Report: Iowa ‘uniquely positioned’ to have carbon-free electricity by 2035

The Iowa Environmental Council is calling on Iowa utilities to “aggressively” take advantage of federal clean energy programs to meet greenhouse gas reduction goals of carbon-free electricity by 2035. 

In 2023, 64% of the state’s energy generation came from wind and solar, while the percentage of fossil fuel generation decreased 6% from 2021, according to the Iowa Electric Generation Council’s 2024 “Condition of the State” report.

Steve Guyer, the energy policy counsel for Iowa Environmental Council, said Tuesday in a presentation about the report that renewable energy generation is cost competitive with fossil fuels. 

“Even the lowest cost fossil source is higher than either wind or solar,” Guyer said in reference to a levelized cost of energy chart, produced by Lazard, a financial advisory firm. 

The 2024 Lazard report holds that while renewable energy generation is cost competitive, that “diverse generation fleets will be required to meet baseload power needs over the long term.” It pointed to increased power demands from artificial intelligence, data centers, and the timing imbalance between renewable energy production and peak usage, as reasons to keep gas-powered plants in the mix. 

Guyer said federal tax credits and incentives from the Inflation Reduction Act will make it even more cost effective for Iowa utilities to transition to fully renewable generation in the next 5-10 years. 

“We clearly are already uniquely positioned, but if we aggressively take advantage of the Inflation Reduction Act, there are a lot of incentives and a lot of mechanisms … that can get us there,” Guyer said. 

Guyer pointed to the Energy Infrastructure Reinvestment (EIR) Program, investment and production tax credits, and bonuses for projects in energy communities, or census tracts where a coal plant has closed since 2009. 

The EIR program is a federal financing tool for a variety of additions, repurposing and construction projects that would transition fossil fuel plants into renewable energy infrastructure or storage. Projects that retrofit fossil fuel plants with carbon capture and sequestration technologies would also be eligible. 

Report calls 100% renewable claim a ‘shell game’

The council’s report points largely at energy companies MidAmerican Energy and Alliant Energy, which own the coal plants in the state, but have made significant investments in wind energy. 

According to its website, 62% of MidAmerican’s energy resources came from wind in 2023. 

But Guyer said MidAmerican’s claim of delivering 100% renewable energy to Iowa customers is misleading. 

Per the company’s website, the GreenAdvantage program makes use of renewable energy certificates (REC), a program that quantifies renewable energy that is generated and put into a power grid. Once in the power grid, it’s impossible to track where energy came from or how it was created, but RECs allow consumers to purchase a representation of that generated renewable energy.

The council’s report called this a “shell game” where MidAmerican claims renewable credibility, but still operates fossil-fuel-burning plants in the state, “while Iowans are stuck with all of the pollution and other costs of the coal plants.” 

Geoff Greenwood, a spokesperson for MidAmerican Energy, said the company relies on coal, gas-fired, and nuclear generation to fill the gaps when the sun isn’t shining, or the wind isn’t blowing.

“The result is that all MidAmerican customers in Iowa can confidently say that the electricity they used was offset with emissions-free power through the course of that year,” Greenwood said in an emailed statement. 

Greenwood said the company is “crystal clear” that its goal of delivering 100% renewable energy to customers refers to the amount of renewable energy generated, compared to the amount of energy used by Iowa customers in the same year. 

“MidAmerican has added wind energy at no net cost to our customers, thanks to longstanding federal tax incentives … We will continue our long track record of making smart clean energy investments on behalf of our customers, including incorporating federal tax incentives where appropriate.”

The International Energy Agency predicted in July that global electricity demand is expected to increase by 4% in 2024, and another 4% in 2025.  

Guyer said with increased demands for electricity, clean energy generation will have to come from other sources. 

“I think we’re going to see a transition away from our current paradigm which is: the utilities provide everything, to one where the customers themselves actually not only start to have their own generation on site, but they actually start to work as a part of the overall system.” Guyer said. 

The Iowa Environmental Council is set to host its annual conference, Tuesday, Sept. 24, at Drake University.