The Future of Energy Production in Utah

On September 7, 2022, the temperature at the National Weather Service’s Salt Lake City International Airport measuring station reached 107 degrees Fahrenheit. It was the second time the mercury reached such dizzying heights over the summer, and the fifth time in history the city had reached that all-time high. That day was also the 34th time temperatures had reached triple digits this year, adding to an unseemly tally and shattering the previous record of 21. It’s getting hot out there, folks, and it’s about time we acknowledge it.

At long last there’s been some action on climate change at the federal level. The Inflation Reduction Act (IRA), signed in August, is a multi-faceted bill aimed at reducing the deficit, reducing prescription drug prices and investing in domestic energy production while reducing carbon emissions. The bill allocates $369 billion for clean energy and climate change mitigation, which will reduce carbon emissions to 40% lower than 2005 levels by 2030. The fact that it had to be passed using budget reconciliation while featuring an opaque title is tacit acknowledgement we can’t confront reality for fear of partisan strife. The distorted conversation makes understanding how radically the energy landscape in Utah may be affected in the coming years and how those living and visiting the Beehive State will be impacted.

“It’s certainly a step in the right direction,” says Meisei Gonzalez, Communications Director with HEAL Utah, a 501c3 committed to protecting public health and the environment by promoting renewable energy and clean air initiatives. “The IRA utilizes the incentive approach—the carrot not the stick—which we’ve seen achieve better results in Utah. The bottom line is it will help us transition to newer technologies for production and generation of clean energy and away from fossil fuels. It has the potential for wide-ranging positive effects locally and beyond.”

61% of power generated in Utah last year came from coal-fired power plants, according to the U.S. Energy Information Administration. That’s down from 75% in 2015, and over that same period solar power has gone from supplying just 0.2% to 10%. It’s a trend not necessarily born of altruism, but one driven by the increasing economic viability of new power sources. “The market is already shifting towards renewables,” says Gonzalez. “Costs are lower and efficiencies are higher, so investment is drawn in that direction.”

Indeed, there’s already been a massive global investment in renewable energy. According to figures from the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), the world added 464 gigawatts of solar and nuclear power energy generation in just 2020 and 2021. That exceeds the amount of power produced by all the nuclear plants (413 gigawatts) operating in the world today at a cost ($32 per megawatt-hour) that’s half that of coal and natural gas and one quarter that of nuclear generated power. 

Utah Energy Production

Still, there’s reason to believe the pace of change, especially in Utah, will be underwhelming. “The IRA is a good tool to spur development of renewables via extended and expanded ITC (investment) and PTC (production) tax credits. But for the IRA to have an impact on Utah’s fuel mix, I wouldn’t count on that. Coal is going to have to stay in the supply stack for now in Utah,” says a power generation investment professional with a focus on thermal assets who asked to be identified as Mr. Pink. (His participation in this story was dependent on anonymity for job security.)

“Imagine replacing, megawatt for megawatt, all the coal power in Utah with storage. That’s about 4.4 gigawatts of dispatchable energy, meaning it can be on whenever required. To have that all available with batteries running four hours at a time—because the typical reference technology is a four-hour battery—is astonishingly difficult to comprehend and absurdly expensive at this point. It’s insane to think it’s simple,” says Mr. Pink.

So even as the government moves to influence an already shifting market, there’s a sort of catch-22 keeping fossil fuel power alive. “From our perspective, legacy assets are paradoxically getting more valuable as renewables are built,” Mr. Pink says. “Coal is more expensive on a fully delivered basis relative to solar because of the fixed cost. Those costs are recovered through rates, so even though coal plants are running less because they’re getting priced out, customers are going to have to pay an increased rate for the reliability they offer.”

So, all the wind turbines and solar panels in the world won’t sustain the power grid without an unimaginable number of batteries. “The element in the bill that’s really essential is the investment into battery storage. It’s crucial for making renewables more viable,” Gonzalez agrees. Battery technology has drastically improved in recent years and is the key transforming the power grid. Utah has the resources to fuel the shift.

Utah is home to 28 of the 35 federally listed mineral-derived commodities for which there is skyrocketing demand owing to new battery technology, and Utah is the second most favorable mining jurisdiction in the contiguous United States, both according to the Utah Geological Survey. Mining in Utah is a critical necessity for systemic change in the country’s energy production but has the potential for environmental and social justice calamity if mishandled. “While wind and solar inflict far less environmental harm, they still require resources from our earth. How sustainable our mining practices are will ultimately determine how Utah fares environmentally as infrastructure changes,” Gonzalez warns.

Some eggs need to be broken to make an omelet, but we don’t need to throw them at the windows. The Southern Utah Wilderness Alliance (SUWA), a nonprofit protecting Utah’s wilderness-quality lands from oil and gas development supports the IRA as a positive, if imperfect, bill. The bill “will reduce oil and gas leasing speculation, which is rampant in Utah,” SUWA said in a statement. “The bill contains more good than bad and represents the largest federal investment in climate mitigation and leasing reform to date.”

The future remains unwritten. Clean domestic energy production holds the possibility of economic windfall and environmental restoration in Utah, but the same forces that have driven investment for profit threaten to undermine the pace of change and its myriad outcomes. The extractive industries haven’t always been kind to Utah, but there’s hope things could be different this time. The winds of change are blowing. It’s up to us where they take us.  

Tony Gill
Tony Gill
Tony Gill is the outdoor and Park City editor for Salt Lake Magazine and previously toiled as editor-in-chief of Telemark Skier Magazine. Most of his time ignoring emails is spent aboard an under-geared single-speed on the trails above his home.

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