Competition, innovation, legislation: What’s powering a shift in Missouri’s energy mix

For much of Missouri’s history, the state has been heavily reliant on coal-fired electricity for most of its energy needs. As the United States and the world have started to shift toward renewable forms of energy, Missouri has gradually started to follow suit. In a state that, as recently as last year, ranked second nationally in terms of coal consumption for energy generation, the move is the product of multiple factors.

Hear more: The Market Dives podcast examines Missouri’s shifting energy profile

Josh Campbell, executive director of the Missouri Energy Initiative, said market forces are the main driver behind the advancement of alternatives to coal, which was responsible for 70% of Missouri’s electricity production in 2020.

“Both the regular consumer and — more importantly, I think — the corporate consumer has started to look at ways to demonstrate it is environmentally conscious,” said Campbell, whose organization is a nonprofit focused on energy initiatives for development, innovation and education in the state.

A new Missouri law could help push the state closer to a cleaner energy profile. This summer, Gov. Mike Parson signed a measure that allows a process, commonly referred to as securitization, whereby utilities refinance debt that was used to build coal-fired power plants and reinvest the savings into renewable energy projects.

The state’s two largest utilities have also set goals for cleaner energy in the future. St. Louis-based Ameren plans to invest $8 billion in renewables over the next 20 years and is targeting net-zero carbon emissions by 2050. Kansas City-based Evergy is looking at a similar timeline, with a goal of reaching net-zero carbon emissions in 2045 and a plan to shutter most coal production by 2040.

All of this comes against the backdrop of climate change, in which carbon emissions created by the burning of fossil fuels play a large part. While some parties involved in the shift away from coal in Missouri have been hesitant to point directly to the role of climate change, its influence has been impossible to ignore.

With utilities setting targets and the state government starting to get involved, the question then becomes when and how these energy goals will be achieved. The state has already seen a decrease in coal-fired electricity from a peak of 81% of electricity generation back in 2010. But, the path to a much larger drop is murkier. Campbell notes that many coal plants last for several decades, so decommissioning them is a costly option that could add billions in debt if the process is rushed.

“Right now, an existing coal plant is cheap to run,” Campbell said. “So we have to have financial mechanisms so you and I, the consumers, aren’t burdened with shutting down a perfectly working billion dollar facility and then building another billion dollar facility.”

The state’s new securitization law could help with this, but Campbell and Sanjeev Khanna, who runs the Industrial Assessment Center at the University of Missouri, both agree that the process will likely be drawn out. That means solutions must be looked at in the interim and plans have to be geared toward the long run.

Khanna said that building up energy resiliency throughout the state could both reduce current costs and provide for more efficient infrastructure in the future with energy resiliency being a long-lasting solution. Khanna describes energy resiliency as the ability for energy systems to adapt and withstand disruptions. Building up resilient infrastructure requires upfront costs, but it prevents the heavy financial losses associated with system failures and allows for more efficient energy usage in the long run.

One path to enhancing energy resiliency is diversifying Missouri’s energy portfolio with wind and solar plants so that the state is less susceptible to problems with any one power source. Another is forming smaller, localized power grids so that large swaths of the state aren’t reliant on a single plant or power source.

Khanna believes there is another key area Missouri should target.

“The other thing is that we have to be able to somehow come up with a plan and an investment to create more energy storage possibilities,” Khanna said. “So we have to become more resilient by first having locally available energy and then being able to store that surplus energy for use in a bad climate event.”

Campbell sees a similar route to reaching a point where Missouri’s energy infrastructure is capable of withstanding the closure of a coal plant. If a plant is to be closed, either the load it carries has to be replaced or the demand for that energy load has to be cut.

“That’s what every customer should understand and every utility does understand, is how to increase the efficiency of whether it’s our home, our cars, our animal agriculture, or our manufacturing or office buildings — how do we increase the efficiency?” Campbell said.

While these are ways in which Missouri could quicken what will be a long-term shift, there have been some real changes in recent years and the event horizon of a cleaner Missouri energy profile is in sight.

Wind energy production in the state doubled in 2020 to 2,000 megawatts. Northwest Missouri has the same environment as the windfields of Kansas and Iowa, states that get 44% and 41%, respectively, of their electricity production from wind. Illinois and Oklahoma also feature wind power prominently in their energy mixes, making northeast and southern Missouri areas for potential wind expansion.

There have also been moves to develop solar arrays across the state that could begin to ease some of the burden as well.

Campbell and Khanna both note that any progress will rely on all stakeholders to buy in. There is no one route or actor who can single handedly resolve these issues, and it will continue to require a diversified and dynamic approach.

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