What Can Hydro and Wind Imports Do for New England? New Study Brings New Numbers to the Debate

, senior energy analyst, Clean Energy | April 28, 2016, 4:14 pm EST
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With a major natural gas pipeline project in Massachusetts being put on hold last week, Massachusetts’s electricity future is a hot topic. A new study looks at pieces of the electricity policies in play in the state, and comes to some pretty positive conclusions. Like the Union of Concerned Scientists’ own recent study on Massachusetts and energy, this new work suggests that more renewable energy is likely to be a good deal, in a lot of different ways.

The recent UCS study looked at some of the electricity proposals that the Massachusetts legislature is considering, and that might find their way into an upcoming “omnibus” energy bill. Our study concluded that embracing a wide range of clean energy technologies, at scale, could lower natural gas risks, significantly cut carbon emissions, and generate solid benefits in terms of public health and the state’s economy, all at very modest cost.

Zoom in

Now a new study looks at one particular piece of that energy progress puzzle. The Analysis of benefits of clean electricity imports study was funded by the Massachusetts Clean Electricity Partnership (MCEP), a collection of hydro, wind, and transmission companies in the Northeast (and Canadian Southeast). It looks at the idea (supported by the Gov. Charlie Baker and others) of having Massachusetts utilities go out to bid for a big chunk of their electricity needs via long-term contracts from hydro, wind, solar, and other renewable energy supplies.

And here’s what it found, according to John Dalton of Power Advisory LLC, who carried out the study on behalf of MCEP (emphasis added):

Our analysis shows that displacing natural gas-fired electricity generation with hydropower or a combination of hydro and wind results in substantial annual savings to Massachusetts energy consumers as well as dramatic reductions in greenhouse gas (GHG) emissions.

In picture terms, here’s what the math looks like:

In signing long-term contracts for renewable electricity imports, Massachusetts can capture the lion’s share of the benefits—and help its neighbors at the same time (Source: Power Advisory/MCEP).

In signing long-term contracts for renewable electricity imports, Massachusetts can capture the lion’s share of the benefits—and help its neighbors at the same time (Source: Power Advisory/MCEP).

The new study underscores the findings of UCS’s recent one, and adds to it:

  • Gas reductions – Like our work, the MCEP analysis comes at the issue from the perspective of natural gas (over)reliance, the need to cut gas usage, given Massachusetts’s heavy reliance on that one fuel, and prospects for even greater reliance. This study similarly found potential to reduce it—in this case, by about 10% across the region.
  • CO2 reductions – The new analysis found levels of carbon reductions similar to what we found. They usefully frame it (as we did) in terms of Massachusetts’s compliance with its own Global Warming Solutions Act and a 2030 goal that Gov. Baker signed the state onto. The carbon savings, the study found, would get us about 20% of the way to the 2030 goal, 10% of the way to 2050.
  • Financial savings – Our modeling exercise looked at the power sector itself, so while our report talks about the positive effects for natural gas consumers (savings across the board because of reduced demand for gas), we didn’t quantify that. This new study does, and it’s a notable/important piece of the savings they project, which they project as potentially $171 million in one year.
  • Hydro pricing – Part of the challenge in modeling hydro is guessing what it’s going to cost, given that there aren’t many (public) data points; hydro can be low-cost, but hydro producers don’t necessarily have an incentive to supply power as cheaply as they can. Power Advisory used medium, low, and high price assumptions to give a range of possible outcomes in the absence of harder data about costs. Our study, on the other hand, assumed that hydro would have to compete with wind and other renewables for the long-term contracts, meaning the pricing would have to be comparable. Setting up that competition is going to be a key piece of making the long-term contracts as attractive as possible for Massachusetts.
Even after the costs of investing in renewable energy projects and transmission get taken into account, Massachusetts consumers could come out ahead on electricity bills—and way ahead on natural gas and carbon (Source: Power Advisory/MCEP).

Even after the costs of investing in renewable energy projects and transmission get taken into account, Massachusetts consumers could come out ahead on electricity bills—and way ahead on natural gas and carbon (Source: Power Advisory/MCEP).

Zoom back out

The MCEP study, as its name suggests, focused on imports. Clean energy imports are an important piece of how Massachusetts is going to meet its need to cut natural gas use and cut carbon emissions at the lowest cost.

Those imports are only a piece of the overall equation, though. In these parts, the discussion is around a “combo platter” of energy technologies and policies, and capturing the fuller picture is important.

The UCS study reflected that by including offshore wind power, which is the subject of a lot of discussion in the state and region these days, and a likely (and key) piece of any big energy bill aimed at shaping Massachusetts’s electricity future and driving economic development with clean energy. We also modeled an increase in the state’s renewable portfolio standard, as another signal to the market about the value and importance of clean energy.

These are all pieces supported by a new, broad Massachusetts coalition of businesses, environmental groups, and others, including UCS.

Overall, though, the MCEP study is a useful contribution to the Bay State’s debates about where we want to go, and how we’re going to get there. Large-scale procurements of hydro, wind, and other renewables offer certainty for renewable energy developers, price stability for energy customers (us), and clarity about the future of Massachusetts.

Better information about the options can only lead to better decision making.

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  • Tony Bismullah

    There is no replacement for natural gas heat nationwide. I’d trade my oil furnace/hot water system to gas in a second if that were an option in my area.

    • ucsjrogers

      Actually, Tony, air-source heat pumps have come on strong in the last few years — have improved greatly in terms of their performance at low temperatures — and are now a much more viable option for heating even in cold-weather climates like Massachusetts’s: http://www.masscec.com/learn-about-air-source-heat-pumps. I’ve upgraded two (bought new, higher efficiency ones to replace old ones) in the last two years and been really pleased with the results. It’s worth looking into, if there are suppliers wherever you live, as an option for getting off oil heat. – John