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CHINA’S BIG COAL CHALLENGE: China needs to cut in half its carbon emissions from its coal plants by 2030 in order to achieve its pledge of becoming carbon neutral by 2060, according to new research this morning.
To halve its emissions from coal China must shut, retrofit, or put into reserve 364 gigawatts of coal within 10 years, around a third of its current total, according to London-based climate data provider TransitionZero.
The report argues China could save $1.6 trillion by replacing the majority of its coal fleet with clean energy alternatives, in a manner that is technologically feasible and supportive of Beijing’s economic development goals.
China isn’t listening: China generated 53% of the world’s total coal power in 2020 (compared to 44% in 2015), making it the only G-20 nation to significantly increase its coal-fired generation last year, according to a separate report last month from Ember, a London-based research group.
China’s five-year plan released in March provided no evidence it plans to reduce fossil fuel consumption soon to get it on a path to reach carbon-neutrality by 2060.
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FERC APPROVES POLICY ENCOURAGING CARBON PRICING: FERC finalized a policy statement encouraging power grid operators to incorporate state carbon pricing policies into their markets. GOP commissioner Neil Chatterjee initiated the carbon pricing policy when he was chairman, which in part prompted the Trump administration to demote him. He had the support of Democraic chairman Richard Glick and commissioner Allison Clements in finalizing the policy.
“I am extremely pleased we are taking this step on a bipartisan basis,” Chatterjee said at FERC’s monthly meeting this morning. “Carbon pricing is an important market-based tool that can reduce emissions in an efficient and transparent manner. Sometimes, leadership requires sticking your neck out in order to make progress on important goals.”
The policy does not mean FERC is setting a carbon price, which is outside the commission’s authority. It would simply enable power market operators to incorporate state-level carbon prices.
No market operator has submitted a carbon price proposal to FERC, but eastern markets have discussed adopting potential carbon price mechanisms. The New York ISO is furthest along in developing a carbon price, but it’s been stalled by Gov. Andrew Cuomo refusing to endorse the proposal.
GLICK REJECTS CHATTERJEE’S TRANSMISSION REFORMS, PROPOSES HIS OWN: The Democratic FERC chairman decided to abandon an effort Chatterjee started to reform the commission’s incentives policy for developers to build transmission lines in favor of his own proposal. Glick and Chatterjee vehemently disagreed with each other’s approaches. The prior proposal, issued in March 2020, was meant to increase the incentive for utilities who belong to a RTO or ISO — the wholesale power markets FERC oversees. Glick, however, argued it’s not clear if that model actually incentives utilities who belong to RTOs or ISOs to build transmission.
“An incentive must incentivize something. If it does not do that, then it is a handout, not an incentive,” Glick said, adding “there’s never been anything in the record that suggests somehow [utilities] need the incentives to stay in an RTO.”
Chatterjee countered that not finalizing his proposed rule would delay the buildout of transmission that both parties agree is necessary to deliver renewable energy from rural places to urban consumption centers.
“At a time when we recognize the need to construct thousands of miles of transmission lines, it is illogical to make it more difficult for utilities to obtain capital,” Chatterjee said.
US OIL PATCH SPRINGS TO LIFE: U.S. shale oil production is ramping back up, with crude prices returning to pre-pandemic levels following recovery of demand, making drilling profitable again for the majority of companies, Josh reports for a story this morning.
The increased activity that surged in March follows a temporary slowdown in February due to freezing weather and comes after drillers shut in a record amount of production in 2020 because travel restrictions during the pandemic sapped consumption of oil-based fuels.
The strong rebound shows that some oil producers are refusing to resist the temptation to drill from higher prices, despite the pandemic worsening financial problems that companies faced from taking on debt to pay for growth during the shale fracking boom of the 2010s, without providing sufficient returns.
“The oil industry is still under immense pressure, but reports of the death of shale are exaggerated,” said Mark Finley, a fellow in energy and global oil at Rice University’s Baker Institute. “All of the other factors matter, but not as much as what the price does. The key will be can the industry keep its cost under control as it gets back to work.”
US GAS PRODUCER BACKS DEMOCRATS’ BID TO SAVE METHANE RULES: EQT Corporation, the nation’s largest natural gas producer, became the first U.S. company to endorse an effort by Democrats to use a procedural tool to cancel a Trump administration action to block the EPA from the direct regulation of methane emissions.
“We believe the responsible development of natural gas will help meet future global energy demand as we address climate change together,” EQT said in a statement this morning.
EQT joins European oil majors Shell, BP, and Total to support a Democratic resolution to use the Congressional Review Act to scrap the Trump administration methane rollback in a fast-tracked manner with a simple majority vote.
GOP FLOATS INFRASTRUCTURE ALTERNATIVE: Senate Republicans, unhappy with President Joe Biden’s $2.3 trillion infrastructure proposal, plan to offer a less costly measure centered on roads and bridges that will be paid for with gas taxes and other user fees, the Washington Examiner’s Susan Ferrechio reports.
The GOP lawmakers said that the plan would be bipartisan, but so far, only Republicans are talking publicly about a compromise measure.
Sen. Shelley Moore Capito, a West Virginia Republican involved in the talks, said she supports an infrastructure measure worth $600 billion to $800 billion, with far more funding dedicated to traditional infrastructure projects addressing roads, bridges, waterways, and broadband.
US PLEDGE FOR 50% EMISSIONS CUT WOULD BE BOLD: A U.S. commitment to cut emissions 50% by 2030 would rank among one of the most aggressive pledges to the Paris Agreement, a new report from the Rhodium Group finds.
If Biden were to put forward a 50% reduction target, as he is rumored to be considering, the U.S. level of ambition would be nearly on par with the European Union and Switzerland, but still fall behind the United Kingdom.
Rhodium assessed all the commitments against a 2005 baseline, to compensate for the fact the Paris Agreement allows countries to set their own base year from which to set their emissions targets.
MOVING TO ALL-ELECTRIC CARS AND TRUCKS DELIVERS BIG BENEFITS, REPORT SAYS: An aggressive trajectory to electrify cars and trucks would prompt hundreds of billions of consumer savings each year and slash transportation emissions by nearly 60% by 2035 and nearly 93% by 2050, according to a new report this morning from the University of California Berkeley, Energy Innovation, and GridLab.
For the report, the researchers modeled a scenario where 100% of new car sales are electric by 2030 and 100% of new truck sales are electric by 2035. In addition, the power grid is 90% clean electricity by 2035.
To achieve those benefits, however, will require massive investment and a significant increase in electricity load. The report projects that such an aggressive electrification trajectory would increase the electricity load by up to 40% by 2035 and by up to 75% by 2050.
Massive charging and electricity infrastructure investments would also be needed on the order of $10 billion each year over the next three decades, the report finds. To support such an increase in electric vehicles, the U.S. would need to build around 300,000 to 350,000 public charging plugs each year for the next few decades, the report adds.
It’s a large buildout, but not “unprecedented” globally, said Nikit Abhyankar, a lead author on the report from UC Berkeley, who noted in a briefing with reporters that China built 300,000 charging stations just last year.
Reaching this level of electric vehicle sales will require strong policy support: A companion report from Energy Innovation and UC Berkeley calls for expanding federal incentives for consumers to purchase electric vehicles and extending a federal tax credit for the construction of charging infrastructure, among many other policy proposals.
Biden’s infrastructure plan, which promises $174 billion in electric vehicle investments, is “a good start, but more will be needed,” said Sara Baldwin, Energy Innovation’s director of electrification policy. She told reporters Biden’s plan should be supplemented by investments from state and local governments and the private sector.
Much of Biden’s plan, though, will require legislation from Congress before it can become reality.
WIND POWER COSTS SET TO FALL FAST: The costs of onshore and offshore wind are likely to fall 17% to 35% by 2035 and 37% to 49% by 2050, according to a survey of 140 wind energy experts released this morning by the Lawrence Berkeley National Laboratory.
It’s a faster pace of cost declines than experts predicted just five years ago, the report notes. Experts expect greater absolute cost reductions for offshore wind, with the cost gap narrowing between fixed-bottom and floating offshore wind turbines.
According to the report, the experts also predict that wind turbines will grow significantly in size, with onshore and offshore wind in 2035 having capacities twice or triple the size of current wind facilities.
WEST VIRGINIA ATTORNEY GENERAL RAISES ALARM OVER EPA SCIENCE ADVISER PURGE: West Virginia Attorney General Patrick Morrisey is demanding EPA Administrator Michael Regan explain why he dismissed dozens of science advisers appointed during the Trump administration, suggesting he could sue if he finds Regan’s reasoning to be political.
“Objectivity is essential to these committees’ scientific and technical work,” Morrisey wrote in a letter to Regan yesterday. “Such aggressive and wholesale restructuring threatens to politicize their work, and thus calls their future objectivity into question.”
Morrisey has pledged to hold the Biden EPA to account, saying he’ll quickly challenge any decisions by the agency he feels are overreaching. Regan’s purge of the science advisory panels, a rare move, has also drawn scrutiny from Republicans on the House Oversight Committee.
Environmentalists and Democrats, however, welcomed Regan’s move, saying it was necessary to reset the advisory boards that they say the Trump administration stacked with industry representatives.
FALLING POWER SECTOR EMISSIONS DRIVE US GREENHOUSE GAS DIP, EPA SAYS: The latest EPA greenhouse gas inventory shows U.S. greenhouse gas emissions fell 1.7% between 2018 and 2019, driven largely by the continued shift from coal to natural gas and renewable energy.
Transportation remains the largest-emitting sector in the U.S., accounting for 29% of total emissions, with the electricity sector not far behind at 25%, according to the EPA data. The industrial sector accounts for 23% of U.S. emissions.
A different framing: The Biden EPA’s news release announcing the greenhouse gas inventory presented the data with little fanfare or commentary, instead noting it is an “impartial, policy neutral report.”
It’s a stark change from the Trump administration, which had often used the data as an opportunity to note that U.S. emissions have fallen even while the economy grows and without greenhouse gas mandates.
The Rundown
Reuters Trading clunkers for electric bikes: France moves to offer financial incentive
Bloomberg What happens when an oil giant walks away
Reuters Big business seeks unified, market-based approaches ahead of climate summit
Calendar
THURSDAY | APRIL 15
12 p.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled, “Making the Case for Climate Action: The Growing Risks and Costs of Inaction.
TUESDAY | APRIL 20
11 a.m. The Great Plains Institute will host the second virtual CO2NNECT event on carbon dioxide transport and storage, featuring remarks from Energy Secretary Jennifer Granholm and Sen. Chris Coons.
12:30 p.m. The National Capital Area Chapter of the United States Association for Energy Economics’ will hold its annual Energy Policy Conference. The virtual event runs over two days.
WEDNESDAY | APRIL 21
6 p.m. Citizens’ Climate Lobby’s D.C. chapter will hold a virtual town hall meeting with Rep. Eleanor Holmes Norton.
