States Can Construct Affordable, Adaptable, Clean…

Navigating Uncertain Policy Climates: How the Energy Industry Can Adapt and Thrive

As we approach 2025, the energy industry is facing significant turbulence and uncertainty in federal policies and regulations. This is evident from the scrapping of programs such as Solar for All and the swift reduction or complete termination of incentives from the Inflation Reduction Act for technologies such as solar energy, energy storage, wind power, and electric vehicles. The industry faces a pivotal choice – lay low and anticipate a favorable political shift in Washington, or adapt and confront the current challenges head-on.

The Industry Response: Activism and Solution-Focused Leadership

“It is very easy to get overwhelmed by this moment,” acknowledged Amisha Rai, Senior Vice President of Advocacy at Advanced Energy United (United), a representative entity for numerous leading firms in the solar, wind, storage, and distributed energy sectors. “You could go into the zone of just being flustered and become part of that chaos. Or you can figure out a construct where you can continue leading and focus on a solutions-oriented path.”

For Rai and United, which was established in response to the 2010 failings of the federal Waxman-Markey cap-and-trade bill, the choice was straightforward. United’s modus operandi from its inception was to foster robust engagement with state policymakers and regional regulators, educating them on the benefits of advanced energy technologies for their citizens and the power grid.

Over a decade of active involvement at state and regional levels, United has racked up an impressive tally of legislative and regulatory wins. One recent achievement to note is their role in the passage of California’s “Pathways Initiative” bill. This legislation empowers the state’s independent system operator to collaborate with other Western states to establish a new day-ahead energy trading market. This move is projected to enhance clean energy deployment and save participants up to $1.2 billion annually.

Stepwise Progress, Practical Solutions, and a Blueprint for the Future

Despite national setbacks, United continues its state-level progress and recently devised a playbook for the industry to build on this progress. “The playbook is a way to organize the solutions available to decision-makers and a guide to leaders of any political stripe and in any state about how to think about the urgent challenges they face today,” Rai explained.

These challenges are formidable, with electricity demand expected to surge due to factors like data centers, artificial intelligence, electrification, and industrial reshoring. Concurrently, we face increasing energy costs, supply chain disruptions, and tariffs hampering energy infrastructure development, while extreme weather events test grid resilience.

State leaders are thus caught in a tricky position, trying to balance rising citizen concerns about energy costs and the pressing need to cater to escalating load growth while ensuring grid reliability. As Rai pointed out, “The beauty of this playbook is it applies in Texas, and it applies in Pennsylvania, California, Indiana, or Virginia.”

State and local decision-makers recognize their responsibility to their constituents, who expect reliable power supply and affordable bills. Advanced energy technologies available today offer immediate, deployable solutions. These include large-scale solar, wind, and storage facilities, and distributed resources like virtual power plants, smart thermostats, and building energy management systems, which can be quickly deployed to meet urgent reliability needs and control costs.

United’s Playbook: A Three-Pillar Strategy

The playbook developed by United organizes solutions around three core objectives that address the full range of state energy challenges:

1. Build it

To cater to the anticipated load growth, states can expedite the deployment of least-cost energy projects by reforming generation and transmission development processes. This involves streamlining planning, siting, permitting, interconnection, and procurement procedures to establish a stable project pipeline that can meet future residential, business, and industrial energy needs.

Case in point, California’s Pathways Initiative. This trailblazing legislation, nearly a decade in the making, allows Western states with vastly different energy portfolios to collaborate on market expansion. This collaboration facilitates increased transmission capacity, connects more clean energy projects to the grid and creates efficiencies that will enhance affordability and reliability across the region.

United has also been working on bettering energy markets in other parts of the country. For example, the organization has been spearheading efforts to have PJM Interconnection, the nation’s largest grid operator, implement significant reforms to alleviate the project backlog awaiting grid connection. This backlog is a significant obstruction to clean energy deployment and a major factor behind soaring prices. These regional efforts complement state-level developments in siting and permitting legislation that United recently facilitated in Michigan and Massachusetts.

2. Make it flexible

States can maximize current grid infrastructure by scaling up distributed energy resources, energy waste reduction, virtual power plants, and advanced vehicle and building electrification solutions. These technologies can help grid operators manage costs in real time while preparing the system for increased load.

Following the devastating blackouts caused by Winter Storm Uri in 2021, Texas state leaders saw the benefits of flexibility, energy waste reduction, and consumer participation. Recent legislation in Texas has widened opportunities for demand-side programs to enhance grid robustness. “Texas has showcased that these resources can actually keep the lights on and help strengthen the grid system,” highlighted Rai. “We don’t need to wait 20 years to solve all of our problems. These are solutions that can actually be deployed immediately.”