3 december 2020

Inside Clean Energy: The Energy Transition Comes to Nebraska

Lincoln Electric System is the second large utility in Nebraska to approve a net-zero emissions goal, as the state reaps the benefits of wind power.

Dan Gearino, Inside Climate News, Dec 3, 2020

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.

Nebraska's Power Shift

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.

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