Planning Connecticut’s energy future, policymakers may discover that all that glitters may, or may not, be green. Next week, the Connecticut Energy Advisory Board (CEAB) will begin conducting a review of the state’s green energy goals to check their feasibility and find out how they can best work.

The state’s Renewable Portfolio Standard (RPS) is one of many efforts to increase the use of green energy in Connecticut. According to the RPS, within a decade, 20% of power in the state has to come from such sources as solar power, wind power and fuel cells and 3% more must come from other sources, such as trash-to-energy, biomass or small-scale hydro. By 2020, another 4% will have to come from a third category of sources, including combined heat and power and energy efficiency. Combined, that’s an ambitious 27% of the state’s energy supply set to come from all those renewable sources.

Higher costs

Of course, green energy is much more costly than traditional sources, and the CEAB will help sort out what’s possible and prudent for Connecticut.

Understanding the true costs and benefits of renewable power is critical to the long-term viability of our economy—which, according to Gov. Dannel Malloy and DEP Commissioner Dan Esty, will be the “third E” of the proposed new Department of Energy and Environmental Protection.

In fact, said Esty, the state’s economy will be a front-and-center focus of the new agency, “to contribute to the governor's agenda of rebuilding a platform for economic growth.”

Massachusetts experience

Massachusetts, which in 2008 set up its own renewable energy goals, is finding out that the green energy issue is complex. The Bay State’s goals are slightly less ambitious than Connecticut’s—20% of the state’s power supply by 2025. In response to that mandate, the state’s two largest utilities recently struck deals that show the financial realities of renewable energy. 

Power utility National Grid made a deal with CapeWind to build and run the nation’s first offshore wind project. When completed, the project will cost ratepayers in Massachusetts $1.2 billion more than what’s projected to be the market price for energy. Building the massive, 468-megawatt Cape Wind project alone will cost $2.62 billion.

On the other hand, NSTAR, another utility, has a deal in place with three smaller, land-based wind farms in Massachusetts that will total $111 million below market price.

That’s a $1.3 billion dollar gap between the two projects. For businesses in Massachusetts, the impact of CapeWind’s 18.7 cents per kilowatt hour rate with a 3.5% escalator each year will be devastating.  

Shortcomings

The reality is, green energy, while desirable, has some significant shortcomings that must be dealt with.

For one, producing green energy takes a tremendous amount of resources. According to Jesse Ausubel, director of the Program for the Human Environment and senior research associate at Rockefeller University, the entire area of Connecticut would be needed for enough wind turbines to power the city of New York.

It’s also expensive. President Obama's Energy Information Administration estimates that by 2016, onshore wind (the least expensive of these green energies) will be 80% more expensive than combined cycle, gas-fired electricity.

Wind, solar and biomass sources are also unreliable because they depend on factors that can’t always be controlled, such as sunlight, strength of wind and availability of water. 

It’s good that the CEAB will be reviewing Connecticut’s renewable standards. We can’t afford to saddle our businesses and economy with high costs that could be avoided.

The CEAB is holding a roundtable discussion on Connecticut RPS Policy Objectives on Monday, April 11 at the DEP in Hartford.

For more information, contact CBIA’s Kevin Hennessy at 860.244.1979 or kevin.hennessy@cbia.com.