Growing Clean Energy

Feb 17, 2015 by  | Bio |  Leave a Comment

The recent massive snow storms provide a stark reminder of why we need more clean energy. The more fossil fuels we burn, the more global warming we face.  Fiercer and more frequent storms continue to march across New England wreaking havoc with the daily lives and pocketbooks of so many.

Thankfully there are many efforts to bring more clean energy to the region and begin to break our addiction to fossil fuels.

In Vermont, Legislators are taking up a broad bill that would expand renewable energy opportunities. For electricity, the legislation would set the highest standard of any place in the region – 75% renewable by 2032. While much of that electricity would come from existing sources, including imported hydro power from Canada, it sets a new benchmark for what is possible — closing down coal plants, walking away from new gas facilities, and relying on more clean local power. The City of Burlington is already exceeding this standard and showing in real terms how meeting a 100% renewable standard is achievable and saves money for their customers.

The Vermont legislation would require that a full 10% of the electricity in 2032 come from smaller scale local renewable projects. Putting power generation closer to power needs reduces pollution and curbs the need for massive new transmission projects. This builds on the rapid success in Vermont of expanding customer opportunities to rely on renewable power. When combined with energy efficiency that already meets over 13% of our electric supply needs, Vermont jumps well ahead of the curve in bringing about a much needed clean energy transformation for the region.

The legislation also corrects a troubling problem with existing Vermont law. No longer would utilities double-count renewable resources, by both claiming them for Vermont while selling them to customers in other states. The Federal Trade Commission recently criticized this practice in regards to one utility’s activities. Instead, Vermont’s renewable supply would be better integrated into the regional renewable markets. Vermont can continue to sell renewable power in the region and avoid undermining our own efforts to reduce greenhouse gas emissions.

Some of the more innovative aspects of the Vermont legislation begin to tackle the biggest sources of greenhouse gasses in Vermont – fossil fuel used for heating and transportation. As of 2011, heating and industrial uses account for about 32% percent of Vermont’s greenhouse gas emissions and transportation accounts for about 46%. To meet our needed greenhouse gas reductions and avoid future climate disasters, we need to reduce fossil fuels from more than just electricity.

To further reduce greenhouse gas emissions and save money, the Vermont legislation would set binding requirements that by 2032 Vermont utilities provide opportunities for their customers to reduce fossil fuel use for heating and transportation. Projects can include such things as expanding the availability of heat pumps, weatherizing homes and businesses, installing efficient biomass heat, and providing facilities to support electric vehicles. Projects would not only need to provide reduced pollution, but offer clear economic savings as well. This opens up opportunities for partnerships that can break down barriers. Meeting customers where they are and providing the services they need and want at a reasonable cost is the hallmark of any good business. Legislation that paves the way for successful businesses to meet our broader 21st century power needs will position Vermont well to tackle global warming. Keeping a clear focus on the economics and the pollution reduction ensures that all Vermonters benefit from these changes.

With storms raging throughout New England, it is good news the Vermont Legislature is taking action to tackle global warming and help Vermonters save money.

ISO Corrects Its Big Mistake — And Will Count Renewable Energy

Jan 26, 2015 by  | Bio |  2 Comment »

At the January 21, 2015 meeting of the ISO’s Planning Advisory Committee (PAC), the ISO made clear that – for the first time in its history – the ISO is going to count renewable energy Distributed Generation (DG) in calculating how much electricity capacity it buys in its annual “Forward Capacity Auction” (FCA). Although many details remain to be worked out, this is a big win for renewable energy – and one that CLF has been fighting for literally for years.

ISO-New England is the entity that runs the New England electricity grid and wholesale electricity markets; those markets, in turn, determine how much ratepayers will pay for every kilowatt hour of electricity they use. You can read about CLF’s long-standing work with the ISO, here.

Once a year, the ISO runs a “Forward Capacity Auction” (FCA). In a blog post on October 15, 2014, I explained what these FCAs are, and why they are so important:

Once a year, ISO holds what it calls a “Forward Capacity Auction” (FCA) for a one-year period of time three years in the future. The purpose of these FCAs is to ensure that there will be adequate supplies of electricity (that is, enough power generators) in the region to meet the expected load. . . . The technical term that ISO uses to describe what it wants to buy in these FCAs is “Installed Capacity Requirement” (ICR). Don’t be frightened by the name or the acronym: the ICR is the quantity of electricity generation (“capacity”) that is needed (“requirement”) to meet the expected load (electricity usage) during the relevant period.

One reason that these FCAs matter is because a lot of money is involved. The clearing prices of the eight FCAs that ISO has conducted have resulted in real costs to New England electricity ratepayers of between $800 million to $2.2 billion (that is per annum).

For years, CLF (and others) have been arguing that, when the ISO calculates its annual ICR figure, it needs to account for renewable energy DG that is actually on the New England electricity grid or expected to be during the relevant period. The title on my October 15 blog post was: “The ISO’s big Mistake: Not Counting Renewable Energy.” I said:

ISO’s big mistake was not accounting for renewable DG when it projected how much electricity to buy in the next Forward Capacity Auction . . . ISO’s big mistake will cost ratepayers a lot of money. For every 100 MW of renewable DG that ISO failed to count, New England ratepayers will overpay $200 million in the upcoming February 2015 FCA. And ISO’s own estimate (which CLF believes is overly conservative) is that there will be hundreds of megawatts of renewable DG in New England during the relevant period (2018-2019).

On October 6, 2014, CLF sent a letter to the ISO challenging the ISO’s big mistake. As you can see, CLF emphasized the potential savings to ratepayers if the ISO corrected its mistake of improperly ignoring renewable energy. And CLF was not the only one that objected to the ISO’s big mistake. The New England States Committee on Electricity (NESCOE) sent its own letter urging the ISO to count renewables in making its ICR calculation.

As you can see, CLF’s letter to ISO also raised the possibility that, if not corrected in the future, ISO’s mistake could make the ISO’s auction results subject to legal challenge before the Federal Energy Regulatory Commission (FERC). (All major ISO decisions are subject to FERC approval.) In its letter, CLF cited the specific section of the Federal Power Act that such a challenge would be based on and cited specific cases on the topic.

FERC essentially agreed with CLF. On January 12, 2015, I posted a blog on CLF’s website entitled, “FERC Agrees With CLF About the ISO’s Big Mistake, Not Counting Renewable Energy.” In that blog, I linked to a January 2 FERC Order directing the ISO not to make the same mistake again when it next calculates how much capacity to buy in the next Forward Capacity Auction, FCA-10, scheduled to be held in February 2016.

The good news now is that the ISO got the message that CLF, NESCOE, and FERC have all been sending. At the January 21, 2015 meeting of the PAC, ISO staff reported that they will include some renewable energy DG in the calculation of the ICR for FCA-10. While CLF is not completely satisfied with the methodology that the ISO proposes to use, this is nevertheless a huge step forward – because it means that we can now discuss how to account for renewable energy on the system rather than whether to account for it.

In fact, at the January 21 PAC meeting, ISO staff acknowledged the existence of four separate “buckets” of DG on the electricity grid: (1) DG that participates in the Forward Capacity Market and does get a Capacity Supply Obligation from the ISO;  (2) DG that does not participate in the Forward Capacity Market but is known to the ISO’s Control Room as so-called Settlement-Only Generators (SOGs);  (3) behind-the-meter resources that are accounted for already as part of the ISO’s load forecast; and (4) behind-the-meter resources that are not accounted for already as part of the ISO’s load forecast. The third of these four categories will not result in any change in future ICR calculations, because these resources are already figured in to the ISO’s load forecasts. However, there is now opportunity, for the first time, for the other three categories to be accounted for in the ISO’s annual calculation of how much electricity capacity to buy in the annual capacity auctions.

This will result in a classic win-win situation. All New England ratepayers will benefit because they will stand to save literally hundreds of millions of dollars a year by not double-paying for energy. And renewable energy producers will finally start to receive some credit for the electricity that they are putting into the New England electricity grid.

Renewable Energy Bill Introduced Into Rhode Island General Assembly

Jan 15, 2015 by  | Bio |  Leave a Comment

On January 14, 2015, H-5079 was introduced into the Rhode Island House of Representatives. Representative Deborah Ruggiero (D-Jamestown) was the lead sponsor; House Environment Committee Chairman Arthur Handy (D-Cranston) was a co-sponsor. You can see a copy of the bill on the General Assembly’s website.

The bill would extend the life of Rhode Island’s 2004 Renewable Energy Standard, Rhode Island’s first, very successful renewable energy law. CLF strongly supports H-5079, and worked with Rep. Ruggiero to craft its language.

In June 2004, Rhode Island became one of the first states to enact a so-called “Renewable Portfolio Standard” (or RPS). In Rhode Island, our RPS law is called the Renewable Energy Standard (RES). RPS laws are among the most successful renewable energy laws ever enacted in the United States, because they have a track record of actually working to get small, medium, and large renewable energy projects financed and built. California enacted the first RPS in 2002 (with Rhode Island close behind in 2004). Today 29 states have mandatory RPS laws, including five of the six New England states (all except Vermont), as well as New York, Pennsylvania, Texas, Ohio, Illinois, Arizona, and New Mexico.

The principal feature of Rhode Island’s RES Statute is the mandate, or obligation, that Rhode Island’s principal electricity utility, National Grid, buy a certain percentage of its electricity from renewable energy sources, with that obligation increasing over time. The Rhode Island RES Statute started with an obligation to purchase 3% of electricity load from renewables in 2007 and ramps up to 16% of load in 2019. (Of course, the comparable figures for the RPS obligations in other states vary from state to state. For example, the current California RPS, the most ambitious in the nation, ramps up to 33% of electricity load by 2020.) The RES Statute also defines what counts as “renewable energy”: wind, solar, geothermal, and small hydro (under 30 megawatts).

Rhode Island’s original RES Statute was designed to be an experiment, and it is set to expire in 2019. Now that we have more than a decade of experience with the law, and know that it has worked extremely well, H-5079 is designed to extend its life from 2019 through 2035 – with the obligation continuing to ramp up at the substantial rate of 1.5% per year. CLF is working closely with other environmental groups to build broad and strong support for H-5079.

As Cold Sets In, the New England Winter Energy “Crisis” Fizzles

Jan 14, 2015 by  | Bio |  8 Comment »

As of this writing (mid-January), we’re reaching the end of our first major cold snap here in New England, so let’s take stock of how New England’s electric system and market are faring. In short, we are doing much better than expected, to the great surprise of the many “experts” who have said we are in a “crisis.”

(credit: EcoPhotography)

(credit: EcoPhotography)

Despite months of talk about energy shortages and ever-higher prices, wholesale prices for electricity and natural gas are running well below last year, and power plants are getting the fuel they need to run, even in very cold weather. After big power plant retirements, the system is working well, and the forward prices that will set future retail electric rates are also down. Unfortunately, many customers’ bills remain extremely high thanks to poorly timed energy buys by electric utilities, but rates are already falling. The new, calmer reality we are seeing this winter should force rational policymakers to dial back the energy crisis hysteria.

There is no question that there were challenges last winter. As we’ve discussed before, the spot prices for natural gas delivered to New England spiked to incredible heights, and, because natural gas power plants are the dominant power providers in New England, wholesale electricity prices followed suit. Prices stayed very high through March. On a few of the coldest days, some natural gas power plants didn’t get enough fuel to run. Older, dirtier, costlier power plants filled the gap, running much more than usual. While regional grid operator ISO-NE has described the system’s condition as precarious, there wasn’t actually a power shortage or emergency due to natural gas constraints. (On one occasion in December 2013, sudden loss of imports from Hydro-Quebec did cause the grid operator to dip into short-term reserves. A similar incident happened earlier this winter, on December 4, 2014.) As CLF has pointed out, the real issue last winter was a failure to deal adequately with the increased use of natural gas for power generation, not a major deficit in pipeline capacity.

So far, what happened last winter isn’t happening this winter:

  • In December, New England wholesale power prices and natural gas prices were down 55% and 64% from last year, respectively. The average spot price of power was about 4.3 cents per kilowatt-hour. So far in January, we’ve seen an increase in these prices on cold days, especially during the morning and evening “ramps” when we see very brief “needle peaks,” but the increase has been much less than last year.

ISO-NE prices

  • Even in the coldest weather, natural gas power plants are getting the gas they need to run. While December was somewhat warmer than last year, we’ve seen some bitterly cold weather in January, and there has still been enough gas to heat our buildings and serve power plants. And we don’t have any more pipeline capacity than we did last winter. In general, it appears that ISO-NE, power plants, and pipeline companies have learned lessons from last winter about timely communication, coordination, and fuel supply, something federal energy regulators are pushing as well.
  • ISO-NE has implemented a number of meaningful pricing reforms in the wholesale electric market. These changes seem to have helped contribute to more accurate, moderate wholesale prices, including the innovation—well-explained recently by my colleague Jerry Elmer—of allowing negative prices. The power plants running during negative price events are actually paying into the electric grid for the right to operate, reducing the amount we all have to pay. We saw negative spot prices on a number of occasions in December, and we even saw them on a fairly cold night earlier this week. ISO-NE has a more thorough description of its most recent market changes here.
  • Liquefied natural gas is helping. As CLF has argued for several years, making greater use of our existing LNG infrastructure to help supplement natural gas deliveries through pipelines can be a smarter, lower-cost option than building new pipeline capacity and is much cleaner than relying solely on oil-fired power plants. Unlike last winter, ISO-NE opened its “winter reliability program” to LNG this year. The price of LNG is tied to global oil prices, which have fallen dramatically, making LNG deliveries—a new shipment reached the Everett, Massachusetts terminal just this week—an even more cost-effective way to meet high winter gas demand.
  • The market appears to be taking the 2014 retirements of several major power plants (Vermont Yankee, Salem Harbor, and Mount Tom) in stride. CLF sees these retirements as appropriate technology turnover and major opportunities to build the region’s clean energy future. In the wake of these retirements, energy efficiency and renewables are playing an increasingly important role, with thousands of megawatts of these resources expected to come online in the next few years.
  • Looking into the future, New England natural gas and power futures for the rest of this winter and next winter are way down from their recent highs, and less than they have been in more than a year, before last winter’s challenges spooked the market. This trend suggests that market observers are not expecting last winter’s challenges to recur to the same extent in future years.

    Feb. futures

    February 2015 New England power futures sit at $85/MWh or 8.5 ¢/kwh; many utilities locked in winter prices between September and November 2014 (source: CME Group)

If this is what is happening in the market, why are many customers paying so much for power this winter? The answer: profoundly terrible timing and insufficiently flexible buying practices on the part of utilities. The utilities charging the highest rates this winter locked in power buys last fall, at astronomical multi-month rates that in some cases doubled the previous supply rates in customer bills. The upshot: some retail customers are paying more for each and every kilowatt-hour of energy they use through the spring than the wholesale market prices on even this winter’s coldest days.

There are silver linings for even these electric customers: customer bills will return to earth when new rates are set. This week, two utilities that avoided setting rates last fall—Central Maine Power and Bangor Emera—set their prices for this year, and their supply costs dropped almost 15%, to 6.5 cents per kilowatt-hour—less than half what many customers in other New England states are paying this winter. Competitive energy suppliers also are beginning to offer lower prices, and retail choice may allow customers to find a lower rate even sooner. Other utility customers should see substantial drops when their rates change next, and most will have lower bills in time for summer and air conditioning season.

Taking a broader view of customer energy bills to include transportation and heating fuels, the sustained decline in oil prices means that most New England households and businesses are likely to spend less on all their energy this year than last year, even if they pay a high electric rate this winter. While this drop in oil prices may benefit us in the short term and take the bite out of winter electric hikes, relying so much on fossil fuels is a sword that can cut both ways; until we more aggressively shift to the “free” fuels of renewable resources, we will be living with and need to manage the risks of the fossil energy rollercoaster.

ISO-NE's conservative expectations for wind, solar, and efficiency growth

ISO-NE’s conservative expectations for wind, solar, and efficiency growth

Where does this leave the ongoing discussion about our regional energy future? Over the last year, you’ve probably heard the dire prognostications of state officials, industry advocates for new gas pipelines like Kinder Morgan’s Northeast Energy Direct and power lines like Northern Pass, and even representatives of ISO-NE. The message: we don’t have enough gas pipeline; our old power plants are retiring without reliable replacements; we need much more imported power; electric rates will be sky-high until we “do something.” That something is the so-called  “grand bargain” solution, concocted behind closed doors, then put on hold last summer, but likely to reemerge in some form this year. The plan: build lots of big new energy infrastructure, with electric customers footing the bill. We’ve been told that, until that billions of new infrastructure comes online, households and businesses would pay devastatingly high electric bills. So far, this winter has shown that the payoff on this multi-billion-dollar bet is far from assured and likely to be much less than assumed from last winter’s experience, as it’s not clear how much new infrastructure we really need and the region is already saving a great deal without new mega-projects.

With the winter energy crisis narrative fizzling before our eyes, and new political leadership in several state capitals, New England has an opportunity to set a different course this year. We can craft incremental, market-oriented measures that help ensure we meet our energy needs at a reasonable cost, reduce our fossil fuel use and greenhouse gas emissions, and make full use of the infrastructure we have. In a market that can turn on a dime, these are smart moves, and they are already paying off this winter.

Follow me on Twitter as I track the data through the winter at #winterenergycrisis.

FERC Agrees With CLF About the ISO’s Big Mistake, Not Counting Renewable Energy

Jan 12, 2015 by  | Bio |  Leave a Comment

On October 15, 2014, I posted a blog that explained that the ISO, the entity that operates New England’s electricity grid, had made a huge mistake in neglecting to use its own renewable energy forecast in deciding how much electricity to buy for the period 2018-2019.

On January 2, 2015, the Federal Energy Regulatory Commission, the governmental agency that regulates the ISO, issued an Order that agrees with CLF’s position, and tells the ISO to correct its big mistake when it decides how much electricity to buy for the following year, 2019–2020.

Here are the details of what happened. (If you find some of this discussion confusing, read my October blog first, because that explains many of these terms.)

On November 4, 2014, the ISO filed with FERC its projected figure for the Installed Capacity Requirement (ICR) for FCA-9 (that is, Forward Capacity Auction 9, to be held next month, February 2015, for the Capacity Commitment Period that runs from June 1, 2018, to May 31, 2019). CLF voted against the ISO’s figure in NEPOOL, the ISO’s legally mandated stakeholder group. CLF cast this negative vote specifically because that figure (34,189 MW) improperly failed to account for the ISO’s own forecast of renewable energy distributed generation that would be on the New England electricity grid during the relevant period, 2018–2019.

Significantly, a majority of NEPOOL members sided with CLF on this issue. The problem that both CLF and NEPOOL pointed out was that when the ISO calculates an ICR that totally ignores the ISO’s own distributed generation forecast, the resulting rates cannot, by definition, be “just and reasonable” within the meaning of the Federal Power Act, because the ISO is significantly over-procuring capacity.  This yields unjust rates in at least two separate ways. First, ratepayers are procuring extra capacity that they don’t need. Second, the auction clearing price is likely to be higher than it should be because the demand side of the equation is improperly exaggerated. So it is a double whammy: procuring too much of commodity and at a price that is artificially inflated.

FERC discusses this issue in paragraph 7, page 3, of its Order:

NEPOOL states that it does not support the ICR value because NEPOOL believes the ICR value should be reduced to account for distributed generation, especially solar photovoltaic resources, that is forecasted to be available during the 2018/2019 Capacity Commitment Period. According to NEPOOL, some participants contend that failure to reflect the amount of solar photovoltaic capacity in the ICR calculation will lead to over-procurement of capacity in the FCA.

Although the FERC Order does accept the ISO’s ICR filing for this auction, the Commission also tells the ISO to clean up its act before the ICR filing for the next auction, FCA-10. This is an important victory for renewable energy (and for common sense). The language I am referring to appears in paragraph 20, page 8, of the January 2 FERC Order:

[W]hile we are accepting ISO-NE’s proposed values for FCA 9, we expect ISO-NE to fully explore the incorporation of distributed generation into the ICR calculation in the stakeholder process. We expect ISO-NE to do this on a schedule that will allow these factors to be reflected, if determined appropriate, in the ICR calculation for FCA 10.

Over the coming year, CLF will use this language to push the ISO to correct its huge mistake for its next ICR filing in November 2015, for the next auction, FCA-10, to be held in February 2016. If the ISO does not listen to CLF – and to the overwhelming majority of NEPOOL members – on this issue, there is the very real possibility that next time FERC will reject the ISO’s flawed ICR calculation.

Mapping the Road to a Low-Carbon Future for the Northeast

Dec 23, 2014 by  | Bio |  1 Comment »

“All you need is the plan, the road map, and the courage to press on to your destination.”
–Radio legend Earl Nightingale (1921-1989)

How do we, efficiently and effectively, complete the transition from an energy system rooted in fossil-fuel generation to a much-needed clean energy system for our region? As participants in last week’s Lessons for a Climate & Energy Roadmap 2050 Process for the Northeastern US learned, it takes courage to embark on the collective journey to a low-carbon future, and it helps to bring a map.

Hosted by CLF, CLF Ventures, and The Fletcher School of Law and Diplomacy’s Center for International Environment & Resource Policy, and sponsored by The Oak Foundation and German Consulate General of Boston, the December 16 event at Tufts University brought together business and government leaders and environmental advocates from the Northeast with their counterparts from Germany and the European Union (EU), Canada, California, and beyond. The goal: explore how the EU’s experience pursuing renewable energy, energy efficiency, and climate protection policies and targets could offer lessons for our region’s clean energy and climate transition.

The Northeast Roadmap 2050 event drew inspiration from the EU Roadmap 2050 process, which convened key stakeholders to shape a shared vision for reducing greenhouse gas (GHG) emissions in the EU at least 80% below 1990 levels by 2050. Here in the northeast US/New England, we have a very similar opportunity. The New England states and New York, along with the Eastern Canadian provinces, have adopted climate goals and mandates that mirror the EU mandate. We have a core of business leaders that can be mobilized, and a number of key energy players here are the same companies that sat at the table for the EU Roadmap 2050 process. Though the questions underlying a similar planning process for the Northeast are simple, the challenges are anything but: Can the leaders of our region articulate the vision of a sane energy transition that leaders and decision-makers in Washington have not? If so, how do we achieve essential buy-in from key regional decision makers, like executives and regulators, to move from a shared vision to an implementable course of action?

During the daylong event, participants joined in person and over videoconference to begin to build a foundation of shared knowledge upon which a Roadmap 2050 process can be built for the Northeast. Among the day’s highlights:

  • Tufts emeritus professor of international environmental policy and lead author on several Intergovernmental Panel on Climate Change (IPCC) reports William Moomaw urged participants to accelerate the transition to renewable energy sources and emphasized that such a transformation is essential.
  • Mike Hogan, Senior Advisor to the Regulatory Assistance Project, shared several key lessons learned from the EU Roadmap 2050 process, including:
    • Derive legitimacy from a very broad base of stakeholder participants, including industry, governments, NGOs, governments, and technical experts.
    • Start from a point of broad consensus about the destination. Participants don’t need to agree on how to get there or even if they can get there, as long as they agree on the destination.
    • Focus on shifting the public narrative about what makes sense and re-defining the “middle ground.”
    • Keep everything on the table and take nothing for granted (except the destination).
    • 90 percent of the success of the Roadmap process is just getting people to sit in the room and stay in the room to work together on the process.
  • Dr. Patrick Graichen, Executive Director of Agora Energiewende, a German energy think tank, and Graham Weale, Chief Economist, RWE AG, a leading European utility, presented insights from Germany’s energy transition (Energiewende) and from the German energy industry, including the key role of wind and solar energy, and the importance of building both supply- and demand-side flexibility and strong market mechanisms into a low-carbon energy system.
  • V. John White, Executive Director, Center for Energy Efficiency & Renewable Technologies, offered insights from the ongoing California 2030 Low Carbon Grid Study. Among the Phase I findings:
    • The importance of balancing California’s energy portfolio both technologically and geographically;
    • The need to modernize California’s currently inefficient gas fleet and use gas differently;
    • The increased role of bulk storage and demand response to shift energy demand to different parts of the day and reduce demand on the overall system;
    • The emerging need for California to take a more regional approach to its energy grid.
  • Michael Jasanis (HotZero, LLC and former CEO of National Grid USA),Phil Giudice, CEO and President of Ambri, and Cindy Arcate, CEO and President of PowerOptions, contributed the perspectives of Northeast utility and energy industry leaders.

From the wide range of opinions and insights shared over the course of the day, participants were left with a sense of urgency to accelerate a clean energy transition for the Northeast as well as many questions that remain to be explored. Next steps? Participants expressed interest in a second, follow-up convening that will likely be planned for early 2015, hosted by an organization that can provide a supportive yet outcome-neutral role in advancing a Northeast Roadmap 2050 stakeholder process. Once the process is underway, the group will develop a framework for the multi-sector analysis and modeling work needed to create a powerful vision that will shape governmental and business decision making and that will be owned by a broad and deep regional stakeholder group.

Exciting News on Renewables in New England

Dec 19, 2014 by  | Bio |  3 Comment »

The ISO’s on-going effort to integrate renewable energy into the New England power grid is not only on track but is accelerating. ISO-New England is the FERC-licensed entity that runs the New England power grid.

Specifically, two distinct but related changes are under way right now. First, on December 3, the ISO – for the first time in history – introduced negative price offers into New England’s wholesale electricity markets. You can read about what that means, and why it is so important for renewable energy, in my previous blog post, here. The second change is that the ISO is on a trajectory to make variable output renewable sources (like wind and solar) fully dispatchable in New England’s real time wholesale electricity market. You can read about what this means here.

One more piece of information – about the ISO’s tariff – is crucial to understanding how these two related phenomena are going to radically change New England wholesale electricity markets for the better. The ISO’s tariff is the document that sets out – in exquisite detail – the rules and procedures that govern New England’s electricity markets. The tariff itself runs to 395 pages, and that is without Appendices A through K that add hundreds more pages.

Here is the crucial point: Under the ISO’s tariff, only generation resources that are fully dispatchable get to set the clearing price for electricity. That clearing price, which can be different for every hour of the day, is the price that every generator on the system receives for its electricity output during the relevant hour. Now that renewables are being made fully dispatchable, renewable resources (like wind) will, for the first time in New England history, be able to set the clearing price for electricity. And that is happening at the same time as the ISO is introducing negative pricing!

Because I have the honor of representing CLF on several ISO committees, I have had a close-up view of this process actually working; it is really exciting. At an ISO meeting earlier this month, we went through a line-by-line and word-by-word review of the actual changes in the ISO’s tariff that will make wind and run-of-river hydro power fully dispatchable. ISO will decide on the final tariff language in January, and plans to file the tariff changes with FERC in February. Wind and hydro should be be fully dispatchable in the New England electricity market in late 2015; and the ISO plans to make other renewables, like solar, fully dispatchable by 2018.

And, as I said above, negative prices became possible on December 3. In fact just over a week later, on Thursday, December 11, the wholesale price of electricity in New England dropped to minus $151.73 during one hour of the ISO’s “Operating Day.” Today (December 19) we had a clearing price of zero for an hour this morning, and then the clearing price dropped to minus-$47.67. Negative wholesale electricity prices in New England are not merely a theoretical possibility; they have been happening this month.

Needless to say, owners of conventional, fossil-fueled generating plants are very unhappy about these changes. As I explained in my previous blogs, most clearing prices are set by fuel costs. Because renewable generators have no fuel costs (sunshine and wind is free), it is renewable generators that are most likely to make negative-price bids in electricity markets. But when renewable generators set the clearing price at below zero, that is the clearing price for that hour for all generators (including the fossil-fuel generators which do have fuel costs)!

The old pricing paradigm for electricity changing – and it is renewable energy that is forcing the change. Fossil fuel (and nuclear) generators are not happy about it, because clearing prices below zero will undermine (and may eventually destroy) their entire business model. To its credit, the ISO is moving ahead with the changes, despite the manifest unhappiness of the fossil-fuel industry.

It is very, very cool to see intermittent renewables being made fully dispatchable, able to set prices, and getting integrated like this into the region’s wholesale energy markets. In the past, environmentalists frequently heard the argument that, sure, renewables have some environmental benefits, but they are just too darned expensive. At some time in the foreseeable future, renewables are going to be setting (very low) prices in the wholesale electricity markets, and suddenly everyone will perceive them differently. In the future, we may see renewable energy being extolled for its low prices and direct benefits to ratepayers.

 

Coming Clean: Strengthening EPA’s Clean Power Plan

Dec 4, 2014 by  | Bio |  Leave a Comment

Even if it’s hard for our brains to accept, we all know the impacts to come from climate change if we don’t significantly reduce greenhouse gas emissions now and throughout the century: food insecurity, species extinction, and dramatically severe weather events. If that news isn’t sobering enough, we’ll also face a rapidly decreasing ability to adapt to these impacts by the year 2100. In spite of these dire predictions, the fact remains that there are actions that we can and must take to have a chance of slowing the effects of climate change and avoiding the most devastating impacts.

The Environmental Protection Agency (EPA) is currently proposing one of these necessary actions with the Clean Power Plan, a rule intended to reduce greenhouse gas emissions from existing power plants that burn fossil fuels. Under the Plan, EPA will lay out the best system of emissions reduction and each state will devise a program to meet those required reductions.

Even before its Monday deadline, EPA had received more than 21,000 comments from interested stakeholders. Given the complexity of the rule and the many interested parties weighing in, CLF submitted a brief, targeted letter highlighting a couple of crucial areas where the Plan should be strengthened to be truly effective. We asked for:

  • a more accurate assessment of the cost-effectiveness of renewable energy sources, energy efficiency, and demand response against which to measure fossil fuel–burning plants, and
  • measures related to natural gas (including regulation of methane emissions from its production, transmission, and distribution).

Without a better strategy for dealing with these two issues, the Plan could backfire and end up fostering powerful economic incentives to simply substitute one polluting fossil fuel for another in our energy system.

Finalizing a strengthened Clean Power Plan would be a step toward fulfilling our country’s responsibility to ourselves and the rest of the world to mitigate climate change. But it’s only one step. Even as we all wait for meaningful federal action on climate change, CLF is continuing to lead crucial efforts to curb harmful greenhouse gas emissions at the state and regional level through smart economic and environmental policy.

Why Is Hydro-Québec So Intent on Overselling Its Hydropower?, Part II

Oct 24, 2014 by  | Bio |  Leave a Comment

CLF has been asking questions about the carbon footprint of large-scale Canadian hydropower since before the Northern Pass project’s inception. I recently raised our concerns in my list of three ugly numbers behind the regional push for more hydropower imports, pointing out that, in the first decade after flooding, greenhouse gas pollution from new hydropower reservoirs can produce 70% as much greenhouse gas pollution as natural gas power plants, according to Hydro-Québec’s own science.

As with our number on new hydropower costs, Hydro-Québec took exception in a press release, asserting that CLF does not understand the science. We obviously disagree. In this post, the second in a series of three, I will break down what Hydro-Québec’s defense of its product gets wrong—on the climate benefits of its hydropower. This will be a deep dive, especially because Hydro-Québec’s press release is so profoundly misleading.

hydro-Québec

Aurora Borealis over Gouin Reservoir, Québec (photo credit: flickr/-AX-)

Why CLF Cares About Hydropower’s Carbon Footprint

Why is this issue important at all? As our region considers massive new infrastructure to import more hydropower, we need to have a full, honest accounting of the real impacts—on both sides of the border. Greenhouse gas pollution and climate change know no international boundaries, and New England is ultimately responsible for the carbon pollution attributable to its power use.

Getting credible estimates of the climate effects of new imports is especially important because virtually every proponent of new hydropower imports touts reduced emissions as a dominant reason to pursue them. Likewise, federal law and some state statutes require accurate assessments of what new imports of hydropower will mean for New England’s greenhouse gas emissions and how we achieve our short-term and long-term climate goals. To the extent new imports are in the region’s future, something CLF could support with the right conditions, we need honest numbers.

Given that hydropower projects do not have smoke stacks, when I say “carbon pollution” or “greenhouse gas emissions” from hydropower, what do I mean? Reservoirs behind new dams inundate vast geographic areas. For example, the Eastmain reservoir in the James Bay region is roughly 600 square kilometers, or more than three Lake Winnipesaukees. Drowned vegetation and biological material decompose over time and release carbon dioxide and methane into the water column and then into the atmosphere. In addition, the flooding destroys northern forested landscapes that can be potent carbon sinks (and are often called “lungs of the planet”), increasing the net greenhouse gas emissions of the reservoir by the amount of any lost capability to sequester carbon.

The key question is how much net greenhouse gas pollution a reservoir produces for its power output over time. To assess the climate effects of new imports of hydropower, pollution from the facilities supplying the power can be compared with the emissions of displaced power here in New England.

It’s also important to understand the effects in the province supplying the power and in neighboring regions, like New York or Ontario. If Canadian hydropower is merely shifted from those markets to ours and the gap is filled by fossil fuel power plants, the imports won’t reduce greenhouse gas emissions overall.

What Hydro-Québec Gets Wrong About Its Own Research

In its press release, Hydro-Québec says that “CLF asserts that hydropower greenhouse gas (GHG) emissions are much higher than they actually are … by cherry-picking data contained in a scientific study on emissions from a recently created reservoir in Québec…. What that study really indicates is that hydropower is one of the lowest-emission generating options per kilowatthour produced.”

Here again, as with hydropower costs, Hydro-Québec misstates CLF’s point. The number I cited does not pretend to describe all hydropower, or even all Hydro-Québec hydropower.

The 70% number clearly and expressly describes the emissions from a new large-scale hydropower facility during the first ten years of operation. It is taken directly from peer-reviewed scientific analysis by Hydro-Québec and academic researchers of data collected at the Eastmain 1 reservoir, a new hydropower facility in northern Québec. My blog post includes the relevant graph, presented in a scientific paper that a Hydro-Québec scientist co-authored, showing a direct comparison of these emissions with natural gas and supporting CLF’s statement that a new large-scale hydropower facility can emit 70% of the greenhouse gases of natural gas power plants in the decade following development.

A 100-year life-cycle analysis shows lower long-term emissions, but in a world where climate change is accelerating and we desperately need to reduce emissions now, the early emissions of Hydro-Quebec’s new facilities—several of which are under construction and slated for development in the coming few years—are vitally important. Moreover, it is these new facilities that Hydro-Québec intends to rely on to support new exports to the United States, likely making their carbon footprint more relevant to New England’s current decisions to increase imports than the footprints of existing reservoirs that are supplying Québec customers.

It is worth noting that the 100-year emissions described in the research are much higher than the numbers that Hydro-Quebec’s press release implies that the study confirms. The paper says that 100-year emissions are 40% of the emissions of natural gas power plants, about ten times more than the factor Hydro-Québec quotes and much higher than solar and wind power, which emit no pollution once installed.

While Hydro-Québec says CLF is “cherry-picking” a data point from its research, it ignores that the data point is a key finding of what is now seminal research, which Hydro-Quebec touts on its website as the first time ever that researchers have measured the emissions of a landscape developed for hydropower both before and after flooding:

Project EM-1 is a world first, since this is the first time that GHG emissions are measured before and after the creation of a hydroelectric reservoir. This will make it possible to precisely identify the impact hydroelectric reservoirs have on greenhouse gases.

Despite its billing, Hydro-Québec’s Eastmain research does not provide a full picture. In particular, there are many important differences between hydropower facilities in Québec, and the differences’ effects on reservoir emissions haven’t been fully researched.

For example, Hydro-Québec’s new dams along the Romaine River, now under construction, are creating somewhat smaller reservoirs than Eastmain (collectively, only one and a half Lake Winnipesaukees), suggesting that they might produce less net pollution. However, the flooded landscape along the Romaine and the flooded landscape at Eastmain are quite different. Hydro-Québec’s research at Eastmain suggests that the flooded landscape wasn’t a carbon sink prior to reservoir construction, whereas the landscape along the Romaine is more heavily forested and could provide much more vegetation that will decompose over time as well as a greater value as a carbon sink, which is now being lost.

And of course, the project’s emissions rate depends on how much power the reservoir produces. A vast reservoir that produces a relatively small number of megawatts of power will likely have a higher emissions rate than a smaller reservoir in the same landscape that produces a higher number of megawatts. That’s why true “run-of-river” hydropower facilities, which are powered by the flows in existing rivers and do not require enormous dams or flooding, are much lower carbon resources than large-scale hydropower.

Hydro-Québec’s Faulty Math

So why is Hydro-Québec so upset with CLF’s characterization of the utility’s own groundbreaking research? The core of Hydro-Québec’s disagreement with CLF is this: the utility likes to cite a greenhouse gas emission rate (pollution per unit of energy generated) that assumes its Eastmain reservoir alone powers two generation stations (meaning that the emission rate equals the reservoir’s emissions divided by the output of both stations). When the utility is in charge of the presentation, it highlights this number, which reflects a steep drop in the emission rate after the newer generation station came online by early 2012. The peer-reviewed version of the research, published in 2012, refuses to make that assumption and leaves out the newer generation station from the reservoir’s power output. Why?

The new station (Eastmain 1-A) was constructed to include flows made possible and channeled to the Eastmain reservoir by Hydro-Québec’s massive project to divert the Rupert River. That means that the net effects of the landscape changes associated with the diversion project are key to understanding the emissions of the Eastmain complex as a whole. A major element of the diversion project was the creation of two diversion bays totaling about 350 square kilometers, or the flooding of about two additional Lake Winnepauskees. While Hydro-Québec’s favored number assumes that this flooding has no net effect on emissions, the peer-reviewed research says the effects are unknown and therefore does not include the power from Eastmain 1-A in its calculation of the Eastmain emission rate.

That leaves us with the table from the peer-reviewed paper itself, which is where CLF got its number. We are also informed by the thorough research summary from Synapse Energy Economics on this topic that CLF released more than two years ago, which shows that new hydropower facilities have significantly higher emissions than have been assumed and advertised.

CLF has attempted to engage Hydro-Québec in a serious dialogue on this issue. While there have been several interactions—like this one on our blog after CLF released the Synapse report—we have yet to see anything that meaningfully addresses CLF’s concerns or corrects its misleading public relations campaign.

The Need for Honest Numbers

If this all seems complicated to you, you’re right. The research on hydropower emissions is not complete, and it is probably fair to assume there is significant variation from reservoir to reservoir. Some likely have a larger carbon footprint than Eastmain and some smaller; some are decades old, with relatively low emissions going forward, and others are newer, with a larger carbon footprint now and in the near term.

For many years, policymakers and large-scale hydropower boosters have assumed this complexity away. Hydropower emissions were either presumed to be zero or were pegged at a level based on extrapolations from simple measurements of greenhouse gas emissions from reservoir surfaces, including reservoirs flooded many decades ago. In many cases, including in Canada’s inventory of greenhouse gas emissions, a single miniscule emissions figure is used to characterize all large-scale hydropower facilities. These assumptions are at work in Hydro-Québec’s press release, including in its comparisons to other power sources and its statements about avoided emissions from its energy sales.

We know now that the old simplifying assumptions can be way off, which is one reason why CLF and others have identified a need to “tag” the energy from individual power facilities in Québec that are used for exports to the United States and define, with at least some reasonable approximation, the energy’s source and its environmental attributes and emissions profile.

The developers of the Northern Pass transmission project and Hydro-Québec are continuing their campaign to gloss over the very real greenhouse gas pollution that hydropower projects create. Despite Hydro-Québec’s own research, they are advertising numbers and slogans that inaccurately minimize reservoir carbon footprints or deny the pollution even exists. Unfortunately, it’s also the case that many New England policymakers and the federal officials reviewing Northern Pass’s permit application appear thoroughly disinterested in getting to the bottom of what Canadian hydropower projects really mean for the climate or in insisting on an accurate accounting from Hydro-Québec. For example, we have not received a single substantive response to our August 2013 request that the states meaningfully assess this issue as part of their regional efforts around hydropower imports.

As with the costs of Canadian hydropower, New England deserves honest information about the emissions of the product that Hydro-Québec wants to sell us. Instead of impugning CLF for raising questions, Hydro-Québec and American transmission developers like Northern Pass that want to bring New England its power should start offering New England the basic respect of fair dealing and real numbers.

Coming next in this series, what Hydro-Québec’s defense of its product gets wrong—on the reliability benefits of new imports for the New England electric grid.

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