SHARE NEW ENERGY, SAVE THE COMMONS

It is the obligation of government and citizen to protect the commons. Otherwise, the sum of private acts - individuals acting in their own self-interest - could cause harm to that which is shared in common.

Edward Krapels, a transmission entrepreneur, calls for New England states to eschew what he dubs “environmental mercantilism” in favor of a cooperative approach in the development of New England’s New Energy resources.

State Renewable Electricity Standards (RESs) may be good for each individual state’s New Energy development but may drive state regulators and legislators to incentivize home-grown New Energy projects even when better choices are available in a nearby state.

Krapels: “…an ‘I win - you lose’ approach to energy and environmental policies… risks putting into motion a modern version of the tragedy of the common. In this metaphor, early use of a common (for example, the few cattle grazing on the original Boston Common in colonial times) does no harm. At some point, the use of a common turns into overuse and ultimately abuse, even though no single user intended that to happen. The tragedy occurs even though remedies are known.”

Krapels points to Maine wind as an example. He asserts it is the best wind resource in New England but Massachusetts may choose, because of its RES, to develop less economic New Energies of its own. Instead, Massachusetts should build Krapels’ proposed subsea "Green Line" transmission project between Wiscasset, Maine, and Boston.

Krapels: “We [in Massachusetts] have to reach out and do business with our neighbors to the north, who, by and large, are eager to sell us their green, carbon-free, and sustainable energy just as they sell us their lumber and lobsters.”

There is self-interest in Krapels’ argument but he is not necessarily completely wrong. The population in New England’s far north is small and the energy potential is great.

New Energy – be it solar, wind or wave – needs new, smart transmission. It also needs a NATIONAL RES, setting a standard for New Energy production in every state of the union. While a state like Massachusetts should not hesitate to develop its own resources, it can only be better off sharing in the development of capacity to transfer resources to its population centers from the smaller, North Country states. Not only would that tend to make more New Energy available to the populated cities but it would encourage concentrated populations to disperse to the North Country, relieving pressure in the cities.

Perhaps there would be merit in writing a clause for the national RES crediting a state with more expensive New Energy resources for spending on new transmission to bring in New Energy resources from a state with excess supply. Massachusetts gets credit for paying for transmission, Maine for building wind. California pays for transmission, Arizona and Nevada build solar. Everybody meets the minimum New Energy requirement on time. Later, with infrastructure in place and economies of scale geared up, states can develop their own resources.

Krapels: “In history, mercantilism - the "I win - you lose" attitude - was ultimately supplanted by the better idea that cooperation and commerce would allow each region and each country to do what it does best, to the benefit of all. The same can be true in meeting New England's environmental goals: all the states can be big winners, but only if they think regionally.”

This is what Krapels is getting at: Building new transmission in Boston is cheaper than building new generation capacity and saves consumers just as much money. New transmission gets paid for and everybody ends up using New Energy. (click to enlarge)

Mercantilism and the green energy debate
Edward N. Krapels, March 3, 2008 (Boston Globe)

WHO
Deval Patrick, Governor, Massachusetts; Edward N. Krapels, Chairman, New England Independent Transmission Co., New England's electricity operator, Independent System Operator New England

Energy is signifcantly cheaper in Maine. (click to enlarge)

WHAT
Environmental mercantilism, a state’s tendency to subsidize its own New Energies instead of cooperating regionally to develop the best New Energies, could undermine the greater development of New Energy, which requires new transmission and a national Renewable Electricity Standard (RES) as well as local production.

WHEN
The emphasis on transmission development comes from an insiders understanding that new transmission takes years to be permitted and built and must be initiated immediately and with as much of a sense of urgency as New Energy development.

Maine has impressive wind assets, especially on the coast. (click to enlarge)

WHERE
- Krapels asserts that New England’s best wind resources are in “…the far north (the Canadian Maritimes, northern Maine) and offshore.”
- The biggest power demand is in southern New England and Krapels calculates that every wind project in Massachusetts, Connecticut, and Rhode Island cannot produce enough electricity to meet the needs of those three populated states.

Massachusetts has great coastal wind assets, too, but unreasonable harassment by a privileged minority pushes the price of offshore wind up - to the detriment of all its citizens. (click to enlarge)

WHY
Krapels offers this concrete set of circumstances: A Massachusetts proposal to allow long term contracts between utilities and New Energy providers might incentivize more Massachusetts wind energy installation even though that wind could be much more expensive than Maine wind-generated electricity. The Massachusetts utility might serve all New England better by contracting with Maine producers. At same time, it is not worth the cost for Maine to participate in regional grid upgrading if it cannot sell its wind to the more densely populated states. That could potentially deprive the more populated states of Maine’s resources.

Peak demand will soon be greater than peak supply and the region must act. When the lights go out, they go out for everybody, even the fat cats on the Cape. (click to enlarge)

QUOTES
Krapels: “The global atmosphere is like a common, and after decades of denial about our role in abusing the global common, leaders like [Massachusetts Governor Duval] Patrick and the other New England governors and legislatures have finally mandated renewable energy and agreed to mutual regional goals to mitigate the harm our energy policies have been doing. We are fortunate to have a huge array of wind, biomass, and other renewable energy resources we can deploy, but that deployment requires regional cooperation.”