Outsourced Ideology: Sending the dirty work of clean energy north
Credit: Laura Finaldi | Worcester Business Journal | April 25, 2016 | www.wbjournal.com ~~
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With limited ability to generate large-scale renewable electricity within their own geographies, the three southern New England states are close to assigning large sums of money to more remote regional locations to do what Central Massachusetts has largely been resistant to: install new major energy infrastructure.
Starting on Tuesday and lasting until late July, Massachusetts, Connecticut and Rhode Island will begin awarding contracts to clean power providers inside and outside their jurisdictions who offered to help the states reach their goals for emissions-free electricity. By partnering together starting one year ago, the three states planned to use their collective buying power to elicit more responses and drive down the cost of renewable energy, which is important for a region that already has the highest electricity prices in the continental U.S.
“By procuring with other states, it allows us to attract and benefit from economies of scale and benefit from renewables with a cost-effective price. Not only are we meeting our clean energy goals, but we are reducing the cost of electricity,” said Judith Judson, commissioner of the Massachusetts Department of Energy Resources.
This tri-state request for proposals is the latest effort to find a common ground between New England’s dreams of a cleaner environment with the economic realities of achieving those goals. Around the turn of the century, all the region’s states adopted renewable portfolio standards (RPS) that called for a certain percentage of power grid electricity to come from renewable sources by a certain future date. Even though the RPS vary by state, by partnering together, New England states are trying to solve these problems regionally, just as power is generated, pooled and procured regionally.
“In a lot of ways, what we’re seeing is a convergence of the renewable portfolio standards’ goals regionally with where the wind resources are in New England,” said Patrick Woodcock, director of the Maine Governor’s Energy Office. “Maine certainly has a resource that southern New England wants.”
The RfP is modeled, in part, after a $1-billion renewable energy purchase made by Connecticut in 2013 that enabled the state to fund New England’s largest solar farm at the time – a 20-megawatt facility in Lisbon – by packaging it with a 250-megawatt wind farm in Maine. Because large-scale wind farms can generate electricity at a relatively low cost – in this case roughly 6 cents per kilowatt hour – that made the funding of a large in-state renewable energy system more affordable, even if the Lisbon solar array cost roughly 13 cents per kilowatt hour. Both projects are under construction.
Massachusetts, Connecticut and Rhode Island – who consume the majority of electricity in New England – began working together on the tri-state RfP in February 2015. They have since received 24 bids ranging from 20-megawatt to 600-megawatt projects in Massachusetts, Maine, Connecticut, New Hampshire, Rhode Island, Vermont, New York, Maryland and eastern Canada. They include wind farms, solar arrays, transmission lines and a fuel cell park, according to its website.
The RfP has the potential to procure up to 280 megawatts towards the Massachusetts RPS, Judson said.
While the 24 bids include proposals from inside Massachusetts, if the state is going to get the maximum amount of clean energy for the cheapest price, it will likely have to partner with developer of larger installations outside of the commonwealth.
To create the economies of scale for lower cost renewable electricity generation, only large-scale wind power can get to the 6 or 7 cents per kilowatt hour price, according to the U.S. Energy Information Administration.
Yet, the wind resources in Central Massachusetts are rated as either marginal or poor for potential wind turbine generation, according to the U.S. Department of Energy. The region is home to large swaths of land that can be used for solar farms, but even the largest one in the state – a 13-megawatt facility in Warren – generates only about 5 percent of the electricity than the largest proposed wind farm in Maine will. Central Massachusetts’ ability to install hydropower is limited as well, although the state’s RPS requirements don’t allow for large-scale hydro to count as renewable energy anyway.
This reliance on wind power is an extension of what Massachusetts already is doing to meets its RPS goals. According to 2014 DOER data on renewable portfolio standards, 56 percent of Massachusetts’ 2015 RPS goal was met through wind power. The remaining renewables contributing to the RPS were landfill gas (18 percent), solar photovoltaic (15 percent), biomass (8 percent), hydro (3 percent) and anaerobic digester and hydrokinetic, which accounted for less than 1 percent each.
Not in my backyard
Even if Central Massachusetts had the resources to generate large amounts of renewable electricity, the entire state has been resistant to the installation of large energy infrastructure. Most notably, the Cape Wind project proposed for Cape Cod – whose resources are rated as outstanding by the U.S. Department of Energy – faced strong opposition from local communities and politicians until it was scrapped altogether.
More locally in Central Massachusetts, the plans by Houston energy giant Kinder Morgan to put its Northeast Energy Direct natural gas pipeline through northern Worcester County received pushback from the community. Although natural gas is a fossil fuel and the pipeline wouldn’t have helped toward the Massachusetts RPS, it would have lowered heating and electricity cost by enabling more homeowners and power plants to burn a fuel cheaper and cleaner than oil and coal.
Kinder Morgan scrapped its northern Worcester County plans and instead rerouted the pipeline so it would exit the state in northern Franklin County and dip into southern New Hampshire before reappearing in Massachusetts just before Dracut. But in April, the energy provider announced it was suspending its plans to build a pipeline indefinitely.
Despite community concerns over energy infrastructure, Roy Nascimento, president and CEO of the North Central Massachusetts Chamber of Commerce, backed the natural gas pipeline, saying such efforts are needed to keep energy cleaner and cheaper in the state.
“[High energy costs] put us at a competitive disadvantage,” said Nascimento. “I’ve had manufacturers tell me they can get electricity for half the price in North Carolina. For some of these manufacturers, prices going up one penny could mean a million dollars a year in additional costs.”
Not in my backyard either
Even though the tri-state RfP contracts can be worth millions to the developers – one of the Maine proposals said an award could be worth up to $250 million in annual gross domestic product to New England – not everyone in those more remote locations wants wind farms, which take a substantial clearing of trees and building of roads to install turbines at high enough elevations to capture the strongest winds.
Groups such as Friends of Maine’s Mountains, Saving Maine and the Moosehead Region Futures Committee have opposed wind power projects in the northern part of the state. At the heart of those opposing perspectives is a fundamental question about the tradeoffs involved in putting industrial-scale wind farms in some of Maine’s most scenic locations.
“Maine has a good wind resource. The question of whether Maine can and should exploit that wind resource depends a little bit on the question of what Maine should be selling to the rest of the world? If you are selling pristine landscapes, you need to think about where you want to put those wind turbines,” said Tom Welch, former chairman of the Maine Public Utilities Commission.
These types of grassroots oppositions – which have also slowed the 1,200-megawatt Northern Pass transmission line in New Hampshire to connect New England to Canadian hydropower – might not necessarily stop the tri-state RfP from awarding the contracts to renewable energy proposals in those areas, but they can make the regulatory process cumbersome for those projects to receive the final and official go-ahead.
Massachusetts, Connecticut and Rhode Island will begin award contracts starting Tuesday through July 26, according to the RfP. The three states then expected regulatory approvals to come by November.
“Our strategy is to develop a balanced and diverse portfolio of resources,” said Judson, of the Massachusetts DOER.
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