Clean electricity is extremely popular in the Bay State. A recent survey commissioned by the Massachusetts Clean Electricity Partnership (MCEP) found that 89 percent of Massachusetts registered voters support the use of additional renewable, clean energy. And 58 percent of respondents were comfortable with spending more each month for clean electricity.
Now, a new independent economic analysis conducted by Power Advisory LLP shows that clean hydro and wind will pay for itself while lowering wholesale energy costs across Massachusetts and New England. The detailed study provides a clear, unequivocal answer to a small group of critics who question why the Bay State should import clean hydropower and wind power from Canada, New England and Upstate New York.
Computer modeling of the New England natural gas and electricity markets, both with and without clean energy imports, demonstrate that imported hydro and wind would exert downward pressure on wholesale energy prices. Long-term contracts in the Commonwealth for imported hydropower and Class 1 wind generation would create approximately $171 million in net savings in the state’s wholesale energy marketplace, every year, for the next 25 years. These savings would effectively cover the cost of new energy infrastructure to generate clean electricity and transmission lines to deliver it to Massachusetts.
The Power Advisory assessment of potential clean energy imports looked at impacts on both the electricity and natural gas markets in New England and Massachusetts. The economic modeling examined a “business as usual” approach using current electricity market data and also considered clean energy imports as a future energy supply option. The assessment determined that Massachusetts, before accounting for the cost of transmission and generation infrastructure, would achieve an estimated $600 million of savings each year on wholesale electricity costs and savings for customers who use natural gas for heat and cooking.
With an overall decrease in demand for gas and lower priced electricity, other New England states would also see benefits in terms of lower gas prices and reduced wholesale electricity prices.
Power Advisory’s analysis utilized conservative assumptions, including proposed gas pipeline expansions in Massachusetts, new natural gas power plants and continued electricity demand growth based on regional forecasts from ISO New England. The analysis assumed the import of 18.9 TWh of clean hydro and onshore wind power over a 25-year period, which is outlined in legislation pending before the state’s House of Representatives and Senate. With imported clean electricity, wholesale market demand for natural gas in Massachusetts would eventually decline by 10 percent and wholesale natural gas prices would subsequently fall by five percent due to reduced demand.
This finding, which indicates significant benefits for business and retail gas customers while assuring a strong market share for natural gas power plants, is consistent with the results of similar studies. It also validates what Massachusetts’ environmental and energy leaders have said for more than a decade: importing hydro and wind power as part of a balanced approach is a prudent way to deliver clean, reliable and affordable electricity to the residents of the Bay State.
Competitive solicitation for clean power is the main driver behind a new energy landscape in Massachusetts, with clean electricity projects competing based on specific energy goals, pricing and other considerations. The process would be subject to rigorous review by the Department of Public Utilities, in consultation with the Attorney General, to ensure cost-effective solutions for ratepayers.
Equally important, additional clean hydro and wind would put Massachusetts on a path toward meeting mandatory carbon reduction goals under the state’s Global Warming Solutions Act. Power Advisory’s study projected 7.2 million metric tons of GHG reductions per year as the result of clean electricity imports, or 10 percent less GHG emissions in the state, the equivalent of eliminating the annual GHG emissions from more than 1.5 million automobiles.
Massachusetts stands on the cusp of a brighter energy future. Abundant clean, affordable and readily available supplies of North American hydro and wind are poised to help the Commonwealth meet mandatory carbon reduction goals, keep electricity bills stable and contribute to a more resilient power grid for decades to come.
Donald Jessome, CEO of Transmission Developers Inc., and Robin McAdam, Vice President with Emera Inc., are members of the Massachusetts Clean Electricity Partnership.