New Massachusetts energy efficiency plan to push storage, heat pumps and ‘demand response’
The 2019-2021 energy efficiency plan, approved by the Department of Public Utilities on Jan. 29, would cut aggregate retail electricity sales by 2.7 percent and cut natural gas sales by 1.25 percent within the three-year period.
The plan provides new tools for Mass Save, the energy efficiency program run by the state’s utilities. Homeowners will see incentives to switch from oil and propane furnaces to electric heat pumps. Commercial and industrial energy storage will be encouraged; “strategic electrification” will get a boost; and “demand response” — where customers save money by curtailing or shifting consumption during periods of heavy power demand — will gain greater footing.
Read the full article from MassLive here.
Settlement Puts Rhode Island in a Leading Role on Utility Reform
PROVIDENCE — Acadia Center applauds the Rhode Island Public Utilities Commission’s (PUC) approval today of an amended comprehensive settlement in National Grid’s distribution rate case and Power Sector Transformation proceeding. The PUC’s order represents the first steps toward utility business model reforms and power sector transformation activities that will further Rhode Island’s ability to achieve a clean energy future.
“Approval of the revised National Grid settlement will greatly benefit ratepayers and the state by putting Rhode Island firmly on a path toward expanding local clean energy resources and bolstering energy system reliability,” said Daniel Sosland, Acadia Center President. “Rhode Island has jumped into a leadership role among New England states seeking to reform utility regulations. Embracing the changes needed to modernize the energy system will deliver large economic, public health, consumer and environmental benefits to all Rhode Islanders.”
The agreement lowers National Grid’s return on equity and reduces the utility’s original base rate proposal by over $40 million. The agreement also provides more meaningful bill relief for low-income customers, up to a maximum discount of 30% for some qualifying customers. Importantly, the agreement also approves initial investments in a modern grid, electric vehicle charging, and energy storage as well as a study of Advanced Metering Functionality (AMF) and further grid modernization investment.
“Acadia Center commends the Public Utilities Commission, Division of Public Utilities and Carriers, National Grid, the Office of Energy Resources and other intervenors for the commitment and collaboration throughout this process,” said Erika Niedowski, Rhode Island Director for Acadia Center. “We look forward to working with our colleagues through the newly established Power Sector Transformation Advisory Group to advance further reforms including new utility performance mechanisms, grid flexibility and resiliency, and expansion of clean energy resources that benefit customers.”
Acadia Center engaged in every stage of Rhode Island’s Power Sector Transformation stakeholder process and provided expert testimony to the PUC on a variety of components in today’s settlement. Acadia Center has long recommended the types of reforms included in the settlement through reports and materials such as UtilityVision.
“Rhode Island is now leading the way in New England utility business model reforms,” said Mark LeBel, staff attorney at Acadia Center. “In the future, Rhode Island must do even more to shift investments away from expensive capacity building projects that primarily benefit the utility and toward projects that benefit the customer by maximizing energy efficiency, expanding distributed energy resources, and bolstering system reliability.”
Acadia Center will release a more detailed summary of the approved settlement in the coming days.
MA Legislature Takes Measured Step Forward on Clean Energy
Further Action Will Be Required to Address New and Unresolved Issues
BOSTON – Yesterday evening, a conference committee of the Massachusetts House and Senate released a compromise clean energy bill, H.4857, which is expected to pass both chambers of the legislature today. The bill enacts several key policies for supporting clean energy in the Commonwealth and represents a significant accomplishment by the legislature, but it falls short in other areas that are equally necessary for swift progress toward clean energy goals.
“The compromise bill takes measured steps forward that will enhance Massachusetts’ ability to meet its climate commitments, but future progress will be necessary to ensure that programs are administered equitably and clean energy resources are prioritized,” said Deborah Donovan, Massachusetts Director for Acadia Center. “This bill continues to advance renewables, offshore wind, and energy storage, and these technologies are poised to revolutionize the Commonwealth’s and the region’s electricity system and eliminate the need for expensive bailouts for aging fossil plants or new fossil fuel infrastructure. However, details of the legislation also raise concerns.”
The bill includes an increase in renewable energy requirements from 25% to 35% by 2030, provides for a ramp up in energy storage, expands the scope of energy efficiency programs to promote strategic electrification and renewable energy technologies, removes unfair charges on new solar customers, allows solicitations of local clean energy resources to replace infrastructure investments, and could double the Commonwealth’s offshore wind procurements to 3,200 megawatts by 2035. However, the bill does not include significant measures previously passed by the Massachusetts Senate to advance solar equity or implement carbon pricing. In addition, the new clean peak standard could potentially incentivize burning trash to generate electricity, which damages public health.
Similarly, other provisions mark steps both forward and sideways. “Today’s bill helps address one major issue for the future of local solar generation in Massachusetts by eliminating the unfair and inefficient solar charges introduced by Eversource earlier this year, but it leaves several important questions unanswered for solar,” said Mark LeBel, staff attorney at Acadia Center. “It risks leaving out low-income residents and other groups requiring additional focus by failing to increase the net metering caps and implement a new requirement to distribute the benefits of solar incentive programs equitably. Acadia Center will closely monitor the types of projects built under the new solar incentive program and work to ensure that the program benefits all communities in the Commonwealth.”
“Acadia Center has long called for expanded use of clean technologies such as electric heat pumps in Massachusetts’ energy efficiency programs to give residents greater ability to move away from expensive oil, and with the Legislature’s action on this bill, it advances strategic electrification and renewable resources,” said Amy Boyd, senior attorney at Acadia Center and member of the Energy Efficiency Advisory Council. “Acadia Center is also very pleased to see the full legislature pass the House’s provision requiring the electric companies to identify reliability issues and solicit local, clean energy resources to fill those needs, rather than spending more and more on infrastructure.”
“Massachusetts’ continued progress in the electric sector provides a blueprint for success in the transportation sector, where we are falling behind,” said Jordan Stutt, carbon programs director at Acadia Center. “Our outdated transportation system now accounts for twice as much CO2 as any other sector, and we are in desperate need of new investments to modernize and decarbonize how we get around. A price signal to reduce transportation sector carbon emissions, as called for in a bill that the Senate passed, would set us on the right track to a cleaner, modern and more accessible network of transportation options.”
Deborah Donovan, Massachusetts Director & Senior Policy Analyst
email@example.com, 617-742-0054 x103
Mark LeBel, Staff Attorney
firstname.lastname@example.org, 617-742-0054 x104
Pacheco: ‘No excuse’ for House not to act on energy bill
Last week, the Northeast Clean Energy Council and the Acadia Center — organizations that co-chair the Alliance for Clean Energy Solutions — sent a letter to Golden, Sanchez and other members of House leadership, calling it “essential” that the House approve four bills: H 4575 to increase renewable energy and reduce high-cost peak hours; H 4576 to increase grid resiliency through energy storage; H 4577 relative to net metering; and H 1724 relative to energy efficiency.
“These four bills would greatly advance Massachusetts’ clean energy leadership and deliver economic, energy, environmental, and health benefits to residents, businesses and industries across the Commonwealth,” the coalition’s letter said. “Prompt action by the House is needed to ensure final passage of legislation on these topics this session.”
Read the full article from the Taunton Gazette here.
Clearing the Air: Long-Term Trends and Context for New England’s Electricity Grid
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.
Can New England Steal California’s Storage Thunder?
Clean energy rivals New England and California are racing toward a new prize: leadership on energy storage. Both coasts have been leaders on energy efficiency, renewables deployment, and electric vehicles (EVs), and storage is the logical next step to improve system efficiency and back up intermittent wind and solar as they are increasingly adopted.
The benefits of storage are clear and increasingly well-recognized. Storage deployed at scale will serve the same purpose as warehouses and refrigerators in our food system by rationalizing an energy grid that is massively overbuilt to match supply and demand every second of every day. This logic is backed up by analysis from the Massachusetts’ Department of Energy Resources (DOER) showing that the top 10% of peak demand hours drive 40% of energy costs, and storing energy to meet these peaks would provide $3 billion in energy system benefits each year. According to a recent study from UC Berkeley, storage can also produce significant public health benefits by avoiding reliance on dirty ‘peaking’ power plants that are often located in marginalized urban areas.
In the race for energy storage in the Northeast, Massachusetts is taking an early lead. Under energy diversity legislation passed this summer, DOER can act to meet the storage target it recommended—600MW by 2025—which proportionately would be far larger than California’s mandate. The legislation also cleared an important practical hurdle by authorizing utilities to own storage, and, so long as third-party owners are protected to ensure competition, political support for energy storage should remain strong.
An overall mandate would build on efforts already underway in the Commonwealth. DOER is offering $10 million for demonstration projects through the Energy Storage Initiative. The Massachusetts Clean Energy Center has invested $9 million in storage-related initiatives and is serving as a match-maker for storage developers and potential customers. Under the new solar incentive mechanism being developed, bonus incentives for storage are being considered in the range of two to seven ¢/kWh, based on storage duration (kWh) and power (kW) relative to solar capacity. Within energy efficiency plans that invest $700 million per year, utilities are piloting demand management programs integrating thermal and battery storage, and attention to demand resources is likely to increase as peak demand flatlines, overall consumption declines, and the focus on improving system efficiency at all levels grows.
New Tool in the Energy Toolbox
Across the Northeast energy storage is gaining favor as an alternative to more expensive and often difficult-to-site transmission and distribution (T&D) system upgrades. In Boothbay Harbor, Maine, cheap energy available at night is stored in ice that is then used to cool buildings on hot summer afternoons. In conjunction with targeted efficiency, solar, and demand response, storage is being deployed instead of an $18 million transmission upgrade. At a larger scale, in New York ConEd is investing $200 million in storage, targeted energy efficiency, distributed generation and demand-response in lieu of a $1.2 billion substation upgrade. The potential for eye-popping T&D savings (in addition to other energy system benefits) contributed to a proposed rule from the Federal Energy Regulatory Commission that would require all Regional Transmission Operators to remove barriers impeding storage from providing energy, capacity, and ancillary services. This clear directive will help drive the grid operator ISO-NE to take necessary steps to enable storage, including compensating storage for rapid response capabilities, opening markets to smaller storage facilities, and allowing storage to provide multiple services simultaneously. Large scale energy storage could additionally help replace retiring nuclear and coal capacity in Southeast Massachusetts/Rhode Island (potentially pairing directly with offshore wind in a coal-to-clean energy conversion at the soon-closing Brayton Point plant) and address expected load growth in the greater Boston area.
Complementing top-down reform, several states are pursuing grid modernization processes in order to capitalize on declining costs and technology advances for energy storage and other distributed energy resources. New York’s Reforming the Energy Vision has received the most attention, but REV does not stand alone. Massachusetts utilities filed Grid Modernization plans including energy storage projects and pilots in August of 2015, and while the plans need improvement to ensure unified progress toward truly modern grids, the process has begun. Meanwhile, Rhode Island is pursuing a truly bottom-up approach by using distributed resources to meet energy system needs, and grid modernization proceedings were recently initiated in New Hampshire.
Resiliency and Preparedness
Because of its resiliency and preparedness, storage is increasingly recognized for its security advantages. The vulnerability of the grid to cyber-attacks was made clear in Ukraine, and physical attacks on critical grid infrastructure have recently increased. Weather-related outages will also increase with climate change-fueled extreme weather. As we grow ever more dependent on electrical devices, the importance of grid security expands accordingly.
Storage alone can provide backup power, and pairing storage distributed generation offers steady supply when the grid is down. In recognition of these benefits, Massachusetts put $40 million into the Community Energy Resiliency Program to support solar plus storage projects at schools that double as emergency shelters, hospitals, and other critical facilities. Following storms that caused major power outages, Connecticut established a microgrid grant and loan program that is currently deploying $30 million in funding.
And the Winner Is…
California receives the most attention for energy storage, and with real progress toward a bold procurement mandate the attention is deserved. However, unique conditions in the Northeast—aggressive renewable energy targets, relatively high energy prices, and difficulty siting traditional infrastructure—make the region ripe for storage.
At this stage the race for energy storage leadership is just getting started, and the ultimate winners will be customers and the climate, as storage deployment ramps up, costs decline, and our entire energy system becomes more efficient and cleaner.
This blog post also appeared as a guest post on UtilityDive.com. See it here.
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.