Energy (Power & Fuel)
Key Steps to Curb Carbon:
- Limit new, long-term investment into older, dirtier and/or less efficient technologies, (e.g., coal-fired plants and gas pipelines) to avoid tying up assets in unsustainable infrastructure and to make more space for renewables.
- Expand the adoption of Combined Heat & Power (CHP), through Industrial Revenue Bonds to support implementation. Modify “Standby Rates” (charges levied by utilities when an on-site system experiences a scheduled or emergency outage) to support Combined Heat and Power.
- Deny utilities’ requests to shift all fixed costs onto meter charges.
- Provide more incentives and pilot projects for distributed renewable power, including solar farms, rooftop solar, geothermal and hydro-power, as well as energy storage within the industrial sector.
- Promote expansion of Energy Project Assessment Districts statewide.
- Provide Industrial Revenue Bonds to support Combined Heat and Power implementation
- Encourage the State Energy Environment Cabinet to conduct workshops on energy storage technology, targeting regulators, staff and industry.
- Promote resiliency incentives for battery banks, targeting specific vulnerable facilities including schools, hospitals, government buildings that are sensitive to power interruptions and provide incentives for low-income facilities such as halfway houses and missions to stabilize expenses.
- Encourage incentives to increase utility investment in storage to offset energy spikes.
- Increase energy security by providing residential and community access to redundant energy systems (residential solar, energy storage, etc).
Kentucky has particular challenges, and opportunities, for addressing climate change through the energy sector. During the early 20th Century, Eastern Kentucky coal became one of the primary energy sources for cities throughout the midwest. However Kentucky coal production reached its peak in the early 1990s and now coal employment has since been in a steady decline, with only about 6,000 jobs remaining. Similarly, nationwide use of coal has begun a steady decline as corporations move to less carbon-intensive energy choices. [Source: Kentucky Coal Facts, 2017]
Multi-national corporations with a presence in Kentucky are a notable influence in this transition away from carbon-intensive energy as they begin to comply with the goals of the Paris Climate Agreement.
- In 2017, 79% of Kentucky’s net electricity generation was coal-fired, the fourth-largest share of any state, but a record 13% of Kentucky’s net generation is now natural gas-fired.
- In 2017, 37% of all new hydroelectricity generating capacity brought into service in the United States was located in Kentucky, and hydropower supplied 90% of Kentucky’s renewable electricity generation.
- [Source: EIA Kentucky Profile]
Energy Sector Transition
As multi-national companies begin to comply with the goals of the Paris Climate Agreement, they are influencing the energy decisions made in Kentucky, regardless of U.S. participation in the climate accord.
In 2017, 79% of Kentucky’s net electricity generation was coal-fired, the fourth-largest share of any state, but a record 13% of Kentucky’s net generation is now natural gas-fired, a trend expected to continue. And 37% of all new hydroelectricity generating capacity brought into service in the U.S. was located in Kentucky, suppying 90% of our renewable electricity generation.
As trends show coal being replaced with efficiency, renewables and natural gas, we must choose a rational low-carbon path. The timeframe needed to reach climate goals as outlined in the Paris Accord, does not favor a two-step transition from coal to gas, and then to renewables. Just as “new generation” coal-plant proposals largely were abandoned a decade ago, we must also discourage the build-out of new natural gas infrastructure. Methane, a greenhouse gas that is 100 times more potent than CO2, can leak during the production, and delivery.
Kentucky has already suffered impacts from fracking operations in neighboring states, including illegal dumping of waste in our landfills, threats of eminent domain from cross-state pipeline developers, proposals to barge frack wastewater on the Ohio River and development of new infrastructure to store petrochemical byproducts in our region.
In order to protect citizens and discourage unnecessary development and delays our clean energy transition, we must modernize our laws to address the current impacts of the natural gas industry. And also adopt local ordinances that protect landowner rights to address poorly-sited pipeline infrastructure or infrastructure that disproportionately affects low income communities.
- Promote grassroots initiatives such as the Divest/Invest movement are holding financial institutions accountable for financing fossil fuels over renewables.
- Support landowner rights and local ordinances to address poorly-sited gas pipeline infrastructure.
- Discourage the repurposing of natural gas pipelines in Kentucky for the transport of petrochemicals, which are byproducts from gas.
- Discourage the buildout of other support infrastructure for highly volatile non-utility byproducts, such as those proposed to be stored in the Appalachian Storage Hub Petrochemical complex. These non-utility projects provide additional markets for by-products that promote more focus on gas and less on renewables.
Expansion of Solar and Renewables
Solar energy is now cost-competitive with fossil fuels nationwide, as costs have fallen 53% in the past five years, according to the Solar Energy Industries Association. Opportunities for tapping solar energy in Kentucky are diverse, limited only by state statutes favoring the electric utilities’ monopoly powers. Within the past decade, Kentucky has built successful community-scale solar models, such as the Berea Solar Farm. Investor-owned utilities in several parts of the state have installed large-scale solar projects. And solar power has become increasing popular with Kentucky homeowners, too, allowing them to curb their rising utility bills.
Solar power’s affordability and consumer independence have inspired utilities to push back against existing state laws and regulations requiring them to provide net-metering to their customers’ installations. As most solar installations in Kentucky are largely grid-dependent, the utilities’ efforts to control all solar power production threatens Kentucky’s solar industry. Kentucky’s solar industry and nonprofit advocates have worked very hard ensure private citizens have continued access to the electric grid via Kentucky’s net-metering statutes. Despite spending seven digits, they persuaded the 2017 and 2018 legislature to let the statutes stand.
Kentucky has minimal wind-power potential to develop, but has attractive opportunities for more small-scale hydroelectric projects. Analyses show significant potential to generate even more power from our waterways. There are 33 existing dams within the state or on the Ohio River, built for flood control, water supply and/or navigation, that lack hydroelectric production. Oak Ridge National Laboratory researchers estimated in 2012 that retrofitting turbines and generators to those “non-powered” dams could quadruple Kentucky’s existing annual hydroelectric production.
- Address outdated laws that discourage the independent solar installer market over utility-scale solar and ask the Public Service Commission to investigate options for properly evaluating the value of renewables.
- Raise the visibility of solar projects in Kentucky that address low-income facilities and communities, such as the Catholic Action Center in Lexington, the Kentucky Coal Museum in Benham,
- Promote more demonstration project for small-scale hydroelectric on waterways in Kentucky.
- Encourage policies that allow for more distributed energy and community-supplied energy, from all renewable sources.
Cogeneration or “combined heat and power” (CHP) is the concurrent production of electricity or mechanical power and useful thermal energy (heating and/or cooling) from a single source of energy. The opportunity to reduce emissions and save money through cogeneration is significant due to the inherent low efficiency of electrical generation.
Kentucky’s Energy and Environment Cabinet has an active program to promote CHP, in partnership with the Ky. Association of Manufacturers, Ky. Pollution Prevention Center and the Ky. Division for Energy Efficiency, with a goal of offsetting 18% of the state’s energy demand by 2025. Their most recent plan, released in May of 2015, outlined enhanced CHP education and outreach, along with guidance, reference documentation and technical assistance.
- Expansion of Energy Project Assessment District territories: Energy Project Assessment District legislation (HB100) was signed into law in April 2015. You may learn more about EPAD at the following link.
- Provide more tax Incentives to support Combined Heat and Power.
- Provide Industrial Revenue Bonds for implementation: Industrial Revenue Bonds (IRB) may be issued by state and local governments in Kentucky to help finance industrial buildings as defined by KRS 103.200. Bond funds may be used to finance the total project costs, including engineering, site preparation, land, buildings, machinery and equipment, and bond issuance costs. The Kentucky Center for Economic Development has a fact sheet on Industrial Revenue Bonds that explains how they can be utilized: https://www.thinkkentucky.com/kyedc/pdfs/IRB.pdf
- Address “Standby Rates” to be implemented by the PSC and utilities to support Combined Heat and Power. LGE\KU recently removed their standby charges from their tariffs.
Other helpful links:
One of the most promising opportunities for transitioning Kentucky and the nation to a clean energy economy are improvements in energy-storage technologies, including pumped hydroelectric, compressed air, flywheels, thermal storage and batteries.
EnerBlu, Inc., a high-power technology company focused on innovative new energy solutions for utility, military, transport and commercial applications, recently located its corporate headquarters in Lexington, KY. The company provides high-powered batteries as well as fleet transportation vehicles.
The Resilient Power Project, an initiative of the Clean Energy Group, is an example of how to increase public/private investment in clean, resilient power systems (solar + storage). Such systems can protect low-income and vulnerable communities from high energy costs with a focus on affordable housing and public facilities. Local solar vendors in Kentucky are also looking at solar + storage packages as alternatives to grid-tied systems.
Electrical demand across the nation has begun to flatline, causing anxiety within the utility industry, especially investor-owned utilities. One utility response has been to regular requests for PSC approval to shift all fixed costs onto their compulsory, fixed meter charges. At face value, this goal might make sense, until we remember Kentucky’s utilities are regulated monopolies. They have the right to pass on their costs to their customers and to earn handsome returns on their capital investment in exchange for added regulation and requirements to provide public benefits. High meter fees not only penalize low-income customers, but also erode rates of return on investments into energy efficiency and solar power.
Resources: Jump Start Battery Storage
- Encourage the State Energy Environment Cabinet to conduct workshops on energy storage technology, targeting regulators, staff, and industry.
- Promote incentives for battery banks, targeting resiliency for specific facilities, including schools, hospitals, government buildings that are sensitive to power interruptions
- Provide storage incentives for low-income facilities such as halfway houses and missions.
- Encourage incentives to increase investment in the addition of storage to baseload plants