Iowa Utilities Must 'Rapidly' Make Use of Biden-Era Renewable Credits to Reach Emissions Goals

Your financial contribution empowers watchdog reporting that protects and informs us all. Iowa utilities still have a "long way to go" to meet a 2035 net zero emissions goal, especially as changes at the federal level have accelerated the timelines for key wind and solar tax credits, according to the 2025 Iowa Electric Generation Condition of the State report. The annual report from Iowa Environmental Council said in order to meet this net zero goal, utilities not only have to transition away from coal but also continue to meet demand, which is projected to increase by 30%-60% over the next 20 years. The net zero goal is consistent with federal goals from 2021 that directed the energy sector to achieve net zero emissions, or emissions that are equal to the amount of greenhouse gases that are removed from the atmosphere, by 2035. The Intergovernmental Panel on Climate Change similarly found in 2022 that global greenhouse gas emissions must reach net zero by 2050 in order to avoid the greatest impacts of climate change, including limiting global temperature increases. Steve Guyer, IEC's energy policy counsel, said in a webinar Wednesday about the report that climate change costs Iowa businesses, families, governments and taxpayers billions of dollars each year. "I want us to keep in mind that energy, the environment and the economy are actually inextricably linked," Guyer said. Guyer, and the report, said coal generation which has the greatest greenhouse gas emissions in the energy sector, not only "drives climate change" but also has negative effects on public health, creates air pollution, can cause premature death and can even impact corn yields. "Air pollution does not discriminate," Guyer said. "Everybody has to suffer, and is burdened by, basically, this impact – not only financially, but otherwise." Coal down, wind and solar up In Iowa, the share of coal-based electric generation has declined consistently since 2010, according to the report. From 2021 to 2024, fossil fuel generation decreased by 9% in the state. The share of wind generation has steadily increased in Iowa since the early 2000s and has trumped coal generation in the state since 2019. In 2024, wind energy accounted for 66% of the state's total electricity generation. Solar increased in 2024 to represent 1% of the share of electricity generation. According to the report, in 2024 Iowa had the largest share of generation from renewable sources of any state. Graph shows the change in electric generation sources in Iowa. (Graph courtesy of Iowa Environmental Council) "So wind and solar in 2024 actually represented 67% of our generation," Guyer said. "That places us certainly ahead of any other state as far as the percent of generation from renewables. It also means that we are uniquely positioned to actually achieve 100% carbon free by 2035." Geoff Greenwood, the media relations manager for one of Iowa's main utilities, MidAmerican Energy, said Iowa's status as a leader in clean energy is "in large part because of MidAmerican Energy's clean energy leadership." Wind makes up the majority, or 64%, of MidAmerica's energy mix. Greenwood said in an email that since 2004, the company has invested in more than 7,600 megawatts of wind and 141 MW of solar, and has plans to invest in hundreds more by 2028. According to the company's website, it delivered "the equivalent of 100% carbon-free energy" to Iowa customers in 2024. "The environmental benefits of renewable generation are not diminished by the timing of its production—each and every megawatt of clean energy MidAmerican generates contributes to overall emissions reductions and supports our customers' sustainability goals and Iowa's leadership in clean energy," Greenwood said. "MidAmerican has made, and continues to make, significant, measurable progress in reducing greenhouse gas emissions and leading Iowa's electric sector in decarbonization efforts." The report points out that despite the significant share of wind and solar generation in the state and commitments from MidAmerican and Alliant Energy, to achieve net zero emissions, Iowa has six operational fossil-fuel power plants. According to the report these plants emitted more than 14 million tons of carbon dioxide in 2024, along with several thousand tons of sulfur dioxide and nitrogen oxides. Power plants represent about 16% of Iowa's greenhouse gas emissions, according to the most recent greenhouse gas inventory report from the Iowa Department of Natural Resources. The report shows that agriculture at 29% accounts for the largest share of emissions in the state, closely followed by residential, commercial and industrial fossil fuel use. A pie chart shows greenhouse gas emissions by sector. (Graph courtesy of Iowa Environmental Council) Greenwood said MidAmerican has already retired "several coal units" and "will continue to retire the remaining coal units by 2049." He noted the existing plants are in compliance with federal and state regulations. Coal generation in Iowa is nearly 52% lower in 2024 than it was in 2005, and carbon emissions have decreased by 47% in the same time, according to Greenwood. "The Council's report itself acknowledges that the electric sector is the only sector in Iowa that has made meaningful progress in reducing GHG emissions," Greenwood said. "MidAmerican is proud to be a key contributor to that progress." A spokesperson for Alliant Energy said in an email the company is implementing a strategic plan to "create a more sustainable future for our customers and communities." Alliant plans to, by 2030, reduce greenhouse gas emissions from utility operations to 50% of 2005 levels, and to eliminate all coal from generation by 2040. According to the spokesperson, the company reduced its 2005 emission levels by 39% in 2024. "We will continue to review and update our Energy Vision, based on future economic developments, evolving energy technologies and emerging trends in the communities we serve," the spokesperson said in an email. "Our goals remain the same, however, increasing customer energy needs, reliability and resource adequacy requirements and tax policy changes may result in delays in achieving, or revisions to, our goals." 'Staggering' increases in energy needs projected Guyer said energy demand is increasing rapidly, in part due to the implementation of data centers. According to the report, which analyzed modeling projections from the Midcontinent Independent System Operator, or MISO power pool, Iowa has a projected load growth of between 30% and 60% over the next 20 years. Guyer said that projected load, plus a change in MISO's rules as to what can count towards a utility's accredited capacity, means there is a "staggering" amount of energy that will be required in the next 20 years. "We have a, I'll just say, a staggering mission ahead of us," Guyer said. "Not only do we have to try and achieve the reduction in greenhouse gas emissions, but we have to try and do that while we're also trying to meet this increase in demand." Greenwood said the "exponentially" growing demand for energy noted in the report, means that "a dependable supply during this growth is critical." "Our long-term vision remains clear: we are striving to achieve net-zero greenhouse gas emissions while maintaining the reliability our customers expect," Greenwood said. "It's crucial that our energy transition balances reliability and affordability with environmental responsibility. Reliable electricity is not a luxury, it's a necessity." 'Big beautiful' law changes timeline for tax credits Guyer said utilities need to "aggressively move" to make use of the wind and solar credits made available under the Biden administration's Inflation Reduction Act. This massive spending bill created tax credits to incentivize many types of renewable energy investments, including solar and wind energy projects, through 2032. The massive, Republican-led tax incentive and spending bill known as the "One Big Beautiful Bill Act" which was signed into law in July, shrinks the timeline for these credits. Now, to be eligible for the credits, projects must begin construction by July 4, 2026, and be placed in service before 2028, according to the report. "Even though there was an urgency back with the IRA, that has been exponentially increased now due to the big, beautiful bill," Guyer said. But, Guyer said, whether a company can make use of IRA credits or not, renewable energy projects are still the cheapest forms of electric generation in Iowa. "Even without the credit, the renewable generation will still be lower cost, but the credit certainly will have an impact and help customers overall," Guyer said. Never a dull moment! Subscribe to the free DecorahNews.com newsletter and stay one step ahead with local news and information you just can't get anywhere else.