Undergraduate Research in Agricultural Economics

 

Date of this Version

Fall 12-19-2016

Document Type

Article

Citation

Op-Ed from ENSC 230. Energy and the Environment: Economics and Policy, University of Nebraska-Lincoln, Department of Agricultural Economics, Fall 2016

Abstract

The state of Nebraska and more specifically the Nebraska Public Power District has so far shown a surprising reluctance to incorporate clean or renewable sources of power into its portfolio. The state’s reluctance is exemplified in their support for legal challenges to the Clean Power Plan put forth by the Obama Administration. NPPD in particular has decided to stick with coal as its primary fuel source and has even discouraged the construction of natural gas facilities in the state. The power utilities in this state need to develop a modern, clean energy system to avoid being left behind.

On one hand credit must be given to NPPD for their innovative partnership with Monolith Materials for the conversion of one boiler at Sheldon Station to hydrogen power. This facility will produce virtual zero emissions and will be one of the first utility-scale uses of hydrogen power in the United States. This is the type of innovative approach the entire nation needs when addressing a shift to clean energy, and while this partnership is laudable the state needs to do more.

The state’s strong opposition to the Clean Power Plan is odd given the apparent ease with which it could meet the goals laid out in the plan, due to the regions abundance of natural power in the form of wind. It is this abundance of natural energy that other states across the Great Plains have decided to harness for power generation. Iowa produced over a third of their electricity using the wind last year while wind power was responsible for over 20% of the electricity in Kansas. In comparison Nebraska produced less than 10% of its electricity using wind power last year even though 90% of the state is considered to be suitable for use in utility-scale wind projects.

Wind energy would not only help the state produce cleaner power but would also lessen the strain on Nebraska’s water sources and farmers. Traditional forms of power, such as coal and nuclear, require significant amounts of water to operate and in a state with a lack of abundant water supplies, at least in the form of lakes or rivers, this can be problematic. In contrast wind power requires little to no water to operate. Wind energy can also help farmers throughout Nebraska overcome low crop prices by compensating the landowners for the wind turbines footprint.

There are numerous methods outside of wind by which Nebraska could work to build a cleaner energy portfolio without abandoning coal or fossil fuels. One such approach would be transitioning old coal facilities over to natural gas, which is not only cleaner burning than coal but can also be significantly more efficient when implemented with combined cycled technology. Natural gas also offers the benefit of being easily ramped up or down based on demand, as opposed to coal, which must run constantly a certain levels.

The use of co-firing technologies would allow the state to still use the cheap Powder River basin coal from Wyoming while decreasing emissions. These technologies burn coal with another fuel, such as wood chips or natural gas, which produces similar levels of power while reducing emissions.

The state could also provide more incentives for those who choose to install solar panels on their homes, which reduces the power demand on utilities, or implementing state efficiency standards. This would involve regulations to make sure all new buildings are as efficient as possible and making it easy for Nebraskans to make their homes or business more efficient. These types of standards are already in use in 26 other states.

Admittedly all of the potential routes to a cleaner and more efficient power supply in Nebraska would require a significant amount of investment on part of the various public utilities across the state. However, the short-term investment in cleaner power and more efficiency could save Nebraska money in the long run. NPPD has long cited their ability to sell power to neighboring states as a contributing factor to the low energy prices in Nebraska but this could soon change. Due to the massive investment in wind power, a technological with little cost after installation, neighboring states are now able to sell cheap surplus wind energy into the regional grid. This could result in the technologies with higher marginal costs, such as coal, out of the regional market thus eliminating a major source of revenue for state utilities.

Another side of this issues would be that as a public utilities Nebraska power companies have an obligation to lower costs but also to develop energy sources supported by their customers. A 2013 survey conducted by UNL, determined that over 50% of the respondents in NPPD, OPPD, and LES markets supported regulations requiring wind energy development with no more than 15% opposing such regulations in those areas. Therefore, the state should be working to develop wind energy and other clean technologies in the state instead of spending taxpayer dollars fighting the Clean Power Plan.

The abundance of natural energy in the form of wind and the number of technologies available make it clear that not only could Nebraska comply with the Clean Power Plan but also that it should comply. The state needs to end it’s opposition of the Clean Power Plan and work to provide a cleaner and more sustainable energy.