Wind Forcing: New England's Coming Energy War

New England state RPS policies represent some of the most aggressive and costly programs in the country. By 2021, over 20% of the electricity sold retail in the region must come from renewables. Given a robust mix of natural resources, particularly wood biomass, and some hydroelectric, meeting the state mandates, while tough, is possible. But recent legislative and regulatory proposals altering the Massachusetts and Connecticut RPS programs now threaten the balance in favor of building new wind power facilities which could lead to an energy policy war between the states.

Background: Meeting the RPS policies

Sixteen different RPS programs are on the books in New England, each representing different technology classes for new and existing resources and each with different annual compliance requirements. Since the policies are designed to encourage deployment of new renewable generation -- RPS 'Class I' technologies -- the mandates for Class I resources are accelerated. Renewables designated as new resources are state specific but typically include wind, solar, some small hydro, low-emission biomass, landfill gas, and ocean thermal.

The ISO-New England estimates that 30,420 GWh, or 20.2% of the region's projected electric energy use in 2021 will come from renewables of which two-thirds represent new resources built to meet the RPS targets. Electricity suppliers can satisfy their RPS obligations by purchasing generation or Renewable Energy Credits (RECs)[1] from a variety of technologies located either within New England or from eligible resources operating in New York and Canada.

Competitive markets have generally met the RPS demand with the help of existing facilities that were recognized as new renewables by the states, but since 2010, New England has had a shortage of available RECs for most technologies.

Paving the Way for Big Wind

Wind energy has not been welcome in most of New England. A lack of available open land, conflicts with sensitive environmental resources, limited transmission capacity and intense community opposition have stymied its growth. The high price tag (9-12 cents per KWh wholesale) coupled with its unpredictability has made wind less attractive for energy suppliers as well.

By the end of 2012, just 750 MW [2] of wind energy was installed in New England although thousands of wind megawatts have been proposed. Most projects are small, averaging under 40 MW. Without substantial public support including the federal production tax credit and RPS mandates, most of the installed wind would not have been built at all.

Despite these issues, the New England Governors' Conference (NEGC) has blindly pushed for more wind in the system and Massachusetts and Connecticut were the first to respond.

Last year, Massachusetts imposed rigid emissions requirements on wood biomass which, when fully implemented, would effectively disqualify most in-region biomass plants as Mass RPS Class I technologies. A similar phase-out of 'dirty biomass' passed the Connecticut House in May and is expected to become law.

Since Massachusetts and Connecticut represent nearly 75% of the region's total RPS load, the effect of these changes on the region's renewable energy mix will be significant.

Surplus biomass RECs forced out of Massachusetts and Connecticut will migrate to smaller programs in Rhode Island, New Hampshire and possibly Maine and quickly saturate their Class I requirements. The market for biomass will dramatically shrink and may force privately-owned plants to shut down killing hundreds of jobs. At the same time, Massachusetts and Connecticut policies still retain aggressive Class I mandates that will need to be met. With biomass pushed out, the door is wide open for big wind.

As an added push, Massachusetts now mandates that 7% of RPS compliance be met using long-term (15-20 year) power contracts. Amendments to Connecticut's RPS, if adopted, will force 4% of the state's RPS load to be satisfied with contacts. The contract provisions are direct hand-outs to the wind industry which has shown, time and again, it cannot compete against other renewables, even with New England's generous policy support.

Mandating the North to Serve the South 

By the end of 2012, only 44 MW of industrial-scale wind operated in Massachusetts with none in Connecticut and Rhode Island. In contrast, New Hampshire and Maine already have significant existing renewable resources within their borders to meet their 2021 RPS Class I obligations. (Vermont does not have a mandatory RPS.) However, most of the RECs and energy produced in these states are sold out-of-state. In 2011 89.2% of Massachusetts' 2011 RPS Class I compliance was satisfied by out-of-state resources. Of that, 47% came from Vermont, New Hampshire and Maine.

Bluntly speaking, the northern three states of New England are being sacrificed to meet RPS obligations in the lower three.

The only way to satisfy the RPS Class I requirements for Massachusetts and Connecticut, will be to build thousands of megawatts of new wind sited on ridgelines further north. But with wind comes infrastructure. Over 4,000 miles of new high-voltage transmission would be needed to deliver the energy from remote regions to points south. The cost of building wind-related transmission alone is estimated to be $11-15 billion. This is in addition to the $5 billion already approved in New England to address existing reliability requirements. None of this transmission has been proposed to date nor has any public discussion been initiated on who would pick up the tab.

It doesn't end there.

Connecticut's current RPS amendments also create a set-aside for Canadian hydro-power, a provision widely seen as a 'gift' to the state's largest utility, Northeast Utilities (NU). This gift will help NU with Northern Pass, a 1200 MW merchant transmission line proposed to interconnect Canada to Massachusetts through New Hampshire and deliver hydroelectric power to the region. New Hampshire's opposition to Northern Pass has been strident and unmovable.

New Hampshire Governor Maggie Hassan is on record opposing Connecticut's RPS amendments because of the harm they pose for her state's biomass operators, and th​e focus on Northern Pass.  

A War of Policies 

Earlier this year, both New Hampshire and Vermont sought statewide moratoria on wind farm development until the impacts could be better understood. Maine's Governor LePage has long been critical of state laws he sees as favoring wind energy development and he has blamed wind energy for inflating Maine's energy prices.

Feel-good politics and a desperate wind industry are driving Massachusetts and Connecticut policies but at some point energy policies have to be grounded in reality. Opposition to wind energy in the northern New England states has settled in and the residents are beginning to argue enough-is-enough. The first shot-across the bow may come from New Hampshire if Governor Hassan denies Northern Pass in retaliation for Connecticut's actions. In any event, the next few years are likely to see less unity in New England on the renewables front. As is typical in areas around the world, wind energy will once again bring division.


[1] Renewable energy certificates are tradable, nontangible commodities, each representing the eligible renewable generation attributes of 1 MWh of actual generation from a grid-connected renewable resource.

[2] Significant curtailment has been imposed on several facilities in Northern New England due to a lack of transmission capacity. Curtailment has driven down average capacity factors and impacted project economics.

MAY 30 2013
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