by Ted White and Bobby Dishell
Advanced energy and reducing greenhouse gas emissions are at the forefront of Coloradans’ minds. The 2019 legislative session set ambitious climate goals, like reducing Colorado’s greenhouse gas emissions by 90% by 2050. This, coupled with Xcel Energy’s recent announcement to be 100% carbon free by 2050, presents a variety of business opportunities and legal work to be accomplished. This is not limited to Colorado; almost half of the states in the country have announced ambitious greenhouse gas reduction targets. Corporations are joining in as well, with over 200 major corporations pledging to source 100% of their electricity needs from renewable energy under the RE100 Initiative. In order to achieve these goals, we need to shift our energy portfolio to incorporate more renewables, electrify appliances, and increase the efficiency of our buildings.
A successful renewable energy practice requires an interdisciplinary team with in-depth knowledge of advanced energy issues. The work ranges from drafting complex commercial contracts to navigating a variety of real estate requirements, from going before the public utilities commission to litigating associated disputes. Additionally, Colorado has established a Just Transition Office to assist companies and employees with the transition from carbon producing energy to renewable energy. Employment attorneys will play a key role in this process.
The idea of “electrifying everything,” popularized by Bruce Nilles, is a common thread through each facet of switching to a more renewable portfolio and reducing our greenhouse gas emissions. Electrifying everything means transitioning our combustion products to electricity. Burning gas pollutes more than burning coal and poses serious health risks. Electrification will increase grid reliability and opportunities for renewable energy development. In addition to increased battery storage, whose technology continues to improve, by switching to electric water heaters and other products, energy that is produced from renewables that exceeds the grid’s capacity can be off-loaded to heat water, charge electric vehicles and various other applications.
Currently, electricity generation accounts for approximately 25% of Colorado’s carbon dioxide emissions. In Colorado, we primarily increase our renewable energy portfolio through wind and solar. Solar energy can take up a large area of space in a “solar farm,” whose power is then sold to the grid. Solar also shows up as solar panels on buildings, or as a community solar garden. Community solar gardens require subscribers to contract with the solar garden directly. Xcel Energy has proposed expanding its community solar garden power capacity by 40 megawatts per year until 2021. Community solar gardens allow someone to subscribe to a project and receive the credits it produces, which are then applied to their energy bill. Building a community solar garden is less capital intensive than a larger-scale solar farm.
According to Mike Kruger, president and CEO of Colorado Solar and Storage Association, the “demand [for solar] drastically outstrips the availability supply.” Developing a full solar project requires land acquisition or land use for the construction of the project and electrical transmission siting, power purchase agreements between the energy producer and the energy purchaser, financing and investment agreements to bring the project to fruition, and a breadth of administrative law expertise from land use boards to the public utilities commission. The regulatory process is similar for wind and solar projects respectively.
The transportation sector is now the largest source of CO2 emissions in the U.S., while buildings consume almost one-third of natural gas. As more technology is developed to assist with controlling supply and demand in a renewable energy space, the reliability of the grid will increase, as will the need for legal representation. Each of these companies will need patent and trademark assistance, support in contract negotiation and review and other corporate counseling.
Electric vehicles are an increasing percentage of market share, boosted in part by laws such as Colorado SB 77. An increasing number of vehicle manufacturers are creating electric or zero emissions vehicles.
Deploying electric vehicle charging stations is now required for new buildings, so reviewing contracts with an eye towards such changes is critical. General contractors must be equipped to install and property managers must have the resources to maintain these charging stations.
Charging stations can help offset the grid when renewable energy sources produce too much electricity by storing excess electric supply in vehicle batteries. This is a part of the electrification transition, which has an even larger impact on buildings. Under Colorado HB 1260, local jurisdictions are required to bring their land use codes into conformity with one of the three most recent versions of the International Energy Conservation Code when they update their building code. While this only applies to cities and counties that have building codes, this has major impacts for metro areas in Colorado, all of which have building codes.
The electrification of these new buildings will help increase grid reliability, but also requires a nuanced understanding of energy optimization and the new codes to ensure our clients are in compliance. Additionally, new real estate developments like office or industrial parks are ripe for wind turbine or solar garden development. This creates another possible revenue source for clients.
Colorado’s legislature and current and past governors have made significant strides in enabling renewable energy to succeed; however, the legal work and support is just beginning. This article scratches the surface of possibilities and provides a general overview of the renewable energy landscape.
We are experiencing an increasingly rapid energy transition which will result in associated industries continuing to rise like carbon recapture and sequestration, recycling and reuse of both renewable energy generation that is nearing the end of its lifecycle and coal or natural gas plants that are nearing the end of their lifecycles, and geothermal energy. Now is the time to build an interdisciplinary team to handle these issues for clients and provide better counseling.
— Ted White, name partner of Moye White, focuses on corporate transactions such as mergers and acquisitions, and financings for business in a variety of sectors including advanced energy. Bobby Dishell, a J.D. candidate at the University of Colorado Law School, has served as a legal intern at Moye White since 2018.