Importance and Implications of Massachusetts’ Clean Energy Bill
With just a few hours to go in the legislative session, the Massachusetts legislature passed a bill that will significantly reduce carbon pollution, reshape the regional power system, and foster new technologies that will play a large role in meeting future energy needs. The main provisions of An Act to Promote Energy Diversity (H4568) center on providing long term contracts for offshore wind, hydroelectricity, and other forms of renewable energy. These contracts will enable financing to cover the construction costs of grid-scale clean energy sources and electric transmission to connect the new projects to demand centers. The final bill meshed a streamlined proposal from the House and more ambitious and comprehensive package from the Senate to include contracting and a number of complementary pieces, most notably support for energy storage.
The core of the bill requires utilities to solicit long term contracts for 1600 megawatts (MW) of offshore wind. The procurement is the largest ever in the United States (or the hemisphere for that matter) for offshore wind, launching a brand new industry that the Department of Energy estimates could support 54,000 jobs and $200 billion in economic activity by 2030. Some of these jobs are already starting to materialize, with the arrival last weekend of a purpose-built construction vessel for Rhode Island’s Block Island Wind Farm.
With relatively shallow water close to major population centers, the Eastern Seaboard is prime location for offshore wind, and steady wind speeds allow offshore wind farms to operate at high frequencies (38%-52% capacity factors according to DOE). Once fully online and operating 45% of the time (midpoint of DOE range), the new offshore wind will produce about 6.31TWh of energy, or approximately the output of the soon-to-close Pilgrim Nuclear power plant.
Hydroelectricity and Other Renewables
The other main piece of the bill requires solicitations for 9.45 terawatt hours of hydroelectricity and other energy sources eligible for Massachusetts’ Renewable Portfolio Standard (RPS). The solicitation builds on an existing collaboration with Connecticut and Rhode Island that has led developers to put forward a diverse array of proposals for onshore wind, hydroelectricity, solar, energy storage, and pairing of multiple resources. Opening procurements up to diverse clean energy resources was a key priority for business, health, consumer and environmental organizations collaborating to provide input on the legislation through the Alliance for Clean Energy Solutions, an effort Acadia Center co-led with the Northeast Clean Energy Council. Broadening procurements beyond hydroelectricity alone allows for innovative approaches and forces competition that will bring costs down. Pairing of resources also helps ensure optimal use of new transmission lines needed to connect hydroelectricity from Canada, wind from Northern New England and Upstate New York, and grid-scale solar from areas where land is available.
The combined impacts of the clean energy procurements are profound. The wind farms would total more than three times the capacity of the long-stalled Cape Wind project (which was excluded from participation), and the procurement for hydro and other renewables will likely lead to an additional (~1000MW) transmission line designed for the first time to access low carbon energy, and potentially a number of smaller projects. If the new energy supplies displace natural gas, they will avoid 7.9 million tons of carbon pollution, bringing electric sector emissions down 56% from 2012 levels and helping Massachusetts make progress toward the deeper 80% reduction across the entire economy required by 2050.
Massachusetts’ legislation and joint effort with RI and CT also signify a deeper shift in planning for the region’s energy future. Significant progress has been made towards advancing energy efficiency and other customer-sited resources like rooftop solar, but over time New England will need to bring online significant additional quantities of grid-scale renewable energy resources to replace fossil fuel power plants. Additionally, there will be increased demand for clean electricity as electric vehicles replace gasoline-powered cars and heat pumps replace oil and gas for heating.
New England has previously explored steps needed to enable large quantities of grid-scale renewables (up to 12,000MW of wind and hydroelectricity in a 2010 analysis for New England’s Governors), and the Massachusetts legislation is likely to build momentum for reforms. One clear step is to plan transmission for renewables, but this planning must be paired with reforms to improve transparency and reduce high costs of the current model that encourages over-building transmission for reliability when smaller scale, clean, and less expensive alternatives exist
Another promising approach for enhancing clean energy and improving the operation of the grid is to deploy energy storage. Energy storage will facilitate integration of variable resources like wind and solar, providing power when the breezes die down or clouds roll in. Storage also can avoid the need to build expensive grid infrastructure that is only needed a few hours of the year to meet peak demand. As described in another Acadia Center blog, storage provides the equivalent of warehouses for the world’s largest supply chain (the power grid), which currently works on an overpriced instantaneous delivery model. The legislation recognizes the breakthrough potential of energy storage, and directs the Department of Energy Resources to set 2020 utility procurement targets for storage, building on leadership the Baker Administration has already shown through the Energy Storage Initiative. If Massachusetts’ procurement is of similar scale to California’s successful program, utilities would need to contract for 330MW of storage, which would both help rationalize the grid and provide a boost to an industry with enormous potential and promising storage technologies being developed in the Commonwealth.
The legislation includes important provisions to repair natural gas leaks but did not include language prohibiting the unprecedented proposal to require electric ratepayers to subsidize new gas pipelines. The legality of this risky and unnecessary approach will now be decided in the courts, with the fate of the controversial Access Northeast project hanging in the balance.
Additional provisions of the bill include commercial clean energy financing through tax assessments (CPACE) establishment of a nuclear decommissioning advisory council, net metering for small (under 2MW) hydroelectric facilities, expanded eligibility for fuel cells and waste-to-energy under the Alternative Energy Portfolio Standard.
In all, the legislation represents a major commitment to clean energy and reducing carbon pollution. The procurements set in motion by the bill will decarbonize Massachusetts’ electric sector and accelerate the transformation of the regional energy system. At the same time the bill provides vital support for two new technologies — offshore wind and energy storage — that will put the Commonwealth at the forefront of industries that will power the energy future.