PA Environment Digest Blog: Ohio River Valley Institute Decarbonization Pathway Relies On Zero Emissions Resources, Energy Efficiency, Increased Electrification -- Less Costly Than Natural Gas, Carbon Capture Options

Monday, December 12, 2022

Ohio River Valley Institute Decarbonization Pathway Relies On Zero Emissions Resources, Energy Efficiency, Increased Electrification -- Less Costly Than Natural Gas, Carbon Capture Options

On December 12, the Ohio River Valley Institute released a new report showing an energy decarbonizing strategy based on zero emissions resources, energy efficiency and increased electrification is 13 percent less costly than a strategy based on hydrogen/natural gas and carbon capture in 10-county Southwest Pennsylvania area.

Including an emphasis on energy efficiency measures not only reduce electricity load, emissions, and the need for additional generation, but also leads to local job creation and savings for consumers.

Expenditures on energy efficiency and resulting residential bill savings support 12,416 total jobs in 2035, and 15,353 total jobs by 2050.

Compared to both power generation and fossil fuel extraction, energy efficiency has a greater potential for local economic development, leading to more, higher-paying jobs served by workers and suppliers within the region.

The 10-county area includes: Allegheny, Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Lawrence, Washington and Westmoreland.

Introduction

This report describes the development and analysis of a clean energy pathway for a 10-county region in southwestern Pennsylvania. Due to its abundance of fossil fuel resources, the region has a long history of substantial energy production, often at the expense of local environmental quality and economic diversity.

A transition to clean energy provides a compelling opportunity to transform the local energy profile, while ending the region’s overreliance on fossil fuels, to reduce emissions and pursue a path of sustainable growth.

To date, the prevailing narrative for decarbonizing this region has centered around the perpetuation of the natural gas industry and costly investments in carbon capture and storage (CCS) technologies and infrastructure.

Strategen’s analysis provides an alternative focused primarily on zero emissions resources, energy efficiency, increased electrification, and leveraging clean energy imports from outside the region, while minimizing the local need for fossil fuels.

Key Takeaways

-- Energy Efficiency/Clean Energy Imports: A renewables-based pathway, including energy efficiency and clean energy imports from the PJM market, is more cost-effective than continued reliance on fossil fuels. A strategy focused on natural gas and carbon capture will be 13% more costly than the clean energy pathway, which avoids expensive investments in CCS technologies to reduce emissions, while limiting the region’s exposure to fuel price volatility and mitigating the risk of stranded fossil fuel assets.

-- Coal Plants, Most Natural Gas Power Plants Shut Down: In the developed decarbonization pathway, all coal plants and a significant portion of natural gas plants in the region will retire or reduce output by 2035, drastically reducing emissions going forward. A limited portion of natural gas plants may be kept online as capacity or peaking resources and to ensure reliability, though clean dispatchable resources could potentially serve this role in the future, as technology progresses.

-- 97% Carbon Dioxide Reduction: The clean energy pathway results in a 97% reduction in CO₂ emissions from the power sector by 2050, leading to environmental benefits of nearly $2.7 billion annually. These benefits are greater than those associated with strategies built around natural gas and CCS, furthering the case for the clean energy pathway as a least cost option for energy transition.

-- Expanded Electrification: Deep electrification of the transportation and buildings sectors can directly lower regional CO₂ emissions from these sectors by 95%. The total annual value of environmental and health benefits associated with combined reductions from the power, buildings, and transportation sectors reaches $4.2 billion in 2050, through avoided social costs.

-- Decrease Natural Gas Use In Buildings By 98%: Through reduced reliance on natural gas for power generation and in buildings, Strategen’s decarbonization pathway will decrease natural gas consumption by 96% and 98%, respectively, for two these sectors by 2050. Lower consumption provides an opportunity to reduce emissions associated with natural gas extraction. The value of these avoided emissions would surpass $1 billion in 2050 alone.

-- Reducing Electricity Load: Energy efficiency is projected to increase over time, reducing regional electricity load by an average of 2.6% each year of the study period. Combined with electrification, the clean energy pathway results in overall load growth of 33% by 2050.

-- Job Creation: Efficiency measures not only reduce load, emissions, and the need for additional generation, but also lead to local job creation and savings for consumers. Expenditures on efficiency and resulting residential bill savings support 12,416 total jobs in 2035, and 15,353 total jobs by 2050. Compared to both power generation and fossil fuel extraction, energy efficiency has a greater potential for local economic development, leading to more, higher-paying jobs served by workers and suppliers within the region. [The Institute did not do a complete net jobs analysis for the whole proposal.]

Conclusions

From an economic development perspective, Strategen’s proposed decarbonization pathway offers further advantages for the local economy.

Energy efficiency improvements provide a particularly strong opportunity, as the region transitions away from fossil fuels, generating economic activity in labor-intensive sectors and leading to job creation in industries served by the local workforce.

Strategen conducted analysis to explicitly estimate the job creation potential from energy efficiency improvements included in the clean energy pathway for the region, using local multipliers from the U.S. Bureau of Economic Analysis, finding that expenditures on efficiency and resulting residential bill savings support 12,416 total jobs in 2035, and 15,353 total jobs by 2050.

Energy efficiency provides tremendous value not only as a cost-effective alternative to utility scale generation, but also as a compelling driver for local economic development.

Compared to electric power generation and fossil fuel extraction, energy efficiency has greater potential for local, sustainable growth.

Analysis of multiplier data for the 10-county region shows that efficiency investments create more jobs than these industries, and that the jobs created offer higher wages.

Moreover, most efficiency improvements, such as upgrades in lighting, insulation, doors and windows, or heating and cooling systems, can be performed by local workforce, supporting jobs for contractors and suppliers within the region.

This is especially true for rural or exurban areas.

In contrast, industries such as natural gas extraction have often relied heavily on workers and suppliers from out of state.

Energy efficiency therefore offers a particularly attractive option for a region where job growth and personal income have significantly trailed national growth rates since the beginning of the natural gas boom.

Southwestern Pennsylvania carries a disproportionate socio-economic and environmental burden from the energy industry, but a power sector decarbonization pathway for southwestern Pennsylvania that leverages clean energy imports from the PJM market and is focused on renewable energy, existing nuclear, energy storage, and energy efficiency has the potential to transform the region and shift away from its reliance on fossil fuels.

The clean energy pathway designed by Strategen results in cost savings, emissions reductions, and local economic development, laying the groundwork for sustainable prosperity in the 10-county region.

Click Here for a copy of the complete report.

For more information on their research, upcoming events and more, visit the Ohio River Valley Institute website or follow them on Facebook and Twitter. Click Here to sign up for regular updates (bottom of the page).

NewsClips:

-- Inside Climate News - Jon Hurdle: Decarbonization Program Would Eliminate Most Emission In SW PA By 2050, New Study Finds

-- Environmental Health News: Western PA Can Meet Its Climate Goals, If The Region Stops Subsidizing Natural Gas

-- Team Pennsylvania, Co-Chaired By Gov. Wolf, Issues Road Map On Hydrogen Development, Carbon Management In PA [PaEN]

-- PA Environmental Council: Clean Hydrogen & Carbon Capture Can Be Part Of A Comprehensive Decarbonization Strategy: Responsibly Deployed With Environmental Integrity, Accountability And Equity [PaEN]

-- Gov. Wolf Signs Massive, 20-Year Taxpayer Subsidies Into Law For Natural Gas, Hydrogen And Petrochemical Industries With No Public Accountability Or Environmental Safeguards [PaEN]

-- NRDC Blog: How Clean Is Pennsylvania’s New Hydrogen Subsidy? It’s Up To The Feds [PaEN]