Powering Rural Economic Development with Renewables
Article courtesy of RMI.
By Katie Siegnerm, Mark Dyson, & Gabriella Tosado
Despite serving only 13 percent of US electricity load, electric cooperatives loom large in conversations about the US energy system’s past, present, and future. The initial vision for nonprofit electric co-ops dates back to the New Deal, when the Rural Electrification Act of 1936 authorized the creation of co-ops to serve rural areas bypassed by the larger electricity providers of the time. Today, 832 distribution co-ops and 63 generation and transmission (G&T) co-ops still serve the majority of rural America, including more than 90 percent of persistent poverty counties (counties with at least 20 percent of their population living in poverty).
As the energy transition ramps up, bringing the benefits of low-cost renewable energy to more and more places, electric co-ops the opportunity to replace their aging coal fleets with wind and solar projects. This can lower electric bills and drive rural economic development in areas that need it.
“If You Know One Co-op…”
Through several years of engagements with co-op leadership and stakeholders, we have learned that electric co-ops face unique and varied constraints as well as incentives when it comes to decarbonizing their generation mix. Co-ops have lagged other utilities in retiring their coal plants, although a spate of coal retirement announcements and emissions reduction goals set by several prominent G&Ts in the past year indicates they may be closing that gap. A combination of rapidly falling costs for renewable energy and battery storage technologies, state climate policy, and member demand for carbon-free electricity is driving that shift.
Nonetheless, a number of G&T co-ops are continuing to operate aging and increasingly uneconomic coal plants without plans for their retirement. This can be due to the nature of some co-op financing structures as well as regulatory and governance models that muddy the economic signal for retirement. For example, coal plants may have undepreciated value that the G&Ts are seeking to recover, and in some cases, they act as the collateral on G&T debt obligations, making their retirement a risk to lenders.
What’s more, co-ops’ nonprofit status limits their ability to take advantage of existing tax credits for wind and solar development. And G&Ts with a history of asset ownership may be reluctant to shift toward greater shares of third-party-owned generation (e.g., wind and solar projects contracted for through power purchase agreements).
In short, co-ops’ situations and needs are as varied as the geographies they serve — as the saying goes, “if you know one co-op, then you know one co-op.” As such, there hasn’t yet been a silver bullet approach that can overcome the barriers to full co-op participation in the clean energy transition.
Federal Policy Can Support and Speed the Co-op Energy Transition
Policy intervention can smooth the path forward for the cooperative energy transition by allowing G&Ts to retire uneconomic coal and replace their fossil generation with clean energy alternatives. This could spur rural economic development and clean tech asset ownership opportunities while at the same time lowering member electricity bills.
Today, federal policymakers have the opportunity to facilitate a coal-to-clean transition among electric co-ops through investment that incents co-ops to retire their coal assets and replace them with renewable generation. The White House includes funding for transitioning rural co-ops to clean energy in its American Jobs Plan, and additional proposals outline incentives that would be available to co-ops for each kW of coal that they replace with clean energy. These proposals also provide direct support to impacted coal plant and mine communities.
The replacement of rural cooperative coal with wind and solar would yield economic development benefits stemming from the construction and operation of those projects, largely in rural communities. Our analysis shows that the tax revenues, land lease payments, and wages generated by these projects, in addition to their low-cost electricity, have the potential to more than offset any cost of the policy.
Planting Seeds of Opportunity in Co-op Territory
To quantify the benefits that might accrue to rural communities from a policy that facilitates co-op coal retirement and re-investment in clean energy, we developed estimates for the direct local revenues that new wind and solar projects could produce in the states where the coal was retired based on our Seeds of Opportunity report methodology. The analysis uses the capacity expansion model from UC-Berkeley and GridLab’s 2035 Report to estimate the share of wind and solar projects that would be built in a particular state, as well as the report’s state-level capacity factors for wind and solar.
While we assumed full generation replacement with wind and solar, the economic development benefits could vary based on the actual choices co-ops make upon retiring their coal fleets. For instance, the addition of battery storage, transmission assets, energy efficiency projects, and other clean energy technologies that might be needed could yield additional revenue streams and energy bill savings over and above what is captured here.
The coal plants captured in this analysis are at least partially owned by co-ops and extend across 23 states and 33 co-op territories. Arkansas and North Dakota, the two states with the most coal plants (five each) that might take advantage of federal policy incentives to retire, could see $4.8 billion and $4.2 billion, respectively, from replacing their co-op coal generation with new wind and solar projects.
In Ohio, retiring the 1,265 MW Cardinal coal plant could spur over 4,000 MW of wind and solar project development, contributing nearly $2 billion in revenues to the state’s rural economy. Florida’s even larger Seminole coal plant, should it utilize federal policy incentives to retire, could pave the way for 4,400 MW of solar projects that would generate $2.3 billion in economic development to rural parts of the state.
The map and table below illustrate the location of all coal plants with a share of co-op ownership and the new wind and solar capacity that would be needed to offset each plant’s 2019 annual generation. We then show the economic development that these projects would produce over the course of their lifetimes.
Click image for full table as PDF.
We recognize that coal plant retirements raise questions about maintaining the reliability of the local electric grid. The wind and solar replacement capacity modeled here indicates what would be needed to fully replace the annual generation of the retiring coal, but of course, the grid reliability considerations are more complex.
In some cases, the co-op territory or region may have excess capacity on the system, which is a fairly prevalent characteristic of regional grids, as we document in a recent white paper. This makes replacement capacity unnecessary. In other cases, the co-op may need new capacity as well as other grid resources such as flexible demand or storage to maintain system reliability. These solutions will be developed on a co-op-by-co-op basis — what is shown here is the local economic upside that any new renewables capacity would bring.
Co-ops Can Be Renewable Energy Leaders
Co-ops are poised to play a leading role in enabling rural America to reap the benefits of wind and solar development. Federal policy that unlocks this potential is likely to see a strong return on investment in the form of jobs and revenues flowing to rural residents, landowners, and communities.
A $10 billion investment to support co-ops’ energy transition efforts as contemplated in the Biden Administration’s American Jobs Plan would yield just over $50 billion in wind and solar-induced economic development revenues — benefits five times greater than the cost of the policy. Coupled with the lower operating cost of renewable energy and transition support to impacted communities, a modest federal incentive could provide outsized economic benefits to rural communities and position cooperatives to be renewable energy leaders.
In a landmark shift for the U.S. housing finance system, the Federal Housing Finance Agency has issued a directive ordering Fannie Mae and Freddie Mac to formally consider cryptocurrency as an asset in single-family mortgage loan risk assessments.
The move, signed by FHFA Director William J. Pulte on Wednesday, signals a new era of crypto integration into traditional financial infrastructure — this time within the core of American home lending.
The order directs both housing finance giants to develop proposals that include digital assets — without requiring borrowers to liquidate them into U.S. dollars prior to a loan closing.
Pulte said in a post on X that the move aligns with President Donald Trump‘s vision “to make the United States the crypto capital of the world.”
Historically, cryptocurrency has been excluded from underwriting frameworks due to volatility, regulatory uncertainty, and the inability to easily verify reserves. This directive changes that.
The decision comes at a time of increasing institutional embrace of crypto across banking, payments, and federal policy.
“Cryptocurrency is an emerging asset class that may offer an opportunity to build wealth outside of the stock and bond markets,” the order states, acknowledging crypto’s growing role in household financial portfolios.
The directive restricts consideration to digital assets that are stored on U.S.-regulated, centralized exchanges and can be clearly evidenced. It also requires Fannie Mae and Freddie Mac to develop internal adjustments to account for crypto’s market volatility and ensure that any risk-weighted reserves comprised of crypto do not compromise underwriting standards.
Under the directive, both enterprises must submit their assessment proposals to the boards of directors for approval and then to the FHFA for final review.
Fannie Mae and Freddie Mac were put under government control in September 2008 as entities that are known as government-sponsored enterprises, or GSEs.
Arevon Energy just brought a massive new battery storage project online in San Diego’s Barrio Logan neighborhood, and it’s built to keep the lights on when the grid gets stressed.
The new Peregrine Energy Storage Project clocks in at 200 megawatts (MW)/400 megawatt-hours (MWh), making it one of the biggest battery storage facilities in the San Diego region. That’s enough stored energy to power around 200,000 homes for two hours during peak demand.
Built for $300 million, Peregrine is the fifth utility-scale energy storage project Arevon has launched in California. It uses lithium iron phosphate (LFP) batteries, which are known for their safety and thermal stability. LFP batteries use iron, phosphate, and lithium to create a strong chemical bond that resists overheating, making them safer than other lithium-ion chemistries. They also have a longer lifespan and are less prone to degradation over time.
The facility created more than 90 construction jobs and is expected to generate over $28 million in property tax revenue over its lifetime.
Energy storage projects like this are key to making California’s grid more stable and reliable. By soaking up clean energy when demand is low and discharging it when the grid is under strain, Peregrine helps reduce blackouts and avoid spikes in electricity prices.
“The successful completion of Peregrine Energy Storage is a result of the collaborative efforts of the project’s stakeholders and the local community who collectively support California’s renewable energy goals,” said Kevin Smith, CEO of Arevon.
Arevon already operates more than 3.2 gigawatts (GW) of renewable energy projects in California, with another 800 MW under construction. Nationwide, it owns and operates 4.7 GW of solar and storage projects across 17 states.
Read more: SpaceX alums just supercharged EV charging at Costco
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The time is finally here: there are actual driverless Tesla Robotaxis on the road, at least in a portion of Austin, Texas, as of this weekend. And thanks to their ridership of exclusively Tesla influencers, almost all of the miles they’ve put under their belt has been filmed or livestreamed, which gives us plenty of footage to discover what’s gone right and what’s gone wrong.
Tesla’s Robotaxi service went live on Sunday around noon, at least for the relatively small number of Tesla influencers who were invited to ride.
It’s a limited launch in several other ways, too – it’s geofenced to somewhere around 30 square miles in South Austin which Tesla spent additional time mapping and testing in, it’s supported by backup teleoperation, it doesn’t operate from 12am-6am or in bad weather, and every car has a “safety monitor” in the passenger seat with access to controls to stop the vehicle.
Nevertheless, there are Teslas without someone in the driver’s seat, and that’s still a step forward, and partial delivery of a promise that Tesla CEO Elon Musk has been making for about a decade now (though there are still other unfulfillied promises on the table).
Because of that decade of promises, a lot of eyes have been on this launch – and also because of the fact that every invited rider is chasing views on social media, so we have a lot of footage just a few days in.
To be clear, this is not the first driverless taxi on the road. GM used to operate robotaxis through subsidiary Cruise (more on that in the Take), and Google has its Waymo robotaxis in multiple US cities (it just expanded its service area last week) and is even testing overseas.
So there’s already plenty of text and video out there talking about the experience of riding in non-Tesla self-driving taxis (like my long writeup and video of my rides in Waymo’s driverless taxi during a chaotic Venice Beach weekend).
But, Tesla is Tesla, and there’s always more attention on what Tesla does. So lets put a little more attention on the various errors that we’ve seen from Robotaxis in the 3 days since launch.
We did link to several of these videos, and others, in a post the day of the launch, when vibes were quite positive from the Tesla fans who were invited to ride. In the first few hours, there were few issues.
But, soon, errors started creeping in. We added some as updates to that article as they came in, but we thought this article would be better to compile them all (and thanks to r/SelfDrivingCars which compiled several others)
Indecision leads to driving into an oncoming lane
In Tesla Daily’s first Robotaxi ride, the Tesla tries to attempt a left turn one intersection early, gets indecisive, then continues on, driving through an oncoming lane for a time before re-entering a left turn lane ahead. See the whole exchange starting at around 7:08 in this video:
Robotaxi stops in middle of street for about a minute
Dirty Tesla pressed the “pull over” button to get dropped off early, and the car got confused and tried to let him out in the middle of a left turn lane. Support ended up “resuming the ride” and the Robotaxi found a nearby gas station to drop him off at. The whole interaction took about a minute, starting at ~8:58 in the video:
Robotaxi drops rider off in an intersection, stays there for ~55 seconds
Farzad also asked for a slightly early dropoff, and the car stopped quite early… as in, gridlocked in an intersection and leaking out into one lane of traffic. Thanks to wide Texas streets for letting others by, I guess. 38:04 in the video:
Tesla phantom brakes when caught by sun glare
Kim Java had a hard “phantom braking” moment, where the vehicle hits the brakes for no particular reason, while driving into the setting sun. 10:13 in the video:
Safety monitor intervenes, presses “stop in lane” to avoid UPS truck
In what seems to be the first true intervention caught on video, Dave Lee was approaching a parking spot when a UPS truck stopped in the lane and started backing up. The Tesla “safety monitor” in the front seat wisely anticipated the situation and was hovering the “stop in lane” button, then pressed it when it seemed like the car wouldn’t stop on its own. The car then remained in position while the UPS truck backed up, giving it just enough room, but it probably would have been nicer if it backed up a little more. Excellent job by the safety monitor here, really. 28:53 in the video:
The previous day, Dave Lee was getting picked up by a Robotaxi in a parking lot and it hit a curb in the parking lot right at the start of the drive (at 0:39 in the video).
Robotaxi hits a bump too fast, then goes 27 in a 15mph zone
Farzad was heading to a disc golf course on a low-speed street. The Robotaxi handled one speed bump well, but then took another one too fast. It then drove past a 15mph speed limit sign, slowed down for a deer, and then picked speed back up to 27mph. The whole exchange starts around 14:27:
In the same video, starting at 4:56, the car seems not to know what to do about a shopping bag in the road – it brakes, then considers going around it, then just runs it over.
Tesla brakes for nearby police, exterior view
Edward Niedermeyer, a longtime Tesla hater, posted a video from an exterior angle of a Robotaxi behaving strangely nearby police vehicles. The Robotaxi passes by one police vehicle with lights on in a parking lot, then brakes rather hard when it passes by another police car blocking a side intersection, then passes by another at normal speed, then brakes hard for a fourth despite it being in a parking lot behind a curb. Slowing down would be appropriate behavior in this instance, but the braking events seem more sudden than necessary, and inconsistent given the position of the police vehicles involved.
Safety monitor intervenes, hops in drivers seat in parking lot
In what seems to be the second intervention, Dirty Tesla had just gotten out of the taxi and while it was trying to leave the parking lot, it nearly ran into a parked car. The Safety monitor intervened to stop the car, then apparently got out and drove the car away manually (not captured in video).
Electrek’s Take
Yes, the title is lighthearted. I was going for irony.
The fact is that there are issues with Tesla’s approach to self-driving, and these various videos show them.
Tesla drivers are well acquainted with the current limitations and quirks of FSD as well, many of which were shown off in the clips above. It doesn’t do well with sun glare (neither do you, but you can wear sunglasses and/or flip down the visor for a little help), it sometimes misses speed bumps, it phantom brakes, and it has weird moments of indecision sometimes. C’mon, we’ve all seen it, let’s be honest with ourselves here.
As best I can tell from hundreds of miles away, these vehicles exhibit pretty similar behavior to the FSD in the vehicles I’ve driven. It works pretty well a lot of the time, but most of the time I’m also glad I’m there in the driver’s seat so I can tell it to STOP CHANGING LANES FOR THE 5TH TIME THIS MINUTE FOR PETE’S SAKE.
Tesla’s system also uses only cameras, not LiDAR, and most experts (including Tesla engineers) agree that incorporating multiple sensing modes is the correct path to take (here’s more on that). Tesla is using only cameras because it’s cheaper, and thus more scalable (though LiDAR prices have dropped rapidly).
In particular, LiDAR does better in poor weather than cameras do. We haven’t seen particularly bad weather yet for Robotaxi (there was rain in Austin on the morning of the Robotaxi’s launch – and the launch coincidentally did not happen until afternoon), and Tesla’s FSD system does work in the rain.
But even I, in famously sunny Southern California, have encountered a rainstorm severe enough for FSD to suddenly shut off and tell me to take over. So, in the very conditions that you’d definitely want an enclosed space to keep you safe from the weather, Robotaxi might not work.
So far, the errors we’ve seen above have not caused any sort of damage, either to Tesla occupants or the general public (except for some curb rash, perhaps), but as miles get put on the system, it is inevitable that something will happen.
When something does happen, the public will not respond kindly to it. Recall when GM’s Cruise robotaxi got into an accident in San Francisco – which was actually entirely the fault of a human driver. A human driver struck a pedestrian, who was then pushed into the path of a Cruise vehicle which didn’t have time to stop, and hit the pedestrian as well.
This was largely reported as a self-driving car crash, even though Cruise didn’t cause the accident in the first place. Cruise was, however, responsible for having poor after-crash behavior, as the car didn’t realize the pedestrian was stuck under the vehicle and dragged her on the road for several feet, and then hid this fact from investigators. As a result, its license was pulled in California and it soon shut down elsewhere as well.
We are all aware of how many unpredictable things happen on the road every day, and how many problems are caused by human drivers. Autonomous technology does promise solutions to that, particularly in its theoretical ability to make decisions quickly. But autonomous technology has heretofore not been great at understanding what to do in unexpected situations, like the Cruise issue above.
Waymo has had issues as well, one of which you can see in my own experience with the system, where the car I was in got stuck for several minutes trying and failing to make a left turn into a crowded street. Or this clip where it gets stuck in a parking lot and needs a manual driver.
One pattern I do notice is that a lot of Tesla’s errors seem to happen when the car is dropping off or picking up riders. This could be because parking lots are more complex spaces than roads, or simply because the ability to park is a newer feature for FSD. In my time in Waymos, it also seems the least decisive when trying to find parking or pickup spots.
But the exceptional part about these Tesla issues is that it’s only been three days, and there are reportedly only 10 cars and 20-some riders using the system. Tesla has always said that it could scale its solution to an entire fleet with a single software update, without geofencing, thus turning the entire fleet autonomous overnight.
And Tesla has also always been famous for the “move fast and break things” approach which is so common in Silicon Valley. This is all well and good for tech, but when you’re dealing with thousands of pounds of metal going down the road near pedestrians, things can get serious real quick.
And so, its questionable that Tesla is operating in a regulatory vacuum and doesn’t want the public to see details about its program or FSD safety data. We saw what hiding information from regulators did to Cruise, and it certainly wouldn’t advance Tesla’s progress if the same happened.
Thankfully, Tesla does seem to be taking a more measured approach than we might have expected, given its inclusion of safety monitors who we’ve already seen avoid two accidents in just the first three days of operation. But that’s not scalable, and while Tesla fans have pointed out that Waymo also started with safety monitors, it didn’t charge fees or take public rides during that testing phase, and Tesla is doing both.
It remains to be seen if Tesla’s approach will be scalable faster than Waymo’s (or MOIA’s, or Zoox, or anyone else’s), but given the first few days of limited operation in Austin, the dream of expanding everywhere overnight does seem unlikely.
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