One might think that with so much money going to carbon allowances, energy prices in RGGI states would have increased, but a research study by the Acadia Center shows the opposite is true: Electricity prices in RGGI states have fallen by 5.7 percent, as increased energy efficiency has resulted in decreased demand. In the rest of the US, electricity prices haven’t fallen at all; rather, they’ve increased by 8.6 percent in the last decade. CO2 emissions from RGGI electric power plants have also fallen by 47 percent since 2008, dramatically outpacing the rest of the country.
Read the full article from the River Hudson Valley Newsroom here.
Bridgeport looks to become a hub for offshore wind in Connecticut, with its Park City Wind project expected to deliver 14% of the state’s electricity supply. That is, if the offshore wind farm can get federal approval. Our guests:
RGGI has been in effect since 2008, and a recent review by the Acadia Center of the program’s first 10 years found that:
CO2 emissions from RGGI-covered power plants have fallen by 47 percent outpacing the rest of the country by 90 percent, while reductions in other air pollutants from these plants have resulted in over $5.7 billion in health and productivity benefits
Electricity prices in RGGI states have fallen by 5.7 percent, while prices have increased in the rest of the country by 8.6 percent
The combined economies of the RGGI states have grown by 47 percent, outpacing growth in the rest of the country by 31 percent
RGGI states have generated $3.2 billion in allowance auction proceeds, the majority of which have been invested in energy efficiency and renewable energy programs
But Jordan Stutt, carbon programs director at Acadia Center, a clean-energy research and advocacy organization with offices throughout the northeastern United States, said those fears are unfounded.
“The doomsday concerns about electricity prices and competitiveness in the region have not come true,” he said.
Emissions from power plants have dropped 51 percent from 2008, a year before the program started, to 2017, he said. Electricity prices in the region have fallen nearly 6 percent, while they have increased by nearly 9 percent in the rest of the country.
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.
Making smart policy decisions on any issue requires sound objective analysis. To contribute to the public debate on a range of regional energy and environmental decisions, including evaluation of proposals for electric ratepayers to finance new regional natural gas pipelines, Acadia Center recently released a fact sheet that takes a comprehensive look at several different regional trends for greenhouse gas (GHG) emissions, electricity generation, and fuel consumption across all sectors.
Recently, Concentric Energy Advisors (Concentric) produced a report that includes an emissions analysis of this past winter’s electricity generation on behalf of a coalition of advocates for ratepayer-funded expansions in natural gas pipelines. Acadia Center’s Climate and Energy Analysis Center (CLEAN Center) reviewed this analysis, and it seems clear that the Concentric analysis significantly overestimated winter greenhouse gas (GHG) emissions from oil and coal generators in New England this past winter, likely between 15–20% higher than actual emissions from these sources.
This is because the Concentric report, like most analyses, makes assumptions as a part of its calculations. Assumptions are often used when data is incomplete or to avoid additional analysis that will only provide small improvements in accuracy. A frequently used assumption in electricity generation calculations is called a “heat rate,” which measures how efficiently a power plant turns fuel into electricity. A lower heat rate means a plant uses less fuel to generate the same amount of electricity. This information can be used to estimate the amount of fuel that a power plant consumes based on the amount of electricity it has generated. The estimated level of fuel consumption can then be used to estimate greenhouse gas emissions. However, fuel consumption data is often reported directly and can be used to more accurately estimate greenhouse gas emissions. Acadia Center’s recent analysis used fuel consumption data from the U.S. Energy Information Administration (EIA) to estimate GHG emissions for recent months where emissions data isn’t directly available.
The Concentric analysis begins with electricity generation data from ISO New England and then uses assumed heat rates to calculate fuel consumption. The calculated fuel consumption is then combined with an assumed emissions rate to estimate GHG emissions. In this case, Concentric used assumed heat rates based on S&P Global Market Intelligence data to represent the heat rates of power plants in New England. The Concentric analysis does not state if this assumed heat rate data is based on regional or national figures, nor does it compare it to other published data for regional heat rates as a check on its accuracy.
The Acadia CLEAN Center examined recently reported EIA data on fuel consumption and generation for individual power plants in New England from December 2017 through February 2018. This data can be used to directly calculate actual heat rates. Based on Acadia Center’s analysis of this EIA data, it appears that the assumed heat rates in the Concentric analysis for oil and coal generation in New England are significant overestimates. In other words, the Concentric analysis assumed those types of power plants used more fuel to generate electricity than they actually did.
Table 1 – Concentric Assumed Heat Rates and Actual Heat Rates (MMBTU/MWh)
As shown in Table 1, the assumed heat rate in the Concentric analysis for oil generation is 25% higher than the actual heat rate for oil generation in New England this past winter. Similarly, the assumed heat rate in the Concentric analysis for coal generation is 9% higher than the actual heat rate for coal generation in New England this past winter.
There can be many reasons that assumptions do not accurately represent reality. Assumptions based on historical data or national data do not necessarily reflect recent local conditions in New England. The assumptions in the Concentric analysis about the relative inefficiency of oil generation could also be reflecting a more general misconception about oil generation in New England. The older oil generating units in New England are more inefficient. However, newer units, including combined cycle and combustion turbines that can run on both natural gas and oil, are much more efficient.
Table 2 – Oil Heat Rates for Electric Generation Sites with Significant Oil Combustion from Dec. 2017-Feb. 2018 (MMBTU/MWh)
As this data shows, many of the electric generation sites in New England that used a significant amount of oil this past winter were much more efficient than assumed in the Concentric analysis and only one site, New Haven Harbor, was less efficient than the overall average assumed in the Concentric analysis.
The impact of this inaccurate assumption by Concentric flows through to subsequent calculations. This means that the estimates in the Concentric analysis for combined GHG emissions from coal and oil generation would be much higher than actual GHG emissions from coal and oil generation, likely between 15–20% higher. As a result, calculations of incremental GHG emissions during the winter cold snap are likely significant overestimates, as well as the other calculations in the Concentric analysis based on the estimate of incremental GHG emissions.
No one who is concerned with climate change wants fossil fuel plants to continue releasing greenhouse gases. But using emissions data to justify any policy case requires accuracy. To better inform the broader energy and environmental debate in New England, Concentric should update its analysis based on actual heat rates in New England this past winter. More broadly, all of the tools available to meet our energy needs—market reforms, energy efficiency, energy storage, solar, wind, and fixing gas leaks among them—need to be fairly evaluated in order for the right conclusions to be drawn.
Some entities and stakeholders have raised concerns about the environmental performance of New England’s electricity system during a particularly cold multi-week period in December 2017 and January 2018. Specifically, they have called attention to emissions due to the amount of oil and coal used for electricity generation during that time. Acadia Center takes these concerns very seriously and advocates strongly for reducing pollution that hurts public health and the climate in order to meet the region’s science-based requirements.
In addition, some of these stakeholders are advancing a specific proposal that they argue would solve the region’s emissions issues, a multi-billion-dollar electric ratepayer-funded investment in new natural gas pipeline capacity. Public investments in natural gas pipelines would have significant consequences for the region and the claimed benefits of such an investment should be scrutinized closely.
To provide perspective on the grid’s environmental performance this past winter and the impacts of a proposed major expansion of natural gas pipeline capacity, Acadia Center has developed a fact sheet which takes a comprehensive look at several different regional trends for greenhouse gas (GHG) emissions, electricity generation, and fuel consumption across all sectors. The results demonstrate that the selective statistics used by pipeline advocates are incomplete at best and significantly misleading at worst.
Policymakers in the region should not be misled by pipeline advocates and must consider a full set of options to ensure that New England continues to progress toward a clean, reliable, and affordable electricity system in the coming years. Eight charts on relevant issues are presented in the fact sheet, but the most important points are included here.
New England is making significant progress reducing GHG emissions from the electric sector over the long-term. New England GHG emissions from electricity generation from March 2017 through February 2018 were 53% lower than in 2001-02, 26% lower than in 2012-13, and 8% lower than in 2016-17. Progress reducing GHG emissions in the electric sector is undeniable, even accounting for emissions related to the cold snap in December 2017 and January 2018.
Figure 1 – Annual GHG Emissions (Mar. to Feb.) from Electricity
Generation in New England
The region has historically seen significant monthly variation in GHG emissions from electricity generation. While GHG emissions from electricity generation in New England were higher in December 2017 and January 2018 than some other months, seasonal and monthly variation in GHG emissions is normal. Monthly GHG emissions from electricity generation in New England are typically higher in hot summers and cold winters. January 2018 was the 10th highest month of GHG emissions dating back to the beginning of 2014, while February 2018 was the lowest in the 21st century.
Figure 2 – Monthly GHG Emissions from Electricity Generation
in New England
GHG emissions from electricity generation are falling in New England because of several drivers, including energy efficiency, increased renewables investment, and a major decrease in the amount of electricity generation from coal and oil. Annual electricity generated by coal and oil from March 2017 through February 2018 was 91% lower than the levels in 2001-02 and 49% lower than just five years ago in 2012-13.
Figure 3 – Annual Electricity Generation from Coal and Oil (Mar. to Feb.)
in New England
New England is rapidly approaching the limit of the GHG reduction strategy of replacing electricity generation from coal and oil with natural gas. As might be expected, coal and oil generation has been reduced in part through increases in natural gas generation. However, as a long-term strategy, shifting from one fossil fuel to another will not allow for the GHG emissions reductions the region needs to meet its science-based commitments.
GHG emissions from natural gas combustion across all sectors, including those from gas delivered through two recent regional pipeline expansions, will be an increasingly significant percentage of overall regional GHG emission limits over time. Looking at combustion emissions in isolation also understates the overall impact of emissions from natural gas because it ignores the significant GHG emissions during extraction and delivery. Adding a major new regional pipeline would only exacerbate this issue, potentially increasing combustion emissions from natural gas to 49% of the overall regional GHG emissions target in 2030, and that would rise to 72% in 2040, and 135% in 2050.
Figure 4 – Natural Gas Combustion Emissions in New England from All Sectors Versus Overall Regional GHG Emissions Requirements
Of course, emissions are not the only important policy consideration for the successful operation of New England’s grid. Other serious considerations are reliability and consumer costs. Some stakeholders have argued that there is a medium-term reliability risk, which could lead to rolling blackouts or other harms. However, a recent report from Synapse Energy Economics demonstrates that, with reasonable expectations for growth in demand for electricity and natural gas and accounting for planned investments in renewables and transmission for clean energy, the risk of major reliability issues is close to zero. Keeping on this path will take some effort but should be achievable.
On the consumer costs side, using hard-earned ratepayer dollars for major new natural gas pipelines would not have any impact on electricity prices until construction is finished, which could be in 2022 or even later. Furthermore, there are good reasons to think that purported consumer benefits would not outweigh the guaranteed costs that ratepayers would have to pay. Major investments are currently being planned for offshore wind and new transmission lines for clean energy that would come online in the same timeframe as a pipeline, and these investments undercut many of the alleged benefits of a pipeline. Additional pipeline capacity would also increase the chances of exporting natural gas out of New England, which would drive up natural gas prices.
In the shorter term, many other available policy options can help improve the reliability of New England’s grid and reduce costs, while simultaneously lowering emissions. This year, ISO-NE is implementing “pay-for-performance” market reforms, which provide additional incentives to generators to respond during times of high demand and high prices. Additional investments in energy efficiency for natural gas and electricity, fixing leaks in the natural gas distribution system, advanced energy storage, local renewables, and grid modernization will start to help right away with energy prices and reliability, while simultaneously advancing the region’s long-term emissions requirements.
The usefulness of using natural gas as a “bridge” over the last two decades is at an end and the region needs to avoid further long-term public investments in fossil fuels. New England’s economic and environmental future depends upon building a clean, reliable, and affordable modern energy system. Acadia Center’s EnergyVision 2030 shows a path to meet economy-wide GHG emissions reductions of 45% from 1990 levels by 2030 using market-ready technologies, with no additional natural gas pipeline capacity needed. It’s time to move forward with a smart portfolio of investments to benefit consumers, create well-paying local jobs, improve public health, and lower the risks of climate change.
Mark LeBel, a staff attorney with the Acadia Center — a nonprofit advocacy group intervening in the rate case — said the imposition of a demand charge based on a 15-minute peak would be “unfair, and really hard to manage” without “smart meters” to keep track of peak usage dramatically adding to costs.
Also, LeBel said, moving from existing rate structures that provide customers with incentives to reduce consumption in peak months or during peak hours would “be bad for energy efficiency and low-income customers who tend to use less electricity. For customers who use more, they’ll be paying less per kilowatt-hour, while people using less will see their bills rise because of the higher customer charge.”
Read the full article from the Greenfield Recorderhere.
While potential energy savings are disputed, panelist Peter Shattuck said after Congress in 2005 extended daylight saving time by several weeks, energy consumption during that additional period decreased by 0.5 percent.
“If people don’t have to turn on the lights as early, they use less electricity,” said Shattuck, Massachusetts director for the Acadia Center, an energy and environmental advocacy group.
Read the full article from the Associated Press (reprinted in several local papers) here.
The DOER’s proposed tariff would replace the NEM retail rate remuneration and the SREC value that currently go to solar owners for the generation their arrays send to the grid, said Acadia Center Massachusetts Office Director Peter Shattuck, who’s followed the proposal.
“The most important thing is continuing solar development,” agreed Acadia’s Shattuck. “That can best be accomplished by a value-based payment structure that accurately credits solar generation.”
The value of solar’s benefits, including energy, capacity, and price and emissions reduction, can be worth more to the system than the retail price of electricity, Shattuck added. “We haven’t seen universal interest yet in an open transparent process to determine the accurate value of solar.”
Acadia Center Attorney Mark Lebel sees opportunity in the DOER straw proposal if stakeholder differences can be resolved. “There are a lot of important details still to be worked out but if it lowers costs for ratepayers and still provides the certainty developers need for financing we could get a win-win solution.”