Oregon Bill Sets Precedent To Phase Out Coal

on March 17, 2016 at 2:00 PM

Coal Mining In India's Jharia

Oregon’s SB 1547, signed into law on March 8, 2016, will phase out coal-fired generation from the state’s electricity mix by 2035 and double the state’s Renewable Portfolio Standard (RPS) to 50 percent by 2040. RPS policies require state utilities or electricity providers to procure a minimum share of their electricity from eligible renewable energy sources based on the state’s resource base and preferences.

SB 1547 marks the first state legislation to eliminate coal-fired generation and places Oregon among the other top-tier RPS states: California and New York, which have 50 percent targets by 2030; Vermont, which has a 75 percent target by 2032; and Hawaii, which has a 100 percent target by 2045.

Beyond closing Oregon’s only coal-fueled power plant, the coal phase-out will require its utilities to cease importing coal-fired power to Oregon customers. From an environmental perspective, this still might not result in a net emissions reduction: the utilities could reallocate coal power to non-Oregon customers or swap it for hydro or gas-fired generation. However, the requirement also casts new doubt over the future of coal plants serving out-of-state customers and contributes to the growing number of legislative and regulatory measures to reduce the use of coal.

The second major provision of the bill – the ambitious RPS goal – will shape the state’s energy mix; and, in the light of studies indicating that RPS programs can displace fossil fuel-fired generation and facilitate cost-effective compliance, further increase the use of renewables. A recent Department of Energy (DOE) study shows that RPS programs resulted in more than $7 billion in environmental and health benefits in 2013; and, perhaps more notably, that RPS compliance led to fossil fuel displacement both within and outside states with RPS mandates.

The Oregon legislation could set precedent for other states to rule out coal and boldly pursue clean energy initiatives despite the uncertainty created by the Supreme Court stay of the Clean Power Plan (CPP). Though RPS programs are tailored to suit individual state policy objectives, local market characteristics, and different resource potential, the increasing stringency of RPS policies in some regions necessarily impact other state’s energy portfolios as well. These stronger RPS policies will also stimulate market technology and development to increase the competitiveness of renewable energy. Moving forward, these standards will continue to evolve, and utilities and grid operators must explore ways of integrating large quantities of renewable energy into system operations, while developing capabilities that enable new installations to actively enhance the power quality of the electric grid.

Originally published by EnerKnol.

EnerKnol provides U.S. energy policy research and data services to support investment decisions across all sectors of the energy industry. Headquartered in New York City, EnerKnol is proud to be a NYC ACRE company.