Inside Clean Energy: Here Are 3 States to Watch in 2021

The Biden administration promises to restart U.S. progress on clean energy and climate policy, after the backsliding of the last four years.

But one thing that won’t change from the Trump administration is that state governments will be the most likely to pass far-reaching legislation, considering that, on the federal level, President Joe Biden is working with a narrowly divided Congress.

This year, I’ll be watching Massachusetts and Illinois, which are poised to pass major clean energy legislation, and California, where officials will soon update their building code in a way that is likely to reduce the use of natural gas in new construction.

“Cities and states will need to continue to lead,” said Kit Kennedy, senior director of the climate and clean energy program at the Natural Resources Defense Council.

Her comment reflects the reality that there is only so much Biden can do, and a history that shows that climate and clean energy policies often rise up from states.

Massachusetts: The Democratic-controlled Massachusetts legislature passed a sweeping climate bill on Jan. 4, only to see it vetoed last week by Gov. Charlie Baker, a Republican.

But both sides have indicated that they want to find a compromise, and soon.

The vetoed bill set a target of net-zero emissions by 2050, with interim goals every five years. It also had provisions that aimed to cut emissions in transportation and buildings, and increase the target for offshore wind energy development.

I asked Greg Cunningham, a vice president at the Boston-based Conservation Law Foundation, what he expects to happen.

“It is pretty much certain to get worked out,” he said. “And I would note that it was passed in its original form by a veto-proof majority, so there is absolutely strength in the legislature’s positions on these issues, although I fully expect that they will compromise.”

Charlie Baker is a moderate Republican who has supported policies that fight climate change. But he has been wary of the costs, and he said in his veto message that parts of the climate bill were going to hurt the state’s efforts to address other vital needs.

For example, he said the bill might discourage construction of much-needed new housing because of a provision that seeks to reduce emissions from new buildings.

Baker’s criticism of this provision stings some environmental advocates because they see great opportunities for Massachusetts to be a leader in reducing the use of fossil fuels for heat, and the bill would have helped to make that happen.

Massachusetts has a reputation for being on the leading edge of progressive policies, but it has not been a leader on climate and clean energy in recent years. Some lawmakers had hoped to pass a measure in 2018 that would have set a target of 100 percent carbon-free electricity, but the bill Baker ended up signing then was a more modest package that included smaller increases in clean electricity targets.

Cunningham said one problem is that some leaders in Massachusetts seem to be resting on their laurels because of climate policies that are now more than a decade old, like the 2008 Global Warming Solutions Act, one of the first state laws to set emissions-reduction targets. Massachusetts was a leader back then, but similar laws now have been passed by many states, he said.

Still, he said, he is optimistic that the period of inaction or underwhelming action is about to end with a revised bill that would pass sometime in 2021.

One of the main beneficiaries could be Baker himself, who could shape a legacy as “a true climate leader,” Cunningham said.

Illinois: The 2016 Future Energy Jobs Act was supposed to unleash rapid growth in renewable energy across Illinois. While the law succeeded in many ways, the ride has been a bumpy one, with an imbalance between the large number of potential energy projects and limited funding.

Now the money for key parts of the law has run out, leading to what clean energy advocates call a “solar cliff,” and the potential for the loss of jobs.

The result is a strong push for lawmakers to pass the Clean Energy Jobs Act, a proposal that would extend and expand the previous law and set a target of 100 percent renewable energy by 2050.

“Nowhere in the Midwest are the stakes this high or the opportunities this meaningful,” said John Delurey, Midwest director for Vote Solar, in an email. “Illinois is overdue for comprehensive energy legislation and now, as a result, clean energy workers are losing their jobs and state agencies are on the precipice of budget shortfalls.”

Advocates have pushed for the last few years to pass an extension of parts of the 2016 law, but they have run into some big obstacles. One of the biggest is the dark cloud cast by a federal bribery investigation involving Exelon, the energy and utility company that was a leading beneficiary of the 2016 law.

The ongoing investigation continues to ripple through state politics, but Gov. J.B. Pritzker and leading lawmakers have made it a high priority to do something this year on energy policy.

Pritzker, a Democrat, has said that the bill will not be written by utility company lobbyists. That sounds good, but utility lobbyists were an essential part of passing the 2016 law, with a combination of a nuclear power plant bailout for Exelon and a wish list of items for clean energy advocates. And, Exelon now says it needs an additional bailout for nuclear plants.

I expect that something will pass, but the specifics are far from clear.

California: It’s a bit of a cheat to list California as a state to watch on clean energy and climate policy, because California is always a state to watch on those topics.

There is a lot happening in the state in 2021, but I’m going to focus on the upcoming update of the state building code, which could be a major step in reducing the use of fossil fuels in buildings.

The California Energy Commission is now working on the code update that will take effect in 2023. The commission will release its proposal and go through an approval process this year.

Officials with the commission have indicated that the new code will try to reduce the use of natural gas in new construction, which they are likely to do by providing incentives for builders to use electric heat pumps instead of gas furnaces. Leading environmental groups would like to see the code ban gas in nearly all new construction.

“This is a generational opportunity for California to align its massive residential and commercial building sector with its world-leading air pollution and carbon reduction goals, and stand up to the gas industry, which is furiously fighting efforts to reduce pollution,” said Bruce Nilles, executive director of the Climate Imperative, a project at the think tank Energy Innovation, in an email.

Nilles noted that buildings that use gas emit more asthma-causing pollution than all of the state’s cars and SUVs.

“This is California’s chance to lead America on building decarbonization—a sector that has thus far avoided emissions-reduction policy action in every state,” Nilles said.

The idea of a gas ban would have been a stretch a few years ago, but California cities have been at the forefront of passing local rules to limit or ban gas hookups in new construction. 

Gas utilities don’t like the way this is going and are urging state officials to take a gradual approach. This is part of a larger fight, which includes aspects of the debate in Massachusetts, as the gas industry wants to slow down the erosion of its market.

Everywhere else: Many other states are likely to take big steps on clean energy and climate this year, completing landmark projects, passing new laws and doing the hard work to implement laws that are already in place.

Kennedy of NRDC said the clean energy economy has progressed to the point that there is substantial activity just about everywhere.

“We’re going to see that activity in purple and even red states as well as blue,” she said.

I could list dozens of examples, but here are two:

• Florida Power & Light expects to complete the Manatee Energy Storage Center late this year. The project would be the largest battery storage project in the world as measured in megawatts, with 409 megawatts. The utility, a subsidiary of NextEra Energy, is embarking on a major ramp-up in solar power and storage within Florida, following a period when the state was slow to take advantage of the ability to turn its abundant sunshine into electricity.
• Pennsylvania is on track to join the Regional Greenhouse Gas Initiative, a coalition of 11 New England and Mid-Atlantic states that participate in a cap-and-trade program to help reduce emissions. Pennsylvania Gov. Tom Wolf signed an executive order in 2019 to have his state join the coalition, and now the state is nearing the end of a rulemaking process that would make the order official. Pennsylvania would be the 12th member and the largest emitter of greenhouse gases to join the group, representing a major expansion of the cap-and-trade market.

Global Spending on the Energy Transition Rose in 2020. But It Fell in the United States.

BloombergNEF has taken a broad measure—global renewable energy spending—and broadened it further, to include spending on electrifying transportation and buildings, among other things.

The result is the research firm’s first-ever report on global spending on the energy transition, showing $501.3 billion in spending in 2020, an increase of 9 percent from the previous year.

The addition of the new categories is an acknowledgement of the rapid rise in spending on electric vehicles and high-efficiency heat pumps, which are in the early stages of reshaping the transport and building sectors.

“The coronavirus pandemic has held back progress on some projects, but overall investment in wind and solar has been robust and electric vehicle sales jumped more than expected,” said Jon Moore, chief executive of BloombergNEF, in a statement. “Policy ambition is clearly rising as more countries and businesses commit to net-zero targets, and green stimulus programs are starting to make their presence felt.”

The virus was one of the chief reasons that spending was down 11 percent in the United States and down 12 percent in China. But the decrease in those two countries was more than offset by the 67 percent increase in Europe that was largely driven by clean energy policies. Europe also was the leader in dollars spent, with $166.2 billion, followed by China, with $134.8 billion, and the United States, with $85.3 billion.

If the report had focused just on the electricity-generation sector, growth would have been nearly nonexistent. Global spending on wind, solar and other electricity sector technologies totaled $303.5 billion, up 2 percent from the prior year.

The second-largest category was spending on electric transport, which was $139 billion, an increase of 28 percent from the previous year. It was followed by spending on heat pumps in the building sector, which was $50.8 billion, up 12 percent.

Reading the report, I was struck by how investment is increasing at the same time that the costs of EV batteries, solar panels and other components are falling, a compounding of growth that is incredible to see.

But it’s also clear that the United States is not the center of gravity for this investment, something the Biden administration and the states can begin to change.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].