Retiring 90% of our Coal Power Plants would Save Money - Michelle Solomon, Energy Innovation

Michelle Solomon is a Senior Policy Analyst in the Electricity program at Energy Innovation, working to accelerate the transition to a clean, affordable, and equitable electricity sector in the United States. We’ve invited her to talk about their recent publication of the third edition of their report - Coal Cost Crossover – which argues that over 90% of coal-fired power plants in the U.S. could be replaced by renewable energy generation at a net cost savings.

Prior to joining Energy Innovation, Michelle earned her Ph.D. in materials science and engineering at Stanford University, where she studied nanoparticles with applications in purifying chemicals for use in medicine and the environment. During graduate school, she also pursued an interest in energy policy and spent a summer working on electric vehicle policy at the California Energy Commission. After graduating, she transitioned full-time into policy as a Congressional Science and Engineering Fellow. As a fellow, she had the chance to work on energy and environment policy for Senator Ed Markey, focusing on a wide range of issues spanning environmental justice to electric vehicle charging.

Michelle holds a Ph.D. and an M.S. from Stanford University in materials science and engineering. She also completed her B.S. in physics at Boston College.

Further Reading:

·      Coal Cost Crossover 3.0: Local Renewables Plus Storage Create New Opportunities for Customer Savings and Community Reinvestment

·      Coal Cost Crossover Interactive data visualization

Transcript

Greg Williams: 0:10

Thanks for joining us for another episode of climate money watchdog where we investigate and report on how federal dollars are being spent on mitigating climate change and protecting the environment. We're a private, nonpartisan, nonprofit organization that does not accept advertisers or sponsors. So we can only do this work with your support. Please visit us at climate money watchdog.org To learn more about us and consider making a donation. My name is Greg Williams, and I learned to investigate and report on waste, fraud and abuse in federal spending while working at the project on government oversight, or Pogo. 30 years ago, I learned to do independent research as well as to work with confidential informants or whistleblowers to uncover things like overpriced spare parts, like the infamous $435 hammers, and expensive military weapon systems that didn't work as advertised. I was taught by my co host Dena razor, who founded Pogo in 1981, and founded climate money watchdog with me last year, Dina has spent 40 years investigating and sometimes recovering millions of dollars wasted by the Defense Department and other branches of government at Pogo, as an independent journalist, as an author, and as a professional investigator. David, would you like to say a few more words, before we introduce our guests?

Dina Rasor: 1:30

Yes, I'm really glad that we're going to be talking what I consider a really fascinating thing. I mean, I told someone who's in the climate, nonprofit, when I had lunch with today that the number about 99% of the coal, you know, the coal plants could be replaced, and by by renewable energy, and he did have like a double take. And it's what's surprising everybody is I think, what's how fast wind and solar price came down. And that has made it so that all these other, you know, all of the be above, like Obama used to say, are all the contingency things we have. And all that kind of stuff is starting to fade away because it could Oh, capitalism, it can't compete. And so that's what Michelle Solomon's going to talk about today. And so, I think this is extremely important because it gives it takes the another excuse away from continuing to burn coal.

Greg Williams: 2:30

So Michelle, Solomon is a Senior Policy Analyst in the electricity program at energy innovation, working to accelerate transition to a clean, affordable and equitable electricity sector in the United States. Prior to joining energy innovation, Michelle earned her PhD in material science and engineering at Stanford University, where she studied nanoparticles with applications in purifying chemicals for use in medicine and the environment. During graduate school, she also pursued an interest in energy policy and spent a summer working on electric vehicle policy at the California Energy Institute. After graduating, she transitioned full time into policy as a congressional science and engineering fellow. As a fellow, she had the chance to work on Energy and Environment Policy for Senator Ed Markey focusing on a wide range of issues spanning environmental justice, to electric vehicle charging. So we've invited Michelle de to join us tonight, in part due to our interested in, in a series of papers or reports, called the cold cost crossover, which is in its third iteration. And what I enjoy, particularly about those publications is addressing the cost of transition and investigating energy production, not sort of in the abstract, but in specific geographies with attention paid to grid interconnects and other things that often are sort of lost and, and the details but at the end of the day, are very important detail. So welcome to show.

Michelle Solomon: 4:14

Thanks so much for that great introduction. And I'm really excited to chat with you both today.

Dina Rasor: 4:20

Okay, to start out, let's let's go to the very first thing, because people will say your organization, Energy Innovations, it sounds great, but what is it? What is?

Michelle Solomon: 4:30

Yeah, so we're a nonprofit, nonpartisan climate policy think tank. And what we do is we provide objective analysis and policy recommendations to policymakers at both the federal and state levels, as we all tackle the climate crisis, and we really have an emphasis on tackling the biggest emitting sectors in the biggest emitting countries. And so for me, I'm on the electricity team at energy innovation so we focus on the US electricity sector.

Dina Rasor: 5:00

Okay, so let's, it's interesting because it isn't just that a solar and wind is going down, but the cost of keeping these older existing coal power plants is going up. And so it's, you know, down and up thing rather than just a renewables going down. So explain to us why existing coal power plants are going up the cost to run them.

Michelle Solomon: 5:26

Yeah, so there's a few reasons that are causing the cost of coal to rise. One is, of course, just that plants are getting older. We haven't really been building new coal fired power plants in this country for a while. And so the existing fleet is just aging. Another reason is that they're operating much differently than they were first intended to operate. So coal for a long time was this, you know, really consistent source of electricity in the country. But now coal is being run for a lot less time, and it's being ramped up and down instead of just held online. So what that does is it causes a lot more fatigue on the plants, which leads to higher operations and maintenance costs, and then the cost of fuel is increasing as well.

Greg Williams: 6:12

So say a little bit more about that, that up and down process, are these plants being converted to so called peaker plants? Or why are they you know, suddenly going in and out of Operation instead of operating consistently?

Michelle Solomon: 6:26

Yeah, that's a good question. So part of it is that, you know, one of the big reasons why coal has kind of become a smaller share of our electricity system is not just due to the rise of renewables, but mainly due to the rise of gas. And so it tends to be cheaper to operate gas plants. And so the gas has kind of taken up more of that electricity generation, and the coal just isn't needed as much. And so it only really comes online when you have kind of a capacity crunch to some extent in a lot of places. So when you're experiencing really high electricity demands, that's when the coal will come online. And so it's a little bit more due to that kind of seasonal variation, as opposed to kind of daily peaking that we see in a lot of gas plants.

Greg Williams: 7:18

Would you still consider it baseload or somewhere between peaker and baseload?

Michelle Solomon: 7:26

Yeah, so the average capacity factor, I think, across our whole fleet was around 46%. And we kind of in general, are not really trying to think of resources as providing baseload power anymore, since there's, you know, becoming a more diverse set of resources that kind of operate at different times of the day. So I think it's, I guess, I would say, it's more toward that kind of peaker aspect than the previous baseload power, I think, to be closer to what used to be baseload power would be more like an 80% capacity factor, which we do see at a couple of plants, but the vast majority are operated much lower than that percentage of time.

Greg Williams: 8:14

So capacity factors are really important concept that some of our listeners may not have at the tip of their tongues. What did you explain what that is?

Michelle Solomon: 8:22

Yeah, it's really just the percentage of time that the coal plant is operating, essentially. So to get the capacity factor, we just look at the total energy generated, versus the total possible energy generated by that plant based on its capacity or size. So if a coal plants capacity factors, 46%, that means it's operating 46% of the time,

Greg Williams: 8:47

or, you know, perhaps a larger percent of the time at less than its maximum capacity. Yes, yes. So this is also important in the context of wind and solar, which, of course, cannot operate when the winds not blowing and the sun isn't shining. So can you give us a sense of how that 47% capacity factor compares to technologies like wind and solar?

Michelle Solomon: 9:12

Yeah, I don't have the average kind of capacity factor of wind and solar off the top of my head. But, you know, if you think about solar solar panel, you know, in, say, in the springtime, we have 12 hours of sunlight, so you know, you and you're not getting the full capacity of that solar panel over the entire course of that sunlight, because the strength of the Sun varies over the course of the day. So first of all, you're going to be generally lower than 50% of the capacity factor, whereas in the winter, that'll be lower and in the summer, that might be a little bit longer. Right.

Dina Rasor: 9:55

Okay, well, now the one of the things that one of the factors has been of course, So there's this, there's been several bills that bring in a huge amount of money from the federal government for climate. And one of them is called the inflation Reduction Act. That's because was part climate and part Reduction Act, stuff, Ira. So it doesn't sound like it has anything to do with climate, but it does. But your your report has talked about how the IRA has money has shifted the economic scale more towards wind and solar. And if you could explain those new investment opportunities in areas with existing coal plants, and what is the 10% tax credit boost for projects and local compliment, explained that sort of whole push by the federal government to get these have reasons to shut these plant coal plants down?

Michelle Solomon: 10:47

Yeah, absolutely. So the inflation Reduction Act is very, very long. But there are a few programs in it specifically, that can have a really big impact on this kind of economic dynamic between coal and renewables. One is the kind of extension and expansion of two tax credits called the investment tax credit and the production tax credit, which have which have been in existence for some time. But what the inflation Reduction Act does is it gives them a full 10 year length. Whereas over the last several years, we've kind of had tax credit some years and not had tax credits the other years, and what those tax credits are. So for the investment tax credit, it's kind of you know what it sounds like, for every dollar you invest in renewable energy technology, you get a credit back up to a certain percentage. So with the inflation Reduction Act, those tax credits are up to about 30. Well, the kind of base tax credit there is 30%. So for every dollar you invest in wind or solar, you could get 30 cents back. The production tax credit is not tied to the investment value, but instead tied to the amount of energy you produce. So for every unit of energy you generate, you get, you get some money back. And so for renewable energy, kind of developers and owners, those tax credits can be really, really beneficial. And especially as we've seen, the costs of wind and solar dropped. So significantly, the value of that investment tax credits, since it's tied to the amount that you invest, has kind of gone down. So there's been a lot of interest in moving to a production tax credit, where even though the investment is, you know, relatively cheap, you can get money back for kind of over the course of the lifetime of that project. And so for solar in particular, where costs have really come down, that, that creation of the production tax credit for solar has been really well, or we hope will be really beneficial for for new solar projects. And in our analysis, we generally found that their production tax credit ended up being we kind of evaluated both the potential to use the investment tax credit and the production tax credit, and their production tax credit tended to be a bit more lucrative. So in addition to kind of creating that production tax credit option, extending the tax credits for 10 years, there are also some updates made in order to allow entities that don't generally have huge tax liabilities to take advantage of those tax credits, without losing as much of their value. And then, as you mentioned, Dina, there's a 10% tax credit boost for projects located in energy communities. And so what an energy community is, according to the inflation Reduction Act? Well, it's a pretty broad definition, but it includes communities that are surrounding retired fossil fuel plants, or who depend heavily on fossil fuel jobs. So that would encompass, you know, most of the communities are really all the communities surrounding the coal plants that we're looking at. And so not only do you get that 30% tax credit, or, you know, the equivalent production tax credit, but you get an additional 10%. So, whereas before, you might have looked at what your available renewable resources might be. And you might have said, Oh, the sun is, you know, a lot stronger if we just move a little bit further away, because you know, that we can get better weather and it's just generally sunny here so that solar could be more valuable. But now, it kind of shifts the narrative because Do you get an extra bonus for citing a project in a community, you can kind of deal with the slightly less kind of production from that, you know, solar panel or wind turbine economically, and it might make it more lucrative to put a project closer to a community where it can start to provide jobs and tax revenue to that community.

Dina Rasor: 15:21

So that, that, and people want to think well, well, you know, what does that matter? You know, well, it's not all even, okay, when you go to Arizona, or California, you know, any place like that, where there's low humidity, you get in an intense sun, and you get a lot of sun, and you get a little rain, you go to someplace up in Ohio, Kentucky, Michigan. Yeah, you can still do solar, it still works, but there's just there's just less of it, or less wind someplace and more wind someplace else. So this kind of if you are, if you're if you lived in one of these, that they could sometimes call them sacrifice zones, where these coal plants have been. This is going to help you actually transition over to the renewable energy, even if it's not optimum. And that's because you You sacrificed basically your your ecology, do you have this both coal plant and your kids, you know, your kids lungs, you have this coal plant puking out all these years, and now you're gonna get an extra boost? So you can compete? Is that

Michelle Solomon: 16:24

Yeah, exactly. So you know, you might need to build a few extra solar panels to get the same amount of energy in Ohio than you would in Arizona. But now, because of that additional boost, you can afford to do that.

Dina Rasor: 16:42

Alright, walk us through the cost comparisons between the coal renewable energy and explain why they found an astonishing 99% of all coal fired, fired power plants are more expensive to operate than the cost of replacement with renewable energy projects. In other words, there's just 1% of coal plants left that can even compete with renewables. Because it's, I found that a lot of people have found that really surprising. I'm sure you get this a lot. Because what it basically means is that renewables are clearly the more effective and cheaper way to go. Yeah, whether you worry about the planet or not, it's just cheaper. Go ahead.

Michelle Solomon: 17:29

Yeah. Yeah. So what we looked at to kind of get to this conclusion was, we compared the marginal cost of coal energy, which is, you know, the cost that is required to generate every unit of power from that coal, kind of the going forward costs, and what goes into that is the cost of fuel the cost of operations and maintenance, and then kind of the going forward capital expenditures necessary to keep your plant running. So we compare that that marginal cost of coal to the cost of building entirely new renewables. So that's called the levelized cost of energy. And it takes in all of the capital costs, as well as operations and maintenance, over the entire lifetime of the plant. And then of course, there's no fuel costs for renewable, so we don't have that in there. But so we did that for every plant in the country using publicly available data from the Energy Information Administration, and then calculated what that levelized costs for renewable energy would be in the nearby region using using a model from enrol. That's also open source. And what we found is that you could replace that energy generation from the coal plants with energy generated from renewables at a cheaper rate for almost all plants. And what was really interesting that we found was not only are these renewables much cheaper, are not only are they cheaper in almost all the plants, but they're much cheaper. So at I think it was something like over 75% of the plants, it would be 30%, or more cheaper to replace the energy generation with renewables. And then one point to kind of add on here is that energy generated from renewables is not necessarily the same as energy generated from coal, because as we've discussed, you know, renewables are variable, they don't generate energy at all times of the day. So there's certain times of the day when you when you need energy to be available. And so what we looked at in addition to just adding renewables to generate energy, we also looked at the potential to use those savings that you would get by generating your electricity renewably. How much for our battery storage that could pay for and so we found that not only could you replace the energy generation with renewables, but you could also I'm at a really significant portion of battery storage to help integrate those renewables into the grid and kind of get their energy to the time of the day when you need it. So we found that over 60% of the capacity of the coal fleet could be replaced with for battery storage, in addition to replacing the generation with renewables. And just kind of one point on that is that it's not, um, there's no exact number for what ratio of solar plus storage, you need to kind of replace that sort of time of day value of a coal plant, and it's going to be different for every plant. So this number is just starting to say, you know, hey, not only is it a lot cheaper to generate energy here, but for those planners, those utilities, those grid planners, starting to look, you're replacing coal plants with solar plus storage is becoming a really economic option as well.

Greg Williams: 20:58

So help us understand why four hours is a relevant measure. I mean, if you're talking about solar, you need, you know, anywhere from you know, 12 to 18 hours of, of storage to cover the full 24 hour cycle. So, why four hours? You know, is it still economical if, if you need, you know, four or five times that those kinds of things?

Michelle Solomon: 21:23

Yeah, so we looked at for battery storage, primarily, just because it's really commercially available right now, you know, we wanted to compare to commercially available technologies. longer duration, storage is definitely something that would be great to pair with renewables as well. We just didn't look at it, because it's, you know, a little bit more of an up and coming technology at this point.

Dina Rasor: 21:50

And why one of the things I want to add for the listeners is the the challenge of a podcast is you have no visuals. And so there are they have with this report, a fantastic group of graphics, showing all the different coal, the coal plants across the country, and all the things and all the different statistics we talk about. And they have that on their blog. And on their website, however, what we're going to do, if you come to listen to this podcast on our website, we'll put those, we'll put that group of fantastic graphics that go with the report. So as you're listening to the podcast, you can then pull up that and see just the same way, when you're reading, you'd be flipping over to look at the graphics. So we always make sure that the listener has something to look at, in a wall, we're talking.

Greg Williams: 22:45

Yeah, I was gonna mention that. I think one way in which we are very, very fortunate in the United States, and a way in which our democracy is still very much alive and healthy, is the amount of public data that that's available, either through the government or nonprofit organizations is really tremendous. And a big part of our goal with this podcast is not so much to make the podcast itself, the entirety of the information, the audience's is expected to absorb. But rather, each one of these, each one of these episodes is meant to be the beginning of somebody finding a subject interesting, and a few materials for them to carry their their research and their education to the next level. And so that's why those links, and those additional materials are so important to us.

Michelle Solomon: 23:36

Yeah, and I'll just add on, in addition to the report, we also have an interactive data visualization that, you know, has all of the coal plants that we looked at mapped out. And if you scroll over them, you can see all of kind of the cost comparisons that we were able to make. And we're able to do that because of all of this publicly available data. And again, that's another reason why we kind of focus on commercially available technologies is because we have that data available to look at as well.

Dina Rasor: 24:08

Okay, so this this sounds, you know, I want to read the headline of this and started digging the report, I sort of got a holy cow. And so with this, there's so other climate people that I've talked to because, you know, you expect maybe 60 70%? Well, that's pretty good, but 99% of the points. I mean, did you guys have that kind of reaction when the numbers were finally popping out of your Mathcad and your Excel charts that this is really a giant leap?

Michelle Solomon: 24:42

Yeah, we definitely were surprised by by this jump, you know, we've we've done this report two times in the past based on 2017 and 2019 data and now we did 2021 data. And when we looked at the 2017 data we saw 62% of the plants were or which were cheaper if you use renewables instead of coal. And then, in 2019 data, we saw that it was up to 72%. So this jump in two years from 72% to 99%, was definitely bigger than expected, and very much outpaced kind of the Yeah, what we had been predicting. And it was really due to the inflation Reduction Act, and those those tax credits that are now available. Right.

Dina Rasor: 25:31

Okay. So you know, as all scientists do, once you hit a milestone, and you've made a big accomplishment, you say, how can we do better? What can be done to speed up the transition to coal to clean energy is if the 99% number is not enough?

Michelle Solomon: 25:49

Yeah, so certainly, despite this coal cost crossover, as we call it, where the cost of renewables become cheaper than the cost of coal, we're not necessarily seeing all coal plants going offline immediately. And that's because there's a lot of barriers to both retiring those coal plants and getting replacement energy available to the grid. So kind of one of the the first big barriers, of course, you know, I think it's been spent in the news, I think, probably a lot of people will have heard about the kind of delays in in connecting new renewable resources to the grid. So just to kind of put that in context, in sort of the Midwest region of the United States, the system operator there, the grid operator there, they have three times the capacity of renewable resources waiting to connect to their grid as they have coal capacity on their system. So the desire to get renewables out there is is high, but they're not they're not coming online. And that's because of, well, it's because of a lot of reasons. One is that the transmission system is kind of at capacity in a lot of ways. You know, we can't, it's kind of, you know, if you think of the highway system, there's a lot of traffic on the transmission highway of the United States, and it's getting tough to fit more cars. Yeah,

Dina Rasor: 27:22

so like, when Eisenhower built the inner inner state growth of highway system, there was a whole heck of a lot less people a traffic jam, probably that you've got five cars near you. Now. It's bumper to bumper and I, we've we've actually done podcasts on that. And everything else, I wanted to add one thing I just suddenly popped in my head on these cost comparisons, I have gone to coal plants. And I have stood on the one of the biggest disasters around all of these old coal plants is the coal ash. And I have stood on coal ash mountains, I have looked over coalesce lakes, I've seen them seeping into the Ohio River, you know, and so does. When is your is your cost comparison, I'll have to do also with the possibility of cleaning up the toxic mess that's left behind in a coal plant? Or is this just to tear it down and build the other new and not looking at any kind of environmental mitigation for this? Disastrous coal ash is disastrous material?

Michelle Solomon: 28:29

Yeah, yeah, we don't we don't include the costs of cleaning up the coal site into kind of the cost that it would take to switch over to a different system. There's there's several things we don't account for, we don't account for kind of the health benefits that you would get and the cost of those those health issues that come from coal plants, asthma attacks, deaths, all of that. We also don't account for the what the customers are paying on the kind of remaining plant balance for these coal plants. So when utilities make an investment in a coal plant, they kind of take out debt, essentially, to finance that coal plant, and then they're paying back that debt over the life of the plant. So 30 years or longer, and they're doing that with customer money, that that that cost is going down to customer bills. So we're not even including kind of that amount of the customer bill that's going towards paying off that capital expenditure. So yeah, just to say that this was a very kind of simple analysis of just the operating costs of the two. But certainly when you retire a coal plant that environmental mitigation is needed. Yeah.

Dina Rasor: 29:57

That might get you up to 100 right away. It is a gigantic problem. Go ahead, Greg.

Greg Williams: 30:02

Yeah, yeah, I just I think it's worth saying a few things about just how utility prices work, it's generally speaking, a cost recovery enterprise, where instead of being a competitive marketplace, you know, like the ones where we buy gas or food or any number of other things, generally speaking, traditionally, there has been one utility provider where you have your home or your business. And for that reason, the government has to, you know, carefully regulate what prices they charge and what costs are likely to incur. And intrinsic to that is a system where the utility provider goes to the government says, I would like to build this kind of plant, that's going to cost me this much. And I think that justifies, you know, this increase in utility rates for this customer base. And that's all agreed to by utility regulatory Commission's in the different states and in municipalities, and that's what you know, creates this, the arrangement that you described, where you build a plant, and you have a certain amount of time over which you, you the utility operator, expect to recoup those. Those expenses?

Dina Rasor: 31:20

Yeah, I mean, Michelle, you want to comment on that?

Michelle Solomon: 31:25

No, I think that was a really, really great, Greg's really

Dina Rasor: 31:27

good, you know, we love to get in the weeds on here. But our most important thing is it doesn't do us good to get into the weeds in here. If we can't educate the public, like talking about, you know, you always have to compare it to something people understand the interstate highway, you know, when it first was built an overcapacity very nice, you know, you're going along in your 1950s car. And, you know, there's not a whole lot of traffic, and then the population. And so what has happened in the United States is we have not invested in the grid. So yeah, do you want to when you do you make these great transition, and then you can't hook it to anything? One of the, one of the areas that I'm very concerned about, because it's just so frustrating, is, and I've, I've actually seen it in, in real situations, there are communities and they're being filled by, they don't realize it, but it's what you know, it's what they call astroturf, they're being fueled by dark money, that they, the a solar company comes in, and they've got a bunch of, you know, either brownfields or fallow fields that are not going to be able to grow anything but bad hay, and you know, just as not economically good anymore. And they say, Hey, let us do solar panels, leases this land or, you know, on your farm, and we can put these up, and it's not going to take away from your productivity because you're not using it anyway. Or maybe you've decided that, that the the up and downs of food pricing means that the agricultural land that you own, which is an optimum, and you can't compete with corn in Iowa, or something like this, you know, it'd be much better use to lease for solar panels, and, or wind. And there, there was a community in Ohio, in a very rural area with, you know, not the most optimum land. And there were all kinds of farmers like yeah, sign me up, you know, I ancestors just basically bled this this land dry, and we can't and we can't come like we can't compete with the agri big agri farms, let's put solar on that'll help the planet and all that. But then they come in, and they start talking. And they you know, they have these ringers in these town halls or these council meetings, and they get up and say, oh my gosh, they're trying to do this so that we can't grow enough food for the for not not just the world but for ourselves. And, and you know, we aren't going to we aren't going to a way of farming is going to be gone. Yeah, you're not going to have to work as hard to sit in the sunshine. But there's there's a lot of misinformation that comes in there. And it actually there's this giant solar farm and a bad part of Ohio where they really can't farm anymore. I know because I you know, I lived in Ohio for a while. And these wish would have been really, really good for the communities. The communities aren't have nothing, they can't bring in industry. They can't bring anything but they've got this bad land nobody wants to use except the solar people or they've got wind. And what do you do about something like that? And I know this is a little bit more into the political science than rather than the physics science of it. But I can see I can see that, that kind of thing. And they voted it down. You know, they voted it down. So here was a series of thing where you're trying to do economic justice in rural areas and through pure misinformation and vide is the town there's always a hole article about how they sat on opposite sides of the church because there were the pro solar and the anti solar people and they wouldn't talk and their lifelong friends. What do you do about that kind of misinformation that is obviously being funded by people who don't want solar to work and people who want to keep fossil fuel going?

Michelle Solomon: 35:21

Yeah, that's a great question. And definitely a big issue that we're seeing kind of across a lot of the US right now. And I don't know if there's an easy answer to that question. You know, I think that we've seen a lot of kind of really productive messaging around the energy transition and framing it as kind of industrial policy and the potential to revitalize communities. And I think that's been really positive and has worked in a lot of places. You know, in our analysis, we saw that the biggest investment opportunities for these projects are in red states, because, you know, of course, that's where a lot of the coal plants are. So, you know, I think, obviously, trying to get to communities and educate them kind of, before some of this misinformation comes in is crucial. And then also just kind of emphasizing the benefits of this is a really big investment potential for your community, this could bring a lot of jobs, you know, the benefits of clean air and clean water? I think people do want that. And I don't know, I think all we can do is try to emphasize those benefits as much as possible, because the benefits are really real, and now include lower cost. So

Dina Rasor: 36:46

yeah, well, I actually just thought of something that I had read that, you know, look, the weather's getting hotter, most places getting hotter. And what's happening is that crops that used to do well are frying, and there's not as much rain and you know, this kind of stuff. And actually, there's been some solar farms where they put the solar panels, exactly. tractor with Pollard. And they grow, they grow, you know, they grow crops between the solar panels, but they also grow certain kinds of crops under the solar panels, because the solar panels provide the shade, they still get the sun, but the provide the shade, and so it's actually overcoming the increase in the heat. By protecting the, you know, they can put in more more exotic and, and touchy crops, that will bring them more money because they've got a natural, they've got an F canopy. So I, you know, I found that really fascinating, but I think that's maybe well, here, we're talking about a political science problem. But if you could go to them and say, this is going to make you yield more crops and more a mixture of crops, so you're not at the at the market forces creaming you. And it's going to make it so that you can go more different kinds of food and make the energy for it. So there, you know, my father was a PhD physicist, and he said, for every social power problem, there is almost always a scientific answer, if they will take about. So what do you think about that you think that innovation like that would be the kind of thing that would help with at least with the current CRN that we're using up our farmland?

Michelle Solomon: 38:25

Yeah, I mean, I think those potential, the potential for kind of the combination of agricultural land and combining it with renewables is a really seems like a win win for farmers and, and the electricity system. So and I was actually just talking to somebody who mentioned a group in the West, called the Western way, I believe, that is really focused on this idea actually, of trying to combine agricultural land and, and renewable. So I think there's a lot of potential there. I think, also what you said, just at the beginning of our conversation about, you know, this is just good old capitalism. And you know, one of the reasons why we did this study is because the cost story is there. And at the end of the day, people really make decisions based on their wallets. And this is something that could save people money. So, yeah, I think that's another big benefit. And one of the reasons why we wanted to reevaluate things after the inflation Reduction Act is because it has health benefits, it has climate benefits, but it has cost benefits. And at the end of the day cost benefits is, you know, what really matters in people's day to day a lot of times,

Greg Williams: 39:48

though, something I alluded to in the introduction that I want to make sure that we cover is the notion of the scarcity of interconnects to the grid, and that's something that that your report addresses pretty directly. And a lot of that has changed over the last 20 or 30 years with utility deregulation. Give our listeners an introduction to how these interconnects are accessed, who controls them? How do you get access to them? You know, if you're contemplating some kind of renewable energy project, how do you get connected to the grid?

Michelle Solomon: 40:27

Yeah, so it definitely varies by kind of region, I'm in the sort of Midwest region and the Mid Atlantic region, and the kind of like northeast region, there are these entities called independent system operators or regional transmission organizations who kind of have purview over the grid. And by that, I mean, the transmission lines essentially. And so if you want to connect to the grid, those entities need to kind of take a look at the big picture and figure out if you know, you connecting to the grid in a specific spot is going to, as we were talking about the analogy with traffic before, if you connecting in a specific spot is going to come in and create a big traffic jam, or if this is a relatively unpopulated area, and you'll be able to connect easily. So they have to study that process for you to interconnect and figure out if you can, and sometimes, if there's too much traffic, they, the need for somebody new to interconnect will trigger the need for a much bigger upgrade to the grid. So imagine if you were kind of like merging onto the highway, and the person overseeing the highway saw you coming in, and they said, No, there's too much traffic, we need to build a whole new lane. And that cost is going to fall all onto you, because you are the person that we're trying to get onto the highway at the time. So that's kind of what's happening to renewables right now. And a lot of these regions. So and it's largely due to the fact that we haven't been building out a lot of new transmission in the last kind of several years. And we haven't been doing it in a very kind of coordinated manner. So right now, one of the kinds of solutions that's being worked on is the Federal Energy Regulatory Commission is doing kind of a process around making those regional transmission organizations and kind of in general, the transmission system, have better planning processes, so that we're first able to relieve a lot of the current congestion as well as planned better, so that we can continue to build out renewables in the future without experiencing the same levels of congestion. Another thing that's really exciting, because those planning processes take a long time and, you know, it's not likely that we're going to be able to build new transmission overnight, there's actually new materials that you can make transmission lines out of that can take on a larger amount of electricity in them. So you can increase kind of the ability of the transmission lines to carry electricity without having to build entire new lines. That's something called reconnecting those transmission lines. And so that's something that in the short term, is a really good way to be able to add more lanes to the highway as it were, and get renewable projects on faster.

Greg Williams: 43:40

So all of this seems to imply that there's a very strong advant advantage to being an incumbent. Once you have that interconnect. It's not something you sort of have to pay for. Again, it's not something that anyone can compel you to give up. And I wonder to what extent do you attribute the persistence of all of these coal plants, despite cheaper, renewable alternatives?

Michelle Solomon: 44:06

Yeah, so that's a really good point. Because not only once you have that interconnection, do you have it, but sometimes you cannot, under our current rules, reuse it actually, for a new generation resource, or at least, you can't do it in kind of just a really quick process. And you might have to go through that whole process of going to the regional transmission organization and having them study and see, you know, what the impacts might be. So actually, in in the Midwest region of the United States, where the grid operators, the mid Continental, independent system operator, they actually have a process for generator replacement at an interconnection. It's kind of a process that's outside of that normal line to do I connect to the grid. So they have a process in place for you to be able to reuse that existing interconnection but have a different source of generation. So that's actually one of the big policy recommendations in our report is for other regions to look at how they can kind of add this, this kind of parallel process so that when you're reusing the same interconnection, you don't need to wait as long. So that that could be something that could really speed up the potential to get get new renewables on the grid at these coal plant sites.

Dina Rasor: 45:37

Okay, Greg, do you have another comment on that?

Greg Williams: 45:40

Nope, I don't think so. Okay.

Dina Rasor: 45:42

All right. Now we're gonna get in the weeds. Because, and what I'm gonna do is I'm gonna ask you the question, Michelle, you can answer it. And then we'll have Greg come back and do what Greg and I try to do them all time is put it back in, pull, pull apart that the the, the geek stuff, we all love the good stuff, good stuff, so that the average person who doesn't really know about this stuff, but in your report, it said there was a problem with the cost numbers and competitive procurement. Were plans overestimate renewable costs? So what what is that about? And why is it so? And can you make the comparisons more accurate? And why would the IRA program make this over estimate even higher?

Michelle Solomon: 46:24

Yeah, so that's a great question.

Dina Rasor: 46:28

Explain the whole thing, because I'm sure people saying what, what did she just say?

Michelle Solomon: 46:34

Okay, so let's see, when utilities are figuring out what they're going to do, in kind of the next five years or so they put together something, something called an integrated resource plan, oftentimes, which figures out how they're going to what their demand will be for electricity in their service territory, and how they can meet that with collection of electricity generation resources, and how they can do that cost effectively as well. And then they take that plan to their regulator, and the regulator either approves it, or it tells them that they need to adjust it. And so because all of that plan is going to determine what the costs are going to be to the electricity customers. So when regulators are looking at those plans, they're really looking at the costs. And if the utility is proposing something that's really expensive, then the regulator isn't gonna want to approve it. So generally, utilities try to, you know, go for resources that are going to be least cost. So if you're not having accurate cost assumptions in those plans, then you're going to favor resources that maybe you shouldn't be favoring. So in this case, a lot of times those assumptions are favoring the fossil fuel resources, whether it's coal or gas over wind and solar. And one of the, I guess, more generous reasons for why utilities might do that is because models have continually kind of under predicted how quickly the costs for wind and solar will decline. So it's been really hard for utilities to accurately predict what the costs are going to be five years out. And so one, one thing that we talk about a lot of energy innovation, is using kind of what's called technology learning rates to make models more accurate. So some of you may have heard of Moore's law, which is this idea that, as you know, we improve our knowledge of computer chips and how to make them the kind of capacity of information that you can fit on a computer chip with double, you know, every so often, and that learning rate is really just due to kind of like production of, of the computer chips. And so that same sort of logic applies to wind and solar as well. And so historically, models have not really taken into account those technology learnings, which are really driving down costs. So that's one thing is improving the models. But given that utilities are just using the models that are available to them, it's really important that they reevaluate those costs assumptions, and that the regulators are being really are using a lot of scrutiny around those cost assumptions. And especially since the inflation redact just happened, you know, there's some utilities who are coming out with their they don't do these integrated resource plans all the time. So some utilities were already scheduled to do them after the IRA anyways, and so that's been really great to see because some of those utilities have come back and said, Oh, actually, we are going to close our coal plants earlier because the cost of renewables are cheaper. So in Michigan, there's a utility that I can't remember exactly. When their plan came out, but it was sometime in the fall, and they accelerated a lot of their retirements. And so I think the advocates expect to see that happen with several other utility plans that are coming out. But for those utilities that did them just before the IRA passed, they won't be doing them again for a while. And so one recommendation that we have in our report is to have regulators, you know, really push utilities to redo those plans in the wake of the IRA in order to make sure that their customers are getting the least cost resources possible.

Greg Williams: 50:36

Typically, how many years are there between the renewal of these plants? Is it three years? Five years? 10? years?

Michelle Solomon: 50:44

That's a good question. I don't know off the top of my head.

Dina Rasor: 50:52

Okay, well, that yeah, that's, that's fine. I think I think that's really important though, because it gets a sort of a little bit of a learning thing is the old rules, the old formulas don't really can't be used as an assumption, because it was a whole different industry, you pumped it out or dug it out of the thing, you burned it, and went into the air, and renewables are such, renewables are so much simpler thing than any kind of, you know, coal, coal plant or coal mining and oil drilling. And so that's there's, it's simpler. And so as a result, you can't but of course, the fossil fuel companies are going to want to use the old formulas, because that they've, they've been king for so long. And so that's the always gonna have to sort of a cautionary tale, you have to not make the assumptions. And I, you know, the Senate can May says that some of these companies who don't want to close the coal plants down quickly, are even if it even if it's cheaper, you know, they're just wedded to it's like, getting rid of your old beat up car, you know, it's not efficient anymore to me, but you don't want to do it. And so they could, they, those old formulas that have been around forever and been in regulatory, and the regulatory process and everything else, they may try to keep the old rules and because it still gives them hanging by their fingernails, so you know, as an advantage that they aren't going to get to the 99% point and fall off. Is that right? I mean, is that that kind of is that saying a good thing that we you can't make assumptions on the old formulas?

Michelle Solomon: 52:40

Yeah, yeah, I think that's right, and just updating updating the assumptions to the new numbers that in and of itself can can have a really big impact so that's like a really kind of simple thing that can be done that doesn't require building whole new transmission lines. So it would be really really beneficial for for utilities to make sure that they have the most updated most updated cost assumptions both for their balance sheets and for their customers. So

Dina Rasor: 53:12

write that so I you you agree that the the idea that that producing cold digging, digging it out, transporting it, putting it in to coal plants, removing the coal ash trying to do it right, and then have the output scrubbers on the on the smokestacks, you know, all these different things. It's much more complicated than putting in a solar grid or a wind grid, it's more to consider you know, with solar and wind there's not big factories sitting there not big turbine, the big factories living there, it's, you know, the electricity is being made there and immediately less moving parts in my right with that assumption.

Michelle Solomon: 53:57

Yeah, I think that's right. Um, and yeah, I think you know, it's something that's really better in every way for communities of course, communities that are set up around coal plants right now the transition is not straightforward, but if we can make that transition while retaining jobs and tax revenue, then you know, not having that huge industrial site not having to track in cold not having to pollute pollute the waters with coal ash. You know, it's it's can only be a benefit.

Dina Rasor: 54:40

But the other thing that I I'm sure everyone's sort of finding out is you begin to look at should I get an electric car, and I have friends that have electric cars, I have a hybrid so but electric cars, there's so much less stuff. The motor oil, the pistons, anybody's in the sparkplug business now better Get out, you know, I mean, when you go and look at it, the electric cars are so much simpler than having little explosions, with gasoline and, you know, fuel filters and all this stuff. I'm just sort of amazed how much simpler electric cars are, of course, you know, they've got to have to have the big battery and all that. And, but since the electric cars, and it's amazing to me that as we make our transition, and we all go down and throw up the hood of an electric car versus the hood of, you know, an old ice car, you just say, wow, there's just so much less to mess with. And I think that's probably true with a lot of renewables, because you're not really making a factory.

Michelle Solomon: 55:40

Yeah, yeah, I think that's right. That's they definitely have lower kind of operational costs and all of that.

Greg Williams: 55:50

So what are you looking forward to with? Coal cost crossover? 4.0? Are there externalities, you're you're going to try to, you know, bring back internal to the model to have more complete story. How soon is 4.0 going to come out? And others? What are you looking forward to in terms of your, your next step, contributing to this conversation?

Dina Rasor: 56:11

Let's next

Michelle Solomon: 56:12

Yeah. So I think one thing, you know, obviously, at some point, you know, maybe we'll do maybe we'll do another one that's not currently in the works. What right now, we're really focused on making sure that kind of utilities and regulators know about the benefits of the inflation Reduction Act and know how to access those both via those tax credits, but also, via another program that I didn't talk about earlier called the energy, energy infrastructure reinvestment program. And it's a loan program through the Department of Energy. And what it does is it provides basically, it can help facilitate loans at really low rates for kind of entities that want to reinvest in current fossil fuel communities. And one thing that we kind of noticed with both this potential reinvestment program, and with this program, there's $5 billion available that can basically guarantee up to $250 billion in loans, for reinvestment in new energy, new clean energy infrastructure, but only if it's kind of at the sight of a kind of existing or old fossil resource. So between this program and the energy Communities Program, we're starting to see that there's potential for the utility business model to really recenter on community investment. It's now you know, in a lot of cases, the least cost, and it also has potential for the least cost financing for new projects. So it's kind of a really exciting moment in not only the energy transition, but also community transition. So, of course, renewables, you know, aren't necessarily going to provide everything for our community. But in these communities that have depended on fossil fuel as their only kind of source of income, it'd be really beneficial for them to diversify their economies. So part of that can be renewable energy. This kind of new reinvestment program can also be used for other infrastructure. So you know, it can be used to redevelop a coal plant into a more industrial site that can then use some of the clean energy that you could cite there, thanks to the investment in production tax credits. So we're starting to see potential for clean energy at coal plant sites starting to be an anchor tenant for new kind of industrial activity that can revitalize a community more completely than any one source of income could do. So I think, yeah, that's kind of where our focus is now is on figuring out how to help utilities and regulators take advantage of those Ira programs and, you know, Speed up, speed up the energy transition.

Greg Williams: 59:43

So, is there anything else you'd like our audience to know about either your organization or how we can make a faster, more reliable transition to renewable energy?

Michelle Solomon: 59:54

Mmm, yeah, that's a great question. So I think Um, let's see. Oh, the final note, I would say is I don't think we actually said this during earlier. But we have that 99% of coal plants being more expensive than new wind or solar on an energy generation basis. But when we constrained it to local replacement, we saw that 97% of plants were still more expensive than wind and solar, locally, and that that local kind of definition was within 30 miles. So yeah, just that the story remains true for those local replacement options. And we're really excited to see what the potential is for communities. But it's something that isn't going to happen naturally, you know, that community transition also needs to be planned. There's some examples. Colorado is a really great one where they have an office of just transition that is working through and making a plan for every coal community in the state for how they can diversify their economies and can act as sort of like a central organizer for that. And that can be really important to help make sure that funds are going where they need to go. So I think there's going to be a lot of work to do in coordinating the transition, it's not just going to happen naturally.

Greg Williams: 1:01:27

All right. Well, I want to thank you for joining us here tonight. I, of course, want to thank our listeners for joining us for another episode, we are going to remain very interested in your work. And I hope you'll join us here again, some of you. Yeah,

Dina Rasor: 1:01:42

thank you so much. We really, you know, I really love to get scientists on because and it's the the art of it in which I see that you're good at is trying to take something that you learned, like getting a PhD and putting it down so that the average person is driving along in their car say, Yeah, I can understand that. You know, it's the that's that's the most part is part of science is trying to get it or getting in the weeds with regulations and all the other stuff is to try to get it in some way. So that we can you can say that person's driving along can't say, oh, I just can't figure this out. You know, oh, well, yeah. It's kind of like the, you know, the highway and the cars going in and out like you were talking. So now thank you very much. And we're really appreciate that. And we'd love to have you come back and explain some more. Good luck with your research.

Michelle Solomon: 1:02:32

Thank you. And yeah, thanks so much for having me. It was great to chat with you and excited about the work that you're doing. Thank you