California’s state legislature today reached a two-thirds supermajority to extend the state’s cap-and-trade program to 2030. This statement forecasts what impact this vote will have on the state’s carbon market, and can be attributed to Energy Innovation Director of Research Chris…
California’s Governor Jerry Brown, Assembly Speaker Anthony Rendon, and Senate President Pro Tempore Kevin de León have reached agreement on legislation to extend the state’s cap-and-trade program to 2030. This statement forecasts what impact this achievement will have on the…
Offshore wind, in contrast to the widespread cost declines and capacity additions we’ve seen with onshore wind and solar PV, has historically been more of a ‘boutique’ resource—a great idea in theory, but still expensive and concentrated in certain parts of the world. That is now changing, as offshore wind becomes mainstream for three reasons: location, advancing technology, and declining price.
Imagine that we have built enough wind and solar power plants to supply 100 percent of the electricity a region like California or Germany consumes in a year. Sure, the wind and sun aren’t always available, so this system would need flexible resources that can fill in the gaps. Filling this gap is one of the principal flexibility challenges of a low-carbon grid. But what will that flexibility cost?
Trump’s announcement that the United States will withdraw from the Paris Agreement is an unmatched abdication of climate responsibility. This decision needs to be kept in perspective, though. Important reactions and trends will continue to add momentum to decarbonizing the world.
California has the most successful carbon cap program in the world. Many state actors have expressed their support for the program’s extension to at least 2030. in order to serve its intended purpose of reducing emissions while generating revenue and accounting for disadvantaged communities, California’s next carbon cap program would benefit from four crucial elements: set price collars, intelligent use of auction revenues, clear strategy for disadvantaged communities, and constraints for carbon offsets.
Permit demand surged at California’s carbon allowance auction this month, in line with our prediction: 100 percent of current vintage allowances sold at the auction floor price of $13.80. The sale will raise upwards of $450 million dollars for the state’s Greenhouse Gas Reduction Fund. Today’s results underline the California carbon market’s core strength – fundamentally strong policy design.
In April, DOE Secretary Rick Perry issued a memorandum to his staff asking some pointed questions about the future of the electric grid as coal is retired off the system. By taking each premise in turn and providing evidence-based analysis, we can see that the projected demise of coal will result in a cleaner, cheaper, and more reliable energy system.
New technology has tipping points—defined by functionality, consumer preference, and price. Clean energy is passing a huge one. It is now cheaper, in many parts of the country, to build a brand-new wind farm or solar plant than simply to pay the operating costs of coal, and sometimes even natural gas. That is the kind of tipping point worth paying attention to. There is clean energy, and cash, on the table—let’s use them to accelerate our low-carbon energy transition.
As the need for flexible resources grows, there will be an increasing number of “bellwether events.” Resource developers are likely to respond by building new resources that can capture this value on the spot market and through bilateral contracts with utilities. However, not all markets are structured to reward flexibility in the same way as in energy-only markets.