Brayton Point Power Station, Somerset (Flickr’s Frank Grace)
From Gov. Charlie Baker’s inaugural address:
There’s also a direct link between economic growth and a sustainable and affordable supply of energy.
But as we begin the New Year, families and businesses across New England are being hit with unprecedented increases in their energy and electric bills. At exactly the same time energy prices across the rest of the country are falling. This increase is being driven in large part by inadequate delivery systems, the result of poor planning and coordination.
I look forward to working with my colleagues here in Massachusetts and with leaders like Governor Raimondo of Rhode Island as well as the other New England Governors to solve this problem while we continue to reduce our carbon footprint.
The line in bold is not true. From the U.S. Department of Energy’s latest Energy Information Administration monthly national electricity assessment:
EIA expects the U.S. residential price to average 12.5 cents per kilowatthour in 2014, which is 3.0% higher than the average last year. Prices increase in all regions of the country except along the Pacific Coast. Average U.S. residential electricity prices grow at a slower rate of 1.7% in 2015.
While electricity prices are certainly rising faster in New England than they are nationwide, that’s not what Baker said.
We often hear: Yeah, but if only we could get some of that cheap fracked gas from Pennsylvania! Prices in the Mid-Atlantic, which includes PA, are rising almost as fast as in New England.
Where are electricity prices falling? Along the Pacific Coast, because big investments in solar energy are paying off:
The reason solar energy can lead to lower costs is that electricity from the sun displaces mid-day peaking electricity plants, which can be the highest cost plants in the grid. For example, a residential solar system could turn a Southern California home with air conditioning from a high-demand point to an electricity supplier, having a huge impact on end market demand.
The impact on the grid can be seen by falling wholesale electricity prices at California’s wholesale hubs. The NP-15 and SP-15_2 hubs in particular saw the highest wholesale prices in a decade last year. But this year costs have fallen, in part because of the addition of solar to the grid.
High electricity prices on the East Coast were driven by high wholesale electricity prices, something that may be ameliorated by solar energy in the future.
Meanwhile, wind energy is helping keep Midwest electricity prices down during this extreme cold. Why? While fracked gas and nuclear plants love peak usage days as an excuse to charge extortion prices, wind contracts are locked in at a steady price. During a similar cold spell at this same time last year, wind energy saved Midwest consumers $1 billion in just two days.
Here in New England, ISO New England says we’re getting just 1.5% of our utility-scale electricity from wind and solar today. We’re dependent on fracked gas for 45% of our electricity. Is it any wonder why they gouge us & threaten to jack up prices even higher if we won’t subsidize their multi-billion-dollar pipeline plans?
If America could restore government of, by and for the people, as originally intended by the Founding Fathers, our energy policy would not be warped by powerful special interests in the fossil fuel industry. The Kinder-Morgan gas pipeline is an example of the problem. Fixing gas leaks and installing solar panels, wind turbines and insulation would be less expensive, create more jobs, and help prevent a climate catastrophe, but the pipeline is still being taken seriously. Why? Just follow the money.
If you have not done so already, please call your state representative and senator and ask them to co-sponsor the We The People Act, which is being filed by Representative Cory Atkins (Concord) and Senator Jamie Eldridge (Acton). If you need a copy of the draft bill, send me an email at: lauenstein[at]comcast[dot]net.
Three states–Vermont, California and Illinois–have already voted to call for an Article V amendment convention. Massachusetts, the birthplace of American democracy, should join them.
http://rationalwiki.org/wiki/We_the_People_Act
This could be a be careful what you wish for…
I’m pretty sure that’s not the one he has in mind.
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“Average U.S. residential electricity prices grow at a slower rate of 1.7% in 2015 but in MA it will increase at a much more rapid pace” but edited it out at the last minute.
As I have said many times before, my company has plants in IN and in MA. The IN ones expand and the MA ones contract, partly because energy costs in IN (electricity and gas) are half of what they are in MA.
that MA has higher electricity and gas prices, largely due to geography, which the pipeline was supposed to fix.
But relatedly, we are the most efficient state in the country. I don’t know your business, but for businesses generally the question is energy expenditures, not per unit prices. If the state helps you become more efficient, then that helps the bottom line, obvs. Not the same for every business, of course.
I’d rather double down on homemade plentiful energy and efficiency, rather than create a big new leaky piece of infrastructure for burning a greenhouse gas.
The energy costs in IN are $3 million annually. I’m not opposed to conservation and alternative energy but Baker is right to send a signal to business that he has high energy costs on his radar. MA can be an efficiency leader but if it increases the cost for business users don’t expect them to expand. I suspect the legislature is much closer to Baker than BMG on this issue.
From today’s Commonwealth Magazine:
I take your point about energy cost vis-a-vis manufacturing. I’ve heard it before and it’s a real concern.
We will not compete with IN or KY on *unit price* of old, dirty energy. But I’m all for low energy *expenditures*. I’m for $ in the pocket. Efficiency should *by definition* save money.
One of the reasons oil is cheap right now is because of efficiency improvements. And as Miles points out, the near-zero-marginal cost of wind is saving people money in the Midwest *right now* over dependence on gas, a highly volatile commodity. So with gas, you gotta frack yourself before you frack someone else. There are people who are good at this. (Also here, and others.) And the state has ways to help, too. The cheapest gas is the gas you don’t need to buy.
I am definitely against suicidal greenhouse gas emissions. I hope that this circle can be squared — not overnight — but by thinking of *different* inputs rather than just doubling down on more and more and more of the old dirty supply.
Energy is a con.
We need to work to reduce the cons (and there are a lot) and maximize the pros.
Getting away from coal is a definite. I’m not convinced though that fracking or gas pipelines are bad.
Even if they are “bad’ as defined by a majority of the BMG community (maybe not so bad as defined by others), is it worth losing jobs and ending up with a crummy MA economy, if energy costs become too big an issue?
These are questions that are difficult to answer. We’ll have to see what Baker and the legislature come up with.
…that it has to mean losing jobs and ending up with a crummy economy. In fact I would submit the going green is key to creating jobs and driving the economy.
I’m not talking about the abstract.
If I’m a company and my energy costs are X in one place, and 2X somewhere else, that’s a negative.
You keep calling yourself the VOICE OF SAVVY BUSINESSMEN but your comments sound more like ignorant ideology. WHAT GOOD’S USING HALF AS MUCH ENERGY IF IT COSTS TWICE AS MUCH.
not sure what that means.
Jeeze, if Indiana is so bitchin, just relocate there. Problem solved.
You do realize that there are many kinds of economic activity, existing and emerging, that don’t have the specs of whatever you do…right?
Why put up with this gawdaful doomed place when the enterprise utopia of Indiana beckons? It’s not like you’ll be missed, save by a small circle of friends.
Yet when it comes to providing them jobs they don’t get it.
What you’re describing is the future of MA. White collar workers clustered together here while the production is in low costs states or abroad.
Regular people do low wage service jobs.
Forgive me for caring.
I discovered as much when I was data mining the Associated Industries of Massachusetts index. It is quite good. I had an account set up so I could identify leads for a small web marketing shop.
The take away was that there are many small high value tech firms that get defense contracts due to procurement rules that parts must be sourced in the US.
It’s a kind of corporate welfare that Mass has been good at securing via its Congressional Caucus. Raytheon comes to mind.
Then you have Biotech/Pharma. When I worked in it in the 80s, there was still a degree of uncertainty as to whether it would amount to anything.
It sure did and the pay is pretty good even if you are just autoclaving lab ware.
And when you have time to emerge from the early 20th century, you may well note that there are plenty of reasonably well paid and indisputably regular people, (assuming we aren’t talking about gut problems), working in the derided service sector that does, after all, include financial and health care services and even hospitality services beyond the confines of the tried and true low status burger flipper critter you’ve trotted out.
It’s a fake argument. The real core job quality issues are very well described here https://growthecon.wordpress.com/2015/01/05/job-quality-is-about-policies-not-technology/
In your status holdfast in Andover, you’ll find clusters of employers along your namesake river near Deer Jump. And Lawrence has a significant New Balance plant that isn’t going anywhere.
I went to West Elementary in 1962 and my dad owned 20 something acres over near the Tewksbury border at Lowell street, where, surprise, a workable cluster of regular people employers may also be found.
And how could I leave out the Market Basket Distribution Center and a number of other firms down a bit south of Ballardvale?
Regular people, I swear, are to be found in all these locations as I well know from making videos of Andover’s open space amenities, its trails and neighborhoods.
Al French is my main role model in life and the place dedicated to his wife is sacred ground to me.
So there.
White Collar Joe leaves his home in Andover, stops into the Dunkin Donuts for a cup to go on his way to work. On route, he pulls into the Mobil station and fills up. Walking from the freshly plowed parking lot to the office down the street, he takes a moment to go into CVS for some cough drops. At lunch time, he hits the local Wendy’s. On his way home, he pulls up to the drive up window at the dry cleaners. His wife calls and asks Joe to pick up a few items at the grocery store.
The workers at Dunkin Donuts, Mobil, CVS, Wendy’s, the dry cleaner, and the grocery store (and many others who go unseen) have made Joe’s life rather easy. They are not high school kids. These are not “entry level” jobs. In fact, they are the more common place jobs. Let’s not forget that the nation’s largest private employers are retail stores and fast food establishments.
Tell me these workers do not deserve a sustainable wage. Tell me they do not deserve health care, retirement, sick days.
Then tell me that all of these workers need to “find better jobs” and explain to me who will do the jobs that they are leaving for the better jobs you allege to be out there?
Forgive me and merrimackguy for caring.
But then status anxious types will launch the stock fairy tale about how you can’t pay these people more cause dunkies price will go up.
Any job can be a good job if it doesn’t hinge on exploitation.
I believe in both more environmentally friendly energy sources that are not cost prohibitive AND increasing wages and other benefits. I do not at all see why these values should be in conflict. In fact as quality of life issues I find them complementary.
No government policy can change basic geography. New England is DIFFERENT from the midwest. All of the alternatives for “reducing” energy costs in New England in comparison to energy costs in the midwest are, in fact, shell games involving externalizing the real costs.
It seems to me that we should be comparing energy sources for New England, and evaluating the true costs of those energy sources — as delivered to New England, including “externalized” costs.
So long as we accept the settled science of climate change, then natural gas is at best a stop-gap measure. Yes, it is better than coal. Still, if we adopt a regional energy strategy that replaces a structural dependence on coal with a structural dependence on natural gas, then we have still lost in the long run.
Climate change is real.
In general what I am getting at is that it is good that Baker signals he is aware of the issue.
Furthermore he campaigned on what Rosenberg mentions as well- “burdensome regulations,” which for some businesses is the #1 issue. All these have to be put into the mix to make MA more business friendly.
Truthfully I think the #1 energy saving issue in MA is going to be when all companies embrace working some from home (either some people all the time or almost all people all the time). I think that some technology is going to be necessary before they are comfortable that workers are as productive as at the office, but imagine reducing commuting traffic by even 10%. The benefits would be considerable.
and of course we’re not talking about people who have to be on site.
Since renewable resources are by definition of pretty much limitless supply costs should be quite low it would seem.
Fuel costs are just part of the picture. Even wind, solar, geothermal, or hydro power still has to be transmitted and delivered. Those facilities have costs, both operating and capital. The capital costs of generating renewable energy are not negligible.
New England renewables may end up more expensive than renewables in other parts of the country because of our specific geography (climate, insolation, latitude, etc).
Based on sheer latitude alone, I expect energy costs to be higher in New England than in a mid-latitude mid-western state.
How that riddle is solved is still unclear, though I’m confident it will be. The infrastructure is going to be very expensive, at least initially. I know that in places like Norway they dam fjords and pump water into them when the wind is blowing and then generate hydro. Not a real possibility here.
More alternative power can be a great goal, but it’s not going to be the solution during this term of Baker’s or if re-elected the next.
MA (the Globe had this) is not that great for onshore wind. I could link if you need it.
Storage-
http://www.triplepundit.com/2014/09/storage-solutions-wind-solar-energy/
The lack of storage does nothing to limit the use of renewable “fueled” electricity generation in the easternmost 48 united states.
Look, demand fluctuates in real time, though it’s handled in 5 minute intervals. Neither nuclear nor coal nor combined cycle gas fired units can follow that demand change. The only thing that can is combustion turbines (gas or oil), and some hydro. CTs make up about 3-5% of the electricity generation because they’re not fuel efficient. Hydro varies from 0 to 90%, depending on location, season, and the weather 9 months earlier.
The rest of the fleet — nuclear, coal, combined cycle gas, solar, wind, geothermal, and (some) hydro — is incapable of following load on its own. It simply can’t change output quickly enough. So here’s what happens: it doesn’t. Not exactly. Instead, the ISO or RTO operator conducts a symphony in near-real time. He orders plants online 1, 2, 12, 24, even 36 hours ahead of time, using forecasts of weather, fuel availability, and demand. He turns the knobs of 100s of plants in harmony so that, together, they meet demand with supply, balanced.
He can do that because he has sufficient net ramping capability and sufficient planning and forecasting. And here’s the takeaway: the job is just as difficult in places where there is less than 1% wind and solar generation as places where there is 25% wind and solar generation. Reliability on the bulk power grid is no less in the Dakotas or Iowa as it is in Massachusetts as it is in Mississippi as it is in Idaho.
Would very cheap storage result in lower prices? Sure. It would allow us to neither build nor operate the CTs. But that’s true with or without renewables, and has been for 50 years.
P.S. Your statement that “I know that in places like Norway they dam fjords and pump water into them when the wind is blowing and then generate hydro. Not a real possibility here.” is dead wrong. Bear Swamp pumped hydro (Rowe, MA) is 600 MW, and was built about 40 years ago. About five years later, the Northfield Mountain site (Northfield, MA) was built and, at over 1000 MW, was the largest pumped hydro site in the world at the time, with more capacity than Vermont Yankee or Massachusetts Pilgrim or Millstone 2 (CT).
Come on guy. Don’t just make stuff up. It’s not helpful.
Useful and it’s written like a James Agee article in Fortune.
I would think new pumped storage facility in MA are probably never going to happen – I just don’t see anyone allowing someone to blast the inside of a mountain – near their house. You also have some pretty high efficiency losses, you are converting the electricity three times.
Reasonably priced electricity in New England is important – we have to compete with our brains – given our limited resources – and while are rates can be somewhat higher – they can’t be twice higher.
Just an example – computer controlled machining centers – lets us compete worldwide – but they eat electricity – the rates get too high – the work will go elsewhere.Or my plug in hybrid- if electricity gets too expensive – I’ll just leave it in gas mode.
I was just looking at some numbers – Cape wind 454MW 2.6B – Salem 675MW .8B – so Cape Wind costs 5 times as much as Salem per MW.
… the cart and the horse are side by side, neither one gaining an advantage. Until we get the cart behind the horse, there will be added costs. As SomervilleTom notes, there are distribution and transmission costs. There is also the added wrinkle that the present, aging, grid is neither intelligent enough nor fully capable of dealing with non-dispatchable (high variability) power like wind and solar. This is very important because, In a perhaps counter-intuitive process, the cost (and thus the price) of electricity can rise under both too little and too much power: if grid operators fail to accurately predict the weather and thus the derived output of non-dispatchables, in either direction, costs can rise. It’s a real precision juggling act that is getting harder and harder as more and more variable power sources come online. The original grid was built under the assumptions (easily fulfilled by power plants and hydroelectric) of constant, controllable and predictable power supplies in the face of variability in demand. Bolting on any unpredictability in supply is a cost and places variability on both sides of the equation. But these are all just engineering problems that can be solved with money and effort: which is to say, even more cost in the short term. The reason to spend that effort and money is that, as you point out, the supply is limitless so that once we reach the point where management of variability is more or less solved, amortization of those costs can occur and then it’s just gravy. We’re not at gravy yet. We’re just at the cusp of spending a lot tomorrow for gravy the day after… So, like I say, the cart and the horse are side by side.
People forget that we’ve been here before. In the early 19th century, prior to the discovery of the engineering marvel that is long distance electricity transmission, electricity was the boutique power supply and most heating, lighting and other consumption of power occurred through the widespread use of natural gas. Electricity ultimately grew to displace gas for most power and, even to the extent that gas is used as a generator of more electricity, but the rent seekers in the gas industry did not give up that ground altogether willingly… and the proponents of electricity, despite the now obvious superiority of electricity over gas, had to shell out a lot of up front money to overcome that opposition and to build an infrastructure. I don’t think our present situation with respect to green energy and displacing dirty energy is all that much different.
This is half true at best (see above). ISO-NE has no difficulty with this balance, and is not expected to have any difficulty. Yes, it involves planning — but that’s precisely what these organizations do. There are parts of the continental US where they’re dealing with 25% intermittent renewables — New England rarely crosses the 5% threshold.
The reality is that no variable cost economic power plant ramps well — nuclear, coal, combined cycle gas, PV, wind, run-of-river hydro, or geothermal. It’s also a reality that power plants break, frequently. If you think it’s hard for the operator to deal with weather (which is, btw, fairly predictible 1, 3, and 5 hours out), watch the ISO deal with a 600 MW coal plant or a 2000 MW two-unit nuclear plant trip. That challenge is far tougher, and the ISOs and RTOs deal with that all the time, and dispatch as dealt with this problem for 70+ years.
I repeat: in no way is the intermittency of renewable generation hindering the development or installation in the continental United States. The challenges are regulatory, siting, cost, and transmission availability.
when people like you who are technically competent answer people who wing it, or worse, just rely on old nostrums. TY.
… and you will fail in doing so, to find anywhere I said anything about “intermittency of renewable generation hindering the development”.
Christopher first made the statement “supply is unlimited” and then asked “why, therefore, isn’t the cost low?” I replied with a clear description of why costs are not aligned, in the way he expects, with supply, In this description I said nothing about this hindering development. I, in fact, made mention of the fact that these are just engineering problems that can be solved with money which is an argument you mirror in your broadside. I also pointed out the historical parallel between the adoption of electricity in the face of widespread use of gas with our present situation taking pains to point out the ultimate success of electricity over gas hoping that this would underline my hoped for success of renewables. In no place did I say it was insurmountable, unworkable, undesirable, deleterious or otherwise impossible to do.
So there. PffBfftt…
You claimed that both oversupply and undersupply due to intermittency increases costs. If that were true, it would in fact hinder development. Thing is, that’s flat wrong. When there is oversupply, it pushes the LMP (real time wholesale market price) down. In fact, ISO-NE finally announced it would follow the lead of other RTOs and allow that price to go negative. Yip, at times, the market will pay you to consume electricity if there’s too much. That’s not a cost — that’s a benefit, plain and simple.
You claim, as I quote, that our grid isn’t “fully capable of dealing with non-dispatchable (high variability) power”, suggesting the need to spend additional money because of intermittent resources. This, too, is simply not true in New England. While there isn’t necessary enough transmission capacity to build any resource you’d like anywhere in New England, this has nothing to do with intermittent resources — this is a standard problem for generation. There is nothing specific or general about the New England grid that requires investment due to intermittent resources, and that kind of engineering problem doesn’t present itself in New England for a decade or more. Think of it this way: we were getting ready to add ~650 MW of intermittent resource connected at one location at the edge of the grid, and there weren’t any grid upgrades needed due to intermittency.
I scored you as “half right.” I’m standing by that assessment. You didn’t say it was impossible — you stated that it cost extra money for grid work. It doesn’t.
The time when electricity is most expensive in New England is when it is really cold at night. People are using lots of gas and electricity for heating, and about half of our electricity comes from gas. When there isn’t enough gas, the power plants are forced to shut down. The only option at that point is to turn on expensive peaker plants.
And shutting down the Vermont Yankee nuclear power plant is going to make this worse. We do not have enough spare generating capacity to be shutting down large power plants. Closing that one power plant is probably the primary driver of the current jump in electricity prices. We are also shutting off our last few coal plants, but we don’t really have a viable plan to replace their generating capacity. So prices will have to rise until people cut back on consumption enough to reduce demand to a level that the remaining power plants can handle.
Wind would probably help, but solar doesn’t produce when we need power most. Look up NStar’s monthly price levels. Electricity is about half as expensive in the summer as it is in the winter, partly because we have installed so much solar recently, but mostly because electricity gets expensive when people heat their homes.
Electricity demand peaks during the day, both for summer peaks and winter peaks (NE has both though summer is bigger around here).
And the expensive peaker plants are mostly gas combustion turbines too, so would not be dispatched because other gas plants don’t have enough gas. They’d be dispatched because demand spikes (during the day, most likely).
And people heating their homes with gas and oil do not contribute (though that heating) to electrical demand.
I think maybe you mean there is a gas crunch. There is some merit to that argument, even so, solar PV is quite helpful.
Pricey though, I’ll admit, though the cost is coming down.