NECA panelists talk carbon pricing, Northern Pass
By Michael Kuser | RTO Insider | February 5, 2018 | www.rtoinsider.com
By Michael Kuser | RTO Insider | February 5, 2018 | www.rtoinsider.com
AUBURNDALE, Mass. – Speakers at the Northeast Energy and Commerce Association Renewable Energy Conference on Feb. 1 discussed the merits and viability of different methods to achieve New England’s aggressive emission reduction goals.
These topics included carbon pricing, the Northern Pass transmission project and offshore wind energy. Utility and energy service representatives were joined by state and federal officials.
Carbon Tax, Anyone?
Michelle Gardner, Northeast director of regulatory affairs for NextEra Energy Resources, promoted her company’s alternative market model, the Forward Clean Energy Market, developed with the Conservation Law Foundation and Brookfield Renewable Partners. The model is designed to attract new clean energy resources and also retain existing clean energy resources to reduce greenhouse gas emissions in New England.
Gardner said the first question of any state policy is: Does it work?
“To date, the answer has been yes,” Gardner said. “But over time, now in the [ISO-NE] system we’re seeing wind displace wind. We’re not necessarily seeing the same synergies moving forward that mean, if you build a wind farm you move the ball towards a clean energy future.”
NextEra’s alternative market proposal could work with a carbon tax, or carbon pricing, “though to date we have not received a warm reception from the other New England states about moving a carbon tax,” Gardner said.
In fact, many Massachusetts legislators favor a carbon tax, said state Rep. Jennifer Benson (D), who spoke during the conference lunch.
Benson’s bill, H.1726, calls for a $20 tax on every ton of carbon produced by corporations, with 80% of the revenue rebated to taxpayers and the other 20% going to fund a green bank for the state. It and a competing Senate bill are scheduled for a vote Feb. 7.
The bill weights a larger proportion of the rebates to low-income residents, who often miss out on the benefits of existing energy-efficiency programs. “Because if we can’t touch them, our 2050 goals will never be met,” Benson said. “And we really are not on track to meet those today. We have to do something.
“So is it a tax?” Benson said. “Is carbon pricing a tax? This is the debate. I don’t care. Because we have to start putting real money behind these issues. We’re not going to solve the problem of coastal communities that we just saw a few weeks ago drowning in seawater.”
Pass on Northern Pass
Several speakers expressed disappointment at Massachusetts’ decision to award Eversource Energy and Hydro-Québec a contract to deliver 1,090 MW of hydropower each year via the Northern Pass transmission project. (See Northern Pass Cleans up in Mass. RFP.)
They spoke before word buzzed through the crowd near the end of the conference Thursday that New Hampshire siting officials had voted unanimously to reject the project. (See related story, New Hampshire Rejects Permit for Northern Pass.)
Benson said “a legislator cannot go in and try to regulate … but it’s wild that they could find an option that met none of the criteria.”
Colin Schofield of Altenex, an Edison Energy subsidiary that advises non-utility energy buyers, said corporate buyers were largely “agnostic” about the Massachusetts solicitation.
Northern Pass “is probably somewhat of a lost opportunity to pair a utility procurement with some corporate deals that could enable transmission to move resources, but on the other hand, there may be projects out there that would have been contracting with the utility that maybe sharpen their pencil and get creative about other ways to fund and bring a project to market,” he said
“We’re also disappointed in the decision and have the same process concerns that were mentioned,” said Jamie Howland, director of climate and energy analysis at the Acadia Center. “We certainly would have preferred a project that picked up other renewables along the way if you’re building a new transmission line. It also picked the highest-impact transmission line of all the ones that were on the table.”
“I think there was disappointment from a lot of people, but I don’t think there was a lot of surprise,” said Peter Zaborowsky, managing director of Evolution Markets, an institutional brokerage service for energy and environmental markets. “If the issue is meeting the Clean Energy Standard at the lowest cost, [Northern Pass] probably is a low-cost solution … Economics were the big driver likely.”
Massachusetts Assistant Secretary for Energy Patrick Woodcock did not address the Northern Pass issue but spoke on a panel about the grid of the future.
“While the state has been very successful with deployment of clean energy performance-based rate design, more sophisticated price signals and additional grid modernization are areas of focus for Massachusetts to provide a stronger foundation for long-term growth,” Woodcock said. He added that since taking office last April, he’s seen the state focus especially on energy storage and promoting electric vehicles. (See Mass. Prepares for EV Growth, Alternative Energy Standard.)
Offshore Wind has ‘Turned the Corner’
New England has “the trifecta with regard to wind resources and wind energy,” said Jim Bennett, chief of the Office of Renewable Energy Programs at the Bureau of Ocean Energy Management. “First off, we have world-class winds on both the East Coast and on the West Coast, but particularly up here in the Northeast.”
The second piece of successfully developing wind energy projects is “a buildable environment, and we have a shallow slope on the outer continental shelf, particularly up here in the East and the Northeast, which is not the case where there are other good resources, like out on the West Coast,” Bennett said.
Finally, the recipe for success must include market demand, and the Northeast has world-class markets, he said.
As a result, BOEM has conducted a number of sales over the last several years and now has 13 leases for offshore wind farms. Seven competitive lease sales generated $68 million, and nearly 1.4 million acres are under lease.
“We have at least one commercial lease off every state from Massachusetts to North Carolina, from Cape Cod to Cape Hatteras,” Bennett said. “We think the wind industry has turned the corner. It’s economically viable, and we should be looking, as the industry tells us, to have a steady stream of leases for years to come.
URL to article: https://www.wind-watch.org/news/2018/02/07/neca-panelists-talk-carbon-pricing-northern-pass/