The nearly decade-old Regional Greenhouse Gas Initiative (RGGI) was always meant to be a model for a national program to reduce power plant carbon dioxide (CO₂) emissions. The Environmental Protection Agency (EPA) explicitly cited it in this fashion in its now-stayed Clean Power Plan. Although the RGGI is often called a “cap and trade” program, its effect is the same as a direct tax or fee on emissions because RGGI allowance costs are passed on from electric generators to distribution companies to consumers. More recently, an influential group of former cabinet officials, known as the “Climate Leadership Council,” has recommended a direct tax on CO₂; emissions (Shultz and Summers 2017).
Positive RGGI program reviews have been from RGGI, Inc. (the program administrator) and the Acadia Center, which advocates for reduced emissions (see Stutt, Shattuck, and Kumar 2015). In this article, I investigate whether reported reductions in CO₂ emissions from electric power plants, along with associated gains in health benefits and other claims, were actually achieved by the RGGI program. Based on my findings, any form of carbon tax is not the policy to accomplish emission reductions. The key results are:
The town of Portsmouth, Rhode Island (Portsmouth) commissioned a new AAER 1500-77-65 1.5 Megawatt wind turbine on March 24, 2009. On May 18, 2012, significant amounts of metal were found in the gearbox oil filter housing and significant internal damage was observed with a borescope. The filter element was replaced on May 25, and the turbine was returned to service. The turbine was removed from service on June 18, 2012 after significant additional metal was discovered in the filter housing.
The Portsmouth wind turbine gearbox has suffered a significant, premature failure of the first and second planetary stages. The gearbox must be replaced in order to return the turbine to service.
Due to the extent of the damage, replacement is most likely preferable to repair, depending upon repair vs. replacement cost.
The root cause of failure was not determined during this investigation. Several potential causes were ruled out as follows:
Possible root causes of failure that cannot be confirmed or ruled out are categorized as follows:
The gearbox configuration is not conventional by US industry standards. The make and model of gearbox have a poor track record, with at least 3 of 5 installed in the US having gearbox failures within the first 3-4 years of operation. Supply of replacement gearboxes is likely to be limited, and the turbine is destined to become an orphan due to bankruptcy of the manufacturer (AAER) and sluggish support from the designer (AMSC/Windtec). AAER purchased a license to build the 1650 kW AMSC/Wintec design but built a 1500 kW machine instead.
World: Current electricity production and consumption of “low-carbon” and “renewable” electricity – click an area for details
Europe: Quarter-hour load, generation, exchange – click on sample graph for other countries
Nordpool: Current production by source type in the Nordic power system (Norway, Sweden, Finland, Estonia, Latvia, Lithuania, Denmark)
Nordpool: Current power flow in the Nordic power system
West Denmark: Electricity prices, consumption, and production today, every 5 minutes
France: Quarter-hour consumption and production
France: Current, weekly, monthly, yearly demand and production
Germany: Quarter-hour net electricity generation
Germany: Quarter-hour wind production in EnBW control area (Baden-Württemberg)
Great Britain: Last 24 hours of generation by fuel type, every 5 minutes
Great Britain: Current, weekly, monthly, yearly demand and production
Ireland: Daily quarter-hour wind generation and system demand
Ireland: Quarter-hour system demand and fuel mix
Spain: 10-minute demand and generation share
Australia: Australian Energy Market Operator (AEMO, southern and eastern Australia): 5-minute and up to past year regional generation and fuel mix
Australia: AEMO grid (National Electricity Market): 5- and 30-minute aregional generation and fuel mix
Alberta: Monthly wind power forecast vs. actual comparison reports
Ontario: Latest hour of generation
Ontario: Daily hourly generation (scroll to bottom of table for wind plant)
Ontario: Hourly generation and other power data
Northwestern USA: Previous week, real-time 5-minute wind generation, Bonneville Power Administration
California: Daily hourly production, CAISO [click here to download complete report (PDF) from previous day.]
Midwest ISO fuel mix
New England fuel mix (ISO-NE)
Barnstable, Massachusetts: hourly, daily, weekly, monthly, yearly production and consumption of a 100-kW turbine since June 1, 2011 (100% daily generation would be 2,400 kWh)
Scituate, Massachusetts: hourly, daily, weekly, monthly, yearly production and consumption of a 1.5-MW turbine since March 30, 2012 (100% daily generation would be 36,000 kWh)
Mark Richey Woodworking, Newburyport, Massachusetts: hourly, daily, monthly production of a 600-kW turbine since June 2009 (100% daily generation would be 14,400 kWh)
University of Delaware, Newark: current power output (kW) of 2,000-kW turbine
Author: Short, William
What were the original goals of state RPS programs and RGGI [Regional Greenhouse Gas Initiative]?
• The generation of energy either from new renewable or “threaten” existing renewable generation.
• The reduction of Greenhouse Gas emissions.
• Note the Absence of Qualifications.
What are the principal causes of the need to integrate renewables?
State Renewable Portfolio Standards –
• One MWh of Renewable Energy equals one Renewable Energy Certificate (“REC”).
• With no locational, time-of-day or time-of-year adjustments.
• Total focus on energy with no consideration of the reliability value or locational aspects of renewable generation.
Regional Greenhouse Program –
• Equal focus on renewable projects regardless of location or time of operation.
What are the principal results of the failure to integrate properly renewables?
The results –
• Transmission lines to nowhere.
• Encouraging unreliable, uncommitted renewable generation.
• Need for back-up generation and storage.
What is incrementally satisfying New England RPS programs?
• Empty Renewables – those renewables which provide limited capacity values.
• Nowhere Renewables – those renewables which require significant transmission upgrade costs to be borne by ratepayers.
• Worthless Renewables – those renewables which provide no long-term value to New England consumers and retain the ability to participate in their out-of-region RPS programs on a moment’s notice.
What is not incrementally satisfying New England RPS programs?
• Local Renewables. Example, solar energy and off-shore wind.
• Reliable Renewables. Example, landfill gas and biomass.
• Committed Renewables. Example, resources committed to ISO-NE capacity market.
What are the other principal flaws of state renewable energy programs?
Other material flaws –
• A binary market.
• No price support (floor) mechanism.
• Alternative Compliance Payment not related to Value of the Renewable Generation.
What should be the public policy for the integration of renewables and correcting flaws in RPS policy?
A sound public policy that:
• Values more renewable sources built closer to load (the locational argument).
• Values these sources more if they generate during on-peak hours (the time-of-day argument).
• Values these sources more if they generate during on-season hours (the time-of-season argument).
• Requires that these sources be committed to deliver all of their energy and capacity to New England customers (the capacity argument).
• Sets a Floor Price for REC equal to the lower of Alternative Compliance Price or the Value Produced by the Renewable Generation (the price taker argument).
What should be solutions to the integration of renewables?
The solutions –
• Locational, Time-of-Day, Time-of- Season Adjusted and Committed Capacity Renewable Energy Certificates. What are the solutions for state renewable energy programs?
• An unlimited requirement for renewable energy based upon a payment equal to the lesser of the value of REC (for the hour or period of the year in question) or the Alternative Compliance Price.
• A Central Buyer of RECs who purchases any and all RECs under the preceding condition.
What is the value of renewable energy generation to the public?
• The NYISO/NYSERDA wind study found that wind generation (primarily off-peak generation) would lower all energy prices by $1.80/MWh. Assuming a 6% RPS requirement, this value implies a price suppression value accruing to the wind generator of $30.00/MWh.
• ISO-NE’s RSP-06 found that price taker generation (base load) would lower all energy prices by $4.41/MWh. Assuming a 5.9% RPS requirement, this value implies an approximate price suppression value accruing to the price taker generation of $75.00/MWh.
• An analysis of the RSP06 data indicates that the price suppression results are not the same for all hours. This analysis indicates that the price suppression values are worth approximately –
– $300-360/MWh for super on-peak hours (Monday-Friday, noon to six p.m. in the summer months and Monday-Friday, 4 p.m. to 8 p.m. in the winter months).
– $90-120/MWh for all other on-peak hours.
– $30-40/MWh for all off-peak hours.
• An analysis of the RSP06 data also indicates that the price suppression values in on-peak hours exceed an Alternative Compliance Price of approximately $60.00/REC. Thus, the more RECs purchased during these hours, the lower the price of energy to the ratepayer even when the cost of the RECs are included. For the other hours, when the price suppression is less than the ACP, it will be necessary to lower the payments to the renewable generator in order to create ratepayer savings.
• Since the public benefit exceeds the cost to the public, a Central Buyer scheme (similar to that of NYSERDA) should be implemented to ensure that the ratepayer receives the maximum amount of renewable energy that is cost effective.
Normalizing these values, produces the following REC values from this renewable generation:
• Three RECs for each MWh of super on-peak hour energy produced (Monday-Friday, noon to six p.m. in the summer months and 4 p.m. to 8 p.m. in the winter months).
• One and one-half RECs for each MWh of energy produced during all other on-peak hours.
• One-third REC for each MWh of energy produced during all off-peak hours.
How does this compare with what we have now in New England?
• Presently, a 1 MW generator operating at 100 % capacity factor makes 8,760 MWh and 8,760 RECs.
• As proposed, that same generator operating under identical conditions would make the same MWh and same RECs, but with REC production focused on the on-peak periods:
1,950 RECs during the super on-peak hours (650 hours);
5,265 RECs during the balance of the on-peak hours (3,510 hours);
1,545 RECs during the off-peak hours (4,600 hours).
What are the locational adjustment factors for renewable energy generation?
• Generation built closer to load has lower congestion and marginal loss.
• Generation built closer to load will require less transmission improvements.
• Generation built closer to the host state of the RPS will produce greater economic impact, jobs, property tax, electric infrastructure to the host state than generation built further way.
Using these factors, what would be reasonable locational adjustment factors for Renewable Generation qualified for the Massachusetts RPS?
• Massachusetts – no discount.
• Adjacent New England state to Massachusetts – 5% discount.
• Two states away from Massachusetts but still in New England – 10% discount.
• Eastern New York – 20% discount.
• Western New York and Canada – 30% discount.
Combining these two ideas, what are the values for a renewable generator’s RECs under central procurement for the Mass RPS?
• Massachusetts – $180/MWh on super on-peak REC, $90/MWh all other on-peak REC and $20/MWh for off-peak REC.
• Adjacent NE State – $171/MWh on super on-peak REC, $85.50/MWh all other on-peak REC and $19/MWh for off-peak REC.
• Maine – $162/MWh on super on-peak REC, $81.00/MWh all other on-peak REC and $18/MWh for off-peak REC.
• Eastern New York – $144/MWh on super on-peak REC, $72.00/MWh all other on-peak REC and $16/MWh for off-peak REC.
• Western New York and Canada – $126/MWh on super on-peak REC, $63/MWh all other on-peak REC and $14/MWh for off-peak REC.
What would be the outcomes if these policy changes were implemented?
• RECs would be adjusted for their time-of-day, time-of-year and locational values.
• Central Buyer concept would stabilize the REC market and provide a better structure to permit long-term financing.
• RECs would always produce value to the ratepayer greater than the cost to the ratepayer.
• Lowest energy prices for ratepayers (with the savings largely paid for by fossil and nuclear generators) What would be the outcomes if these policy changes were implemented?
• Transmission lines to nowhere would not be built.
• Storage projects for off-season, off-peak energy would not be needed.
• Back-up generation for unreliable or uncommitted renewable capacity would not be constructed.
• With less transmission requirements, less stress on the environment.
William P. Short, III, Consultant, November 18, 2008
Download original document: “Flaws in and Solutions to Integrating Renewable Energy Resources in New England”