Oregon’s Carbon-Capping Bill Could Boost Microgrid Development & Resilience

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A carbon-capping bill with good prospects to pass the Oregon Legislature could boost microgrid development and resilience efforts in the state.

microgrid development

2018 Clean Energy Jobs bill rally, Photo by Lisa Cohn

HB 2020, sponsored by the Joint Committee on Carbon Reduction, where it is now being reviewed, doesn’t specifically address microgrids. But it will create an environment that’s friendly to them, said Zach Amittay, advocate, Environmental Entrepreneurs (E2), a national business group that advocates for policies that are good for the economy and the environment.

Microgrids would provide much-needed energy resilience in the state, which has been plagued by destructive wildfires, summer drought and heavy storms in recent years that have hurt communities, wildlife and local economies, said Amittay.

The Clean Energy Jobs bill calls for an 80 percent reduction in greenhouse gas emissions by 2050, relative to 1990 levels. By 2035, emissions would be reduced by 45 percent. The bill would create a market for buying and selling emission allowances, and the proceeds would be invested in climate change mitigation efforts, including wind and solar power, electric vehicles and public transit, plus carbon sequestration on Oregon lands.

“We feel confident a cap-and-invest program will create a climate-friendly environment that will allow microgrids to thrive,” said Amittay. “With long-term signals for Oregon to reduce greenhouse gas emissions, businesses and the state will look for solutions to meet the targets, and microgrids and storage will step in, assuming they provide economic solutions.”

Carbon-capping, renewables and resilience

Not only would microgrids help bring additional renewable energy to the state; they’d provide resilience in areas susceptible to wildfires and heavy storms due to climate change, he noted. They would help protect communities that are vulnerable to the effects of climate change.

“Storage and microgrids are powerful and growing solutions to achieve greater deployment of renewable energy across the state. And they’re an effective means of keeping the electricity on when the traditional grid can’t provide energy due to extreme weather or natural disasters like wildfire.”

On Feb. 6, more than 700 people gathered at the capital to support the bill during a lobby day, said Sonny Mehta, field manager for Renew Oregon, a major backer of the bill.

“Oregonians from every single senate district in the state (30 districts) attended. We had meetings with 86 of 90 legislative offices,” Mehta said.

One outspoken opponent is the Portland chapter of Democratic Socialists of America, which tweeted that the bill includes exemptions for agriculture, forestry, manufacturing and trade, calling the bill “essentially an overblown gas tax.” The group said that the planet can’t be saved “without actually targeting major polluters.”

Utilities have a different take on cap-and-invest programs. Portland General Electric (PGE), in a press release, said that similar bills introduced in 2018 effectively require customers to pay twice for the same greenhouse gas reductions. They’d pay once for investments in clean energy, and again for complying with the cap-and-trade program.

“This would unnecessarily drive up prices for the 2 million people and 100,000 businesses PGE serves,” the company said.

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Under the current version of the bill — which may change — the sectors covered include all fossil fuels distributed in Oregon, all electricity generated in the state, and electricity imported for use in the state industrial processes, according to a summary of the bill from the office of Oregon Gov. Kate Brown, a supporter of the bill.

Public and investor-owned utilities are granted free allowances, up to a certain date, said Amittay.  Also protected are certain facilities that emit large amounts of greenhouse gas emissions and that pose the risk of relocating outside of Oregon rather than complying with the cap-and-invest program.

“These exceptions are meant to reduce costs to businesses and to reduce negative economic impacts. A lot of these exemptions phase out over time,” said Amittay.

The state will distribute allowances during auctions, and entities that want to acquire allowances will register with the state to bid on the allowances, said the bill summary.

carbon-capping

Solar on Roof of Altura Furniture manufacturing facility, Portland, Photo courtesy Altura Furniture.

Proceeds for microgrid development?

In states with similar initiatives, the electricity sector delivers some of the least expensive emission reductions, said Amittay. For that reason, Oregon is expected to boost the amount of renewable energy it sources for electricity.

And resilience is expected to play an important role in climate-change reduction efforts.

“A solid amount of the proceeds can be invested in resiliency projects,” said Amittay. “There’s a real chance for microgrids and storage to compete for those program proceeds. These can be applied in situations to improve the resiliency of the grid and ensure vulnerable communities can have access to electricity even when the traditional grid is threatened, whether by extreme weather or fire.”

It’s not yet clear who will be administering the funds generated by the cap-and-invest measure. Oregon will create a Carbon Policy Office staffed by policy and technical experts.

E2 hopes that Oregon’s carbon-cutting program will be as strong as California’s and Quebec’s, he noted. E2 doesn’t want to see too many exemptions or lower emission-reduction targets, he noted.

“Some folks argue it’s not stringent enough to align with the California and Quebec programs,” he said.

Generating jobs

The bill is expected to generate clean jobs, as similar measures have done in California and Quebec.

Due to programs such as Oregon’s Clean Fuels Program, the state’s clean energy economy now employs more than 55,000 residents in all of Oregon’s 90 state legislative districts, according to an analysis by E2. The state ranks 14th nationally for solar jobs.

Learn more about how green efforts influence microgrid development at Microgrid 2019: Shaping the New Electric Grid, May 14-16 in San Diego, Calif.

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