I went down the crossroads, got down on my knees … Do check out this rundown of the Tuesday’s State House energy hearing.
Baker says state is at energy crossroads – CommonWealth Magazine.
It’s sad that after eight years of pretty spectacular clean energy leadership by Governor Patrick, we seem to be entering a stage of pull-back under this Governor. Saddest of all is Baker seeming to counsel increasing reliance on gas, which is not clean; a powerful greenhouse gas; which leaks prodigiously; and which for its transport, we’ll have to pay for through rate increases. While Baker claims to be focused on price, it’s still a commodity: there is very little that even statewide policy can do to affect price of gas that can go pretty much anywhere in the world.
Under these circumstances, more natural gas capacity ought to be an absolute non-starter. It should be resisted at every level, at every step, by NIMBY (literally) and in the State House. Gas is the bridge to nowhere. No more.
Slightly more mixed is his planned reliance on Canadian hydro power to comply with the state’s renewable energy mandates. Governor Patrick had reluctantly acceded to this plan, in spite of the fact that Canadian hydro requires the flooding of forest land that may in fact have a large carbon footprint. Baker is getting pushback, especially from South Coast legislators like Haddad and Pacheco who still see the economic potential of homegrown offshore wind. And with regards to price, the Baker administration seems much more optimistic about getting a good deal for hydro as opposed to offshore wind. Why?
Baker also claims to support solar, but wants to dial back the feed-in tariffs for government and large-scale arrays. Some support. Without other offsetting incentives — perhaps in permitting, or encouraging regulation for new construction — this obviously will put a crimp in solar’s growth.
Why is the Baker administration willing to go to great lengths to lower the price for gas — but lukewarm to encouraging home-grown energy sources we have, thereby insulating ourselves (ahem) as far as possible from commodity fossil fuel sources that exacerbate global warming?
It’s not just a numbers game. It’s a values game, with a significant aspect of local economic growth. California is leading. Why not us?
I could imagine a great compromise.
Governor Baker, you want your large hydro? You got it. We’ll build the transmission and bring in 2 GW straight to Boston (where the price impact will be greatest).
In return, we also want to ratchet up our RPS requirements, take another shot at 83/83A long term off-shore wind contracting, will continue to ratchet up energy efficiency programs, want to ratchet up the stretch code and the “base” building code, and want to change the formula for gas leak prioritization so that National Grid et al have to fix far more leaks a year.
But Baker only gets one thing, you say? The idea is to balance the energy imported from Canadian hydro with an equal amount of incremental RE, EE, and gas-leak-savings.
This great compromise would do wonders for reducing emissions (GHG and SOx, NOx, Hg, etc), would be an economic benefit to MA, would suppress wholesale electric prices, and would obviate any need for an additional gas pipeline in New England.
What are hydro rates going to be, and are they stable or do they fluctuate with production?
I don’t know what the first year/levelized price of a new contract would be, but I do know that in 2011 Vermont utilities signed a contract for 225 MW for about $58/MWh (source).
My bet is that it would look like this:
A. HVDC line, payment socialized by ISO-NE in some way, because it adds supply, reliability, and if it goes into the Boston load zone, alleviates transmission congestion. In terms of rate impact, it wouldn’t fluctuate significantly.
B. Energy, capacity of the hydro. I would expect that if Baker wants this, he’d set up the law to allow (require?) the MA electric companies to sign long term PPAs. The long term energy contract could be a fixed price (e.g. $65/MWh for all 8760) or could be quasi-market-based (e.g. 92% of the LMP (wholesale) clearing price). The long term capacity contract? Less important, because capacity bids directly to ISO NE and the utilities procure directly from ISO NE.
My expectation is that large hydro would have a stabilizing impact on rates. To be clear, hedging cuts both ways — it takes some steam out of the rates skyrocketing, but it also buoys rates a bit that are otherwise falling.
Breaking News: MA governor is a Republican.
As has been pointed out on BMG there seems to be a marked reluctance to call him out directly on the part of the opposition party.
Reduce incentives for solar, push hydro and gas–it would help if so-called Democrats in the state to stand up.