax credits, but also, viaanother program that I didn't
talk about earlier called theenergy, energy infrastructure
reinvestment program. And it's aloan program through the
Department of Energy. And whatit does is it provides

(57:00):
basically, it can helpfacilitate loans at really low
rates for kind of entities thatwant to reinvest in current
fossil fuel communities. And onething that we kind of noticed
with both this potentialreinvestment program, and with

(57:23):
this program, there's $5 billionavailable that can basically
guarantee up to $250 billion inloans, for reinvestment in new
energy, new clean energyinfrastructure, but only if it's
kind of at the sight of a kindof existing or old fossil

(57:47):
resource. So between thisprogram and the energy
Communities Program, we'restarting to see that there's
potential for the utilitybusiness model to really
recenter on communityinvestment. It's now you know,
in a lot of cases, the leastcost, and it also has potential

(58:08):
for the least cost financing fornew projects. So it's kind of a
really exciting moment in notonly the energy transition, but
also community transition. So,of course, renewables, you know,
aren't necessarily going toprovide everything for our

(58:30):
community. But in thesecommunities that have depended
on fossil fuel as their onlykind of source of income, it'd
be really beneficial for them todiversify their economies. So
part of that can be renewableenergy. This kind of new
reinvestment program can also beused for other infrastructure.

(58:54):
So you know, it can be used toredevelop a coal plant into a
more industrial site that canthen use some of the clean
energy that you could citethere, thanks to the investment
in production tax credits. Sowe're starting to see potential
for clean energy at coal plantsites starting to be an anchor
tenant for new kind ofindustrial activity that can

(59:15):
revitalize a community morecompletely than any one source
of income could do. So I think,yeah, that's kind of where our
focus is now is on figuring outhow to help utilities and
regulators take advantage ofthose Ira programs and, you

(59:38):
know, Speed up, speed up theenergy transition.

So, is there anything else you'd like our
audience to know about eitheryour organization or how we can
make a faster, more reliabletransition to renewable energy?

Mmm, yeah, that's a great question. So I
think Um, let's see. Oh, thefinal note, I would say is I
don't think we actually saidthis during earlier. But we have
that 99% of coal plants beingmore expensive than new wind or

(01:00:15):
solar on an energy generationbasis. But when we constrained
it to local replacement, we sawthat 97% of plants were still
more expensive than wind andsolar, locally, and that that
local kind of definition waswithin 30 miles. So yeah, just

(01:00:38):
that the story remains true forthose local replacement options.
And we're really excited to seewhat the potential is for
communities. But it's somethingthat isn't going to happen
naturally, you know, thatcommunity transition also needs
to be planned. There's someexamples. Colorado is a really

(01:00:59):
great one where they have anoffice of just transition that
is working through and making aplan for every coal community in
the state for how they candiversify their economies and
can act as sort of like acentral organizer for that. And
that can be really important tohelp make sure that funds are
going where they need to go. SoI think there's going to be a

(01:01:20):
lot of work to do incoordinating the transition,
it's not just going to happennaturally.

Greg Williams (01:01:27):
All right. Well, I want to thank you for joining
us here tonight. I, of course,want to thank our listeners for
joining us for another episode,we are going to remain very
interested in your work. And Ihope you'll join us here again,
some of you. Yeah,

Dina Rasor (01:01:42):
thank you so much.
We really, you know, I reallylove to get scientists on
because and it's the the art ofit in which I see that you're
good at is trying to takesomething that you learned, like
getting a PhD and putting itdown so that the average person
is driving along in their carsay, Yeah, I can understand
that. You know, it's the that'sthat's the most part is part of

(01:02:05):
science is trying to get it orgetting in the weeds with
regulations and all the otherstuff is to try to get it in
some way. So that we can you cansay that person's driving along
can't say, oh, I just can'tfigure this out. You know, oh,
well, yeah. It's kind of likethe, you know, the highway and
the cars going in and out likeyou were talking. So now thank
you very much. And we're reallyappreciate that. And we'd love

(01:02:26):
to have you come back andexplain some more. Good luck
with your research.

Michelle Solomon (01:02:32):
Thank you. And yeah, thanks so much for having
me. It was great to chat withyou and excited about the work
that you're doing. Thank you

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Retiring 90% of our Coal Power Plants would Save Money - Michelle Solomon, Energy Innovation

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Retiring 90% of our Coal Power Plants would Save Money - Michelle Solomon, Energy Innovation