State of the State: Illinois' Environmental Start-and-Stop Leadership
Illinois has become a start-and-stop clean energy and environmental leader making great progress in some areas, but hitting too many self-imposed roadblocks. The recent legislative session likewise reflects both accomplishments and frustrations. Here are some glass half-full and half-empty examples:
- Illinois ranks No. 4 in the nation for wind-related jobs and installed wind capacity, but no large new wind power projects have been built in the past 18 months because of state policies that need tweaking.
- Modern, fast, comfortable higher-speed rail is accelerating in the Chicago-St. Louis corridor, but Chicago’s aging Union Station needs much improvement and the frustrating delays between Chicago and Joliet impede progress.
- Mercury pollution reduction standards for coal plants should lead to cleaner and safer rivers and lakes, but nutrient pollution from agricultural chemical runoff contaminates rivers. Asian carp and other invasive species threaten Lake Michigan’s ecological health and economic value.
- There are more bikeways in Chicago and there’s work to improve the aging CTA transit infrastructure, but transportation funding is stalled in Congress. Moreover, too often, funds are diverted from high-use transit priorities and unsexy bridge repairs to “where’s mine” clouted projects.
Let’s first look at what happened in the Illinois legislative session, and then turn to the U.S. Environmental Protection Agency’s new carbon pollution reduction standards for power plants proposed on June 2. The carbon standards provide Illinois with both future economic growth opportunities and challenges for some aging coal plants.
What happened – and didn’t – in the spring 2014 legislative session
Renewables Wind power development is good for Illinois jobs, good for economic growth and good for our environment and public health. Illinois has skyrocketed from no wind power to 3,568 megawatts of installed wind energy capacity today. A decade ago, who would have thought that Illinois would be fourth in the nation for installed wind power capacity, and that Chicago would be a leading wind energy business center?
Chicago has a concentration of professional and technical jobs at the 13 North American and global wind power corporate headquarters in the Loop. Rural communities across the state are benefiting from construction and operating jobs, and local tax revenues from windfarms support local schools and community services. Wind energy supply chain businesses in Chicago, Cicero, Elgin, Peoria and Rockford are fabricating wind machine components and providing skilled manufacturing jobs. Consumers are gaining the benefits of clean, non-polluting and zero-fuel-cost wind-generated electricity.
Illinois’ landmark renewable energy portfolio standard helped to drive our state’s wind power development leadership. That state law, however, should be modernized to reflect the structural changes in Illinois’ electricity market as several hundred municipalities have moved to aggregate their purchases of electricity.
Clean energy businesses and environmental groups partnered to advance legislation that is designed to provide a technical fix for Illinois’ broken renewable energy standard. Despite productive negotiations and bipartisan support, that important legislation stalled. The job creation, economic growth and environmental quality benefits of wind power development aren’t being gained in Illinois, while wind power is booming next door in Iowa. Why should we give up these jobs and the boost for Illinois’ clean energy economy?
Solar energy can be our next boom. Chicago has advanced policies that speed up permitting and standardize grid connections. Meanwhile, solar panel efficiencies are steadily improving and the economics are becoming competitive. When combined with battery technology improvements, solar energy can make our residential rooftops, commercial buildings’ flat roofs and converted brownfields into sources of reliable electricity that drive our economy forward. Engineers and scientists at Argonne National Labs are closing in on their goal to achieve batteries that are five times more efficient at one-fifth the cost in five years. That will be a game changer.
The General Assembly boosted Illinois solar power development with new legislation requiring the Illinois Power Agency to procure $30 million of solar-generated electricity through its competitive auction processes.
Transportation Higher-speed rail is moving forward in Illinois. Chicago is the hub of the growing Midwest higher-speed rail network connecting our city to 11 major metropolitan areas and the mid-sized cities in between. Amtrak is achieving record-high ridership between Chicago and Milwaukee, Detroit and St. Louis. Modern new railcars being assembled in Rochelle will be on Midwest tracks by 2015. Higher-speed passenger rail improves mobility, reduces pollution, creates jobs and spurs economic growth.
Illinois’ transportation infrastructure funding priorities and needs must be addressed. Our transportation infrastructure — from urban and suburban transit systems to rural highways and bridges — needs repairs, upgrades and investments. Less federal funding and shrinking state gas tax revenues, due in part to better fuel efficiency and less driving, mean harder decisions to focus on true transportation priorities.
Cleaner water Illinois legislators stepped up to ban the sale of products that contain plastic microbeads. These tiny spheres of plastic chemicals are used in products like toothpaste, soaps and shampoos, and they are so small that they slip through wastewater treatment. A survey of Lake Michigan last summer found that alarming levels of microbeads have been winding up in the lake. Illinois has taken a leadership role in protecting our waterways from new pollution problems.
Illinois impacts of EPA’s carbon pollution reduction standards
When the U.S. EPA issued its proposed flexible carbon pollution reduction standards for power plants on June 2nd, the old “sky is falling” rhetoric came from some usual suspects. Actually reading the proposed standards, however, shows Illinois is an overall economic and environmental winner, and there are very specific business winners and losers. As often happens, the losers squawk their opposition loudly while the winners more quietly applaud (and whisper to Wall Street about their added profits).
Let’s cut through the overheated PR doomsday rhetoric and fuzzy economics to assess what this really means for Illinois. The carbon pollution reductions standards are part of a larger set of regulatory standards, economic forces and accelerated technological changes that are reshaping the electricity market in a powerful way.
Electric generating supply exceeds electricity demand in the Illinois power market. That gap will lead to coal plants and nuclear plants shutting down because basic economic realities. That’s just Economics 101.
When some plants shut down, that creates more favorable market conditions for the remaining plants. However, electricity demand is now declining in the Midwest because of technological improvements (e.g., more efficient appliances, refrigerators, air conditioners and coolers, lighting, pumps and motors) public policies and efficiency program investments, and cultural shifts.
Energy efficiency Energy efficiency is the best, fastest and cheapest solution to our climate change problems. Technologies are improving. People are more energy conservation-minded and want to save money on their utility bills.
Solar power Solar energy is most available at peak power price times on hot summer days when the power is needed most. As solar technology improves and photovoltaic panel prices come down, that also reduces market space for coal and nuclear plants.
Shale gas Love it or hate it — natural gas is a gamechanger if environmental concerns can be addressed. New natural gas plants are outcompeting existing coal plants and nuclear plants. If shale gas stays relatively inexpensive, that puts more market pressure on existing coal and nuclear plants.
Wind energy Turbines are becoming much more efficient. With zero fuel costs, wind power can outcompete existing coal and nuclear plants if they require any significant capital costs for modern pollution control equipment and nuclear safety and radioactive waste storage necessities.
Carbon price The U.S. EPA’s standards, in effect, provide a price for carbon that must be incorporated into coal plants’ operating costs. The history of environmental regulation shows that these types of standards drive engineering improvements and technological innovation in ways that often make compliance costs much lower than the PR spin-meisters claim.
Carbon pollution reduction standards won’t kick in through Illinois’ State Implementation Plan until 2017-2018. In the meantime, Dynegy and NRG will face decisions on whether to retrofit or retire their coal plants by installing more equipment to reduce sulfur dioxide, nitrogen oxides, particulates, mercury and other air toxins under the federal Clean Air Act standards.
Exelon and its nuclear plants, overall, are economic winners as its fleet of 11 Illinois plants compete with coal plants and, therefore, benefit from higher carbon prices. Exelon has indicated its Clinton and Quad Cities No. 1 and No. 2 plants, are not economic in the power market. On the other hand, Exelon appears to be achieving a financial windfall from running some of its other nuclear plants. Exelon’s management will decide whether it believes that it can make higher profits running all, most or some of its Illinois nuclear plants.
This is multidimensional chess. The U.S. EPA’s carbon pollution reduction standards are vitally important as a turning point for the United States domestically and in stepping up as the world’s leader to help solve global climate change problems. But, they’re not the only game in town when it comes to the Illinois electricity market.
Illinois is at a crossroads for environmental sustainability and clean energy policy, investments and technologies. We have seen how the development of clean, renewable energy boosts Chicago’s downtown business sector, rural economies and manufacturing in industrial cities across our state. We have seen how passenger rail infrastructure investments support downtown business growth in places like Normal, Illinois. We all know how important Lake Michigan and our rivers and inland lakes are for people’s recreational enjoyment and Illinois’ tourism economy.
Public support for sustainability principles is growing, and Illinois competes for talent, business and future success. It’s time for Illinois to get past the start-stop and steadly accelerate onto a consistent faster path to environmental progress and economic growth together. Illinois can and should be a national leader. Let’s move forward.
Howard A. Learner is the executive director of the Environmental Law & Policy Center.
Illinois Issues, July/August 2014