This blog is the first in a series looking into the key insights of the newly released 2015 Regional Roundup of Energy Efficiency Policy in the Northeast and Mid-Atlantic States.
The winter months of the past few years have been long, harsh, and expensive. Electricity customers in the Northeast and Mid-Atlantic region have incurred higher costs during these periods, largely as a result of the region’s over-reliance on natural gas as an electricity generation resource. Natural gas – once thought to be the ideal solution for a region needy for electricity generating fuels but concerned about environmental impacts – has morphed into a flashpoint of energy policy.
New England’s electricity generated from gas accounted for about 15 percent of the region’s resource mix in 2000, as compared to nearly 50 percent today. This dependence on natural gas for electricity generation collides with uninterruptible, firm natural gas heating contracts, creating a heightened demand and pinched supply in times of greatest need. What’s also becoming increasingly obvious is, to cite a recent blog posting from the Conservation Law Foundation, that “the real problem isn’t a major deficit of pipeline capacity, but a failure to deal adequately with the increased use of natural gas for power generation.”
Electricity generators have been scrambling to deliver adequate amounts of gas to customers during these periods of high demand, especially during the “polar vortex” winter of 2013-2014, which has been used in an attempt to sway public opinion towards energy infrastructure expansion without considering and analyzing the full potential of demand side resources like energy efficiency.
An important missing piece is a comprehensive analysis of all energy efficiency and other clean energy solutions that will provide policymakers with the information they need to “right-size” our energy infrastructure –in alignment with state and regional environmental and economic goals – before committing to new large-scale supply. In particular, and without the benefit of a comprehensive alternative energy resources analysis, several New England governors have embraced a proposal for new “greenfields” gas pipeline across northern Massachusetts, from the New York border to a distribution facility in Dracut – a proposal that has been met with much controversy.
What’s more is that our infrastructure constraints may not be as dire as previously thought, providing a window of opportunity to expand discussions on infrastructure expansion and give full attention to a broader clean energy analysis. A recent article in the Boston Globe found that “the extreme price spikes that marked New England energy markets in past winters have not materialized this season. Those electricity rates — which jumped as much as 37 percent — were based on projections that prices in wholesale markets would surge toward last winter’s record levels. Average wholesale electricity prices, however, are running at about half of last year’s.”
It’s been long understood, especially in leading edge Northeast and Mid-Atlantic states, that energy efficiency holds tremendous value as a regional solution after nearly three decades of investments to meet resource needs. This is most convincingly evidenced by recent analysis from ISO-New England showing that efficiency has helped “flatten” the electricity demand. However, the extent of demand-side resource’s true potential still remains unknown. NEEP encourages policymakers to work with stakeholders from around the region to conduct a regional assessment of energy efficiency potential fastened with a procurement strategy that includes all New England states with the goal of attaining all economically achievable energy efficiency.
There is a growing recognition of the need to package efficiency with other clean energy resources, including demand response, energy storage, wind and solar generation, and combined heat and power as a holistic solution towards our pressing energy and environmental obstacles. These resources are less vulnerable to energy price volatility; they hold the promise of greater cost assurance for residents and businesses, while helping to grow our clean energy economy. So, before making a mad-dash to construct costly energy infrastructure the true potential of all clean energy resources should be first identified, and then capitalized on.