Last year in Indiana, the Northern Indiana Public Service Company, or Nipsco, opened bidding to outside energy developers and found that adding a mix of wind, solar and batteries would be cheaper than building a new gas plant to replace its retiring coal units. (The company will keep its older gas plants online to fill in gaps when wind and solar aren’t available.) Doing so, the utility estimated, would reduce its emissions 90 percent below 2005 levels by 2030.
“We were surprised by that,” said Joe Hamrock, the chief executive of the company that owns the Nipsco. “Renewables in our particular situation were far more competitive than we realized.”
Mr. Hamrock noted that his utility had advantages that others might not have: Its territory sits near land that’s ripe for wind development, making it easier to build new turbines close by without the need for lots of costly new transmission lines. “The answer we got might look very different for someone just 100 miles away,” he said.
Indeed, things look very different nearby in the vast regional grid known as PJM that serves 65 million people from Ohio to New Jersey. There power plants compete in a largely deregulated market and companies are expected to build over 10,000 megawatts of new gas plants by 2024 to take advantage of cheap natural gas from the nearby fracking boom in Ohio, Pennsylvania and West Virginia.
“The shale gas revolution has, frankly, caused a delay in the growth of renewables here,” said Stu Bresler, senior vice president for operations and markets at PJM Interconnection, which oversees the system. Wind and solar make up less than 6 percent of the region’s generating capacity, well below the national average.
Decisions From the States
State legislatures are also increasingly weighing in on which energy sources get built. To date, 29 states have enacted laws that require their utilities to get a certain fraction of their power from wind and solar.
Now, some states are going further. Over the past year, California, Colorado, Maine, Nevada, New Mexico, New York and Washington have all passed laws aimed at getting 100 percent of their electricity from carbon-free sources by midcentury, which would eventually mean phasing out conventional gas plants.