Inside Clean Energy: The Energy Transition Comes to Nebraska

Nebraska has a utility system unlike any other, and until recently that contributed to the state’s sluggishness in embracing renewable energy.

But things are changing—and fast.

Two weeks ago, the board of Lincoln Electric System, one of the state’s largest utilities, approved a goal of getting to net-zero emissions by 2040.

About a year ago, leaders of Omaha Public Power District, another large utility, approved a goal of getting to net-zero by 2050.

Scott Benson, manager of resource and transmission planning for Lincoln Electric, told me that his utility’s new goal is a big deal because it is a more aggressive timetable than that of many other utilities across the country. But the net-zero goal is also not a big deal, he said, because Lincoln Electric was moving in this direction regardless.

“If LES just continues to do the things we’ve been doing the last 10 years, pursuing opportunities when they become available to us, making the right decisions” then the utility would get close to net-zero, even if no goal had been set, he said.

As of last year, Lincoln Electric had cut its carbon emissions 42 percent from 2010 levels. Most of the shift has been because the utility has bought into several wind farms.

Benson said the net-zero plan has wide support in the city, partly because the plan gives future leaders leeway to choose which power sources they want to employ, including turning to carbon capture technology to allow the continued use of at least some natural gas.

The plan has no interim goals, so there are no requirements to hit benchmarks on the way to net-zero. I often look at interim goals to get an idea of whether a utility is planning to make rapid changes, or wait to do most of the work far in the future. In Lincoln’s case, the lack of interim goals might indicate a lack of seriousness, if not for the fact that the ultimate goal is 2040, which is a decade sooner than many other utilities’ plans.

Before I go on, let’s do a quick Nebraska Utilities 101. Unlike any other state, utilities in Nebraska are owned by their customers or local governments, largely the result of legislation in the 1930s that encouraged government ownership of utilities. By the end of the 1940s, the last investor-owned utilities had sold their assets or restructured. That is different from most states, where investor-owned utilities like Duke Energy serve a majority of customers.

Government ownership of utilities has had many benefits, but one of the drawbacks is that people who run the companies are often cautious about embracing new technologies, and reluctant to close old power plants, said Lu Nelson, policy associate for the Center for Rural Affairs, a Nebraska-based organization that works to improve the economy and quality of life in rural America.

Nebraska was slow to develop wind energy compared to some of its neighbors, even though the state has some of the strongest wind resources in the country.

But wind energy development has now arrived in the state in a big way, with development accelerating in the last decade. Wind energy has grown to nearly 20 percent of the state’s electricity in 2019, up from 1 percent in 2010, according to the Energy Information Administration.

Coal, the state’s leading electricity source, has gone down, but not a lot. It made up 66 percent of the state’s electricity in 2000, falling to 64 percent in 2010 and 55 percent in 2019.

Nelson told me that many factors are driving the push for net-zero plans. Some Nebraska communities have seen the economic benefits of renewable energy. There are rising concerns about climate change. And there has been a push by environmental groups to get candidates who are in favor of renewables to run for seats on utility governing boards.

Change is also afoot at the Nebraska Public Power District, a utility serving several rural areas that is also the main electricity supplier for other rural utilities across the state. The utility is working with consulting firms on long-term plans to increase renewable energy and cut emissions, and will review the options early next year, a spokesman said.

The Nebraska Public Power District, along with the utilities in Omaha and Lincoln, are the three largest utilities in the state.

But there is some pushback to the shift to renewable energy, which can be seen in the increase in spending on campaigns for the Nebraska Public Power District board, as Karen Uhlenhuth reported this week for Energy News Network. Some leaders of rural utilities say they have concerns that the move away from fossil fuels could lead to a system that is less reliable and more expensive.

And yet, those arguments are getting more difficult to make after the Omaha and Lincoln utilities have adopted net-zero goals and say they can maintain reliability and low rates.

After Many Delays, Vineyard Wind Seeks a Pause

The Vineyard Wind 1 offshore wind project has gone through an agonizingly long process in applying for federal permission to build the first super-size offshore wind farm in the United States.

So I was surprised this week when Vineyard Wind, the company behind the project, said it was the one requesting the latest delay.

The company said it has decided to “temporarily withdraw” its plan from consideration by the federal Bureau of Ocean Energy Management. Vineyard Wind said the pause in the process, which will take several weeks, is because the company has signed a new agreement with GE Renewable Energy to supply wind turbines, and needs time to revise its plans to account for the changes in equipment.

The new turbines will be 13 megawatts each, which is more than the previous plan, which involved turbines from MHI Vestas that were 9.5 megawatts each. With more powerful turbines, the project will need fewer of them, going from 84 turbines to 62. 

I asked Tom Harries, an analyst for BloombergNEF, what he makes of this latest episode in a long approval process.

“Vineyard Wind in theory absolutely benefits from this change,” he said. “The delay has been good for them now because they’ve got bigger turbines, which means fewer turbines, which means fewer things to install, fewer things to look after.”

He was referring to previous delays in the permit process, not the new delay initiated by the company.

While I doubt Vineyard Wind is pleased with the government’s delays up to this point, the company now has the benefit of being able to use new equipment and technology that was not available before.

My first thought when I saw Vineyard Wind’s announcement was that the pause would push the process past a significant date: Jan. 20. That would mean the decision on the application would come under the incoming Biden administration rather than the Trump administration.

Vineyard Wind’s application has been moving slowly through the approval process since 2018, leading to grumbling and speculation about why the Trump administration was being extremely thorough in its review, at the same time that it was trying to expedite approval of fossil fuel projects.

The most recent delay by the federal office was announced last month, which pushed the target date for issuing a decision to Jan. 15, the final days of the Trump administration.

Harries said the switch from Vestas to GE turbines is a substantial reason to seek a delay, and he doesn’t think Vineyard Wind is trying to wait out the end of the Trump administration. If that was a consideration, it was likely a minor one, he said.

Vineyard Wind is crucial for the development of offshore wind in the United States. At 800 megawatts, it is gigantic compared to the two small projects that are already operating, both of which are 30 megawatts or less.

Many other projects have been announced along the East Coast, and developers are watching and waiting to see how the approval process for Vineyard Wind 1 works.

The company says this latest delay will not affect the timing of two of the most important benchmarks, which include completion of financing in the second half of 2021 and the start of delivering electricity in 2023.

Finding the Good and the Bad in Utilities’ Net-Zero Plans

I spend a lot of time looking at utility companies’ announcements about moving to clean energy, and trying to distinguish between thoughtful plans that are likely to be implemented, and plans that are mostly about public relations and delaying real action.

The Energy & Policy Institute, a nonprofit environmental watchdog, is one of the leaders in taking a close look at what utilities are doing, and not doing. This week, the group issued a report that found that many of the largest utilities were delaying the most significant actions far into the future.

“The consequences of the delay is not just the fact that ensuing CEOs will have to cut tens of millions of tons of carbon dioxide in a short period of time, but also that the emissions that could have been prevented between now and 2030 will remain in the atmosphere for hundreds of years,” said the report, written by David Pomerantz and Matt Kasper, the group’s executive director and research director, respectively.

The report praised NIPSCO, the northern Indiana utility, for having some of the most ambitious goals in the country and outlining clear steps to reach those goals within this decade. Consumers Energy of Michigan and We Energies in Wisconsin are also leaders in having ambitious plans and short timetables.

But many other utilities are moving at a much slower pace, with plans that show little progress between now and 2030. The report lists Duke Energy, American Electric Power and Southern Company, but there are plenty of other examples.

Duke has pledged to get to net-zero emissions by 2050, but its 2030 goal is a 50 percent reduction from 2005 levels, which leaves a lot of work left to do.

Contacted for a response, Duke spokesman Philip Sgro said his company “is committed to taking a leadership role in addressing the serious issue of climate change” and doing so in a way that maintains reliability and affordability.

American Electric Power has a plan that includes cutting emissions 70 percent by 2030, compared to 2000 levels. Spokeswoman Tammy Ridout said the company is “committed to a low- to no-carbon energy future and is focused on diversifying our resource portfolio, deploying technologies to reduce emissions, and modernizing the grid to help us get there.”

Neither company commented on the report’s assertion that their 2030 goals are too modest.

Southern Company did not immediately respond.

As the effects of climate change become more salient and states increasingly legislate cuts to emissions, utilities will face growing pressure to not only get to net-zero, but to do it quickly.

President-elect Joe Biden campaigned on a plan to get the electricity sector to net-zero by 2035. While that may not have much of a chance in a closely divided Senate, it shows that the bar is likely to continue to rise, and utilities will need to get used to being asked why they aren’t doing more.

In the world of the near future, I’d much rather be NIPSCO and the other leaders than some of the laggards.

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