Interested in the future of renewable energy? Do you think there should be a carbon price? What can we do to improve our energy use? These and many other questions will be answered in the coming weeks at multiple university public seminars, including Boston University's Institute for Sustainable Energy’s Spring 2017 public Seminar Series starting March 20 and going until late April. Come to these events and learn about the many aspects and issues of transitioning into a economically and socially sustainable future.
Come to Boston on March 20 for “Energy Storage Economics: The Impact on Renewables & Climate,” to learn about modern energy storage, feasibility, and applications. On April 3rd there will be “Pricing Climate Risk,” a discussion on carbon prices and taxes; on April 13, “Hurry or Wait: Pacing the Roll-out of Renewable Energy in the face of Climate Change“; and on April 24, BU will hold “US State & Local Policies: Key Catalysts to Renewable Electricity’s Ascent” to go over the ins and outs of environmentally sustainable policy.
These events are free and open to the public. They feature specialists in economics, engineering, business, law, and multiple authors including Brett Perlman and Gernot Wagner. Check out the events, their speakers, and RSVP here. The events will be from 4:00 to 5:00 pm at the Hariri Building, Room 508, 595 Commonwealth Avenue Boston MA, 02215.
Also, check out Harvard's sustainability events here! They have many fun, free, and public events going on in the near future.
Today, the majority of New England's electricity is generated using fossil fuels like natural gas, oil, and coal. This balance will shift in the coming years as the state and the region invest in carbon-free and renewable resources to meet environmental policies and consumers' desire for cleaner electricity.
Renewable energy options hold great promise for our future and with rebates and incentives offered through state and federal programs, more customers are becoming interested in getting involved.
Eversource owns and operates a fleet of renewable generation sources that includes:
Northern Wood Power – a 50 MW biomass facility fueled by wood chips in Portsmouth, NH producing clean, renewable electricity for approximately 50,000 homes. The facility replaced a coal-burning boiler at Schiller Station – reducing air emissions by more than 400,000 tons annually. The facility also created a new wood ship market for New Hampshire's forest industry.
Nine hydroelectric power plants throughout New Hampshire, several of which are over a century old and still operating. These energy resources are 100-percent renewable, and combine to produce a total of 70.5 MW of electricity.
A 51 kW solar array at our Energy Park facility in Manchester, NH. The 183 photovoltaic panel array is one of the largest in New Hampshire and offsets more than 100,000 pounds of carbon dioxide emissions each year.
Silver Lake Solar facility – An eight acre, 1.8 MW solar facility located in Pittsfield, MA. Since opening in October 2010, the facility has won two awards: The Photovoltaic Projects of Distinction Award from the Solar Electric Power Association and the John A.S. McGlennon Environmental Award of Corporate Leadership from the Environmental Business Council of New England.
A 12 acre solar facility in the Indian Orchard neighborhood of Springfield, MA. The facility contains 8,200 solar panels producing 2.3 MW of electricity – enough to power about 500 homes.
Eversource's newest solar generation facility is a 3.9 MW facility located on Cottage Street in Springfield, MA. This generation facility occupies 22 acres of land on top of a capped landfill, contains 12,980 solar panels and can supply electricity to 850 average-size homes.
With an increasing number of companies focused on going 100% renewable, driven in large part by the recent push to set science-based carbon reduction goals, PPAs, Virtual PPAs, and RECs are three acronyms that are thrown round a lot in conversations related to enterprise energy strategies. But I admit it—despite being entrenched in the energy industry for the last decade, my command of what these acronyms really meant was limited at best. Sure, I could tell you that PPA stood for Power Purchase Agreement or that a REC was a renewable energy certificate, but I didn’t really understand what they were. I asked a few people to explain it to me, but mostly what I got was a lot of super technical, highly wonky, mostly incomprehensible answers—a byproduct of working with a lot of exceptionally smart people. So I googled, and well, that wasn’t exactly helpful either (as demonstrated below).
Fortunately, my colleague George Favaloro, Managing Director of Sustainable Business Solutions at PwC and co-author of our recently released strategy brief, has a lot of experience explaining really technical concepts to people like me, and he was able to fill in the blanks.
The definitions below are purposefully meant to be comprehensible, not comprehensive. It won’t make you an expert, but at least the next time you hear these terms in conversation, you can nod along without feeling totally out of the loop.
Power Purchase Agreement, or PPA
From Wikipedia:
A power purchase agreement (PPA), or electricity power agreement, is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer). The PPA defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination. A PPA is the principal agreement that defines the revenue and credit quality of a generating project and is thus a key instrument of project finance.
EnergySMART Translation:
Instead of investing your own capital and resources to install renewable technology, you can buy power via a PPA from a company that will handle all aspects of getting the project up and running, including the financing. In a PPA, the “seller” builds or installs the technology (e.g., a solar array or a wind farm) and the “buyer” buys the power on a per kWh basis.
Virtual Power Purchase Agreement, or virtual PPA
From Greenbiz:
A virtual PPA is basically a form of price hedge. A company enters into a contract to pay a renewable energy project on an agreed take-off price. The renewable energy project sells the generated power into the local wholesale market on a merchant basis. The project pays the company if the electricity is sold into the market above the agreed contract price, and the company pays the project the difference if the electricity falls below the agreed price.
EnergySMART Translation:
In a virtual PPA, the company developing the renewable project sells the power to the grid when the project is complete. In order to get financing, the developer enters into a Virtual PPA with a third party—let’s call that party ACME Co. ACME Co. guarantees the owner of the renewable project a certain fixed price for the electricity it sells to the grid. If the electricity sells for less than the guaranteed amount, ACME Co. will pay the difference; if the electricity sells to the grid for more than the fixed price, ACME Co. will actually make money. In this arrangement, there are a few benefits for all parties: The developer of the solar array or wind farm has the price security it needs to get financing for the project, and ACME Co. has the opportunity to make money.
However, the bigger (and more common) value proposition to ACME is that by virtue of the VPPA, ACME Co. can claim credit for bringing renewable energy onto the grid. This is one way that companies can go “100% renewable” without ever having to put in onsite renewable generation or directly source energy from renewable power. Importantly—in this scenario, only the company that holds and “retires” the renewable energy certificates can take credit for the carbon reductions. Even if someone else actually buys the power generated from that particular wind or solar installation, ACME Co. can claim the carbon reduction if it retires the RECs.
RECs, or Renewable Energy Certificates
From Wikipedia:
Renewable Energy Certificates (RECs) are tradable, non-tangible energy commodities in the United States that represent proof that 1 megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource (renewable electricity) and was fed into the shared system of power lines which transport energy. Renewable Energy Certificates provide a mechanism for the purchase of renewable energy that is added to and pulled from the electrical grid.
EnergySMART Translation:
Power on the grid comes from all sorts of sources: coal, nuclear, natural gas, renewables. Once it’s on the grid, it’s all blended together. So, as an end user, you can’t really tell where that exact megawatt hour you’re using comes from. RECs are a way for businesses to certify that they have a valid claim to the carbon reductions from a specific project. These certificates provide verification that a business’ support for renewable energy had an impact on the grid.
Even if your business has yet to start the conversation around renewables, it won’t be long until outside factors force the issue. Pressure from consumers, business partners, employees, and investors are all pushing businesses to aggressively pursue sustainability goals. And with the recent extension of Production Tax Credit (PTC) and Investment Tax Credit (ITC) that have benefited wind and solar, respectively, companies can save money and lock in low energy rates, and companies that don’t could be at a disadvantage over the long term.
The S.2012 Energy Policy Modernization Act (EPMA) was passed by a definitive 85-12 vote in the U.S. Senate on April 20th, 2016. The act represents a major step forward in bipartisan action at the Federal level towards addressing energy and environmental issues.
How did this happen? The bill avoided any highly controversial topics which usually divide the Senate, such as climate change (!) and fossil fuel exploration, and instead focused on promoting renewable energy development, energy efficiency of buildings, and cutting greenhouse gas emissions. If the Senate and House work together on a compromise between their two versions of this bill, it will be the first time since the George W. Bush administration that an energy package has been sent to the President's office for signing.
The bill is requiring electricity operators to modernize the power grid with energy storage systems for the ever-growing production of renewable energy. The bill also includes several programs to improve building energy efficiency, such as increasing the maximum length of time from 10 to 25 years for federal utility savings contracts, allowing for a longer payback period to upgrade government buildings. The 2.5% annual reduction in energy use for government buildings from 2016 to 2025 is formalized by this bill. Cyberattacks on the power grid are also a priority and initiatives to strengthen the safeguards against such attacks are included. National parks and wilderness areas have also gotten attention with the authorization of the Land and Water Conservation Fund.
On the downside, the bill does facilitate the exporting of American natural gas by accelerating the approval of permits for coastal gas terminals, and does not change the immense subsidies for the fossil fuel industry. The bill has left some environmental groups disappointed. Jason Kowalski, the policy director for 350.org has stated that the policy is outdated, “tolerable in the ’80s or ’90s, but not in tune with the scientific realities of 2016.”
Hopefully this bill is seen as a landmark of bipartisanship cooperation, and we can expect stronger action in addressing climate change through our domestic energy policies.
On Wednesday, April 20th 2016, Kinder Morgan announced the cancellation of the planned natural gas pipeline to Massachusetts. Kinder Morgan was working as part of the Tennessee Gas Pipeline Company for the past two years to extend a pipeline through Massachusetts and lower New Hampshire. The pipeline would have brought natural gas up from Pennsylvania to meet the anticipated demand for more natural gas for home & building heating and for electricity generation. Approximately half of the state's electricity generation is from natural gas.
However, due to massive political and community opposition, the project is no longer moving forward. This is a landmark victory in the effort to de-carbonize Massachusetts's energy supply, as well as protecting the environment from the impacts of constructing the pipeline itself. The Mass Pipeline Awareness Network has led a coalition of groups in opposition to this pipeline.
Kinder Morgan said the reason for cancellation was that the market for the natural gas is not ready, with gas distributors, power companies, and other market players not biting on contract commitments for the supply of natural gas. “Unfortunately, despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected…As a result, there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured. In addition, innovations in production have resulted in a low-price environment that, while good for consumers, has made it difficult for producers to make new long-term commitments. Further, current market conditions and counter-party financial instability have called into question TGP's ability to secure incremental supply for the project. Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds.”
Source: Boston Globe, Kinder Morgan, Tennessee Gas Pipeline Company
The Environmental League of Massachusetts has stated that “Kinder Morgan is stopping the pipeline simply because it is both expensive to ratepayers and simply not needed…Massachusetts has the capacity to develop its own energy in solar, wind and hydro and create new industries and jobs here, rather than importing energy and exporting our dollars and jobs.”
The study “Power System Reliability in New England” performed by Attorney General Maura Healey's office in November 2015 found that gas pipelines are not needed, as the power grid will not meet a substantial shortfall until 2030. The report concluded that the best method to approach investments in future power supply are incentives for homeowners and businesses to reduce electricity use and voluntary demand-response programs. The report said that the $101 million investment into such programs would result in $247 million in savings and reduce greenhouse gas emissions by 1.86 million tons. On the other hand, the report has found that expansion of the Northeast’s natural gas pipeline capacity to meet the future potential energy shortfall would cost $66 million and provide savings of $127 million, while resulting in an increase of greenhouse gas emissions by 80,000 tons.
There are still other pipelines…well…in the pipeline. Spectra Energy is planning a pipeline project which will likely face similar market and grass-roots political challenges.
Today, the majority of New England's electricity is generated using fossil fuels like natural gas, oil, and coal. This balance will shift in the coming years as the state and the region invest in carbon-free and renewable resources to meet environmental policies and consumers' desire for cleaner electricity.
