LOUISVILLE, Ky.—Andy McDonald recalls a decade-old Kentucky legislative hearing on an energy diversification bill with the same sense of frustration that he felt back then, when he testified before a panel of lawmakers who were mostly coal industry loyalists.

McDonald, a clean energy advocate and energy policy consultant, was armed with a study by Synapse Energy Economics of Boston that made an economic case for requiring utilities to invest in renewable energy and energy efficiency.

Lawmakers opted to maintain the status quo.

“After testifying about this, the legislature went on a rant about how high energy bills were and why we can’t do anything about that,” said McDonald, founder and director of Apogee, a firm in Frankfort, Kentucky, that provides technical assistance, education and policy research toward advancing a renewable energy transition. “I was banging my head on the table, saying we just told you what you can do about that.”

A decade later, the latest figures from the U.S. Energy Information Administration show that Kentucky is dead last among states for wind and solar production in the United States. And while state officials note an uptick in the last couple of years in proposed utility-scale solar power projects, Kentucky experienced what could be described as a lost decade of renewable energy investment, while wind and solar power have soared in other states—including some other coal states.

“The absence of a renewable portfolio standard has been a major factor in our backwardness,” said McDonald. “The coal industry has had such a grip on the legislature and the governorship, and the culture, it’s really held back policies that would have supported renewables.

“It’s not the lack of sunshine,” McDonald said.

Coal States’ Response to Energy Transition Varies 

Ten years ago, it was clear that the coal economy was in freefall and that wind and solar were on the rise.

Kentucky ranked third in the country in coal production in 2013, behind Wyoming and West Virginia, and the state was tied with several others at the bottom in wind and solar development.

In 2022, Kentucky’s coal production had fallen by 65 percent and its ranking fell to fifth. And, the state had made almost no investment in wind and solar, so it remained at the bottom.

But it was a different story in some of the other leading coal states. Illinois, Indiana, North Dakota, Ohio and Texas all had increases in electricity generation from wind and solar of at least 150 percent.

Kentucky was much more like its neighbors Pennsylvania and West Virginia, with a relative lack of wind and utility-scale solar development.

So what is it about Kentucky that has held the renewable energy sector back? A common explanation is that the state doesn’t have strong winds or bright enough sun.

But that’s not true. Kentucky has more than enough of both to support substantial development, according to a model developed at the Goldman School of Public Policy at the University of California, Berkeley.

“Western Kentucky has very good solar (potential) and also very good wind,” said Umed Paliwal, a senior scientist at the university.

It’s useful to compare Kentucky and Indiana, he said. Indiana’s wind speeds have allowed for significant wind farm development and give it the capability to build about one-third more wind power capacity than Kentucky, and Indiana’s sunshine would allow it to build about double the solar power capacity of Kentucky. This is based on the model’s estimates of the technical potential of what could be built in each state and sell for competitive prices on the market.

Indiana has an edge, but it’s not nearly large enough to explain the huge difference in the amount of wind and solar development that has taken place. This comparison provides a sense of the scale of Kentucky’s untapped potential.

“The states that have done well with renewables are states that planned for it, and had public leadership that welcomed it,” said Adam Edelen, a former Kentucky state auditor who runs a Kentucky-based company, Edelen Renewables, working to bring solar projects and jobs to ailing coal communities in Appalachia. “In Kentucky, for too long, both political parties have alternated between ambiguous and hostile to renewable energy.”

The problem persists. One example, he said, is the recent decision by Kentucky Gov. Andy Beshear, a Democrat, not to veto a bill passed by the Republican-controlled General Assembly intended to prevent the closing of half-century-old and uneconomical coal-fired power plants.

On March 16, before the House voted to pass SB4, Rep. Richard White, a Republican from eastern Kentucky, argued for coal as a matter of religious faith. “When God created this Earth, he provided us with natural resources … and coal is one of them,” White said, adding that God intended coal for people “to make a living, to survive in this world.”

The bill is part of a pattern in Kentucky of sticking with coal despite overwhelming evidence of the fuel’s environmental hazards and high financial costs. It is an allegiance so strong that even the state’s utilities are imploring lawmakers to take a different course.

Kent Blake, chief financial officer of LG&E and KU Energy, the state’s largest utility, had urged lawmakers to hold off and craft a more narrowly focused bill. The two coal plants his utility wants to shutter are 50 to 60 years old and would cost hundreds of millions of dollars to get them up to date, he said.

The bill, now a law, will have “unintended consequences,” he told lawmakers, leading to “higher rates and less reliable service. It does not necessarily support the coal industry in the state.”  

Edelen said this backward-looking tendency is misguided. 

“Energy policy in Kentucky is akin to Confederate Civil War re-enactment,” he said—or repeating the experience of the losing side. 

The Death Spiral of Kentucky’s Coal Industry

Kentucky’s bottom-feeder place in the renewable energy ecosystem can be explained in a single word: coal.

What stands out is Kentucky’s ingrained and ongoing allegiance and cultural affinity to the bituminous rock, often depicted in popular music as a common man’s or family’s struggle. The 1940s song, “Sixteen Tons,” by Merle Travis, alluded to his native Muhlenberg County in the western Kentucky coalfield: “You load 16 tons, what do you get? Another day older and deeper in debt. St. Peter, don’t you call me ’cause I can’t go. I owe my soul to the company store.”

And in the state’s other coalfield, in Eastern Kentucky, Loretta Lynn wrote “Coal Miner’s Daughter,” first released in 1970: “We were poor but we had love. That’s the one thing that daddy made sure of. He shoveled coal to make a poor man’s dollar.”

Coal is the dirtiest of fossil fuels and a leading contributor to climate change. In Kentucky, it has also been on the decline for decades and in a death spiral the last decade, largely because of an inability to compete with the low prices of other sources of electricity.

Kentucky coal production fell 65 percent between 2013 and 2022, dropping from 80.4 million tons to 28.5 million tons. 

During that same time, the state lost nearly 7,000 coal mining jobs, which declined by 58 percent, from 11,781 in the fourth quarter of 2013, to 4,837 during the same period in 2022, according to the Kentucky Energy and Environment Cabinet.

Renewable energy in Kentucky failed to keep up with other states in part because of coal’s inertia, said attorney Jim Gardner, who was on the Kentucky Public Service Commission from 2008 to 2016, serving as chairman and vice chairman. Gardner now has a law practice whose clients include solar developers.

“Kentucky has been behind the curve, no doubt about that,” Gardner said. But the state had an abundance of coal-power generation, which didn’t leave much room for new sources of electricity.

“What coal provided was cheap electric rates compared to the rest of the nation, which helped Kentucky in attracting manufacturing,” such as steel and aluminum mills and automotive plants, he said. “People didn’t want to jeopardize that.”

The loyalty to coal continued even as the fuel lost its cost advantages compared to natural gas, wind and solar power plants.

While Kentucky ranked last in the country in wind and solar power generation last year, it ranked 37th in all renewable sources of electricity, thanks to its hydroelectric dams, most of which were built decades ago.

Developers have tried to build wind farms in the state. At least two companies pulled back in 2014 when their projects ran into state and local opposition, including a state law that changed requirements for public meetings and increased the minimum distance between a wind turbine and a neighboring property line.

Wind power companies found that it was much easier to do projects in neighboring states like Illinois, Indiana and Ohio.

Another complicating factor is that Kentucky is split between several grid regions, said Joe Daniel of RMI, the clean energy research and advocacy group. Much of its eastern half is part of PJM Interconnection, the largest grid in the country, which runs from Chicago to New Jersey. Some of the area along the Ohio River in western Kentucky is in the MISO grid region, which covers much of the Midwest and South. And the rest of the state isn’t part of any grid region.

The upshot is that a renewable energy project in the state may have some additional challenges and expenses navigating the regulatory process to connect to the grid.

Uncle Sam May Spur Renewable Energy Growth

But the balance is changing, Gardner said, citing a plan announced in December by LG&E and KU Energy to shut down three more aging coal-fired units, build two more gas units and a utility-scale solar plant, while adding purchase agreements for additional solar power and battery storage. The plan is controversial, attacked by the coal industry and Republican lawmakers as anti-coal, and environmentalists for relying too much on fossil fuels and failing to move faster toward renewable energy amid a climate crisis.

At the same time, utility-scale solar developers have begun to show interest in Kentucky.

Since late 2019, the Kentucky State Board on Electric Generation and Transmission Siting has received 30 applications for solar plants. Of those 22 have been approved, said Linda C. Bridwell, the Kentucky Public Service Commission executive director, whose staff serves the siting board. 

As those projects come online, the state will see a substantial increase in renewable energy. But this is in the context of utility-scale renewable energy growing even more in neighboring states.

And yet, state officials downplay the role of state policy.

“Kentucky lets the marketplace dictate the types of preferred fuel and has a  regulatory responsibility to ensure reliability,” John Mura, spokesman for the Kentucky Energy and Environment Cabinet, the main environmental regulatory agency in the state, said in a written response to questions.

But that’s not so anymore, with the passage of SB4. Lawmakers propped up coal even after hearing from LG&E and KU Energy, the Tennessee Valley Authority and a gas pipeline company that coal and natural gas plants struggled to keep up during a rapid deep freeze in December resulting in unplanned power outages. They were helped out by the MISO grid region, whose wind resources were a stabilizing force.

Rep. Chris Fugate, a Republican from the tiny town of Chavies, in a heavily mined-over part of Perry County in the eastern Kentucky coalfield, wasn’t buying that explanation, recalling in a recent committee hearing how, as a child, he kept his “pawpaw’s” home so hot by stoking coal in a basement stove that they had to keep the windows open.

“I don’t know that I’ll ever hush about talking about the reliability of coal,” Fugate said. “Because … you can always throw another scoop of coal in that coal-fired generation plant.”

Many lawmakers “just don’t think climate change is real,” said Andrew Melnykovych, the recently retired Public Service Commission spokesman.

For Gov. Beshear’s part, he does not often talk in public about climate change. He  has an energy policy that does not include the term and was criticized last year for wondering why his state had been hammered by repeated extreme weather—flooding and tornadoes—that killed his constituents by the dozens. 

Still, a recent Morning Consult poll ranks Beshear as the most popular Democratic governor in the country as he faces re-election this year—in a state that Republican Donald Trump, with his aggressive fossil fuel agenda, won by 26 percentage points. Last week Beshear made the political calculation to not sign, or veto, SB4, and allowed it to become law. A spokeswoman declined to comment.

Mura said federal incentives in the 2021 Infrastructure Investment and Jobs Act and last year’s Inflation Reduction Act have the potential to change the state’s renewable generation landscape significantly.

Indeed, the state has an opportunity to change course, said Aaron Brickman of RMI, who works on the intersection of economic development and clean energy. Beshear has shown himself to be pragmatic in seeking some clean energy investments, including several battery plants being built for use in electric vehicles, Brickman said.

And, he said, the federal legislation means that investments in renewable energy are going to grow substantially, which gives every state a chance to make up for lost time. 

“It doesn’t matter what you think about clean energy, or what you thought of it before,” he said. “What you’re focusing on now is the jobs and economic development.”

Still, Kentucky has lost out on years of economic investment by renewable energy developers, said McDonald, the clean energy advocate and consultant.

The Synapse report from a decade ago estimated that over 10 years, a renewable energy standard in Kentucky could create more than 28,000 jobs, adding $1.5 billion to gross state product once fully implemented in 2022, while putting downward pressure on rising electric bills.

Nevertheless, McDonald is hopeful.

“In the world around Kentucky, there is so much momentum,” he said. “At a certain point,” the constituents of Kentucky lawmakers who have stood by coal “may see they have better options.”