Five Reasons Why We Should Modify State’s Renewable Energy Standards

Within the next few weeks, the Department of Energy and Environmental Protection (DEEP) is expected to release a new report that will include recommendations for modifying Connecticut’s renewable portfolio standards (RPS). 

That’s good, because the current RPS standards are not economically achievable and severely limit our ability to take full advantage of a variety of clean, renewable power sources in our state and region.  

Originally adopted in I998 as part of electric utility restructuring, the RPS requires electricity providers to obtain a minimum percentage of their retail load from renewable energy sources. Providers that fail to comply with the RPS must pay a penalty of $55 per megawatt-hour.

The current RPS requires that by the year 2020, electricity providers obtain 20% of their retail load from “Class I” renewable sources.  These include solar electric, wind, fuel cells, methane gas from landfills, certain biomass facilities, ocean thermal power, wave or tidal power, and certain small-scale hydropower facilities.

Five concerns

However, there are five major concerns with the impact of the current Class I standards on Connecticut’s economy. 

• First: A variety of factors make some Class I renewable fuels impractical to produce on a large scale within the state.  We are not well situated, for example, to produce significant power from wind, ocean thermal or tidal activity.  In fact, over 95% of the Class I renewable power currently used within the state is produced elsewhere.
• Second: Even with the extension of federal tax credits, renewable sources are still much more expensive than conventional ones—such as natural gas and nuclear—that provide most of our region’s power. For example, the U.S. Energy Information Administration estimates that the levelized cost of energy from renewable sources such as wind, solar and biomass to be 50% to 200% higher than from a new natural gas combined-cycle unit.
• Third: DEEP, through its latest Integrated Resource Plan, projects that by 20I7 there won’t be enough energy from Class I sources–as currently defined–in New England to meet the region’s RPS requirements. Recent data on the availability of Class I renewable credits indicate we are already experiencing a shortfall.
• Fourth: There currently is no way to economically store energy from many of these sources for later use. This presents serious reliability challenges – especially for many manufacturers and other businesses that depend on an uninterrupted flow of electricity.
• Fifth: Siting of some of these sources has proved politically challenging.  Wind towers, for example, have proved so controversial that the legislature placed a moratorium on the production of wind power in the state–effectively foreclosing it as a Class I renewable option in Connecticut for at least the immediate future.

Cleary Connecticut already faces some significant economic challenges in bringing our very high energy costs in line with the rest of the region, if not the nation.  But the current RPS steepens those challenges significantly–which is why lawmakers need to comprehensively reform the RPS during this legislative session. 

The good news is lawmakers have the opportunity to provide greater flexibility that will not only allow us to meet the current RPS requirements, but actually exceed them. 

Connecticut could increase its stature as a national leader in the creation and use of renewable power, and reduce its very high electric costs, by adjusting the definition of Class I renewable power to include large-scale hydropower, thermal renewable energy, certain categories of combined heat and power units, and other clean, affordable, renewable and reliable sources of power.

CBIA strongly supports the development, manufacture and use of alternative, renewable energy technologies in Connecticut; we believe that expanding the definition of Class I renewable power will not hurt the development of in-state renewable power supplies.     

In fact, there will always be a market—perhaps even a market advantage– for reliable and affordable energy that’s on-site or close to its end-user.  Connecticut companies are leaders in the development and manufacture of innovative energy technologies to meet this market demand. As was the case with fuel cells, these emerging technologies can become part of Connecticut’s future portfolio of Class I energy resources. 

We urge comprehensive reform of the state’s RPS, including broadening the definition of Class I renewable, to provide not only plentiful supplies of affordable and reliable Class I renewable power for Connecticut and New England,  but also to lower costs and strengthen our leadership role in developing and manufacturing alternative energy.

For more information, contact CBIA’s Eric Brown at 860.244.I926 or eric.brown@cbia.com.