By William Opalka
BOSTON — The Northeast may be further along than most regions in meeting the Environmental Protection Agency’s new carbon emission rules, but it also faces challenges, speakers at Infocast’s 2nd Annual Northeast Energy Summit agreed. About 60 people attended the conference Oct. 27-28.
As part of the Regional Greenhouse Gas Initiative, New York and the New England states are already doing much of what EPA’s Clean Power Plan requires.
Although the region will need to add electric transmission and gas pipelines to serve the change from coal to gas that’s already occurred, “I don’t see a big change resulting from the Clean Power Plan against business as usual,” said Ann Weeks, legal director for the Clean Air Task Force. She predicted New England will be a net exporter of carbon allowances under the EPA rule. (See Northeast on Way to Compliance with Clean Power Plan.)
But the region’s public policies and energy markets aren’t always aligned, said others.
While the region has long supported renewables, the closure of two nuclear plants adds more pressure to further develop clean and cost-effective resources, said Jon Norman, vice president of commercial development for Brookfield Renewable Energy, a Canadian firm that primarily owns hydropower resources. Entergy recently announced it will close both its Pilgrim nuclear plant in Massachusetts and its FitzPatrick plant in New York.
“We need to continue to push that ball forward in the wake of losing that non-emitting generation,” Norman said.
“The Northeastern markets for investors in renewable generation are not on the whole a very friendly environment, compared to others,” added James Guidera, North America managing director of energy and infrastructure for Credit Agricole.
Wind developers in the Midwest and West have benefited from the certainty of long-term power purchase agreements that have “a dramatic impact on promoting projects,” he said.
With cheap natural gas increasingly setting marginal prices, energy markets in the Northeast “do not really recover the cost of renewable energy,” he added. Renewable portfolio standards, meanwhile, provide “subsidies that don’t provide enough [money] to encourage investment.”
One attempt to address New England’s challenges is a multi-state clean energy procurement process, which seeks to bring economic scale to projects that might not be viable for individual states. (See New England States Combine on Clean Energy Procurement.)
“We now know with experience in New England that without long-term contracts, even the renewable portfolio standard and the volatile spot market for renewable energy credits is not sufficient to make those investments happen,” said Judy Chang, principal at The Brattle Group.
But that does risk sustainable development of the clean energy market, she cautioned. “We don’t want everything under long-term contract because that takes away price signals for the investment community.”
Regional or statewide policy mandates also can run headlong into local concerns, said Michael Voltz, director of energy efficiency and renewables for PSEG Long Island, which runs the power system for the publicly owned Long Island Power Authority.
Next year, PSEG Long Island will develop an integrated resource plan, which will require it to balance the constituencies of clean energy proponents, who would like more solar and wind power, against those of consumer advocates, who may prefer cheaper new natural gas generators.
“The other constituency is the local school district or tax body because there are town and school officials receiving fairly significant tax revenue from old antiquated natural-gas fired power plants that we don’t feel we need anymore,” Voltz said. “But shutting them down is not an easy thing to do politically.”
Also Heard at the Northeast Energy Summit:
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