The Worcester Business Journal published a long piece about “Massachusetts banking on natural gas, renewables to replace retiring plants”. I replied with this comment.
(Update, 13th May 2016: By the way, the Worcester Business Journal rejected my comment.)
First, the retiring of these energy sources is not new news. They have been headed out for years. Accordingly, whatever urgency there is now to replace them is the responsibility and, possibly, the fault of the legislature, and the present and former gubernatorial administrations.
Facts are 59% of Massachusetts electrical energy already comes from explosive methane (*). There is a bunch more energy used for heating. That’s too much, and no amount of casuistry squares increasing or maintaining this intensity of carbon burning with the detailed terms of the Global Warming Solutions Act (GWSA), a law which Governor Baker claims to be enforcing. Ask Senator Pacheco if he thinks we are on track for it. Ask Attorney General Healey.
The legislature zinged commercial enterprises as well as non-municipal communities with their totally pathetic and recent solar legislation. At present, these organizations are effectively singled out for penalties if they install lucrative, cost-efficient, and predictable solar energy on their roofs. I wonder why that happened. See https://hypergeometric.wordpress.com/2016/02/18/who-the-heck-is-robert-rio-and-what-does-a-b-a-biologist-turned-attorney-know-about-solar-energy/ to get some idea of the big companies that denied manufacturers and small businesses this benefit.
Apparently the Massachusetts government isn’t sincere about reducing costs.
First, they are foisting a remarkable proposal to tax ratepayers for pipeline investments for this energy. I thought Governor Baker was a supporter of the free market? The pipeline companies and their partners ought to go out to the open market to raise the bonds and loans they need for the project. Those sources know how to properly appraise the cost and risks of the project. State government does not. And if they won’t get them decent terms, doesn’t that say something about asking the buyers of methane to pay for these?
Second, the lowest levelized cost of energy for electricity (LCoE) is presently held by land-based wind power, lower than methane, and that’s the unsubsidized rate. (Unsubsidized for wind, that is. Methane gets lots of subsidies, federal and otherwise, including eminent domain declarations instead of having to buy land.) See Lazard’s LCoE analysis if you don’t believe me, at https://www.lazard.com/media/2390/lazards-levelized-cost-of-energy-analysis-90.pdf. Instead, Massachusetts is pushing offshore wind, at 5x land-based wind cost. Okay, and offshore wind can be good, especially in the long term and at scale. (It at least offers a constant cost for electricity, unlike the hugely variable cost of methane.) But then various people complain that wind energy is expensive, as if it were organically so. I say be honest: The relatively high cost of wind is because rich folk along the coasts don’t want to look at them, and that’s why the high cost.
Third, no serious part of this discussion includes large scale solar, whether by incentivizing community solar and bringing in smart grid technologies, or utility scale solar. That’s a travesty, because of all the technologies, solar has the fastest decrease in cost per KWh, and is naturally tied up with energy storage and energy demand response and efficiency services. See what Minster, OH is doing, despite a hostile legislature: https://hypergeometric.wordpress.com/2016/04/27/this-is-what-the-future-looks-like-for-towns-and-villages-and-utilities/ Massachusetts gets 85% of the solar energy that Texas does, and Texas is presently the champion in the United States for wind and solar energy, especially the City of Austin.
Fourth, the grid pays a huge penalty due to its old utility model thinking: It is a cost-plus hub-and-spoke distribution platform, which wastes energy in its fuels, themselves dependent upon long distance supply chains, when it burns them, and then wastes more transmitting them. Just like energy efficiency in businesses and homes is a win, generating energy near where it is consumed offers enormous efficiencies compared to the present model. Similarly, the commitment of ISO-NE to market-based measures is half-baked: Sure, according to the article, they put out long lead incentives for people to build gas and oil power plants. But, after all, business is about risk, and those that did assumed that methane would be available to power them. They did not evaluate the risks properly and, so, if ISO-NE is really a champion of markets, they should allow these investors to take it on the chin. Our needs are different, and people don’t want the pipelines for this methane, just like Cape Wind failed primarily because opposition by rich folk along the coasts made it too expensive to complete at per KWh prices to compete. Why should someone with a big coastal house in West Dennis rate more attention than a hard working family in West Roxbury? At least West Dennis just get their views spoiled (in their opinon), and do not risk getting incinerated.
Fifth, and finally, look around you and see what other states are doing: Our neighbor to the west, New York, has launched a huge zero Carbon energy initiative, joining the efforts of academics, small and large businesses, governments at municipal and state scales, and cooperative utilities. They compete for our businesses and dollars. Our high tech businesses have customers with aggressive sustainability plans who are already choosing not to do business with them because they cannot provide their services with guaranteed, 100% zero Carbon energy. There are modern (**) energy businesses in western Massachusetts who already find a friendlier market in New York than they do here. Manufacturers who want to cut costs also want to control costs. Consuming energy generated near their businesses just makes sense, rather than relying upon long term promises from people who will leave government in 4-8 years. There’s lots to learn about this and it simply makes business sense: https://hypergeometric.wordpress.com/2016/05/01/karl-rabago-at-the-rhode-island-state-legislature/ That was at the Rhode Island legislature, part of the government of another competitor.
This is not inevitable. It sounds like the sensible thing, but any sensitivity to energy markets, whether at Forbes or Bloomberg (see http://about.bnef.com/summit/event/new-york/), reveals that the energy industry will be turned upside down during the next 20 years. Massachusetts is institutionalizing, through its proposals, an energy system which may have been good for the last quarter of the 20th century, but, in its implied schedules of depreciation and rate ossification, will leave it vulnerable to becoming the Allentown, PA of New England, with energy costs too high to build or work, its high tech smart employees leaving for states with more vision and opportunity, and the remaining citizens stuck in jobs they cannot leave but do not want, a barren burned out state, with its coasts under assault by sea-level rise, and no money to pay for their protection, reconstruction, or refurbishment.
Not a pretty picture.
It can be different. Vote No on methane expansion, additional pipelines, and especially against ratepayer subsidies of pipelines. Call the Governor, let him know what you think: 617-725-4005.
(Update, 13th May 2016, 21:39 EDT)
(*) Natural gas ain’t granola.