This summer, Bay Staters witnessed the passage of a landmark renewable energy bill laying out requirements for wind and solar power generation over the next 10 years. Now, four months later, the Massachusetts state government, energy providers, and independent organizations are working to meet the requirements and implement the changes set forth in the bill.
“In terms of implementation of the law itself, that hasn’t necessarily gotten underway just yet but it will,” said Eugenia Gibbons, the clean energy director of Mass Energy Consumers Alliance, a consumer advocacy nonprofit. “There are a number of organizations and stakeholders that are preparing to make sure that the provisions laid out in the bill happen the way they’re supposed to.”
Governor Charlie Baker signed House Bill #4568, “An Act Relative to Energy Diversity” into law on Aug. 8 after it garnered bipartisan support in the Massachusetts House of Representatives and Senate.
“This legislation is another step forward in diversifying our energy supply while moving Massachusetts towards our green energy future,” said Senate President Stan Rosenberg in a statement at the time. “We must continue to work together to reduce our reliance on fossil fuels while also addressing unacceptably high electricity rates.”
The bill included multiple provisions related to procuring wind energy and hydropower, improving energy storage, and creating a sustainable commercial energy program.
“What we have here, as opposed to an amorphous bill of clean energy generally or greenhouse gases generally, is a specific technology – an offshore wind economy – that we’re hoping to jump start and we have real incentives in place to make that happen,” says Robert Fitzpatrick, the director of government affairs for the Massachusetts Clean Energy Center (MassCEC). The publically-funded agency’s goal is to increase statewide adoption of renewable energy.
The legislation requires energy distribution companies to enter into long-term contracts for 1,600 megawatts of wind energy by June 30, 2027. Each individual utility company has to acquire at least 400 megawatts of wind energy. Every distribution company must solicit proposals for offshore wind energy generation by June 30 of next year.
Similarly, utility companies have to solicit proposals for about 1,200 megawatts of additional clean energy generation by April 1, 2017. This requirement can be satisfied by hydropower, solar, on-shore wind farms, and other renewables. By Dec. 31, 2022, energy providers must enter into contracts with these renewable producers.
One barrier to widespread adoption of renewables is storing the energy when the sun isn’t shining or the wind isn’t blowing. In addition to procuring renewable energy resources, the state is looking into energy storage systems. By Dec. 31, the department will decide whether to “set appropriate targets for electric companies to procure viable and cost-effective energy storage systems.”
If the department decides to set energy storage targets, they will set them by July 1, 2017 and utility companies will have to implement them before 2020.
The bill also calls for the Department of Public Utilities and Department of Environmental Protection to investigate the environmental impact of gas leaks and establish a plan to grade and repair them; create a nuclear decommissioning agency to supervise the closure of the Plymouth Nuclear Power Station; propose a carbon reduction research center; and establish a program to issue property assessed clean energy (PACE) bonds.
Using PACE bonds, commercial property owners can take out loans and use property as a financing mechanism to finance renewable energy projects. The loans are repaid via an assessment on the property tax bill, and the loan is attached to the property rather than an individual.
Fitzpatrick says that the specificity of the legislation provides a roadmap for its execution and makes it easily enforceable.
“I think that this particular legislation, more so than some others, is very specific. When you have more general greenhouse gas reduction goals and things of that nature, then the enforcement gets trickier,” he says. “But with this legislation, it describes pretty clearly what needs to happen…It does make it relatively enforceable and it does push the utilities to pursue those contracts, and that’s what we’re looking to make happen.”
Matching projects with state funding
Since the legislation was signed into law in August, officials at the Department of Energy and Environmental Affairs have been working to facilitate the first steps mandated by the bill.
Currently, the Department of Energy and Environmental Affairs is working to create a list of projects that would qualify for these bonds, according to its officials. The department issued a request for quotation (or RFQ) on Nov. 23. The RFQ was created to select an independent evaluator to monitor and report on energy solicitations, bid evaluations, and the renewable energy project selection process.
The due date for the quotes from potential independent evaluators was Dec. 9, and the winning response will be selected in mid-December. The independent evaluator will issue reports to the Department of Public Utilities and administer requests for proposals (or RFPs) to solicit proposals from renewable energy companies.
The Nov. 23 proposal lists Dec. 23 as the date by which the evaluator must submit an request for proposals (RFP) to the Department of Public Utilities for the clean energy section of the bill. An RFP for offshore wind will be submitted in February.
Once the RFPs are submitted and clean energy companies submit their bids, the selection of the winning clean energy bid will take place between Aug. 28 and Nov. 17, 2017; while the offshore wind bid selection will occur between Dec. 4, 2017 and Feb. 23, 2018.
Separate from the summer legislation, the department is also working on soliciting wind and solar power from a RFP that was issued in November 2015. On Oct. 24, the RFP evaluation team announced which proposed projects would be allowed to advance to contract negotiation with utility companies.
In Massachusetts, Antrim Wind, Ranger Solar, Cassadaga Wind, RES Americas, Deepwater Wind, and Ameresco will go forward with contract negotiation to create new wind and solar infrastructure in New England.
Advancing energy storage technology
Besides the energy procurement targets, evaluating energy storage technology is one of the most significant aspects of the bill. Energy storage can help the electric grid operate more flexibly and economically because it can provide power when renewable generation is low and can respond to the variability of solar and wind energy.
When it is cloudy or there is reduced wind, with advanced storage technologies, there won’t be as much need for back-up energy supplies such as natural gas.
MassCEC and the Department of Energy Resources released an energy storage study in September.
“[The study] goes into pretty good detail on how storage could reasonably be rolled out on the grid and the benefits available,” says Fitzpatrick of the Massachusetts Clean Energy Center. “If properly deployed, storage will help us save a lot of money.”
The report recommended that the state encourage the expanded use of and investment in storage technology, and predicted that if guidelines are followed, the state can put 600 megawatts of advanced energy storage technologies on the grid by 2025, saving ratepayers $800 million.
The report predicts that the reduction in greenhouse gas emissions resulting from the adaption of these technologies would be equivalent to taking over 73,000 cars off the road.
“The development of energy storage technology and its long-term deployment in the Commonwealth are critical components to energy cost reduction, system reliability, carbon footprint reduction and energy diversification,” said House Minority Leader Bradley Jones in a statement at the time.
The Department of Energy and Environmental Affairs is still deciding whether to require utilities to procure energy storage systems. The department is accepting comments from stakeholders until Dec. 16 and will make a decision by the end of the year.
The state is also making headway into other requirements of the bill. According to EEA officials, the Department of Public Utilities is working on a natural gas leak grading system and will release regulations for leaks.
The department is also working on the PACE bond system, hoping to fund renewables in more creative ways. The department is working on a list of projected projects that would meet the qualification requirements to finance projects such as renewable installations, energy efficiency retrofits, and natural gas extensions.
Promoting offshore wind power
Several publicly-funded agencies and nonprofits are working behind the scenes to help promote renewable energy adoption in Massachusetts and to help interested parties such as energy companies comply with the mandates of the bill.
“A lot of what has to happen in the immediate aftermath of that legislation is for people to just work on getting those things done in a way that is a bit behind the scenes,” Fitzpatrick says.
Besides studying energy storage, MassCEC is a key player in promoting offshore wind. In 2015, the agency completed construction of the $113 million New Bedford Marine Commerce Terminal, a port designed to support the budding offshore wind economy.
In September, three offshore wind developers – Deepwater Wind, Offshore MW, and DONG Energy – signed an agreement to use the terminal. Each has committed to using the port for the deployment of offshore wind.
The organization also gave the Woods Hole Oceanographic Institution a grant to purchase and deploy a WindCube remote sensor to collect data on wind strength, speed, and frequency. This data will help energy companies who want to build wind farms off the coast of Massachusetts.
MassCEC has held public meetings with local stakeholders and concerned citizens to facilitate the adoption of wind energy and keep the process open and public.
A new push for a renewable energy storage
Other groups are looking ahead, pushing for further legislation that wasn’t adopted in the summer bill. The Mass Energy Consumers Alliance, an organization that advocates for consumers to have affordable and sustainable energy, is pushing for provisions that were address by the Massachusetts legislature but weren’t included in the final bill.
One of these is the renewable portfolio standard, or RPS.
“[The RPS] a requirement that electricity suppliers in Massachusetts provide a certain percentage of their supply from renewable resources,” says Gibbons. “The RPS is important because, in setting a requirement for renewable energy, it sends a signal to the market and elsewhere that there’s going to be a market for renewables. We’re working both to make sure that the bill that gets passed that gets fully implemented and pick up where the bill left off and try to get more policy issues advanced in the coming year.”
Massachusetts already has an RPS, but further legislation would increase the percentage of electricity that energy providers would have to get from renewable sources. The current RPS requires utility companies get 15 percent of energy from new renewable sources by 2020.
Mass Energy is also working to prevent a pipeline tax that would require taxpayers to pay for a portion of natural gas pipeline extension into the Commonwealth.
“The utilizes were trying to get permission to charge ratepayers to pay for the pipeline,” Gibbons said. “The supreme judicial court ruled last summer that that is in fact in violation of the 1997 Restructuring Act and you can’t make customers pay for the pipeline.”
The version of the bill that passed in the Senate contained wording explicitly forbidding this pipeline tax, but it didn’t make it into the final version of the bill.
“It’s important to note that these solutions, these renewable resources are here and now,” Gibbons said. “It’s not this far-fetched, far-off conceptual thing. The only thing we can maintain momentum is to stay engaged and keep pushing for the solutions that we want.”
Utilities as clean energy companies
Energy companies are now planning for a future in which renewable resources play a key role in the Massachusetts energy sector.
Eversource, New England’s largest energy provider, is on-track to issue a clean energy RFP for clean energy sources by April 1.
“We’ve long supported renewables as part of a diversified energy portfolio,” says Eversource spokesman Michael Durand in an email. “Separate legislation signed into law this past spring to promote the further development of solar in the commonwealth has a provision allowing utilities to develop additional utility-scale facilities. We’ve submitted a plan to increase our own commitment to solar, which currently is eight megawatts at three facilities we own and operate in Western Massachusetts, to a total of 70 megawatts across the state.”
Because the state hasn’t yet submitted draft regulations for clean energy or offshore wind, utility companies are basically waiting to solicit proposals.
The New England Power Generators Association (NEPGA), a group that represents companies that generate about 80 percent of electricity in the region, initially opposed the bill.
“[Energy companies] should all have the opportunity to compete, and whoever can do it best wins,” says NEPGA president Dan Dolan. “It’s under that competitive market bedrock that led us to have substantial and severe concerns…We continue to have those concerns.”
Dolan is worried that a forced commitment to clean energy could cause early retirements of existing plants and that increasing regulations will make energy more expensive for consumers.
Since 1990, he says, Massachusetts power plants have cut CO2 emissions by 60 percent, more than any other sector in the economy, so these actors are committed to reducing their environmental impacts.
Offshore wind, he argues, has the potential to account for 40 percent of all electricity used in Massachusetts every year, meaning a large portion of the market won’t be competitive.
“It does feel like we’re wrestling for the soul of the competitive marketplace here in New England,” he said.
An uncertain future under Trump
Multiple actors in the state energy sector are considering what the country’s energy future will look like under President-elect Donald Trump, as this legislation starts to go into effect.
“Because of the presidential election in particular, we’re not expecting to see this same push in decarbonization in other areas of the country,” Dolan says. “The northeast has always had higher energy and electricity prices than other areas of the country…and if the state is going to continue to push these climate issues, I think there needs to be a public widening of the price gap.”
Dolan believes that the idea pushed by advocates that energy can be both clean and cheap is disingenuous and that energy prices will continue to rise with pushes for decarbonization and renewables.
Gibbons is more hopeful that the uncertainty at the federal level will give Massachusetts a chance to lead states in acting to promote clean energy, saying that this legislation is a good start.
“It’s a role that Massachusetts has taken before and I think that as a state we can step up and take it again,” she says. “I think it’s imperative that consumers and communities and people in the commonwealth that want to make sure we maintain momentum engage and find ways to connect in the conversation. Whether that’s reaching out to the legislature or reaching out to other folks in their communities or encouraging their communities to purchase green power at the community level, there are going to be ways for everyone to move forward and make sure we have a renewably-powered future.”