Setting Up Renewable Energy Market Proves A Problem
By STEPHEN SINGER, Associated Press
HARTFORD, Conn. (AP) _ Establishing a New England market to buy renewable energy seemed a laudable goal when governors committed last year to bulk purchases of wind and solar power to knock down the price while reducing the region’s reliance on fossil fuels.
Consumers could benefit from price stability, even from costlier wind and energy power. But putting together details about what types of renewable energy the six states will buy in the groundbreaking deal is snared in a patchwork of rules, state laws and disagreements over how even to define alternative energy.
“I don’t think we know how to do it,” was the blunt assessment of Christopher Recchia, commissioner of Vermont’s Public Service Department.
For example, Vermont environmental officials believe biomass– energy from living or recently living materials– is a form of renewable energy. But Dan Esty, Connecticut’s environmental commissioner, said biomass is “not cutting edge.” And Connecticut legislation being considered would require biomass and landfill-gas plants to improve their environmental performance to be part of the state’s portfolio of renewable power.
The price of wind and solar power has been falling, and a regional purchase could be expected to put more downward pressure on prices. To consumers, the immediate benefit from wind and solar power is price stability, which eludes oil and natural gas, tied to fluctuating global markets.
Wind and solar power are more expensive than gas, about 8.5 cents per kilowatt-hour versus 4 to 6 cents per kilowatt-hour, according to Seth Kaplan, vice president of the Conservation Law Foundation in Boston. But wind and solar projects can win financing more easily than coal- and gas-fired plants, which are increasingly in disfavor because of environmental worries. And nuclear plants take years to win permits and to build.
By offering long-term contracts to wind and solar power suppliers, New England states would virtually guarantee financing for renewable power projects.
However, not all of the six New England states are joining the regional effort, the only such endeavor in the country. New Hampshire is not participating, and Maine and Vermont disagree with Connecticut over whether hydropower and biomass count as renewable energy.
Because of their size, Connecticut and Massachusetts can drive the regional project. Electricity demand in the two states is about 70 percent of demand in New England.
“Connecticut and Massachusetts have the ability to make a market here,” Kaplan said. “This is a market that is waiting to be tapped.”
In the region, 28 wind projects totaling 2,000 megawatts are waiting for approval, said Marcia Blomberg, spokeswoman for ISO-New England, the region’s grid. That represents 40 percent of total megawatts in projects waiting for an OK and would nearly triple wind power output in the region.
Esty said he sees a “real break out here in regional cooperation.” But Massachusetts is criticizing Connecticut as it tries to update 15-year-old rules related to the share of renewable energy as a proportion of overall sources of power.
Legislation in Connecticut would expand the types of hydropower and biogas that count as alternative power in the state’s portfolio, create a new class that includes certain large-scale hydropower resources and make other changes in alternative power standards.
Massachusetts officials do not consider large hydropower projects eligible for its portfolio of renewable energy because it’s a “mature technology,” compared with newer alternative energy such as wind and power, said Steven Clarke, assistant secretary for energy in Massachusetts.
Energy Undersecretary Barbara Kates-Garnick said Massachusetts has “serious concerns about how Connecticut’s proposed changes to its renewable portfolio standard will affect the region’s renewable market.”
“We have been talking with Connecticut officials but have made no commitment to a first round procurement,” she said.
Maine also is taking shots at the regional plan because of which renewables are counted. Patrick Woodcock, Maine’s director of energy, said biomass is “unfairly targeted” and he is uncertain that New England can establish a uniform renewable energy policy.
Maine is looking to sign hydropower contracts with Quebec and Canada’s Maritime Provinces, seeing limits imposed in New England on the scale of hydropower and what counts as renewable energy as “parochial,” he said.
“It diminishes a partnership across the entire Northeast to create more certainty with pricing and to further environmental goals,” he said.
Marion Gold, Rhode Island’s energy commissioner, said she’s optimistic that New England will put together a workable purchase plan for alternative energy.
“We’re working through all the different challenges to work collaboratively,” she said.
“Each state has a slightly different way of going through the process.”
(© Copyright 2013 The Associated Press. All Rights Reserved.)