All over the United States, state governments are pursuing decarbonization on their own and in concert with other states. Much of this effort has focused on the electricity sector, where decarbonization will require investment in clean generation and transmission and a bigger focus on demand management. On April 5, 2022, the University of Virginia, the National Renewable Energy Laboratory, and Resources for the Future gathered experts to discuss the unique barriers that states face as they work toward electricity decarbonization.
For clean generation investment, barriers include market structures that disfavor renewable energy resources, backed-up interconnection queues, local siting opposition, policy uncertainty, and challenges in arranging for efficient procurement of clean power. Barriers to needed transmission investment include institutional mismatch between state agencies and Regional Transmission Operators (RTOs) with authority over transmission, difficulty agreeing on cost allocation for interstate and interregional transmission, insufficient state government capacity for studying and engaging with the planning process, and local opposition. Demand management is hampered by lack of access to energy efficiency for low-income households and renters, inadequate metrics for energy efficiency, inadequate price incentives for consumers, incomplete incentives for utilities and transmission investors, and inequitable and confusing rate structures. Workshop participants suggested ways that states can engage with the Federal Energy Regulatory Commission, RTOs, state public utilities commissions, other state agencies, regulated utilities, independent power producers, and local governments to address these barriers. Participants also suggested many promising areas for future research that academics, state and federal agencies, national labs, and independent research organizations can address to help states move toward electricity decarbonization.