Background
In 2023, HB 3630 directed the Oregon Department of Energy to develop a state energy strategy and to submit a final report to the Governor and Legislature by November 1, 2025.
As outlined in the bill, the report must:
(1) summarize the state energy strategy and pathways to achieving the state’s energy policy objectives;
(2) describe the department’s engagement process and how perspectives informed the energy strategy; and
(3) recommend legislation or changes to policy necessary to implement the state energy strategy.
This is the first Oregon Energy Strategy. It has been informed by technical analysis, policy evaluation, and robust engagement, and serves to guide Oregon in advancing toward its energy policy objectives of clean, reliable, and affordable energy.
The Oregon Energy Strategy has been developed during a time of significant change, including changing federal policies and priorities, a limited state budget, increased incidences of extreme weather and wildfires, rapidly growing electric loads, and continuing innovations in clean energy technologies. The energy strategy endeavors to provide long-term guidance and near-term solutions to advance energy policy objectives in this context, and to encourage capturing synergies between energy policy objectives and related areas including resilience, public health, and economic growth.
HB 3630 directs ODOE to periodically update the energy strategy. ODOE recommends updating the energy strategy every four years to track progress, account for changes and developments that arise, and to provide opportunities to learn new information and evolve the strategy to meet Oregon’s need as they change over time.
You can view the Oregon Energy Strategy in its entirety, read a summary, or use this website to explore the strategy.
“Fifty years ago, Oregon leaders created the Oregon Department of Energy following the oil crisis of the early 1970s. The statute creating the agency noted that continued growth and demand for non-renewable energy poses a serious and immediate – and future – problem... It’s only fitting that now, after 50 years serving Oregon, we embrace our origins and proudly present a new state energy strategy that will serve as a north star for making decisions and taking action to achieve an affordable, equitable, and reliable clean energy future.”
Why an Energy Strategy?
Energy is the foundation of modern life. It powers cars, heats homes, and supports our economy. Building and maintaining energy infrastructure requires investment, and that infrastructure affects local communities, cultural resources, and the environment. The energy sector is responsible for most of Oregon’s greenhouse gas emissions, which negatively affect air quality and public health. These effects have disproportionately impacted some more than others — environmental justice communities in particular — and continue to do so today.
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Oregon’s energy use makeup by responsible sector is:
37 percent transportation
27 percent industry
21 percent households
15 percent commercial
The largest source of energy to power these sectors is:
Transportation fuels like gasoline and diesel (36 percent)
Electricity (32 percent)
Direct use fuels including natural gas, biomass, and other fuels (31 percent).
Much of Oregon’s energy comes from fossil fuels. Oregon also benefits from clean sources of energy, including clean electricity resources like hydropower, which generates about a third of Oregon’s electricity statewide, and contributes more than half of the region’s electricity capacity. It also supplies most of the electricity used by consumer-owned utility customers.
The cost of inaction on climate change is already being felt by Oregonians. While climate change is occurring through emissions globally, and Oregon’s contribution is relatively small, Oregon policymakers have recognized the economic and public health benefits of advancing clean energy technology in the state. Oregon policymakers have enacted laws, programs, and regulations to support a shift to cleaner, more sustainable sources of energy. Some of these policies have been in place for decades, while others have been enacted recently. Together, Oregon’s energy policies are transforming the energy system toward clean energy to power our homes, transportation systems, businesses, and industry. Yet until now, Oregon has not had a clear vision for how the various pieces come together. In 2022, the Oregon Department of Energy published its Biennial Energy Report and in it identified the need for a state energy strategy that can take an economywide look at available resources, technologies, and energy needs, and develop a shared vision for the state.
Oregon ramped up programs to support Oregon households and businesses in adopting new technologies, enabled by new policies and federal support. These included programs such as the Oregon Clean Vehicle Rebate Program, Community Renewable Energy Grant Program, and County Energy Resilience Grant Program. Federal incentives encouraged renewable energy development, electric vehicle adoption, and transmission expansion. At the same time, Oregon and the region have seen rapid development of tech loads, including data centers, which exacerbates concerns over electric system resource adequacy and reliability. Oregon faces a housing and homelessness crisis requiring accelerated construction of housing to meet the needs of Oregonians. Customers are feeling the pinch of inflation and higher energy rates. Wildfires and extreme weather are affecting public health, electricity system operations, and utilities’ ability to finance necessary investments.
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Since January 2025, rapid and aggressive federal policy shifts have reduced federal support for these efforts and threatened or cut future funding for Oregon’s policies and the programs supporting uptake of clean, modern technologies across the state. State budget constraints – in some cases linked to federal policy changes – have reduced state resources available to support the clean energy transition. Many programs that support achieving the state’s energy goals are on pause or have an uncertain funding future.
These changes make state leadership and action more important than ever. The energy transition requires an understanding of today’s needs and challenges and a vision of how to steer near-term decisions to achieve long-term outcomes. Oregon’s leaders strive for a high quality of life, strong economy, and responsible stewardship of natural and working lands, waters, and cultural resources. These outcomes rely on successfully navigating a transition from fossil fuels to clean sources of energy in our electricity, transportation, buildings, industry, and agriculture sectors while maintaining energy affordability and reliability. They rely on successfully advancing equity and inclusion of environmental justice communities to ensure that they are not disproportionately burdened by new energy development and can benefit from the clean energy transition.
Meeting our goals requires recognition that addressing Oregon’s energy needs will have a footprint, so they should include a commitment to seeking least-regrets solutions wherever possible while working to maximize benefits.
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Over the Oregon Department of Energy’s 50 years of public service, the agency has been evolving and changing alongside the energy system. Even from ODOE’s beginnings, Oregon has been in the midst of an energy transition – from the 1970s oil crises to the challenges we face today as we’ve developed the Oregon Energy Strategy. Energy costs have been rising for many consumers, increasing energy burdens and contributing to record disconnection rates. Even expanded consumer protections and programs have struggled to keep pace with growing need. Historic levels of growth in electricity demand threaten to outpace construction of resources to meet that demand. And changes in federal policy have led to cuts in critical areas, including support for energy resource development, energy efficiency, and low-income assistance programs – all of which threaten to further raise costs for Oregonians. This makes Oregon’s goals of reliable, affordable, clean energy more important than ever. It also emphasizes how vital the direction set by Oregon policies – and bolstered by the energy strategy – is for affordability and economic growth in our state.
JobsThe technical analysis and engagement also identified challenges that will need to be considered in implementing the energy strategy. For example, the jobs study found displacement in jobs at fueling stations and in vehicle maintenance. While job growth in other sectors significantly outpaced this displacement, the results signal a need to address potential job losses and create options for displaced workers.
Cost Barriers in Heat Pump Adoption
The energy wallet found that some households may see increased energy costs when switching to an electric heat pump, indicating that support may be needed to help overcome cost barriers to heat pump technology adoption. Just as policies are needed to drive uptake of clean energy technologies and deliver their benefits, policies will also be important to address costs and to ensure that those costs do not disproportionately affect environmental justice and energy burdened communities.
Equity
The costs of climate change and our current energy system are not borne equally. An intentional approach is needed to ensure that historic and current inequities are not perpetuated as we advance along the five pathways, and that low-income and marginalized groups have access to the benefits of the energy transition. In developing the energy strategy, the Oregon Department of Energy convened an environmental justice and equity working group to help understand the challenges facing different communities and to identify policy gaps and opportunities. This engagement informed the technical analysis and policy recommendations. It led to the development of the equity and justice framework, and to specific legislative and policy actions that aim to advance meaningful engagement and equitable and just outcomes.
Funding
The pathways, policies, and actions in the energy strategy come at a time when, in the very near term, there are competing priorities for limited funding. State and local governments play an important role in funding and supporting the policies and programs needed to meet our energy challenges intentionally and equitably. This has become significantly harder in the last nine months as the federal government has cut, rescinded, defunded, or dismantled programs that provided critical assistance for many Americans. This includes reductions in energy assistance programs that are lifelines for low-income and rural Oregonians, especially those living in areas of the state that experience colder winters and hotter summers.
At the same time, Oregon has tremendous opportunities. Access to reliable, affordable, and clean energy can promote economic growth across sectors. Through activities such as the buildout of new electricity resources, development of energy efficient technologies, and expanded use of low-carbon fuels, the transition to clean energy offers potential for bringing new business opportunities and jobs to Oregon. For example, Oregon is a leader in research and development, including two projects testing cutting-edge electricity generation technologies: the Mazama Energy Enhanced Geothermal Systems demonstration project and PacWave test facility off Oregon’s coast. Oregon also has deep experience with energy efficiency and distributed energy programs, such as those implemented by Energy Trust of Oregon, consumer-owned utilities, and state agencies; they provide a strong foundation to lower bills and increase the competitiveness of Oregon industries.
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There are many drivers of rising energy costs today. In recent years, higher wholesale power costs, wildfire risk reduction and insurance costs, maintenance and upgrades to aging infrastructure compounded by inflation, and responses to severe weather events have been primary contributors. Global events, like the COVID-19 pandemic, Russia’s war against Ukraine, periods of high inflation, and political unrest have caused large fluctuations in fuel prices that affect transportation, heating, and electricity costs. Oregon’s decarbonization policies and goals have not been the primary driver of recent price increases, though over time they will require significant investment.
The energy strategy looks at expected trends, and at the elements of a least-cost pathway to meeting Oregon’s energy policy objectives. There is a strong focus on the electricity sector, which in the energy strategy Reference Scenario doubles in size by 2050. The biggest driver behind this growth is tech loads, particularly over the next five years, followed by vehicle electrification and other economic growth. Over time, increasing use of electric vehicles, heat pumps, and other electric technologies will contribute to load growth as many end-uses electrify. These various demand drivers are coming at a time when the state’s largest investor-owned utilities and electricity service suppliers will need to eliminate coal and decarbonize other sources of fossil fuel emissions from the electricity they sell, while meeting demand with non-emitting resources to comply with House Bill 2021.
The scale of expected demand growth in the electricity sector is historic, but it is not the only sector where investments are expected to occur. Many of the measures identified in the energy strategy, including those related to energy efficiency and electrification, would require investment — investments that were going to happen anyway. Cars, furnaces, and boilers will eventually need to be replaced. The energy strategy modeling did not assume accelerated replacement of these items. Rather, it helped identify low-carbon replacement options that generated the least overall energy system costs across the economy, and complied with Oregon policies like the Climate Protection Program and Advanced Clean Cars II.
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Even as energy costs are rising, climate change is driving additional costs for Oregon households, businesses, industries, and government. Responding to, recovering from, and adapting to extreme heat waves, widespread drought conditions, severe wildfires, flooding, coastal erosion, and other extreme weather events driven by climate change are increasingly hitting Oregonians’ bottom lines. Climate driven events like the 2018 wildfire season, 2020 Labor Day fires, and the 2021 Pacific Northwest heatwave cost Oregonians hundreds of lives and billions of dollars. In the coming decades, it is estimated that the average Oregonian could lose about $12,000 in income each year from the effects of greenhouse gas emissions.
Climate change is also affecting the power sector. Changing precipitation patterns and drought are affecting the timing and availability of hydropower electricity, which provides some of the most affordable energy for Oregonians. These factors, along with rising temperatures, are also exacerbating stress on fish, further increasing costs to mitigate those effects. Wildfires are threatening homes and businesses. Wildfire risk is also a growing source of utility costs due to infrastructure and maintenance investments necessary to mitigate the risk of igniting wildfires, rising insurance costs, infrastructure rebuilding after damaging fires, and growing liability risk. The increasing frequency and duration of extreme summer and winter weather is further straining energy systems, creating extreme prices during peak events. Hotter summers are driving higher air conditioning demand in summer, and analysts project the confluence of severe winter weather and lower hydropower availability in drought years could create capacity shortfalls in the near future.
Unless global emissions decline considerably, these impacts will happen at a faster pace and intensify over time, committing Oregonians and the rest of the world to increasingly higher costs from climate inaction. Costs will continue to accrue the longer it takes to reduce emissions. While Oregon cannot reduce global emissions alone, it is in a position to lead as a state, and as part of a region driving solutions that reduce emissions and provide economic opportunities associated with the energy transition. Oregon’s energy production and use account for over 80 percent of the state’s greenhouse gas emissions, making it one of the focal points for mitigating climate change and meeting statewide greenhouse gas reduction goals.
Many of the measures identified in the energy strategy can deliver benefits on top of mitigating climate change. Energy efficiency can shrink the overall size of the “energy pie,” reducing investments that would otherwise be needed across the energy system, and alleviating impacts of development on land and water. A complementary analysis conducted for the energy strategy to explore air quality, affordability, and employment effects of meeting Oregon’s energy policy objectives provides additional insights. The analysis finds air quality and public health benefits across the state resulting from decarbonization measures, including electrification of cars and trucks and reduced fossil fuel combustion in power plants. The jobs study finds significant opportunities for employment growth across much of the energy sector. The Energy Wallet illustrates the potential cost savings to many households of purchasing an electric vehicle or electric heat pump. Finally, many of the measures that are part of a least-cost pathway, such as weatherization, distributed resources, and heat pumps for cooling can strengthen resilience to the effects of climate change.
The Strategy’s Pieces
Making the Strategy: Engagement
The Oregon Energy Strategy has been a major undertaking and wouldn’t have been possible without the expertise and guidance from our consulting partners, the Clean Energy Transition Institute and Kearns & West; government-to-government engagement with Oregon’s nine federally recognized Tribes; our partner state agencies; members of our Advisory Group; several policy and technical working groups; and the Oregonians who joined us for webinars and information sessions. Feedback received throughout the process, including during the draft strategy review period in August-September 2025, helped finalize the energy strategy.
Nine Federally Recognized Tribes: Feedback and Themes emphasizes the importance of coordination and engagement with Tribes in Oregon about energy. It summarizes key themes that ODOE heard, which informed development of pathways, policies, and actions in the energy strategy.
The Equity and Justice Framework for Decision-making and Program Implementation is meant to inform how legislators, agencies, and implementers can create just and equitable outcomes when developing energy policies, actions, and metrics. The framework serves to guide meaningful involvement with those who have been historically and are currently excluded from decision-making processes to ensure Oregon’s energy policies meet the needs of specific communities. The Framework is referenced throughout the report to demonstrate ways to apply it across the pathways, policies, and actions.
Pathways and Policies
The five pathways outlined in the Oregon Energy Strategy – energy efficiency, electrification, clean electricity, low-carbon fuels, and resilience – may not seem surprising. Oregon has long been a leader in these areas, from adopting advanced building energy codes to supporting transportation electrification to developing clean energy resources. Yet until now, Oregon has not had a clear vision for how these pathways can come together to achieve our bold energy and climate objectives.
The pathways set the tone as guiding principles, and a set of policy recommendations for each pathway outlines steps Oregon can take to make progress toward a clean energy transition. We know the cheapest and best energy resource is energy efficiency, so one recommendation is to improve efficiency and conservation in buildings and prioritize households with high energy burden. We also recommend expanding efforts to electrify the transportation sector – the largest contributor of greenhouse gas emissions – while removing barriers to ensure all Oregonians can participate. As the state’s energy demand grows, we want it to be as clean and renewable as possible, with enough infrastructure to move energy where it needs to be. We need infrastructure not just for electricity but also for low-carbon fuels, which will be necessary to ensure that the hardest-to-electrify sectors can be part of the clean energy transition. As Oregon’s energy system decarbonizes, it’s also important to fund resilience measures in communities to strengthen Oregon’s ability to adapt to climate change and mitigate other risks like a Cascadia Subduction Zone earthquake. In developing the Oregon Energy Strategy policies and potential actions, we asked the tough questions – including who benefits and how we ensure equity and justice are at the heart of decisions, what could hinder progress, how to balance land use and development, the cost of inaction, and opportunities to bolster the state’s economy and energy workforce.
Each pathway is accompanied by several policies to deploy the pathways. Policies are directional, and along with pathways are meant to guide actions and decisions over time.
Legislative and Policy Actions
The actions build on existing policy frameworks, identify barriers, and provide a foundation for continued progress over time. Each action advances one or more pathways and policies, and calls for application of one or more approaches from the Equity and Justice Framework.
Modeling and Technical Analysis
The modeling conducted by the consultants to the Oregon Energy Strategy examined potential pathways to reach Oregon’s energy and climate objectives while maintaining reliability across the energy system. ODOE worked with consultants to develop the model using an analysis of existing policies, energy and integrated resource plans, energy-related studies and data analysis, and state energy policy objectives.
The modeling divided energy demand into sectors. The following are some examples of the types of demand that falls within each sector. Transportation includes things like cars, trucks, ships, and planes. Residential refers to energy use in homes, including for lighting, heating, cooling, and cooking. Industry and agriculture covers areas like manufacturing and energy used to power tractors or greenhouses. The Commercial sector includes shops, laundromats, and distribution centers. Tech loads include data centers and chip manufacturing. They can be considered commercial or industrial, but here are broken out due to their large energy demand.