MONDAY’S STUDY: Getting To 80% New Energy In New England

ACCELERATING TO 80: Driving the Northeast’s Deep Decarbonization Targets

Sean Burke and Sheri Qualters, March 2020 (Mintz, the Northeast Clean Energy Council, and The Brattle Group)

INTRODUCTION

Concerns about climate change and its potential to cause catastrophic damage to communities, infrastructure, and natural areas are increasing across the globe, but many of the changes necessary to mitigate its impact must be driven at a more regional level. In New England, most of the states have pledged to decrease greenhouse gas (GHG) emissions by at least 80 percent by 2050, with a few states, including elsewhere in Northeast, committing to more expansive targets or a faster timeline. Last year, Governor Janet Mills of Maine signed an executive order to achieve carbon neutrality in the state by 2045, New Jersey Governor Phil Murphy issued a plan to reach 100 percent clean energy by 2050, and New York passed legislation to mandate a zero-carbon emission electric sector by 2040.

Yet it’s not completely clear how to attain such a massive reduction. Many possible solutions have major political and market-related hurdles, and also require changes in consumer behavior. Overcoming these obstacles, while ensuring that there is enough clean energy supply to meet expected increases in demand, will require cooperation across jurisdictions and among competing business interests and constituencies.

In order to brainstorm ideas for what would be an unprecedented undertaking and to set the stage for regional coordination efforts throughout the Northeast, Mintz, the Northeast Clean Energy Council (NECEC), and The Brattle Group convened an invitation-only summit of senior-level clean economy leaders from the public, private, and nonprofit sectors. The event brought together over 30 thought leaders and stakeholders from a broad range of invested constituents: local and state governments, utility companies, industry associations and trade groups, advocacy groups focused on the environment and transportation, and venture capital and project finance funds that invest in sustainable businesses, and private companies ranging from green energy start-ups to Fortune 500 companies.

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MOVING TOWARDS DECARBONIZATION

To kick off the discussion, Jürgen Weiss, a leading energy and industrial organization economist and a principal at The Brattle Group, reviewed several scenarios and takeaways detailed in The Brattle Group’s September 2019 report, Achieving 80% GHG Reduction in New England by 2050. According to the study, there has been a significant upswing in clean energy deployment across the Northeast since 2010, but much more is needed to meet regional climate commitments.

Over the last decade, an average of 280 megawatts of renewable energy capacity has been installed across the six states each year — and the region is on track to more than double that activity by deploying an average of 830 megawatts of renewable resources each year until 2030. These investments provide a solid foundation, but according to the report, New England needs annual renewable energy deployments of four to eight times the current level, or an approximately nine percent annual increase in installations, through 2050 to reach 80 percent emissions reductions. That’s an achievable target given that the region’s clean energy buildout is already accelerating. By comparison, annual global deployments of wind energy projects have increased by more than 11 percent per year over the past 20 years while global solar energy installations have increased by 41 percent per year during the same period. Three primary approaches will enable the region to meet emissions targets: reducing electric sector emissions, expanding energy efficiency of new and existing buildings and vehicles, and adopting electric-powered technologies, including electric vehicles (EVs) and clean heating systems for buildings.

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If the region takes these steps, The Brattle Group projects that demand for electricity will likely double in New England by 2050. In examining that conclusion and the underlying economic scenarios, attendees discussed a number of concerns and related issues. These include technical difficulties associated with storing wind- and solar-generated power, the lack of available land in the region for large-scale solar projects, and stranded or unrecoverable costs related to investments in new technologies that fail to establish a foothold. Utilities may incur stranded costs related to transmission pipes that deliver natural gas to buildings for any structures that convert to a new source of heating energy. Using clean gas derived from hydrogen, biogas, or other net zero sources with the existing infrastructure could avoid that obstacle, a possibility described in more detail in the report. An additional concern is the possibility of increased consumer demand for electricity if technological changes lead to price drops.

Underlying these questions and the overarching issue of whether the region can expand clean energy capacity quickly enough was a shared recognition that technology breakthroughs would change the variables in any GHG reduction plan. Although planning over such a long term is difficult, taking ambitious steps now to cut GHG emissions is critical because we can’t simply count on technology to close the gap. In the event that technological improvements are slower or smaller in scope than expected, an aggressive plan will help ensure that the region meets its 2050 goals.

With these issues in mind, the attendees engaged in a candid discussion of challenges the region faces in meeting the 2050 goal as well as a broad spectrum of potential solutions. Before adjourning the summit, they began the arduous process of outlining next steps to ensure that the region stays on track to meet its emissions goals…

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SIGNIFICANT HURDLES… TRANSFORMATIONAL SOLUTIONS…

NEXT STEPS

To leverage the momentum and cautious optimism generated by the brainstorming session on solutions, the organizers closed the summit with a discussion on next steps.

An early suggestion — to pick two or three of the proposed solutions and create working groups tasked with developing road maps for implementation — revealed the importance of continued dialogue. Other proposals included working to secure early wins on high-impact short-term projects, inviting environmental justice groups and community representatives to participate in any ongoing process, and exploring how to structure a clean energy wholesale market. One stakeholder recommended stress-testing using financial modeling tools in order to evaluate options for expanding the region’s solar power and the cost of power if demand for electricity doubled. Another proposed using a network of demonstration and early adopter sites, possibly at universities, to generate excitement for clean energy innovations.

Building on an idea germinated during the solutions session of the summit, one participant said that designing government programs that can offer one-stop shopping for consumers interested in purchasing green technology should be a priority. In response, another attendee suggested working with companies and activists over a two-to-five-year period to develop programs to promote clean technology through attractive incentives for companies and consumers.

The group also weighed broader questions, including whether to concentrate on Massachusetts issues or retain a regional focus. There was widespread consensus that regional efforts are essential, given that states face common challenges and the regional grid benefits from the ongoing buildout of offshore wind power and early efforts to transform the clean transportation sector, which operates in many ways as a regional market. One attendee noted that regional collaboration doesn’t mean every state must adopt a particular solution at the same time.

In a deliberation about possible breakout groups, attendees proposed a number of categories: offshore wind, solar, buildings, transportation, the electric generation sector (including wholesale market reforms, grid modernization, and the utility role in interconnection), and alternative fuels. There was also a strong counterargument for forming groups around broad topics, such as finance issues and the consumer perspective, to avoid creating silos of participants from the same industry.

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CONCLUSION

Although the unknowns in this massive, decades-long undertaking are many, government and other stakeholders need to agree on and embark on a number of initiatives that will radically reduce greenhouse gas emissions. Achieving this regional goal is almost certain to disrupt energy markets, consumers, and employees in the sector, but only teamwork that leverages the expertise of energy sector decision makers and sustained effort can bring this vital goal to fruition.

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