What Makes Electrifying the Economy So Challenging?

To stave off the most catastrophic impacts of climate change—which means keeping global warming to below 2°C above pre-industrial levels—the world must decarbonize rapidly. Because decarbonizing our whole economy presents so many complex challenges, let’s focus here on the fastest way to reduce carbon emissions: electrifying as much of the economy as possible. We need to electrify buildings, transportation, and industry, but as we do, the demand for electricity will increase. Electricity consumption is already growing twice as fast as overall energy demand, and the National Renewable Energy Laboratory estimated that widespread electrification could boost U.S. electricity consumption by almost 40 percent by 2050.  For electrification to advance decarbonization, all this electricity must come from clean energy sources such as wind, solar, hydropower, nuclear, and geothermal. But just as it is becoming cheaper to switch from coal to renewables rather than natural gas due to the declining costs of renewable energy, the challenges of decarbonization are becoming clearer.

Renewable energy in the U.S.

President Biden has set a goal to achieve 100 percent clean electricity by 2035. In 2021, renewable energy sources were responsible for about around 20 percent of the nation’s electricity.  Wind power generates 8.4 percent of U.S. utility-scale electricity, hydropower accounts for 7.3 percent, and solar produces 3.3 percent.

The country added 28.5 gigawatts of wind, solar and battery storage to the grid in 2021, breaking records for solar and battery storage. The U.S. Energy Information Administration projects that electricity generated from renewable sources will comprise 22 percent in 2022, and 23 percent in 2023 because of rapid expansion of solar and wind.

But as corporations, governments, and consumers move toward decarbonization, will there be enough renewable energy to meet the increased demand for electricity?

A report by American Clean Power suggests that renewable energy is not ramping up quickly enough and that the current pace of deployment will only get us 35 percent of the way to Biden’s 2035 target.

What needs to be electrified?

Buildings

Buildings, both commercial and residential, produce about 40 percent of the nation’s carbon emissions. These emissions stem from the mining, processing, manufacture, transportation, and installation of the materials buildings are made of, and from the operation of their heat, electric, and cooling systems, cooking, and appliances.

About 60 percent of New York state’s emissions are from heating and powering buildings. Without scaling up the electrification of buildings and increasing energy efficiency, the state will not be able to meet its climate goals of reducing greenhouse gas emissions 40 percent by 2030 from 1990 levels, and 85 percent by 2050.

In 2019, New York City passed The Climate Mobilization Act, a suite of laws designed to cut the city’s emissions by requiring green roofs, new energy efficiency grading, and loans for energy and water efficiency. Its centerpiece, Local Law 97, will mean most buildings over 25,000 square feet  will have to meet new energy efficiency and greenhouse gas emissions limits by 2024. These measures ultimately aim for total electrification: phasing out all fossil fuel use for heating, cooking, manufacturing, electricity production, and transportation.

Getting rid of natural gas in buildings is a key part of the strategy because methane, a greenhouse gas 25 times as potent as carbon dioxide at trapping heat in the atmosphere, leaks across the natural gas supply chain. Moreover, burning natural gas for heating and cooking emits pollutants that can cause respiratory problems in people with asthma or chronic obstructive pulmonary disease.

In December, New York City approved a bill banning natural gas hookups in new buildings. The bill will potentially save 2.1 million tons of carbon emissions by 2040, save customers money, and save lives due to improved air quality. New York state is considering The All-Electric Building Act, which would also prohibit fossil fuel use for heating and cooking in new buildings.

To electrify buildings, fossil fuel heating in buildings must be replaced with electric heat pumps, essentially air conditioners that can also operate in reverse. During cold weather, they pull heat from the outside air and transfer it inside; even in winter, outside air contains enough heat to warm your home.

Heat pumps are the cheapest and most energy efficient way to cool and heat homes and can produce two to five times more energy than they need to operate. New Japanese heat pumps can be 200 to 500 percent more efficient than gas furnaces. Heat pumps are often more expensive than gas furnaces, but a new bill being introduced in the U.S. Senate would give heat pump manufacturers tax credits to spur production, which could ultimately help lower prices.

Other states around the country are also implementing new laws to drive the electrification of new construction and eventually all buildings. In 2021, California adopted a building code that incentivizes builders to go all-electric for heating and appliances. Berkeley, Calif. had already banned natural gas in new buildings in 2019, followed by San Francisco. Seattle, Wash. prohibited most uses of fossil fuels in new buildings in 2021. Denver, Colo. is requiring large buildings to shift to electric heating by 2025. Ithaca, N.Y. is aiming to decarbonize all its buildings by 2030. And in New Jersey, all buildings must be fully electric by 2050.

Transportation

President Biden wants half of all new cars to be electric or plug-in hybrids by 2030. Today, less than one percent of the 250 million vehicles on the road are electric, and while EV adoption is growing, it is still inhibited by “range anxiety”—the fear of running out of power before you can find a charging station. Biden has allotted $5 billion in the infrastructure law to build out the system of electric chargers along interstate highways.

New York City currently has less than 20,000 EVs, but to reach the state’s climate goal by 2030, it will need to have 400,000 on the road according to The New York Times.

By 2040, the entire city fleet needs to be completely electric. It’s projected that by 2050, 1.6 million electric vehicles will consume 14 percent of the city’s electricity. Ensuring that all the electricity New York City needs is clean will be challenging.

What are the obstacles to decarbonization?

As individuals, communities, companies, and governments attempt to do what they can to help decarbonize the economy, there is resistance coming from many directions. In addition, there are impediments in the energy system itself that are slowing progress.

Not in my backyard (NIMBY)

In March, Columbia University’s Sabin Center for Climate Change Law put out a report about opposition to renewable energy facilities in the United States. It documents opposition between 1995 and 2022 to renewable energy projects in the form of local laws to delay or restrict renewable energy, moratoria or bans on renewable energy development, and zoning changes designed to block projects. The report found 121 local policies and 204 renewable energy facilities that are being contested. The “not in my backyard” sentiment is occurring in almost every state, and in many cases, the opposition has successfully delayed, scaled down, or gotten a project canceled altogether.

For example, in Coxsackie, N.Y., a group of farmers attempting to sell 1,500 unproductive acres to a solar farm were prevented from doing so when the town passed a law banning the installation of solar panels except in industrial or commercial areas. The solar farm would produce electricity for 21,000 homes, but the town board felt the panels would be eyesores. The Renewable Energy Legal Defense Initiative, established by Michael Gerrard, director of the Sabin Center for Climate Change Law, is helping the farmers sue the town.

At present, the initiative is involved with six cases. “We’re about to file an amicus brief in the Ohio Supreme Court on a case concerning a wind farm,” said Gerrard. “And we have several matters in Michigan where we’re helping.” One case, the South Fork Wind Project, proposed off Long Island 30 miles east of Montauk, has already scored a win. Although the turbines will not be seen from shore, the cable carrying the power to the grid will land in Wainscott in the town of East Hampton. “Some very wealthy residents of Wainscott launched a barrage of litigation challenging the wind farm,” said Gerrard. “Our group, the Renewable Energy Legal Defense Initiative, has been representing pro bono a pro-wind group in East Hampton called Win With Wind, and we’ve been very successful. The approvals have all been granted. And construction began a month or two ago.”

Preemption laws

In 2019, as Flagstaff, Ariz., was working on a plan to reach its goal of net zero by 2030 through promoting building electrification, the state’s Republican-dominated legislature passed the first “preemption law,” which prohibited its cities from banning natural gas use. Now 21 states, most with Republican-controlled legislatures, have passed preemption laws, preventing their cities from banning natural gas. These include Wyoming, Utah, Arizona, Texas, Missouri, Arkansas, Georgia, Florida and others. Four more states have introduced similar bills. Cities in these states do not have much legal recourse, because states have the right to make laws for their cities. The American Gas Association, the trade group for natural gas, and other industry groups claim they want consumers to have freedom of fuel choice, but preemption laws have the opposite effect. Moreover, saying these laws are about “energy choice” is misleading, said David Pomerantz, director of the Energy and Policy Institute. Residents do not get to choose a building’s energy source, because the infrastructure that is usable is determined by the policies in their zip code.

“I think the outcome of all of this [the spread of preemption laws] is that there’s really a chilling effect on local government action,” said Amy Turner, a senior fellow for the Cities Climate Law Initiative at the Sabin Center for Climate Law. “Some of the preemption laws are quite broad so it’s kind of unclear what they are supposed to mean, and local governments aren’t usually looking to attract challenge or litigation.” She said that local governments haven’t really tried to challenge the state bans because most have small legal departments responsible for all local legal issues and may lack the expertise to figure out the complex restrictions on their climate policies.

“In theory, Congress could preempt those preemption laws,” said Gerrard. “But we don’t have nearly the votes we need in Congress.”

Pushback from fossil fuel interests

Other members of the American Gas Association, such as large utility companies, are also fighting state attempts to decarbonize. A report from the think tank InfluenceMap found that almost half of the 25 largest investor-owned utilities in the United States are attempting to obstruct climate policies, as many deliver natural gas to customers as well as electricity. The 11 obstructionist utilities support state preemption bills, lobby against electrification proposals, threaten legal action against renewable energy standards proposed by cities, fund political campaigns, and try to persuade the public that natural gas is clean, affordable, and facilitates the adoption of renewables. Since utilities are often some of the biggest companies in a state, they may have undue influence on state policies.

Florida’s largest utility company is behind a bill to cut net metering by 75 percent. Net metering enables solar customers to sell extra energy back to the grid and get credit from the utility; because it lowers bills, it incentivizes the adoption of solar energy. It’s expected that Republican Gov. Ron DeSantis will sign the bill to become law in 2024. Similar net metering laws are being considered in California, North Carolina, and Michigan.

In Minnesota, a proposed Republican-backed bill supported by the American Petroleum Institute, Midwest Region would prevent the Minnesota Pollution Control Agency from enacting “clean car” standards that Democratic Gov. Tim Walz adopted last year. These would require car manufacturers to deliver more zero-emission cars such as EV or plug-in hybrids for sale in the state.

A backlog of renewable projects

Renewable projects equaling 1,300 gigawatts of solar, wind and battery storage capacity had been proposed in the U.S. as 2022 began. If connected to the grid, these projects could deliver 80 percent clean electricity by 2030. But according to a Lawrence Berkeley National Laboratory report, it’s likely that most of them will never get built, due to the backlog of applications.

For a renewable energy project to get connected with the grid, it first must undergo a number of studies to see how the transmission system might be affected and obtain an “interconnection agreement” with the grid operator. The project must then get permits, make deals with communities or other entities to buy the power, and finally construct the project. The report found that projects spent an average of four years waiting on the queue for approval. The lag time can cause financial uncertainty for projects, many of which end up being withdrawn. In the last ten years, only 20 percent of wind projects, and 16 percent of solar projects actually got connected to the grid and began operating.

PJM, the largest grid operator in the United States, is so overwhelmed by 2,500 projects awaiting review that it is proposing a two-year pause in reviewing 1,200 of them to get caught up. The problem is that much of the nation’s grid, like PJM’s system, was designed for large projects like fossil-fuel power plants, but is now inundated with small projects, each of which need to be studied. “Delayed interconnection queues and backlogs in bringing new generation on is one of the most significant barriers to state clean energy policies,” said the manager of Advanced Energy Economy, a trade group for clean energy businesses.

Lack of sufficient transmission

Most of the U.S. grid was built in the 1950s and 1960s. These aging transmission lines can handle only so much power, and most of the grid is not prepared to deal with the impacts that climate change is imposing on it. In addition, much of the U.S. grid cannot accommodate new renewable power. One study  concluded that the United States will have to invest $75 billion to $125 billion into the grid by 2030 to handle the number of projected EVs alone. According to the U.S. Department of Energy, transmission will need to be expanded 60 percent by then, and the cost of a clean electricity grid could reach over $1 trillion.

Transmission lines must be upgraded and expanded to move renewable energy from its sources to where it’s needed most. For example, wind-generated electricity from the Great Plains, and solar electricity from the Southwest need to be conveyed long distances to coastal cities where demand is high. But construction of new high-voltage transmission lines has slowed in the last 10 years. The DOE reported that new transmission capacity averaged 2,000 miles each year from 2012-2016, and only 700 miles from 2017 to 2021. Biden’s infrastructure bill includes $2.5 billion for DOE to facilitate the construction of new transmission lines, and $3 billion for new technologies to improve grid flexibility.

What’s needed to speed the transition to clean electricity

Deal with preemption laws

Amy Turner helps cities understand the legal frameworks applicable to their decarbonization policy objectives. She has worked with the Southeast Sustainability Directors Network, an organization of local governments across several southeastern states. “And I’ve worked with their local governments in Florida to provide legal research and guidance on what these laws mean,” she said. “It was basically about understanding what avenues they still have for climate action. For example, they would be preempted from a natural gas ban or requiring building electrification, but there might be some more room to work with if they offer incentives for building decarbonization, or if in requiring building improvements, they offer some level of level of optionality around how buildings get there—do what you can that would be far less likely to be preempted, and then offer some optionality to residents who are looking to comply with the requirement.”

The Climate Equity Policy Center also helps communities understand preemption laws and offers support and resources  to challenge them.

But the bottom line is that unless citizens vote to change the political makeup of their state legislatures, cities have little recourse against preemption.

Policies to spur renewable energy development

A University of California Berkeley report suggested that the United States could have 90 percent clean electricity by 2035 without increasing consumer costs or compromising the reliability of the grid by building out 70 gigawatts of wind and solar per year. This is theoretically feasible but depends wholly on having the right policies in place. The right policies include a national clean energy standard aimed at achieving 90 percent by 2035 and 100 percent by 2045 through tax credits and penalties to incentivize electricity producers to develop clean energy.

Utilities should invest more in modernizing the grid with additional long-term storage and smart technology to enable renewables to be easily integrated into the system.

The federal government also needs to invest more money into research and development for clean energy technology, into EV charging stations, and into enhancing existing and new energy infrastructure.

Facilitate renewable energy development and expand transmission capacity

A new system is needed to upgrade the grid and speed the approval of renewable energy projects. Today, renewable project developers may have to bear the cost of any upgrades to the grid that their connections would necessitate. These upgrade charges, once about 10 percent of a project’s cost, have grown to an amount equal to 50 to 100 percent of the total project costs today, according to Lawrence Berkeley National Laboratory. Often these heavy costs must be borne by whichever project waiting to be connected is at the front of the line. This can make renewable projects drop out. The president of Grid Strategies, Rob Gramlich, said this is equivalent to putting “the whole cost of the highway lane extension on the next car on the road.” He contends that what’s needed is for transmission-owning utilities, grid operators, and states to plan and share the costs of grid build-outs. In general, states have authority over the siting of power plants and transmission lines within their states, so giving the Federal Energy Regulatory Commission more authority over regional planning could help improve transmission. The federal government should also provide more financing for transmission lines and facilitate their siting.

Contend with NIMBY

Citizens who support renewable energy need to make their voices heard to influence lawmakers. “Some of these laws are enacted at the local level, especially the anti-renewables laws. And it’s much easier to influence a town board than a state legislature,” said Gerrard. “One thing we’ve seen at the local level is that a few angry loud people showing up at a town board meeting can have a major impact. It tends to be the project opponents who are more likely to come and make their voices heard, and if a town board just sees one side of the story, they’re likely to agree with that side. We need people coming in supporting these projects and doing so very vocally.”

And as for people who may object to the aesthetics of renewable energy, Gerrard said, “I think we’ve lost the luxury to require everything to be built in absolutely perfect sight. There will always be some negative impacts, and we should do our best to mitigate them. But at the end of the day, we’re going to have to build an eye-popping number of large wind and solar facilities that will inevitably have some negative impacts. If we don’t build them, the [climate] impacts will be far worse.”