The 2035 Report is accompanied by a policy paper from nonpartisan energy policy firm Energy Innovation. The paper finds that building a reliable 90 percent zero carbon electricity system is a huge opportunity for economic recovery—a fantastic way to invest in a healthier economy and support new jobs, without raising electricity bills. But America’s current electricity policy framework is not on track to deliver this economic opportunity. Federal policies, utility regulation, and power market structures all need an upgrade.
Without new policy, zero-carbon electricity sources would only make up 55% of our nation’s electricity in 2035. Luckily, policymakers and regulators can use a suite of technology-neutral policies to reach 90% zero carbon electricity while reducing wholesale electricity costs 10%. These no-regrets policies enable all technologies to compete to achieve a clean, affordable, reliable grid.
Without action, our current electricity policy is off track, but to secure this economic opportunity, Congress could:
- Adopt a federal clean electricity standard reaching 55 percent clean (carbon free) by 2025, 75 percent by 2030, 90 percent by 2035, and 100 percent by 2045. Increased ambition on state clean energy standards is an important complement to this action.
- Extend federal clean energy investment and production tax credits and conversion to more liquid incentives, and extend these incentives to battery storage. These are more important in the absence of a clean energy standard.
- Support coal-dependent communities by shoring up underfunded pension and healthcare benefits, providing stopgap funding for local services, and providing pathways for employment in the clean energy economy through local investment and training programs.
- Use utility- and government-backed refinancing of retired coal equity and debt to lessen the customer and utility burden of the coal-to-clean transition.
- Support a national effort to streamline renewable energy and transmission siting to accelerate responsible clean energy deployment.
- Strengthen federal authority to improve regional transmission planning, allocate transmission costs, and reduce unfair interconnection costs.
- Invest in R&D to develop the technologies needed to get to 100 percent clean electricity by 2045.
- Reform wholesale markets to reward flexibility, be compatible with federal and state clean energy targets, and support investment in a least-cost, technology-neutral portfolio of supply and demand-side resources.
- Reform utility business models to incent demand-side management and create fair rules for utility investment decisions.
