Paul Levy writes in this week’s Newton TAB…
While I appreciate Andrea Downs’ sentiment with regard to the Newton Power Choice program, I fear she has overstated the likely impact of the program by calling it the “climate opportunity of a generation.” If people choose to buy the more expensive “higher percentage of renewables” in their electric bill, they will actually not receive electricity that is more based on renewables than anybody else.
The grid that serves us is a regional grid with the same mix of fossil fuels and renewables across six states. The extra charge for “more renewables” will be used to purchase renewable energy credits (RECs), which are financial instruments that do not influence the generating mix serving your home.
Some might assert that these purchases of RECs will expand the stock of renewable resources over time, but even that conclusion is subject to a lot of assumptions. Renewables will be an expanding part of our energy mix if they are less expensive, not more expensive, than fossil-fueled power plants. That is more like the climate opportunity of a generation, not a program that charges us more.
Paul F. Levy, Oxford Road, Newton Center
The author is correct that one cannot specify the exact source of electricity feeding one’s home from the grid. That’s why the REC market was created: to keep track of consumers and producers of renewable energy. Anyone who purchases RECs is directly supporting the generation of renewable energy. The more RECs are purchased, the more renewable (and less fossil fuel based) energy will be produced. The purchase of RECs does affect the energy mix on the grid.
One suggestion: mandate new homes built in Newton are required to have solar roof.. California has already mandated this i think
Paul Levy has more expertise on this than I do. But today, Ann Berwick weighed in with an open in the Globe:
How US mayors can go green
http://edition.pagesuite.com/popovers/article_popover.aspx?guid=8b80e7ce-7b45-40fa-9d35-8f953241fcc2
Someone with Paul Levy’s background should understand this issue: buying Class 1 Renewables from sources in New England provides a financial incentive to develop more wind and solar. This makes the New England power grid greener. Then everyone connected to the grid receives a greater share of renewable power.
Bugek, I don’t think mandating a solar roof is viable in Newton overall (for a number of reasons), I think there is a simple and inexpensive step that could be done: require a solar assessment as part of the permitting process, including for major renovations.
The reason is that permitting and labor are two of the major hassles of solar installation. These happen at construction time anyway, so you can save a good bit of money by rolling them into an existing project (hence why CA has their solar requirement).
However, most builders and homeowners are still simply unaware of those costs, and assume that solar is an expensive add-on that could always be done by the homeowner at a later time.
Requiring a solar assessment (which costs essentially nothing, most installers provide them for free) would do three things: capture low-hanging fruit (ideal solar orientations or people who might be inclined towards solar but didn’t think of it themselves), educate developers about how to design a solar-efficient house, and help homeowners who buy a house that doesn’t have solar (at least had an assessment already done).
Assessments also benefit from knowledge about the house (e.g., construction of the roof) that the builder and inspector would have but that is harder to figure out once the house is finished (insulation sprayed).
The assessment would include costs as well as estimated returns on investment and environmental impact. The assessment requirement would also provide support for local solar installers. If successful, and if the tax rebates return, a geothermal heat pump assessment might also be good to roll in.
Mike,
When an existing homeowner is doing renovations, they haved already budgeted and saved the money they need. To add solar to a roof is abour 10 to 15k which is likely equal or exceeds the renovations they actually want.
In practical terms, most homeowners dont have the extra expense floating around ontop of their original budget.
Just require it for new builds and at least they will be guaranteed to be installed
The problem is the majority of homes in the city, probably upwards of two-thirds, don’t have adequate exposure to sunlight to accommodate PVPs.
Bugek, I meant major renovations. Two of our neighbors are doing $100K plus additions (one much more) to add new floors to their homes. Giving them information about how much solar would cost them to add to the project, and how much it would save them, seems like an easy win. The answer may well be “not economical”, but it is still an answer. It costs almost nothing for an assessment.
“Renewables will be an expanding part of our energy mix if they are less expensive, not more expensive, than fossil-fueled power plants.”
Since Levy’s piece stayed out of the environmental benefits of renewables versus fossil fuels, here’s a response that focuses on just the market.
Renewables will be an expanding part of our energy mix either way. Utility companies are already mandated by law to provide a large chunk of their power from renewable energy sources, and in most states like Mass, the percentage increases annually. Efforts like Newton Power Choice simply accelerate the increase in demand for renewable energy, therefore placing pressure on supply. This process will ultimately help stabilize the renewable generation market, lower capital and operating costs, and eventually be competitive with fossil fuel. At that point subsidies will be weaned off. The alternative to this approach is that we don’t invest in renewables now, wait until we run short on fossil fuels, which will in turn cause oil, coal, and ng prices to skyrocket, which will make renewables suddenly very attractive, and then scramble to shift a global industry in the middle of an economic nightmare. We are already transitioning to renewables. The problem is the pace at which we are transitioning is slower than our rate of consumption of the finite resource that is fossil fuels. The other huge problem is that fracking, drilling tech, and other industry “improvements” have led to lower fossil fuel costs, which make pushing the transition to renewables harder to justify to some. The danger of this is that this simply accelerates the depletion of the resource. We have to get out in front of this, or we will be buried by it.
The thing that bothers me about Newton Power Choice is that households will be automatically opted in: “All Eversource Basic Service customers … will be automatically enrolled.”
I want this to be my informed choice, and not something that appears to interfere with my commercial relationship with Eversource.
I wonder how how the City plans on informing residents, and making sure they know that by default their electricity bills are going to go up? If it’s a leaflet that comes with the tax bill, I can see it being tossed away without further inspection.
As I said regarding REC’s: “Some might assert that these purchases of RECs will expand the stock of renewable resources over time, but even that conclusion is subject to a lot of assumptions.”
This comment more or less proves the point I made: “This process will ultimately help stabilize the renewable generation market, lower capital and operating costs, and eventually be competitive with fossil fuel. At that point subsidies will be weaned off.” The questions are when; whether people want to pay extra to support this transition; and how much they want to pay. Andreae’s original column, in my view, overstated the case.
It is just not right to assert definitively to people that the extra amount they pay will change the energy mix coming into their home, certainly in the short run and perhaps even in the long run. Call it what it is and let people make an informed choice. Advocacy is more effective, in my view, when the situation is clearly portrayed.
Paul, I think we can assert definitively that the energy mix will change with community choice energy, just as we can assert definitively that the Commonwealth’s existing Renewable Portfolio Standard has changed the grid mix to progressively increase the amount of renewable energy that Massachusetts has consumed each year.
For example, in 2015, the RPS requirement was for 10% of electricity in MA to be Class 1 renewable electricity. In that year, 48,010 Gigawatt Hours was sold in MA. Ten percent, 4,801 Gigawatt hours, came from renewable energy. This is verified fact. The same kind of accounting will be used for community choice energy.
Of course, all of the above is framed in terms that exclude the substantial externalized costs imposed on human health in the fenceline and frontline communities by our dirty energy production and consumption.
For example, our Newton public health expert Prof Jon Levy estimates in the publication below that in the ISO New England region, the net annual costs of policy that even modestly greens the grid is $220M/year, but the health co-benefits in this region are $880M/year, for an annual net health benefit of $660M/year.
http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0156308
We’re talking past each other. I’m not arguing about externalities, and I’m not saying things might not change over time. I’m just saying that the original column overstated the likely effect of this program and gives people the impression that their energy mix is going to change when they pay more, and that they were going to have a big impact on greenhouse gases. RPS is qualitatively different from this kind of program, as it was a legislative mandate.
But the energy mix WILL change with Newton Power Choice. Doesn’t that speak directly to your assertion that the energy mix is not certain to change with this program?
I’m sure you think it will change. You’ve made clear your opinion. I don’t believe that the energy mix of subscribers to the program who pay extra will be any different from their neighbors who don’t subscribe.
Paul, I don’t think it’s a matter of belief but of evidence. RPS provides evidence of verification of amount renewable energy purchased. What evidence are you basing your belief on?
I don’t think Paul’s and Nathan’s last statements (11:56am & 3:37pm) are mutually exclusive. If I’m understanding this correctly, the opt-in neighbor and opt-out neighbor would both be getting their energy from same percent of renewable, because it coming over the same grid. Analogous to a union member and a non-union member in an ‘open shop’ both getting the same pay and benefits even though one is paying union dues and the other not.
But the more people who opt in, the more the energy distribution companies have to buy their energy from renewable sources, so that raises all consumers’ percent coming from renewable sources, maybe just marginally, vs what it would have been without the program?
Have I got it right?
I have to agree with Paul a bit here. We have solar panels. We get about a quarter to half of our power from them depending on the season. As part of the incentive to get them, we receive a SREC for each megawatt-hour we produce for ourselves in the 1st 10 years. These can be sold on open market for about $270 after fees. So for every kilowatt-hour we make, we save roughly $0.24 in power cost and get another $0.27 for having created the power.
I looked into making our power more renewable. Where does the extra cost of the renewable power go? To buy SRECS. So essentially in my current state while I think I’m being green getting my power from my solar panels, essentially there is someone out there buying the right to also claim my renewable production for themselves. If I want to be more green, the 1st step would be to just tear up our SRECS instead of selling them. The solar power produced on solar panels on city property is likely in the same boat.
When I ran for Mayor in 2005 I proposed “municipal distribution of electricity” as a potentially significant revenue source for the City of Newton…
Rather than directing that money to hold property taxes down as I had suggested, this different version of the same idea directs the purchasing power of many toward an environmental objective. I agree with Paul Levy’s assessment of that program…
I also believe that if the people of Newton were given a choice between their electricity bill helping hold down their property taxes, versus the ambiguous environmental benefit that may be achieved through this program, most would likely opt for the former.
This has been a good discussion, I think. There a number of issues that I’d like to summarize, and then I’ll bow out (as I fear I’m getting repetitive). First, there is likely to be a benefit in municipal aggregation, just from combining the buying power of the community. As someone who organized the first major buying group in Massachusetts (of nonprofits and others), I’ve seen that happen. There’s no guarantee of lower prices, but it is worth testing the marketplace. Second, the electricity that you get from the grid comes from the same power sources as your neighbor, regardless of the contractual relationship you have with the buyer, and regardless of how much you are paying. That’s just a matter of physics. Third, RECs, as noted, are tradable financial instruments. Whether a city’s purchase of RECs results in more renewables in the system over time is dependent on a lot of variables. Finally, there is nothing inherently wrong with the City’s desire to aggregate customers and attempt to influence the mix of power generation in the region over time. My quarrel with the original opinion piece was that, in my mind, it overstated the environmental benefits of the program and gave the impression that the extra money you might choose to spend would cause different electrons to enter your house. Thanks to all for your thoughtful comments.
Electrons are fungible, like money. Dollars you withdraw from your bank account are unlikely to be the same physical notes you deposited, and may have even passed through some unsavory hands but that doesn’t change how you earned your money.
Same goes with renewables on the grid. The same wires deliver electrons to someone who opts in or out, but those who opt in are in the act of consuming electricity contributing their share to a verifiable quantity of renewable energy to be produced and sold.
I am very concerned that in all this discussion no one has discussed the very real and present danger of climate change as the fundamental reason for getting off of fossil fuels as quickly as possible. It is a total game changer, and aggregating our electricity and upping the amount of New England Class 1 renewable component in the Standard Option that everyone will participate in unless they opt out, up or down, is the easiest, most immediate lift to get us moving quickly to literally save this planet. As Paul acknowledges, he started this “conversation” with a letter to the editor of the TAB about an overstatement of impact and his concern that people would think the energy coming into their individual households would be identifiable as that which they purchased. “My quarrel with the original opinion piece was that, in my mind, it overstated the environmental benefits of the program and gave the impression that the extra money you might choose to spend would cause different electrons to enter your house.” I propose that this is the wrong conversation. Just like talking about “cost” in terms of $$ instead of health or destruction of the planet is the wrong way to quantify impact. We are in serious trouble, people, and our mayor has the opportunity to lead by choosing a higher content of NE Class 1 renewable energy in our bulk contract this fall so that 32,000 households and numerous small businesses together can accelerate the process of getting off of fossil fuels. Yes, it is that simple. This is critical to do now or there will be no future for our children and grandchildren, living just 30 years out. We are seeing the unthinkable before our eyes. Please read more at newtonclimateaction.org, and be one of the people that signs the Letter of Support for 40% More. 12 City Councilors have already done so. 12 organizations have done so. Many individuals have done so. We are not dinosaurs, helpless in the face of the 5th extinction, we are human beings who have made this mess, knowingly, and now must do all we can to save this planet by keeping fossil fuels in the ground. Brookline passed aggregation with 25% more in their standard option last summer. Let’ go to 40% more, the equivalent of taking 10,000 fossil fuel spewing cars off the road. A good place to start for a few dollars more a month. If Newton leads, other towns will follow. Then you will see the impact – more demand and more capacity, and soon 100% renewable electricity in Massachusetts. That’s what Andreae Downs meant by the opportunity of a generation, our generation. We must act now.