The governors of New England and the premiers of eastern Canadian provinces have set ambitious goals to cut greenhouse gases.
And this week the leaders’ staff met to discuss the opportunities and obstacles to reaching those goals with more renewable energy projects. Some of the challenges include transmission constraints and an influx of cheap natural gas.
Governor Peter Shumlin will host the New England governors and Eastern Canadian premiers in Burlington later this summer. As the leaders’ staff assembled with utility executives and other experts in the Statehouse, Shumlin gave the group its marching orders.
"I don’t think that we’ve dug deep enough in terms of really having a plan that’s going to enrich us all and make New England and the Northeast provinces the place where we get energy right," he said. "We have that opportunity; the planning for that opportunity is in your hands."
The climate change plan endorsed by the governors and premiers says the region will reduce greenhouse gases by 10 percent below 1990 levels by the year 2020.
Shumlin says Canadian hydropower will be a big part of the solution.
"You’ve got the power, we’ve got the people," he said. "We’ve got to more actively discuss how we move that power at an affordable rate, where you’re going to be generating it to where we’d like to be using it."
But siting large transmission lines -and then figuring out how to pay for them – are huge challenges. New Hampshire residents are fighting a large power line designed to import 12-hundred megawatts from Hydro-Quebec. The project is behind schedule and the developers are trying to come up with an alternative route.
Transmission constraints are also an issue for local renewable energy projects. Gordon van Welie is CEO of ISO New England, which manages the regional transmission grid. He told the group that upgrades are needed to handle more wind power.
"But there are also going to be investments required in terms of making sure we’ve got enough resource to balance the wind, because the wind is an unpredictable resource," he said. "Our studies show that there’s a modest amount of balancing requirement. The bigger issue is what we call ramping in our world, which is being able to accommodate the large changes in energy production in a fairly short period of time."
Another obstacle to bringing more wind energy on line is that the region is awash in relatively low-priced natural gas. That’s good news for consumers, since it’s kept electricity rates low. But it’s not great for those trying to build the more expensive renewable energy projects. Van Welie says federal tax incentives for wind may also go away.
"With very low gas prices and with uncertainty around the production tax credit it’s difficult, I think, for developers to justify these investments," he said. "So that really takes one to the policy question, what do the states want to do? Do they want to make these investments now, or is this something that they are intending to defer in time? I think that’s the big policy question for the region."
Chris Dutton is the CEO of the Vermont Electric Power Company, which runs the statewide electric grid. He says this may be a good time to diversify the energy portfolio with renewable resources.
"Because you know, over time, like any commodity, gas is going to go up again," he said. "On the other hand it’s a tough political sell to say you should cut back on a lower-cost resource in the portfolio in favor of a higher cost resource."
Natural gas also faces transmission bottlenecks of its own. Several experts assembled at the Montpelier meeting said new pipelines are needed to make sure the region has a steady supply.