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Washington — Nine states and territories have passed mandates for 100% clean energy, a growing trend that will shape the resource mix in the coming decade and complicate the landscape in wholesale markets that are already wrestling with how to accommodate state energy policies.

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In recent months, Nevada, Washington, Maine, and New York have enacted laws that aim to get all of their electricity from clean or renewable sources by 2050 or earlier. These states join Hawaii, California, New Mexico, the District of Columbia and Puerto Rico.

Some of the recent mandates have a renewable target in the near term and clean energy goal in the long term. Nevada set a standard for 50% renewables in 2030 and 100% carbon-free electricity in 2050. And New York is aiming for 70% renewables in 2030 and 100% carbon-free electricity in 2040.

Meanwhile, Maine's mandate is for 80% renewables in 2030 and 100% renewables in 2050. And the state of Washington's goal is to be carbon neutral by 2030 and 100% carbon-free by 2045.

SHIFTING RESOURCE MIX

The trend is potentially speeding a shift away from gas-fired power plants, said Daniel Grunwald, a research analyst at Morningstar. In the next 10 years, combined renewables are likely to surpass gas-fired generation, he said in a research note.

While the cost of renewables and gas will play a big role in this shift, some public utility commissions are also favoring renewables and storage over gas generation, and utilities are setting strong renewables goals as a risk mitigation move, Grunwald said in an email.

Regional ties could also help propel the move to non-carbon generation, Grunwald said, citing California Independent System Operator's western energy imbalance market. "If you are already incentivized to engage in a strong import market like California, it makes for a lot easier sell to states like Nevada, Oregon, Washington, and Arizona to increase their standards," he said in an email.

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Conversely, states could become more isolationist if the other states in a region are not on the same page on climate, said Cory Felder, a senior associate at the Rocky Mountain Institute. If the power a state can import is not carbon-free, then mathematically that suggests a state with a mandate is going to have to produce more carbon-free power within the state, he explained.

This dynamic could create more tension for regional transmission organizations like ISO New England and PJM Interconnection that are already under scrutiny for how they deal with state energy policies in their markets, Felder said.

Most states that are setting aggressive clean energy goals are doing so without a lot of heavy analysis and modeling in advance, said Leia Guccione, the program leader for RMI's electricity program. "And I would say we think that's fine," she said, adding, "These goals are commensurate with the pace and timescale that we need to address climate change and while we don't have all the technical solutions, we have a lot of them."

CONTINUED ACTION

Guccione says the state-level push for 100% clean energy will continue. There will likely be several more such mandates enacted in the near future, then a pause around the 2020 election, and then another wave of action post-election, she said.

Anna McDevitt, who works for Sierra Club's beyond coal campaign, also sees more mandates ahead. "The move toward 100% renewable energy is definitely picking up momentum and it is the reality of dropping renewable energy prices, increasing coal and gas prices, and the shift in public sentiment we've seen where Americans are ready to tackle the climate crisis," she said.

STATES TO WATCH

A number of variables are lining up to support state goals, including climate science, cost-competitive renewables and the economic benefits and jobs benefits of investing in clean energy, Guccione said. And many of these things can be compelling to a bipartisan audience, so it will be interesting to watch for clean energy action in purple or red states, she said, citing Utah, Michigan, Pennsylvania and North Carolina.

Grunwald noted that 100% mandates are under consideration in Minnesota and Illinois and the addition of these states breaks the 30% overall margin for required clean generation in the US, he said in his note.

But the Rust Belt and Appalachia likely need a national standard to move at this point, with West Virginia's 2015 repeal of its standard and Ohio's recent legislation ramping down their standard, he said. Ohio recently passed a law to help support coal and nuclear plants, and the measure also rolls back the state's renewable standard to 8.5% in 2026, down from 12.5%, and then eliminates the standard.

-- Kate Winston, kate.winston@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com