Op-ed: Merrimack Valley tragedy offers climate change opportunity
The significant investments required in the energy infrastructure of the impacted communities present an opportunity to re-think what energy options are available to best meet the needs of these communities, not only for this winter but for many years to come. Doing so can lead to practical, cost-effective actions that will provide a host of benefits for the residents and businesses in these communities: reduced energy costs for ratepayers; safer, more resilient homes and businesses; improved indoor air quality; and, meaningfully, less climate pollution.
Read the full article from CommonWealth Magazine here.
New York Must Expand Solar: How Does Its New Net Metering Process Fit in?
Since 1997, New York has allowed customers with certain types of distributed generation systems, including rooftop solar (sometimes referred to as “mass market” solar) and community solar, to participate in net metering. This simple billing method allows a customer’s consumption and generation to be “netted” at the end of every month. If a customer has consumed more energy from the grid than she has generated from her solar panels, she will pay for the net consumption. However, if a customer has generated more power than she has consumed, then that net generation will be rolled over into the next month’s bill and credited toward future consumption at the retail rate—i.e. the same amount that the customer is charged for using a kWh of electricity.
This form of compensation (sometimes referred to as “retail rate net metering”) has supported solar expansion with a simple, predictable formula. However, because this form of net metering relies only on retail rates, which tend not to vary by time or location, solar systems are not always installed in areas where they are most needed or combined with other technology like energy storage to provide additional value to the grid. Some areas of the grid need more congestion relief, some hours of the day have higher electricity demand, and some distributed energy sources are cleaner than others.
New York has decided to move away from retail rate net metering and toward a smarter and fairer pricing scheme that reflects clean energy resources’ value to the grid. The state is now grappling with creating such a system while at the same time ensuring that this transition is gradual and understandable to consumers.
In 2015, the Public Service Commission (PSC) initiated the Reforming the Energy Vision (REV) process, which seeks to create a new utility business model that incorporates more distributed energy while ensuring that energy remains affordable, resilient, and reliable. Recognizing the need to develop a more accurate way of valuing these clean energy resources, in March 2017 the PSC issued an order transitioning from retail rate net metering to a net metering program referred to as Value of Distributed Energy Resources (VDER) that attempts to more accurately reflect the costs and benefits of these clean resources on the grid.
The first phase of the VDER process applies to larger solar installations including remote net metering (where the electricity produced from a solar installation at one location is credited toward electricity consumption at a different location) and community solar but not to residential rooftop solar. Phase One compensates these projects using a “Value Stack,” which identifies certain components that together represent the value of that clean energy to the grid. The values in the Phase One Value Stack include certain costs that the utility no longer has to incur, which are referred to as “avoided costs” and which are assigned a monetary value. These include:
- The cost of the energy that the utility would otherwise have to generate or purchase (referred to as “wholesale” energy);
- The amount of energy-producing resources that the utility would have to procure to meet demand (referred to as “capacity”); and
- The cost of delivering that energy to customers, as well as the higher costs of delivering the energy in certain congested areas of the grid.
In addition to these avoided costs, the Value Stack also includes a credit for the environmental attributes of certain types of clean energy, primarily the fact that they do not emit greenhouse gases.
A second phase of this transition (referred to as Phase Two Value Stack) is in process to further refine these values. After January 1, 2020, VDER will also apply to new residential rooftop projects under a new compensation method to replace traditional retail rate net metering.
New York’s Solar Gap
Because retail rate is a more straightforward, if blunt, method of net metering, developers may initially struggle to make an easy economic case for solar while transitioning to a value-based compensation structure. However, if done well, this new structure will allow solar to expand more efficiently in New York, with better outcomes for consumers and the climate. Continued expansion of solar is important, because in contrast to other Northeast states such as Massachusetts and Vermont, New York has relatively modest amounts of installed distributed solar given its population (Figure 1). It must accelerate to meet state and regional climate goals.
New York has set a goal of procuring 50% of its energy needs from renewable energy resources by 2030. As shown in Acadia Center’s EnergyVision 2030, with further strategic action New York can reduce greenhouse gas emissions 45% by 2030, a target that will put the state on a path to meet minimum EnergyVision 2030 recommends that, in addition to sharply increasing grid scale wind and solar generation, New York needs to add 13.7 GW of distributed solar, more than 10 times the amount that has been installed to date.
Figure 1 – Per Capita Installed PV
New York’s need for more distributed solar can be addressed from multiple angles: first, by making the transition to value-based compensation as gradual and understandable as possible; and second, by supporting solar expansion through complementary programs. Acadia Center has been an active participant in the VDER proceeding since its inception. Recently, staff from the Department of Public Service approved several changes to the Phase One Value Stack to expand the types of eligible renewable energy resources and make it easier for customers to participate and receive compensation. These changes include:
- Removing certain size limits from eligible clean energy resources
- Expanding the VDER compensation structure to storage and new forms of renewable energy such as tidal energy
- Removing location-based restrictions within utility territories
Acadia Center supported these changes and submitted comments with these and other recommendations for improving various elements of the value stack to make it easier for customers to receive compensation and to ensure these resources are appropriately compensated for the value they add to the system.
Acadia Center also supports solar expansion in New York through statewide initiative and grassroots campaigns. One such state initiative is NY Sun, a program administered by NYSERDA that seeks to add 3 GW of installed solar capacity in the state by 2023. The program works by establishing cash incentives for developers that decline over time as solar installation increases in certain regions of the state. Recently, NYSERDA made improvements to the program by expanding the incentives, supporting larger projects, and encouraging solar installations in a greater variety of locations. In addition, Acadia Center is a founding member of Million Solar Strong, which seeks to double this statewide goal to 6 GW of solar capacity by installing solar on 1 million homes by 2023, including 100,000 low-income households. The campaign has been meeting with public officials and building support around the state.
New York must make the leap to close its solar gap, and both regulatory solutions and grassroots support will be necessary. Together, these efforts have the capacity to make lasting change for this key technology.
Regional Interest in Battery Storage Heats Up
With the sweltering days of summer behind us and New Englanders reluctantly turning their minds to winter storm season, it is worth asking how we can keep our electric grid running affordably and efficiently during both heat waves and cold snaps. Behind-the-meter energy storage is one solution that is showing increasing promise.
In-Home Energy Storage
Behind-the meter energy storage refers to when customers store electric power purchased from the grid or power generated themselves (such as from rooftop solar panels) in batteries installed in their homes. The market for behind-the-meter storage is growing rapidly due to decreasing costs and growing awareness. In addition to providing backup power to homeowners during outages, like a traditional generator, this storage can provide backup power for the grid itself.
Battery storage can also be combined with innovative electric rates. For example, time-varying rates could encourage customers to purchase power from the grid during periods of low demand and use energy stored in their battery during periods of high demand. This would lower storage users’ bills directly while reducing the use of expensive and polluting backup plants typically needed during times when temperatures surge or plunge. In turn, avoiding these expensive resources will cut energy prices for all customers.
Policies and Pilots
Many states are currently experimenting with adding battery storage to the grid to help reduce prices and integrate renewable energy sources that produce power intermittently. This wide range of pilots is providing valuable lessons for putting storage to good use. For example, Vermont’s Green Mountain Power (GMP) claimed it saved customers $500K during a heat wave this summer through its pilot of in-home batteries. During the hours of highest demand, the program allows GMP to withdraw energy stored in customers’ batteries instead of paying very high prices on the wholesale market. This year, GMP also expanded its pilot program to allow customers to purchase third-party storage devices. In New Hampshire, Liberty Utilities is proposing a similar pilot that would combine storage with time-varying rates to provide customers with incentives to use electricity during times of lower demand.
To support a future electric grid where consumers are empowered to produce, store, and use their own electricity, state policies should enable residents to own and operate batteries to the largest extent possible. Utility ownership of residential batteries can stifle the development of competitive markets and reduce customers’ flexibility in deciding how and when to deploy their power. Acadia Center will continue to advocate for programs that prioritize a customer-centered model, helping states pursue and expand programs like those detailed above.
As market takes shape, Connecticut makes its first moves on offshore wind
The expansion of the offshore wind industry in the region has meant more competition, and more competition means lower costs. Emily Lewis, a policy analyst at the Acadia Center, said there’s a common misconception that offshore wind is more expensive than other forms of energy, when it’s actually quite cost competitive.
“The contracts that utilities entering with offshore wind companies are longer term,” she says. “Through that, they’re getting lower prices.”
The data is minimal right now, but her suspicion seems to be right. The price for the Block Island Wind Project was $0.244 per kWh, while the price for in-progress projects in Maryland is $0.132 per kWh.
Read the full article from Energy News here.
Op-ed: Rising transportation emissions are a threat to Maine’s environment
When National Highway Traffic Safety Administration Secretary Elaine Chao and acting Environmental Protection Administration Secretary Andrew Wheeler announced their agencies’ rollback of federal clean car standards in August, they pledged to “ Make Cars Great Again.” In doing so, they have threatened our air, water and public health — and will increase costs for consumers.
Federal clean car standards directly reduce the amount of fuel burned for transportation by requiring auto manufacturers to increase fuel efficiency, saving consumers money and limiting transportation emissions. Consumer Reports says the proposed rollback could cost consumers as much as $100 billion, and the increased pollution is definitely not great for our air or oceans.
Read the full article from Bangor Daily News here.
Merger of two wind power companies is good news for Connecticut, supporters say
Connecticut officials already have issued another request for proposals in an effort to meet the state’s clean energy goals for the future. Three offshore wind bids were among the dozens submitted and supporters of wind power in Connecticut are optimistic that request for proposals will yield further wind power projects to add to the state’s energy mix.
“These bids give Connecticut another opportunity to affordably meet its clean energy and greenhouse gas reduction requirements by bringing more offshore wind online,” said Emily Lewis, senior policy analyst at Acadia Center. “With this procurement, Connecticut should aim to keep pace with its neighbors and grow its offshore wind resource to maximize ratepayer savings, economic growth, and carbon-free electricity generation.”
Read the full article from the New Haven Register here.
National Rankings Highlight Leadership of Northeastern States’ Energy Efficiency Programs
Policy and Funding Challenges Remain
BOSTON – Northeast states continued their nation-leading performance in the 2018 State Energy Efficiency Scorecard, released today by the nonpartisan American Council for an Energy-Efficient Economy (ACEEE). Massachusetts ranked #1 for the eighth straight year, Rhode Island remained at #3, and Vermont, Connecticut and New York ranked #4, # 5 and #6, respectively.
Maine and New Hampshire ranked #14 and #21, respectively.
“Energy efficiency is a cornerstone of the clean energy economy in the Northeast and beyond. Leading states in the region are successfully demonstrating that non-polluting energy efficiency lowers consumer utility bills, reduces the cost of doing business, and provides healthier, more comfortable spaces to live and work,” said Daniel Sosland, Acadia Center president. “All states must continue to prioritize energy efficiency so that these benefits reach additional residents while sharply reducing emissions to meet climate targets.”
In addition to a strong overall performance on the Scorecard, New England states performed particularly well in the category of utility and public benefits programs, which are operated on behalf of utility customers. Together, these programs represent the single largest state policy-driven impact on greenhouse gas emissions in the region. Due in large part to energy efficiency gains, electric consumption in New England has declined over the past few years even as the population and economy have grown. Energy efficiency investments have brought billions of dollars in energy and utility bill savings to consumers and businesses and helped halt the growth of peak electric use. Increasing investments in efficiency has made nearly $500 million of expensive transmission line upgrades no longer necessary in New England.
Leading the charge with low-cost efficiency
Massachusetts and Rhode Island tied for first in the utility program category, followed by Vermont and Connecticut at third and fourth, respectively.
With strong customer-funded efficiency programs, Massachusetts and Rhode Island have achieved the country’s highest electric savings rates – at least 3% of retail sales last year – and demonstrated the significant potential that exists for cost-effective efficiency investments. Acadia Center’s EnergyVision 2030 report shows that, on average, if all Northeast states achieved at least 2.5% annual efficiency savings, efficiency would reduce emissions from electricity generation in line with regional climate targets and offset the additional electricity from increased electric vehicle and heat pump adoption.
“Massachusetts has shown over the last eight years of first place rankings that making effective use of efficiency can grow the economy while saving ratepayers money and cutting carbon emissions. Even so, Massachusetts can do more to maximize this low-cost, clean resource,” said Amy Boyd, senior attorney at Acadia Center and a member of the Massachusetts Energy Efficiency Advisory Council. “Many residents – particularly renters – and businesses need more help lowering their energy costs, and the efficiency programs can play a crucial role in transitioning ratepayers off fossil fuels.”
Rhode Island held the #3 spot overall despite state government action in 2017 that diverted $12.5 million in ratepayer efficiency funds and forced an additional $10.7 million in program cuts this year. Rhode Island’s continued strong showing stems from a state law that prioritizes investments in energy efficiency over traditional energy supply when efficiency is cost-effective and less expensive.
Policy opportunities for lagging states
The gap between the elite efficiency performers and the second tier is significant, as in prior years. While Massachusetts, Rhode Island and Vermont are fully embracing cost-effective efficiency, neighboring Northeast states could do more to show a sustained commitment to efficiency that would reduce energy consumption and minimize consumer costs.
Connecticut took a major step backwards on efficiency in 2017, for instance. Under extreme fiscal pressure, the state diverted $127 million in ratepayer funding for efficiency to the budget’s general fund.
“Connecticut has high-quality, award-winning energy efficiency programs that deserve real praise for helping the state earn the #5 ranking,” said Amy McLean Salls, Connecticut Director and Senior Policy Advocate with Acadia Center. “However, Connecticut can, and should, do more to improve its actual energy efficiency savings levels. Connecticut has slipped down regionally on this all-important metric and will need to ramp up its energy efficiency savings goals in coming years to protect its strong in-state efficiency industry and to meet its aggressive climate targets for 2020 and 2030. As a necessary first step to increasing Connecticut’s efficiency ambitions, the Governor and General Assembly should undo the devastating fund raid imposed by legislators last year.”
Although New York moved up a spot in the Scorecard to #6 overall, it too continues to lag best-practice states, with current annual utility savings levels roughly one-sixth of Massachusetts and Rhode Island. In April, New York announced a plan to reduce energy consumption by 185 trillion BTUs from forecasted levels by 2025, but important details such as utility savings targets and funding sources have yet to be worked out. Acadia Center has offered four recommendations that, if implemented, would strengthen the likelihood of achieving the 2025 energy efficiency target.
“New York should be commended for seeking to jump-start its efficiency efforts,” said Cullen Howe, Acadia Center’s New York Director. “But now it needs to follow through by setting aggressive but achievable targets and ensuring that efficiency’s many consumer and environmental benefits are realized.”
Maine’s dip from #13 to #14 reflects the impact of inconsistent funding and regulatory uncertainty, despite the achievement of reasonable energy savings levels. Maine continues to lead the nation in deployment of clean, efficient electric heat pumps, thanks in part to leadership from Efficiency Maine, the independent administrator of the state’s efficiency programs. The three-year energy efficiency plan currently under review is an opportunity to secure steady, long-term commitments that expand energy efficiency access and savings for Maine homes and businesses and improve economic security.
Despite implementing the first year of the Energy Efficiency Resource Standard (EERS) in 2018, New Hampshire maintained the same relatively low rank as last year, primarily because spending on energy efficiency has not fully ramped up. The EERS puts New Hampshire on a path to reducing energy waste, and the state should progress in future rankings as it pursues more efficiency.
The 2018 Scorecard did recognize New Hampshire’s efforts to target significant energy efficiency funding to low-income communities.
The Scorecard is available at: https://aceee.org/state-policy/scorecard
Erika Niedowski, RI Director and Coordinator, Energy Efficiency Initiative
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Krysia Wazny, Communications Director
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Electric vehicle advocates urge Connecticut regulators not to forget sector in grid planning
A group of clean-energy proponents are calling on state utility regulators to make sure plans for modernizing the state’s power grid include the necessary components to accommodate the expected increase in use of electric vehicles.
“EVs are a key piece of Connecticut’s clean energy future, and the state’s utilities can play a role in advancing these vehicles,” said Emily Lewis, senior policy analyst for Acadia Center, a regional environmental group with an office in Connecticut. “Through this grid modernization proceeding, PURA can set the stage for utility engagement that supports EV deployment, protects consumers, and shares the benefits of EVs more equitably.”
Read the full article from the New Haven Register here.