PowerHouse and Building Electrification: Fact vs. Fiction

Nearly a third of greenhouse gas emissions in the Northeast come from buildings, and most of these emissions result from burning fossil fuels on-site for space heating, water heating, and cooking. Electrifying these end uses with clean, efficient electric equipment—like air- and ground-source heat pumps—is a necessary part of any realistic state climate policy.

Yet the fossil fuel industry and its allies have invested heavily in sowing doubt about electrification. Acadia Center’s PowerHouse home energy simulator counters this misinformation with a detailed analysis of the real costs and benefits of eliminating fossil fuel use in homes.

Information Gaps

PowerHouse is designed to fill a gap in analysis and information available to the public, enabling Acadia Center and its partners to provide credible data to rebut arguments made by the opponents of electrification. The simulator evaluates residential energy needs using ACCA Manual J algorithms and ten years of hourly weather data for eight locations around the Northeast. This allows for an analysis of operating costs, peak demand impacts, demand management potential, and net emissions that is both detailed and state-specific, rather than relying on regional or national averages.

A key capability of the PowerHouse tool is to quantify the compounding benefits of delivering whole-home electrification and weatherization as a package for a variety of residential building types. Weatherization measures like insulation and air sealing can dramatically reduce both the up-front and operating costs of electrification for most homes. PowerHouse puts a dollar value on these savings.

PowerHouse counters common misconceptions about electrification, including:

  • MYTH: Heat pumps cost too much! The simulator demonstrates that whole-home electrification and weatherization leads to an overall cost reduction, which can be even more substantial in the drafty, old homes where marginalized communities often live.
  • MYTH: Electrification won’t actually reduce emissions! As the model clearly demonstrates, whole-home electrification can immediately reduce emissions by more than half—an impact that grows each year as the grid adds more renewable resources.
  • MYTH: Electrification will blow up the grid! Peak demand impacts are an important factor, but concern about the grid is overblown due to unreasonably pessimistic expectations about heat pump performance.
  • MYTH: Heat pumps don’t work in the cold! Currently available cold-climate heat pump models can meet a home’s full heating needs in temperatures well below zero. Thousands are installed in the Northeast every year.

Equity and Justice

Low- and moderate-income households, communities of color, and English-isolated households in the Northeast are more likely to live in older, less efficient housing units. They are also more likely to be renters with very little control over their energy use decisions. Extending the benefits of energy efficiency and electrification to these households will require a concerted and meaningful commitment of resources—something that can be understood perfectly well without a home energy model.

However, PowerHouse can help to make the case for investing in marginalized communities by demonstrating the energy burden that these households suffer. A drafty, old house or apartment can cost six times as much to heat in the winter than a new unit of the same size built to the current building code. Providing clear, accurate numbers about energy burden for state decision-makers and other stakeholders can help bring the issue home for people who might never have dealt with energy bills like this themselves.

Grid impacts

Electric grid impacts are a common area of concern when it comes to heat pumps. Understanding the relationship between equipment performance, weather, and the peaks and troughs of electric demand is critically important to the overall project of building electrification.

PowerHouse closely parses this relationship, accounting for building shell characteristics, heat pump capacity, and input power for each hour of the year—granularity that is not possible with existing home energy modeling software. In this way, it can help to develop strategies for achieving building electrification at scale, for both new construction and retrofits.

Acadia Center’s PowerHouse home energy simulator meets fossil fuel industry misinformation with clear, fact-based analysis that proves the benefits of building electrification. By arming Acadia Center and its partners with this fine-grained analytical capability, the models will give advocates an advantage over the army of consultants working with oil and gas companies to irresponsibly prolong the use of fossil fuels.

The $6 Billion Question: Reality-Checking Baker’s Claimed Cost of Extra Climate Protection

In the flurry of activity at the end of 2020, two landmark (though long-expected) climate visions were put forward by different branches of the Massachusetts government. One, offered by the Executive Office of Energy and Environmental Affairs and backed up by its comprehensive draft Clean Energy and Climate Plan for 2030, called for the state to reduce its greenhouse gas (GHG) emissions in the year 2030 by 45% compared to 1990 emissions. The other, a bill passed with overwhelming legislative support entitled “An Act creating a next-generation roadmap for Massachusetts climate policy”, called for a 50% reduction by 2030, instead of 45%, among many other positive provisions. On January 14th, Governor Baker vetoed the bill. But with the arrival of the 2021 session, the legislature passed the same bill again on January 28th, which the Governor must sign or veto by February 7th (although the large majorities in both bodies’ initial vote mean the legislature could override any veto).

Acadia Center has already debunked other claims in the Governor’s first veto. In his explanatory letter, the Governor claimed unlocking that extra 5% of GHG savings (the difference between 45% and 50%) would come with an extravagant cost: $6 billion more, to be exact. That figure, and how the Governor’s Office arrived at it, has touched off a number of conversations within the legislature and environmental advocacy community, because there has been little information revealed about where it came from.

Despite this, one can still infer valuable information from the Administration’s estimates for 2030. To explore this further, it is important to distinguish between an annual and a cumulative value. If, by 2030, Massachusetts reduced its annual emissions by 50%, the state would be emitting about 4.7 million metric tons[1] of GHGs less, annually, than if it only achieved a 45% reduction. Assuming those two reduction pathways gradually diverge between 2020 and 2030, that means – with a little help from high-school geometry – that the cumulative difference would be around 20-25 million metric tons. This is the triangular “wedge” of GHGs shown in the chart below, and this wedge, according to the Administration, is what costs $6 billion extra.

Now consider two important charts, included below, taken from December’s Massachusetts 2050 Decarbonization Roadmap reports, which contain the technical analyses that underpin policies set forth in the Clean Energy and Climate Plan, or CECP. These two charts show cost and emission differences between the study’s “All Options” scenario, which by 2030 attains GHG reductions of 47% compared to 1990[2], and its “Reference” scenario, which attains reductions closer to 15%. Reading the charts, it appears the “All Options” scenario cumulatively avoids about 150 million metric tons of GHGs and costs roughly $4.75 billion more than “Reference” by the year 2030.

To phrase it another way, the Roadmap analysis suggests that the average cost to get from 15% to 47% (and avoid about 150 million metric tons of emissions by 2030) is about $32 per metric ton avoided. This figure is also in line with a recent Applied Economics Clinic paper that explicitly calculated carbon “abatement costs” for Massachusetts. But the Baker Administration, in their justification for a more restrained 2030 target, says that to go from 45% to 50% could cost almost ten times that amount: $240-$300 per metric ton[3]. It is no surprise that bigger emissions cuts cost more, and costs per ton escalate as the least expensive options are exhausted first. Here, increased costs could mean that some polluting cars and fossil-fueled heating equipment would be replaced before they completely wear out. But the vast difference between these numbers, both of which come out of the same Administration within a few weeks of one another, suggest that different math is being used to tackle the same question.

Figure 5 from the Economic and Health Impacts Report, showing annual costs for modeled scenarios versus the “Reference” scenario. The area below the brown “All Options” line shows the cumulative cost difference for that scenario to be approximately $4.75 billion between 2020 and 2030.

Figure 46 in the Energy Pathways to Deep Decarbonization Report, showing cumulative emissions for the “All Options” and “Reference” scenarios. By 2030, the accumulated difference between the two would be 150 million metric tons.

 

A recent Boston Globe article by David Abel sheds some light on the Administration’s math, focusing on what it would take to stretch beyond the 45% target. For example, the article cites members of the Administration who say the Commonwealth would need 450,000 additional electric vehicles (EVs), which alone would cost $2.4 billion. That would mean over $5 thousand per car in extra costs. But what about the lower fuel and maintenance costs that EV owners enjoy? Even Consumer Reports acknowledges that the total cost of ownership for EVs is less than a car running on gasoline. And what about the other benefits to the public from breathing cleaner air with almost half a million fewer fossil-powered cars on the road? It appears that the Baker Administration’s math may not be accounting for all the benefits in the same way that the Decarbonization Roadmap does.

To be clear, achieving either of these 2030 aspirations, whether 45% or 50%, would be a significant milestone in Massachusetts’ fight against climate change. All other things being equal, fewer total emissions are better than more, since what really matters is the accumulation of GHGs in the atmosphere. Acadia Center is a firm believer in evidence and data-backed policymaking, and the CECP is a tremendous accomplishment, founded on solid analysis. If the Baker Administration is going to use cost to explain why it opted for a less aggressive emissions target, Acadia Center simply feels that the same level of rigor should be brought to that decision as is seen in the Decarbonization Roadmap. Luckily, the bill containing the 50% goal is already back on the Governor’s desk. Acadia Center urges him to reevaluate his position – or at least base it on cost figures that are supported by evidence his own Administration has gathered.

Image credit: https://www.flickr.com/photos/massgovernor/50881414713/

[1] This can be calculated from the annual GHG emissions inventory.

[2] This value lies in between 25% in 2020 and 90% in 2050, and Acadia Center understands that the “All Options” scenario follows this straight line emissions trajectory.

[3] This is Acadia Center’s estimate of the range of marginal abatement costs implied by the Baker Administration’s letter. It relies on approximate values estimated from charts and simple reasoning, since the complete information needed to perform the calculation has not been provided.

Next Generation Energy Efficiency

The buildings in which we live and work are a main driver of energy use and play a key role in determining public health outcomes. Emissions from appliances and heating and cooling systems negatively impact indoor air quality, exposing residents, especially in poorly ventilated buildings, to toxic pollutants. In New England and New York, building heating, cooling, lighting, and operations are responsible for over a third of the overall emissions that contribute to climate change.

Energy efficiency, including services ranging from home insulation improvements to replacing appliances with more efficient alternatives, can improve comfort, reduce exposure to pollutants, and save consumers money. Energy efficiency is also the most cost-effective way to reduce greenhouse gas emissions and has played a major role in helping the Northeast lower carbon pollution.

The Northeast is a national leader in energy efficiency. Efficiency programs in the Northeast lead the nation in important criteria: the highest per capita investments in energy efficiency and the most ambitious energy savings goals. The regional grid operator in the six-state New England region relies on energy efficiency resources for over 14% of the power needs of the region – the highest in the country. Millions of homes and businesses have received efficiency services, which have reduced energy bills, avoided billions of dollars in higher cost energy resources, and improved public health.

Acadia Center is proud of the role it has played in advancing energy efficiency in the region and promoting the creation of stakeholder boards to guide efficiency programs, budgets and goals, but far more must be done to improve the efficiency of our homes and businesses and to ensure that all overburdened and underserved communities reap the full benefits of efficiency offerings.  Programs have not delivered services adequately across all income levels and communities. Many consumers face unequal access to benefits under existing efficiency programs, and underserved communities that face the worst impacts of climate change and poor housing quality have not been able to take full advantage of efficiency programs. Clean electric heating and whole house electrification must be priorities to support the acceleration of clean energy resources and the transition away from fossil fuels. There must be better alignment between state climate goals by reforming key energy efficiency policies, regulations, and stakeholder systems, and the region must continue to value energy efficiency as a core energy resource.

Acadia Center’s Next Generation Energy Efficiency initiative seeks to tackle these challenges through a new approach – one that focuses on energy savings as a core consumer and energy system resource, but is also centered around meeting climate, environmental justice, and electrification goals. It is an approach that recognizes the interrelatedness of these efforts, which can work in concert to bring Northeast communities the future of energy efficiency.

The four challenges the Next Generation Energy Efficiency will prioritize are 1) sub-standard housing quality, 2) climate mitigation, 3) clean heating and whole-house electrification, and 4) sustaining investments in efficiency as the leading energy resource option for utilities and the power grid.

Prioritize Housing Quality Improvements

Energy efficiency must be at the center of addressing the region’s old housing stock. Energy efficiency can improve thermal comfort, reduce exposure to toxins, and lower energy costs. To better serve vulnerable populations and environmental justice communities, existing benefit-cost methodologies, which determine how efficiency programs are implemented, must incorporate climate, equity, and health benefits from building retrofits. Acadia Center will work with environmental and consumer advocates, environmental justice leaders, business interests, and efficiency vendors to develop policy recommendations that identify reforms needed to fully account for all the health, safety, and equity benefits that energy efficiency improvements deliver.

Ensure Alignment with Climate Mitigation

Every kilowatt-hour of electricity that does not need to be produced because of energy efficiency means less dirty fossil fuel use. But energy efficiency programs can achieve even deeper emissions savings if they are refocused with a greater emphasis on climate mitigation. Acadia Center will press to:

  • Update efficiency statutes and regulations, including the way programs are screened through benefit-cost tests, to emphasize reductions in greenhouse gas emissions in addition to energy savings.
  • Make certain that public utilities commissions consider climate and health impacts when evaluating efficiency programs; and
  • Ensure that laws, regulations, and planning processes support efforts to transition from fossil fuels to clean electrification.

Embrace Clean Heating and Whole-House Electrification

If deployed together, energy efficiency and electrification can deliver greater emissions reductions while improving indoor air quality. To better align efficiency programs and electrification, Acadia Center will push for incentives for clean heating and weatherization, as well as for changes in how efficiency programs are administered to ensure co-delivery of building upgrades that are currently delivered in silos. Acadia Center will publish state-specific reports on the value of electrification and flexible demand and will push states to include electrification retrofit pathways in their efficiency plans.

Sustain Investments in Efficiency as the Leading Energy Resource

Northeast states must expand efficiency investment levels and energy savings goals to ensure deeper savings and benefits for all. As one of the fundamental components of meeting state emissions targets, efficiency efforts must be sustained in states that are already leading and improved in states that are falling behind. Acadia Center will work to ensure that decision-makers in the Northeast recognize the value and necessity of efficiency to spur large savings in public health and economic benefits. Through membership on efficiency boards and through PUC intervention related to efficiency plans, Acadia Center will continue to advocate for increased budgets and the maximum possible savings goals, provide expert commentary on state energy issues, and offer data and recommendations to counter bad decisions.

For more information:

Oliver Tully, Policy Strategist, otully@acadiacenter.org, (860) 246-7121, ext. 202

 

 

Massachusetts Climate Policy Roundup

In early January, the Massachusetts legislature overwhelmingly passed a landmark update to the state’s 2008 Global Warming Solutions Act through Bill S.2995, “An Act Creating a Next-Generation Roadmap for Massachusetts Climate Policy.” Many of the provisions have been championed by Acadia Center and we are encouraged by its breadth and specificity.  Bill S.2995 represents meaningful progress in addressing the Commonwealth’s contributions to climate change, codifying the Governor’s commitment to a net-zero future, delivering effective environmental justice strategies, and moving critical sector-specific initiatives forward. It will help increase overall demand for clean energy and support the growing clean energy economy.

Governor Baker employed the pocket veto on January 14th.  The timing of the bill passage and the veto as one legislative session concluded and another began made it impossible for the legislature to override the Governor’s veto.  Demonstrating resolve and commitment to the overwhelming support for the landmark bill, House and Senate leadership refiled an identical bill, S.9, which is expected to come to a vote in the next week or so, and again pass quickly with veto-proof margins.

Significant provisions of the legislation include:

  • “Comprehensive, clear and specific” plans for achieving statewide emissions limits now set every five years (rather than ten) leading to: 50% reductions from 1990 levels in 2030, 75% in 2040, and net-zero emissions by 2050.
  • New tools and protections for environmental justice populations, and plans to improve or mitigate economic, environmental, and public health impacts for these populations.
  • Mandates for emissions sub-limits for six priority sectors of the economy: transportation; electric power; residential heating and cooling; natural gas distribution and services; and natural and working lands, an idea catalyzed by Acadia Center.
  • A requirement also endorsed by Acadia Center: The Department of Public Utilities (DPU) must consider equity and reductions in greenhouse gas emissions as equal priorities to reliability, safety, and affordability. This is essential to empowering the DPU to act in alignment with the state’s climate goals.
  • Boosting the Renewable Energy Portfolio Standard by 3% each year, ensuring that at least 40% of the state’s electric power will be renewable by 2030.
  • An increase to the standard for greenhouse gas emissions for municipal lighting plants for the first time, requiring 50% non-emitting electricity by 2030 and “net zero” emissions by 2050.
  • An expansion of previous targets that increases the state’s total offshore wind authorization to 5.6 gigawatts (GW).
  • A local option mandates – “net zero stretch energy code” – which would allow towns to ban the use of fossil fuels in new buildings.
  • The adoption of appliance efficiency standards in line with California; this may enable Massachusetts to take back the top spot in the rankings of American Council for an Energy Efficient Economy (ACEEE).
  • A requirement that energy efficiency plans achieve a greenhouse gas (GHG) emissions reduction goal and include the value of GHG reductions in cost-effectiveness calculations – two reforms at the heart of Acadia Center’s Next Generation Energy Efficiency strategy.

As one of the co-chairs of the ACES coalition, Acadia Center worked to pull together over 20 clean energy businesses and advocacy organizations to sign on to a letter urging Governor Baker to sign the bill and empower Massachusetts to address the climate crisis.

The climate roadmap envisioned in the newly filed S.9 will put into law the commitments made by the Baker Administration’s Clean Energy and Climate Plan for 2030 and beyond, setting our Massachusetts on a path to reach net-zero emissions and avoid the worst impacts of climate change.  As well, Bill S.9 includes vitally important provisions ensuring that front line communities and low-wage workers will benefit from the Commonwealth’s transition to a low-carbon economy. Acadia Center strongly support S.9 and greatly appreciates the resolve of House Speaker Mariano, Senate President, Representative Golden and Senator Mike Barrett for quickly reintroducing the legislation.  Acadia Center looks forward to swift passage of this important climate legislation, and urges Governor Baker to enact without changes it so that all the state’s residents can benefit from a healthier, safer future.

 

 

 

 

Fact check: net-zero stretch code is the right move for Massachusetts

Yesterday, Massachusetts Governor Charlie Baker vetoed S. 2995, “An act creating a next-generation roadmap for Massachusetts climate policy.” As the Boston Globe reported earlier this week, and as the Governor’s letter to the legislature confirms, opposition from the real estate industry played a significant role in the decision.

The section of the bill that has drawn the ire of real estate groups has to do with the energy efficiency parts of the building code. Currently, Massachusetts has both a standard (or “base”) building energy code and a “stretch” code. The stretch code allows cities and towns to opt in to requirements for higher levels of energy efficiency in new buildings.

The bill would require the Department of Energy Resources (DOER) to strengthen the stretch code and to include a definition of “net-zero building.” Net-zero buildings either emit no greenhouse gases or generate enough renewable energy to offset the emissions they do cause. Although they sound like the far-off future, developers are building zero-energy buildings in Massachusetts right now at no extra cost.

Even so, real estate developers reportedly complained to the Governor that this part of the bill would be a burden. Their complaint is hard to understand. The bill’s approach is about as cautious and reasonable as one could expect, and here’s why:

The stretch code is optional. Cities and towns must opt-in to the current stretch code. To date, more than 80% of the Commonwealth’s municipalities have done so, ranging from urban Springfield to rural Colrain and suburban Rockland. An updated version of the code would be no different. Far from a hardship, the stretch code is a valuable tool which cities and towns use to reduce energy bills for their residents and businesses.

Flexibility is built into the stretch code. Today, Massachusetts’ stretch code is performance-based. This means that rather than dictating that different building components be built in a specific way, the stretch code requires a certain level of whole-building efficiency, which builders may achieve in whatever way they wish. Updating to a net-zero stretch code would entail higher levels of energy efficiency, but it would not alter this flexibility.

The Governor’s agencies would be in charge of developing the code. Notably, the bill does not define “net-zero building.” It assigns that task to the Governor’s own administration. Fortunately, the administration had already begun this work long before the final bill emerged: a recently-released draft of the state’s Clean Energy and Climate Plan (page 30) specifically proposes that the stretch code be updated in just the way that the bill proposes.

The bill provides for a gradual implementation timeline. The bill urges DOER to develop “a tiered implementation plan,” under which the revised code could be phased in over time and modulated to reflect different energy use characteristics between building types. The Governor’s administration would be empowered to make these decisions. And even under an aggressive timeline, years are likely to pass before a significant number of construction projects in the Commonwealth are built under the new code. The real estate industry’s depiction of the updated stretch code as sudden and onerous does not square with the facts.

Responsibility for the code would remain with the state. Campaigns to ban new gas hookups have gathered steam recently in several Massachusetts cities and towns. Real estate interests have opposed these common-sense climate measures as well, on the grounds that, since these ordinances would vary by town, they would add a layer of complexity to developers’ work. While Acadia Center agrees that the Commonwealth must rapidly wind down its use of gas if it expects to reach its climate targets, adopting a statewide net-zero stretch code would not create the labyrinthine landscape of different building codes that developers fear. It would simply update a building code pathway that has already existed in Massachusetts for years to include requirements that many builders in the state are already sticking to on their own.

In conclusion, the updated stretch energy code that S.2995 proposes is optional, flexible, efficient, and ultimately defined by the Governor’s own agencies. To find a more accommodating approach would be difficult indeed. Acadia Center thanks Speaker Mariano and Senate President Spilka for their intention to quickly pass the bill again and urges Governor Baker to sign it this time.

 

Maine Won’t Wait, A Four-Year Plan for Climate Action

On December 1, 2020, the Maine Climate Council released its report, “Maine Won’t Wait, A Four-Year Plan for Climate Action,” to Governor Janet Mills. The focus now turns to the governor and legislature to transition the Plan’s priorities and strategies into legislative and regulatory initiatives.

Not everyone thought it would be possible to build a consensus-driven, aggressive roadmap to addressing the relentless effects of climate change. In fact, in early 2020, the December 1 deadline for finalizing Maine’s Climate Action Plan seemed very far away. The enormity of Covid-19 was taking hold and many were struggling to care for their families, adjust to working remotely and Zoom calls, and balancing the immense stress and anxiety of this extraordinary time.  However, Governor Mills and her staff  assured the approximately 230 Council and Working Group Members, including Acadia Center, of how important our work was and that despite the coronavirus taking its toll on the health, welfare, and wallets of Mainers, the climate challenge wasn’t going away and a climate plan must be a top priority. Now we are ready to implement the Maine Climate Action Plan in a way that maximizes investment in renewable energy, efficient buildings, clean transportation, healthier communities, and our most vulnerable citizens, while driving a clean energy economic recovery.

The Climate Action Plan confronts the extreme impacts of climate change on Maine’s coastal communities, public health, fishing and marine industries, forests, and low-income and other vulnerable populations. Not all strategies are created equal, and the state of Maine will want to focus on those that deliver the biggest bang for their buck. This Plan represents the most significant and comprehensive effort to map out the actions that are needed to reduce climate pollution and create new jobs as part of the transition to a clean energy economy. It sets out strategies based on scientific assessments of the reduction levels needed to help protect our economy, people, and environment from severe impacts of climate change. The final Climate Action Plan includes substantial increases in electric vehicles and residential heat pumps, additional support for renewable energy projects, and assistance to improve community resilience. There are also strong recommendations to protect natural and working lands and forests across the state, which absorb carbon dioxide from the atmosphere.

The Plan will not be successful without a robust political and financial commitment to implement its strategies. The federal government will also need to step up to support states like Maine in investing in clean energy, a modern transportation system, and resilient infrastructure. While the Plan has gaps, especially in its limited support of a regional Transportation & Climate Initiative (TCI) we believe this blueprint will lead to significantly lower greenhouse gas levels, and importantly, a diversity of opportunities for a diversity of Mainers. With a new federal administration coming into office in 2021 with a commitment to climate, state, regional and local work to advance a clean energy and transportation future, we are optimistic about the opportunities and vision Maine’s Climate Action Plan lays out.

There is no single silver bullet to address climate change. We need to attack it from multiple angles, try many approaches. Maine’s Climate Action Plan tackles this intractable challenge holistically and determinedly. With it, we will make the changes needed for a healthier planet and better lives for all Mainers.

Critical Elements of the Plan:

  • Significantly expanding beneficial electrification for heating and transportation.
  • Deploying high-speed broadband to 95% of Maine homes by 2025 and 99% by 2030.
  • Increasing public transportation funding to the national median of $5 per capita by 2024.
  • Increasing weatherization, especially for low-income and rural households.
  • Phasing in modern, energy efficient building codes to reach net zero carbon emissions for new construction by 2035 and incorporate mass timber and wood-fiber insulation into new building structures.
  • Leveraging additional procurements of clean energy supply with specific development targets for offshore wind, smaller distributed energy resources, and energy storage.
  • Minimizing environmental and community impacts of renewable energy siting by focusing on early engagement with key stakeholders and the public.
  • Initiating a power transformation stakeholder process to pursue utility innovation and grid modernization.
  • Marrying Maine’s natural resources and cleantech workforce and innovation to create and maintain good-paying, sustainable jobs.
  • Increasing investments in Maine forest conservation and carbon sequestration.

With the uncertainty of the COVID-19 pandemic, the economy, and a transition to a more climate-friendly President, it is particularly critical now that the final Climate Action Plan spurs robust, sustainable, and equitable solutions for the economic, energy, and environmental benefit of all Mainers. Acadia Center will be working with partners and policymakers to pursue legislative, regulatory, and programmatic initiatives that mitigate emissions from buildings, electricity, and vehicles while ensuring that Maine’s most vulnerable and rural communities are not left behind in such challenging times.

 

 

Transportation and Climate Initiative: Brief Update on the State MOU Announcement

On December 21, 2020, Massachusetts, Connecticut and Rhode Island, and the District of Columbia announced their participation in the Transportation and Climate Initiative Program (TCI-P) by signing onto a Memorandum of Understanding (MOU).  Acadia Center believes this represents a major milestone in a project that we have long championed and a critical component of our vision for a just and sustainable future. We offer some comments on the announcement.

The four jurisdictions participating in the program need to achieve significant emission reductions from the transportation sector to meet their ambitious climate targets. Transportation pollution accounts for 46% of the CO2 emissions across Connecticut, Massachusetts, Rhode Island and Washington, D.C., which is more than double the contribution to climate change from any other sector. Participation in the TCI program will enable these jurisdictions to invest hundreds of millions of dollars each year in clean transportation projects that create jobs, boost the economy, improve mobility, and slash pollution. For those reasons, the TCI program is the first transportation strategy discussed in the Baker administration’s newly released 2030 Clean Energy and Climate Plan, which is designed to achieve a 45% reduction in GHG emissions by 2030. Whether Massachusetts sticks with the Baker administration’s 45% reduction target or the legislature’s newly passed climate bill with a 50% by 2030 requirement, the TCI program will play a critical role in delivering a cleaner, more equitable transportation system.

Acadia Center has played a central role in the TCI Process

  • In the spring of 2017, Acadia Center convened the first meeting of TCI advocates from the region, launched a regional advocates listserv and began hosting bi-weekly TCI advocates calls. Acadia Center played a leading role in creating Our Transportation Future, the public face of the regional TCI advocates network.
  • In January 2018, Acadia Center partnered with the Fletcher School at Tufts University to host the Future of Transportation Symposium, convening regional stakeholders, academics, and Baker administration officials for an exploration of TCI and other clean transportation opportunities.
  • In early 2019, Acadia Center, the Green Justice Coalition, and T4MA launched the MA TCI Table, a new forum designed with intentionality to balance the perspectives of the Commonwealth’s environmental, transportation, and justice communities. By welcoming all voices to the Table, particularly those with concerns about the TCI program, we started and sustained a dialogue around TCI and our shared vision for a sustainable and equitable transportation future. The Table also created a new venue for direct engagement between stakeholders, the Baker Administration, and legislative leaders, allowing them to hear our support, our concerns, and offering a pathway for collaboration on policy solutions.
  • Due to the success of the MA TCI Table, Acadia Center replicated the model alongside partners in Connecticut and Rhode Island. Across southern New England, these forums have united stakeholders, engaged state decisionmakers, and delivered the support necessary for governors to sign the TCI MOU.
  • Throughout the process, Acadia Center has been committed not just to delivering the policy, but to getting the details right. From analysis of the emissions cap to protections for overburdened communities, Acadia Center has worked with our partners across the region to provide the TCI states with actionable recommendations for a robust and equitable program. In November of 2020, as the states worked to put the finishing touches on the MOU, Acadia Center organized, helped draft, and submitted a sign-on letter with 200 signatory organizations containing specific recommendations for a TCI Program that would meet the needs of the region’s communities and the urgency of the climate crisis. Many of the recommendations in that letter were incorporated into the MOU, including the more stringent emissions cap, the commitment to air quality monitoring in environmental justice communities, and the requirement for TCI-funded investment in overburdened and underserved communities to be at least proportional to the populations of those communities.

Additional Content on the MOU

The collaboration between Connecticut, Massachusetts, Rhode Island, and Washington, D.C. represents action at a significant scale. With a combined GDP of $1.09 trillion, the participating jurisdictions would be the world’s 15th largest economy, similar in output to Mexico. The MOU charts an ambitious emission reduction trajectory. The emissions cap will decline by 30% from 2023 to 2032, consistent with recommendations Acadia Center submitted on behalf of 200 organizations in November. Reducing CO2 emissions from transportation fuels by 30% will help states achieve their climate targets while delivering critical improvements in air quality. While additional policies are necessary to achieve Acadia Center’s vision for a just and sustainable future, TCI has an important role to play in that transition.

TCI jurisdictions have worked to incorporate stakeholder feedback to make the program more equitable and ambitious. Important new provisions have been added to last year’s draft MOU to ensure that overburdened and underserved communities receive at least their proportional share of TCI proceeds, that those communities are included in investment decisions and program design, and that air quality monitors will be deployed in the most polluted communities. These commitments represent significant progress at the regional level, but states—and advocates—have much more work to do to develop stakeholder processes and policy solutions that meet the needs of their communities. An equitably-designed TCI program will benefit overburdened and underserved communities, but the participation of those communities in that process is critical. TCI is just one piece of the puzzle: other action, like guaranteed pollution reduction in environmental justice communities and affordable, reliable transit, will still be necessary to deliver transportation justice.

Recent polling shows that 71% of the region’s voters support their state participating in the TCI program, and almost 80% support using TCI revenue to modernize and expand public transit service.

We are particularly gratified that the three states joining the MOU are those where Acadia Center played a leadership role working with many diverse voices to advance support for TCI in coalitions like the Massachusetts TCI Table, who worked together to build respectful working relationships.  These strong coalitions successfully championed a common set of priorities and messages when engaging with decision makers and key stakeholders and preparing public facing materials showing the benefits of TCI.

The four MOU signatories deserve credit for leading the way, and all signs point towards the program growing before the official launch in 2023. While the four-jurisdiction program would be significant in its own right, we expect that, much like RGGI, the program will launch with more states than were on the initial MOU. In a separate document, the four MOU signatories were joined by eight other TCI member states to assert that they are collaborating on the next steps of the cap-and-invest program’s development, suggesting that the program will expand beyond southern New England and D.C. Notably, this list includes a new TCI member, North Carolina, demonstrating the appeal of the TCI framework. All together, these jurisdictions would represent the world’s third largest economy.

Forward-Looking Acadia Center TCI Priorities

As Acadia Center highlighted in a recent NYT article, this four-jurisdiction TCI Program is just the beginning.  Acadia Center is dedicated to continued efforts to support equitable TCI implementation, garner further state commitments, and build the case for TCI with stakeholders and policymakers.

In our core target states of CT, MA and RI, Acadia Center will:

  • Work with community-based partners and state agencies to ensure the program is implemented equitably
  • Identify high-impact investment opportunities that improve local air quality, deliver better transportation options, and help states achieve their climate targets
  • Where necessary, support enabling legislation to grant states authority to participate in TCI Program

Regionally and in other TCI states, Acadia Center will:

  • Strategically build the case for TCI participation with governors’ offices, state agencies, legislators and key stakeholders and address points made by TCI opponents. As an example, Acadia Center’s recently published op-ed in the Portland Press Herald demonstrates that it is not too late for Governor Mills to bring the TCI program’s benefits to Mainers.
  • Quantify and highlight the in-state benefits of TCI participation, and identify the lost benefits and missed opportunity for states that opt out.
  • Continue to lead and coordinate activities of the regional TCI advocates network.

 

New Hampshire Must Continue to Push for Energy Efficiency Gains

This holiday season provides a chance for the New Hampshire Public Utilities Commission (PUC) to deliver the gift that keeps on giving to Granite Staters: a strong energy efficiency program for 2021 and beyond. New Hampshire energy efficiency programs deliver a diverse set of benefits to consumers including lower overall energy system costs, individual cost savings, improved comfort, and lower overall greenhouse gas (GHG) emissions, not to mention supporting almost 12,000 jobs in that state’s efficiency industry.

The PUC is set to vote on whether or not to approve the 2021-2023 Energy Efficiency Plan that implements the state’s Energy Efficiency Resource Standard. The Plan would require the state’s electric and gas utilities to reduce annual electric demand by 4.5% and fossil gas by 2.8% over 2019 sales. While the Acadia Center supported even more ambitious savings targets of 5% for electric utilities and 3% for gas utilities, we believe that the final Plan represents an effective energy efficiency strategy for action over the next three years. Acadia Center supports the continued progress toward acquisition of all cost-effective energy efficiency resources across all fuel types and sectors, helping New Hampshire residents, businesses, institutions, and low-income families meet their energy needs while reducing their cost of energy.

The Granite State lags its New England neighbors in overall energy efficiency policies and progress according to the recently published American Council for an Energy-Efficient Economy’s 2020 national efficiency state scorecard. While Massachusetts, Connecticut, Rhode Island, and Vermont are in the top 10 for overall state-wide energy efficiency policies, with these states saving enough electricity in 2019 to power 250,000 homes for a year, New Hampshire remains stalled in the middle of the pack. While the state has seen improvements in recent years, it must do more to become a regional leader on energy efficiency. New Hampshire residents and businesses deserve to reap the full benefits of robust energy efficiency programs, which not only reduce energy use and costs, but improve public health, support economic growth and employment in energy efficiency sectors, and are consumer-friendly. Acadia Center research indicates that every $1 invested in regional energy efficiency investments yields an average of $3.75 in total benefits. Leaving that kind of money on the table doesn’t make sense for New Hampshire consumers who have some of the highest energy bills in the nation.

This has been a difficult year for all, and Acadia Center understands that residential and businesses customers should not be overburdened with increasing costs. However, as result of the 2019 Granite State test, a cost-benefit calculation that ensures that any and all energy efficiency programs provide benefit to all of the state’s energy consumers, the PUC and state lawmakers can be assured that long-term energy efficiency programs are a sound investment in the state’s future. This Plan allows goals, programs, and budgets to be adjusted during the triennium as needed, while recognizing that the cost-effectiveness savings needed to drive energy efficiency improvements ensures that consumers realize the benefits of these programs. And with a vigorous economic recovery expected in 2021 and beyond, it is essential that the state have in place as strong and robust of an energy efficiency program in place as possible.

Will FERC’s Latest Order Open the Door for Distributed Resources?

It is time for the U.S. electric grid to start thinking small. The grid of the future will be built around distributed energy resources (DERs) such as rooftop solar, neighborhood battery storage, and advanced energy efficiency and smart appliances, capable of responding to fluctuations in electricity demand to optimize energy use and supply. DERs encompass a wide variety of technologies – they can be small-scale energy generators, smart appliances, renewable and non-renewable generating resources. In aggregation, DERs contribute to a more distributed, decentralized, and responsive grid. They also reduce demand for electricity from fossil fuel plants, avoiding the need for costly grid infrastructure like centralized power plants that spew greenhouse gases and air pollutants into the communities they are sited in. Thankfully, the grid is one step closer to this vision of a clean, distributed future thanks to the recent Federal Energy Regulatory Commission (FERC) Order 2222.

On September 17,  FERC, the federal body that oversees the regulation of the U.S. electric markets, will require regional electric regulatory bodies to come up with market rules to allow DERs to compete and be compensated for services provided in the wholesale electric markets. This will level the playing field for DERs, while providing owners of DERs, such as homeowners, with revenue for services delivered to the grid.

The U.S. grid is often called the most complicated machine in the world. Comprised of large fossil-fuel and nuclear power plants, renewable generators like wind, solar, and hydropower; poles, wires, sensors, and meters; and finally, end-use consumers, such as homes and businesses, the grid must balance supply and demand at every moment. Energy technologies have emerged over the last 20 years that allow consumers to generate, save, store, and use electricity on-site or send back to the grid. DERs , often called behind-the-meter resources, as they are sited behind the utility-issued electric meter at the distribution level[1], like rooftop solar systems, home battery storage, electric vehicles, and active demand response, can either reduce energy use during periods of high demand or sell energy back to the grid if the right price signals and market structures are present.

As the cost of these distributed technologies rapidly declined, consumers adopted DERs to reduce their carbon footprint, save energy and money, and improve reliability during power outages. In fact, the DER market is expected to play a vital role in the decarbonized and distributed grid of the future, with some estimates of as much as 380 gigawatts (GW), or almost one-third of installed U.S. generation capacity, of DERs over the next 5 years, with most of it at the residential level.

In New England, DERs have expanded rapidly and will continue growing. The regional grid operator, ISO-NE, noted that in 2019, DERs provided a full 20% of total system capacity. ISO-NE’s forecast anticipates continued rapid development and adoption of energy efficiency, demand response, rooftop solar, battery storage, and other DERs over the next decade, with an estimated 4,300 megawatts (MW) of additional behind-the-meter solar by 2029 (on top of 3,500 MW installed already), and up to 10% of energy demand met through energy efficiency efforts.

While DERs are an important and growing energy resource they are, on their own, often too small to effectively participate in wholesale markets due to high barriers to entry with specific participation parameters. Although DERs benefit the grid through reduced demand, reduced emissions, cleaner air, and enhanced reliability, they are not properly compensated for those services. Without clear market rules these DERs are unable to participate fully in the regional wholesale markets, meaning that vital revenue streams from the regional markets are not available to small-scale distributed resources. Under new market rules ordered by FERC, potentially millions of rooftop and community solar panels, batteries, energy efficiency investments, electric vehicles, and smart appliances can access revenue streams that previously excluded them.

Ultimately, FERC Order 2222 could be a game-changing piece of regulatory reform that opens the door to a cleaner, more reliable, more distributed and democratized electric grid. This a refreshing and needed piece of regulatory reform from FERC and in notable contrast to a number of recent rulings favoring large incumbent generators like natural gas and that continue to undermine state-level clean energy policy through heavy-handed and burdensome federal intervention into wholesale markets. Ultimately, FERC Order 2222 has the potential to spur new and exciting innovations in the clean energy sector, creating market opportunities for not-yet-invented technologies and solutions.

What does FERC Order 2222 Say and Do?

FERC began addressing market participation for DERs in late 2015. The Commission collected data, held technical conferences, and released a proposed rule in 2016. In a separate but related order, FERC required regional grid operators to develop rules that allow battery storage located at the distribution level to participate in wholesale markets. After several years of legal challenges to FERC’s authority, the storage order was upheld in July 2020, paving the way for this new supplemental order affecting other DERs. Together, these two reforms will open the wholesale markets to battery storage and aggregated DERs, allowing groups of smaller DERs to participate in wholesale markets as if they were a single resource controlled by the aggregator.

FERC Order 2222 provides clarity to regional grid operators as they develop participation rules that remove barriers for DER aggregations in capacity, energy, and ancillary service markets. FERC found that existing market rules are “unjust and unreasonable” barriers to participation of DERs, hindering competition and increasing rates by creating barriers to emerging technologies by unfairly favoring large incumbent generators, such as fossil-fuel plants. FERC notes in its order that by reforming market rules to allow DERs to compete fully in wholesale markets, regional grid operators will be able to “account for the impacts of these resources on installed capacity requirements and day-ahead energy demand, thereby reducing uncertainty in load forecasts and reducing the risk of over procurement of resources and the associated costs.” Specifically, FERC requires that each grid operator develop market rules that address DER aggregation in the following ways:

1. Allow DERs to participate directly in the wholesale markets and establish DER aggregators as a type of market participant;
2. Allow DER aggregation to register under a participation model that accommodates the physical and operational characteristics of the DER aggregation;
3. Establish a minimum size for DER aggregation no larger than 100 kilowatts (kW) (roughly equivalent to 12 home solar systems);
4. Address locational, distributional, information and data, and grid coordination requirements for DER aggregator participation; and,
5. Require market participation rules for DER aggregators located in large utility service territories while allowing smaller utilities (defined as distributing more than 4 million megawatt-hours (MWh) in the previous year, approximately 70% of the U.S. utility market) to opt-in to the DER market rules.

By requiring regional grid operators to develop market rules allowing DERs to participate in wholesale markets, FERC Order 2222 paves the way for increased DERs, and will create markets and new ways to finance distributed energy projects. These market opportunities will make DERs more financially viable, increasing adoption, and result in a stronger, cleaner, and more resilient grid.

Next Steps

FERC Order 2222 goes into effect after publication in the Federal Register. At that point, regional grid operators will have 270 days to submit proposed changes to their market rules to implement the order. However, it will likely take several years before all the rules and processes are in place and full market participation is possible due to the need to develop, design, and implement complex technical and market parameters for participation. Acadia Center holds a membership position in NEPOOL, the region’s stakeholder governance body. Acadia Center will coordinate with state, regional and national stakeholders to ensure the region has fair and transparent market participation rules that support continued development of DERs.

[1] The electric distribution system is typically defined as electric transmission at 69 kilovolts (kV) or less, whereas the transmission system operates at higher voltages and travels further distances.

By Deborah Donovan, Senior Policy Advocate and Massachusetts Director, and Stefan Koester, Policy Analyst

Hammering out Maine’s Climate Action Plan: Deep Dive into the BIH Working Group Recommendations

Maine’s Climate Action plan is being hammered out this year by the Maine Climate Council, convened by Gov. Janet Mills. The Climate Action Plan will be a roadmap to achieving Maine’s goals of reaching 45% greenhouse gas emissions reductions by 2030, and at least 80% by 2050. This blog takes you on a deep dive into the process of creating recommendations for the Action Plan, particularly for the Buildings, Infrastructure, and Housing Working Group. You can access more of the recommendations here.

In May, despite the coronavirus, the Acadia Center and its partners convened a (virtual) meeting of more than 400 people, including dozens of environmental, labor, and public health organizations, to learn about how the Climate Action Plan will be created. The webinar, titled “The Maine Climate Council: Everything You Need to Know” was hosted by over 30 entities dedicated to reducing carbon pollution and equitably transitioning Maine’s economy to clean, renewable energy. Acadia Center joined its partners to call for action that strengthens the economy, creates well-paying jobs, improves public health, and ensures equitable distribution of investments, benefits, and opportunities. The full webinar can be found at this link.

Speakers at the webinar demanded a Climate Action Plan with concrete legislative and regulatory actions to mitigate and adapt to climate change. Clear implementation timelines and targets are also essential. Acadia Center has been working individually and with its coalition partners to influence policy strategies being developed across seven working groups of the Maine Climate Council. These working groups have been created to tackle the topics of coastal and marine issues; community resilience planning, public health, and emergency management; electricity and utility innovation; natural and working lands; and transportation. The working group members include businesses, legislators, nonprofits and foundations, scientific and academic experts, state and local governments, and youth representatives, each of which provide a different perspective on the issues. In their decision-making process, working group members considered costs and benefits; impacts on low-income, senior, and rural residences; funding and financing mechanisms; and economic and workforce results. During the webinar, Jeff Marks of Acadia Center presented the results of the Buildings, Infrastructure, and Housing (BIH) Working Group.

Why is the buildings and infrastructure sector so important to Maine’s climate goals? In Maine, this sector comprises 39% of total greenhouse gas emissions, with the residential sector the second highest carbon-emitter overall at 19% of the state’s emissions (transportation is first at 54%). Maine also has some of the oldest building stock in the country (56% of Maine homes were built before 1980) and the highest reliance on fossil fuels for heating. Sixty percent of homes still heat with oil, and 19% with natural gas or propane.

The BIH Working Group moved forward strategies that lead to:

  • Cleaner industrial processes;
  • Clean heating and cooling systems;
  • Enhanced resilience to extreme weather;
  • Improved efficiency, comfort, and safety in existing buildings;
  • Low global-warming-potential building materials;
  • Net-zero, renewable-ready building codes;
  • Increased use of Maine wood products in building materials; and
  • Reduced energy costs

Acadia Center outlined six strategies to reduce emissions in buildings, infrastructure, and housing:

1. Improve the design and construction of new buildings through steadily and more stringent building codes, increased compliance and enforcement, and focus on both operational and embodied carbon.
2. Transition to cleaner heating and cooling, especially high-efficiency space and water heat pumps.
3. Enhance the efficiency and resiliency of existing building envelopes, including audits, deep retrofits, and weatherization.
4. Lead by example in publicly funded buildings, including affordable housing, government buildings, and schools.
5. Accelerate the decarbonization of industrial processes, including overcoming limited funding for industrial efficiency, combined heat and power, and microgrids.
6. Modernize and stabilize the electricity grid, including ways to meet new demand in parallel with beneficial electrification, decarbonization, electric vehicles, and authorizing state agencies to consider climate mandates in their regulatory processes and decisions.

The Working Groups submitted their recommendations to the Maine Climate Council in June 2020, with a final Climate Action Plan due in December 2020.

In addition, Acadia Center was part of an open letter calling on the Maine Climate Council to strategically prioritize specific recommendations – read the details here on our website.

Do you want to share your opinions with the Council? Fill out this survey on the Council’s website to share your thoughts!