Kentucky’s energy policy should put sustainability front and center

Driving down a dark road with lights out is hazardous driving, dangerous to people and the environment. Kentucky’s energy policy is that car, driving in the dark with lights turned off.

Kentucky’s economy and prosperity depends more than ever on a clean energy transition. It’s not about a war on coal. It’s about making peace with the environment, choosing energy resources that add value, not cost to the Commonwealth.

Renewable energy resources are readily available at competitive prices, and their health and environmental benefits to Kentucky will pay most of their cost. They fit right in with the mission of the Kentucky Office of Energy Policy’s which is “To utilize Kentucky’s energy resources for the betterment of the Commonwealth while protecting and improving our environment.” Why have we failed this policy for so long?

Here’s why policies must include environmental and health considerations to the Commonwealth and that political mindset must change and look for highest value at lowest cost to society. That’s not fossil fuels.

First. The US Environmental and Protection Agency (EPA) has developed values for each state to estimate monetized public health benefits of investments in energy efficiency and renewable energy like wind and solar.

Calculation are based on EPA’s values for solar in the major region of Kentucky and are reasonable monetary savings on health cost due to improved air quality.

▪ A utility scale solar facility installing a 10-megawatt system, providing energy for around 1,000 homes will save the Commonwealth from $248,000 to $503,000 per year. The savings are enough to cover 50-100 percent of the cost of the electricity generation.

▪ An average sized home with roof top solar (1000-kW capacity) provides savings to society between $250-500 per year. Roof-top solar is an asset, not a liability to the Commonwealth!

▪ Calculated health benefits for the remaining part of Kentucky, which is basically the eastern region, so savings to society is about twice of the above!

Using EPA’s values for energy efficiency 25-65% of the incremental cost to energy efficiency programs are covered. But utilities spend less on EE programs in 2018 than 2017!

It seems absurd, given the above “free” health benefits to society, that there are no policies to mandate transitioning the state to renewables and that all policies still blindly intend to eliminate roof-top solar.

These failed policies have been effective as only 0.1 percent of all electric generation in Kentucky is from utility - and roof-top solar.

Second. With Kentucky’s position as the fifth largest coal producer in the US, with coal supplying 64 percent and natural gas 30 percent of all electricity in 2019, carbon-emission costs are going through the roof. All of this positions Kentucky in a very bad light, from any investor’s point of view.

Investors are looking for companies with sustainable energy standards. The investment climate is changing with global climate heating, but investor’s concern about climate, is not related to moral or social conscience, rather to hard-nosed cash.

Just look at Kentucky electric utilities that lost $738 million in revenue in the period 2017-2012, mainly due to a 36 percent declining electric sale to its industry customers. They are looking for energy efficient and renewable energy solutions.

For Kentucky, it’s about managing the coal capital transition in time to prevent the state and ratepayers from paying the cost. It’s essential that Kentucky policymakers act in time to address the financial risk of our energy sector head on.

Policies need to assist financial planning and enforce coal-retirement plans over the next 10-15 years. Policies must include sustainable energy solutions and efficiency upgrading of the power infrastructure.

Kentucky’s policymakers must get in the driver’s seat with lights on to secure a transition that benefits all, that’s a sustainable approach, that’s the road forward.

As Abraham Lincoln said:” The best way to predict our future is to create it yourself.”

Community columnist Kris O’Daniel of Springfield is a scientist and native of Denmark who raises beef cattle and trains horses.