100% Clean Energy Commitments: The Ultimate Long-Term Goal
ScottMadden, Inc., one of North America’s leading management consulting firms specializing in energy, recently released its latest edition of The ScottMadden Energy Industry Update (EIU). Themed “Take It to the Limit,” this EIU explores how factors, such as the state-by-state adoption of clean energy standards, challenges to natural gas infrastructure expansion, slow progress on resilience issues, and more, may take energy utilities to their limit of financial, regulatory, and operational wherewithal.
Hawaii made waves in 2015 with the first 100% renewable energy portfolio goal. In the last year, a growing number of states, utilities, and end users have staked a claim on a new and aggressive long-term target—100% clean energy. These commitments, stemming from a wide variety of stakeholders including states, electric utilities, companies, cities, and counties, are starting to represent a significant portion of electric usage—commitments from states and electric utilities alone account for more than 30% of the United States’ electricity sales.
As the EIU highlights, the renewable energy industry must scale rapidly to meet the growing list of 100% clean energy commitments. Implementation and generation portfolios vary, depending on the type of commitment (i.e., 100% renewable vs. 100% net carbon neutral). Regulatory reforms related to system upgrade costs, recovery on third-party power purchase agreements, and tax normalization rules could facilitate renewable energy development. However, challenges will remain as the transition will require a balancing act between costs, technology selection, and compliance accounting.
“Designing a 100% clean energy portfolio will require careful planning and assumptions on the availability and cost of emerging technologies,” explains Theo Tran, manager at ScottMadden. “When thinking about these goals, you need to consider the specific customer base and the resources available. At the same time, you want to think about what is cost effective in your jurisdiction so you can meet these commitments in a technologically feasible way that is also affordable for customers. Unless mandated by state law, the costs for new or emerging technologies, especially in later years, are likely to receive close regulatory scrutiny.”
Complimentary Energy Industry Update Webcast
If you have not yet registered, we encourage you to join ScottMadden’s complimentary webcast, “ScottMadden’s Energy Industry Update – “Take It to the Limit” on Thursday, June 18, 2020, from 1PM–2PM EST. During this session, our industry experts share their views and field questions related to the future of the gas utility, 100% clean energy goals and how they may be impacted by COVID-19, and regulatory strategy during a pandemic. Cristin Lyons, partner and energy practice leader, will serve as webcast moderator. Register for this webcast here.
About ScottMadden’s Energy Practice
We know energy from the ground up. Since 1983, we have served as energy consultants for hundreds of utilities, large and small, including all of the top 20. We focus on Transmission & Distribution, the Grid Edge, Generation, Energy Markets, Rates & Regulation, Enterprise Sustainability, and Corporate Services. Our broad, deep utility expertise is not theoretical—it is experience based. We have helped our clients develop and implement strategies, improve critical operations, reorganize departments and entire companies, and implement myriad initiatives.