CEG’s Natural Gas Strategy: Squaring Natural Gas With Climate Protection

Author: Lewis Milford, Clean Energy Group | Project: Clean Energy Innovation

blogphoto-Coal-Fired-Power-PlantA few weeks ago, Conservation Law Foundation (CLF) announced it had reached a settlement with the owners of a new 630 MW natural gas plant in Salem, Massachusetts. The settlement paves the way for the new gas plant to replace an old coal plant, which is good; but perhaps more importantly, the settlement includes tough and progressive emissions limitations, and a sunset provision for the gas plant.  This marks the first time that a natural gas plant has been held to the claims of the industry, namely, that natural gas is a “bridge fuel” only intended to provide a temporary solution while renewables ramp up.  This landmark settlement could be a model for the country.

Clean Energy Group is involved, not in the litigation, but as a strategic partner with CLF, because of our interest in limiting greenhouse gas emissions (GHGs) and raising new capital for no- carbon technology investment. The state of Massachusetts was also a party and committed to convening a regional decarbonization roadmap process and other actions (including gas distribution leak reduction policies) as part of the deal.

What follows is a summary of the settlement and its implications for new funding for no-carbon technologies.

Most importantly, the settlement provides declining annual GHG emissions limits and a 2050 decommissioning date.  That is, the plant owners agreed to a declining GHG emission rate consistent with an end goal of reducing the plant emissions by 80% by 2050, at which point the plant must shut down. The emissions limits can be met by decreasing operations, by technological improvements or by investments in renewable resources (e.g., blended contracts with renewable output where gas provides firming).

The target of 80% emissions reduction by 2050 is consistent with the findings of climate scientists, who say we need to reach those levels to have any hope of stabilizing climate change.

Clean Energy Group is interested in this work because we believe that any new gas investment must be squared with our region’s commitment to stabilize the climate. We believe in particular that gas investment should be leveraged to finance no-carbon investments. Otherwise, more gas could well crowd out investment in no-carbon resources needed to reach that climate stabilization target.

In particular, we believe that that any new gas infrastructure, including proposed new gas pipelines in the region, should be leveraged with a new System Transformation Charge (STC) to raise significant revenues for the deployment and innovation of no-carbon technologies. This would be similar to the system benefit charges (SBCs) on electric utilities that now fund many state clean energy funds.

Clean Energy Group will be making this argument in the coming years, so that our no-carbon technology portfolio has the capital to reach scale.

New investment in no-carbon technologies is critical for many reasons. Recent reports and peer-reviewed studies support the conclusion that natural gas is only useful as part of a short-term transition strategy, but does not represent a satisfactory long-term replacement for coal and oil. In fact, new natural gas power plants would increase emissions in New England unless properly conditioned and subjected to appropriate emission limits.

Moreover, expanded investment in natural gas infrastructure threatens continued investment in renewable and low-carbon technologies. This is true for the electricity sector as well as for advanced electric heat and renewable thermal technologies.

New gas infrastructure has a useful life of 50 years or more. If the current increase in natural gas generation and infrastructure is left unchecked, natural gas will become the dominant fossil fuel for power generation, space heating, and industrial use through this century. If closing coal-fired power plants and driving oil out of basements and furnaces results only in a lock-in of natural gas and a lock-out of no-carbon technologies, climate protection will not advance.

What you will see from Clean Energy Group and CLF over the next few years is a three pronged strategy:  1) Manage and condition new gas investment to be consistent with decarbonization; 2) Leverage new gas investment to raise revenue for no carbon technology and resource deployment; and 3) Create a long term decarbonization strategy for New England.

This new Massachusetts agreement is a major step towards progress on all three prongs.  It imposes conditions on new gas infrastructure including GHG limits which can be met through investments in new renewables, and it commits the state to long term decarbonization planning (that we suggest should include various strategies such as new financial models).

In key respects, the settlement agreement creates a landmark precedent. It is a first-of-its-kind model for replacing coal plants with gas.

The settlement agreement documents can be accessed here.

Press coverage and analysis of the CLF settlement includes:

Clean Energy for Resilient Communities

Author: Lewis Milford, Clean Energy Group | Project: Resilient Power Project

Clean Energy for Resilient Communities Report CoverTo become more resilient in the face of severe weather events, communities should rely on proven distributed energy technologies like solar PV with energy storage to protect residents from future power outages, according to a new report released today by Clean Energy Group.

In the first blueprint of how a city could become more “power resilient,” the report, Clean Energy for Resilient Communities, shows how Baltimore and other cities could use clean energy to create a more reliable electric system that protects vulnerable citizens during power blackouts.

The report was written by Clean Energy Group for The Abell Foundation, a leading private foundation in Baltimore.

The report starts out with some basic assumptions:

  • Building stronger and more resilient local communities has always been at the core of community development. It aims to overcome poverty and disadvantage by investing in the physical infrastructure of neighborhoods, building family income and wealth, improving access to quality education, and promoting social equity.
  • Adding to the well-known and pervasive challenges to community well-being are new threats brought on by climate change, which can impact especially the most vulnerable among us—the poor, the elderly, and the disabled.
  • For millions of people in the East, Superstorm Sandy and the derecho of 2012 have now changed the definition of what a resilient community is and needs to be.
  • Resilient communities need resilient power. Without dependable power, a community can be brought to its knees. Extreme weather events and resulting power outages deprive a community of its most basic need—the electricity that makes the multiple levels of urban infrastructure, economic activity, and social interdependence possible.
  • All infrastructure systems are vulnerable to power disruptions, whether they are buildings, utilities, gasoline, health care, telecommunications, transportation, water and wastewater, food supply, solid waste—and public safety. All rely on electricity, which is the community’s lifeblood.

We have learned from recent extreme weather events that a community without dependable and reliable power is a community at risk. The consequences of losing power are stark, especially for low-income residents, the elderly, and disabled.

The damage and harm caused by storms are always compounded by poverty. Low-income areas have more difficulty responding and recovering from the destruction caused by extreme weather events and related power outages. They often lack the income, savings, jobs, access to communication channels and information, and insurance to recover from the adverse impacts of extreme weather events.

These dangers are often forgotten after the immediate damage from these events is over. But public agencies concerned with the health and welfare of its most vulnerable residents must come to realize that these impacts are not inevitable; they can be prevented. And they should also realize they might have legal obligations under the Americans with Disabilities Act to do more to ensure the disabled and the elderly have access to facilities in emergencies, which is denied to them if power is not on. A court has ruled that New York City violated their rights when power was out during Hurricane Sandy.

The report is designed to explore some basic issues:

  • How solar technologies can help the poor, the disabled and the elderly with their day-to-day lives, especially in the face of threats from more frequent extreme weather events in the future.
  • How solar, configured with battery storage, can help protect lives by keeping the elevators running and the air conditioner on in senior centers and housing during a power outage.
  • How clean resilient power can help reduce the risk of heat stroke and hypothermia in vulnerable populations during power emergencies and extreme weather events.
  • How public facilities like schools can be powered by solar power with battery storage, or other forms of clean energy generation, to serve as emergency shelters.
  • How cities can ensure that critical public facilities like shelters, emergency centers, and police and fire stations are equipped with more reliable power to withstand the next storm.
  • How public policies and utility support programs can be targeted to provide opportunities in low-income communities for distributed solar generation and community power resiliency.
  • How these new measures to protect vulnerable populations from power outages also provide a public health benefit by reducing the environmental impacts of conventional electricity generation on low-income communities.

The reports offers many specific recommendations as to how a city could become more power resilient.

Our key solution is clean energy, especially distributed solar with battery storage, which can keep solar up and running in a power outage. Solar with storage can be a useful community development tool to create community power resiliency, while at the same time leveraging public and private investment in low-income communities.

This focus on power resiliency comes from an examination of what are the best strategies to provide low-income communities with access to the benefits of solar power. We could affirm those policies that say it is better to completely subsidize the technology for low-income households, using deep subsidy to essentially give the poor solar at little or no cost. That strategy depends on heavy subsidies over the long run, which can prove to be an unreliable and unsustainable approach.

For that reason, we find it is better to align new business models that may be ready to serve those markets without deep subsidy. We believe this strategy to be more promising.

That leads us to focus on power resiliency as a way to tap into emerging business and technology markets for solar battery storage. That approach would give community buildings and schools and other facilities more power protection in the event of severe weather events. We think this approach makes more business, political, and economic sense for the communities of concern.

The report also makes many specific recommendations for how a city could adopt policies and finance these technology solutions for a more resilient community.

Most important, these recommendations could apply to any community that wants to protect its most vulnerable populations from the ravages of future severe weather events.

In the end, damage from power outages is not inevitable. We have the technologies and the business models to prevent such damage. Communities and their officials simply need to take the steps to use them to protect their citizens from harm in the future.

In the Dark, Again and Again

Author: Lewis Milford, Clean Energy Group | Project: Resilient Power Project

blogphoto-Lower-Manhattan-Following-SandyIf we’re going to deal with increasingly severe climate-related power outages and are going to make our communities more resilient, we in the environmental community have to change the kinds of technologies we propose to solve the problem. Investing in the same old stuff – simply more energy efficiency and solar without energy storage – is not a climate resilient solution.

This past week, more than 1 million people lost power due to the snow and ice storms that hit the Northeast; and more storms are on the way. This last storm caused more people to lose power than any severe weather event since Hurricane Sandy, when over 8 million people were left in the dark. Important critical facilities like hospitals had to run on backup generators.

What this should tell us is that we haven’t learned enough from Hurricane Sandy. Storms happen. Trees go down, and the utilities can’t provide power. It’s the same old same old.

At the same time, many people have applauded the work that cities are doing to address climate change. A recent report from Bloomberg C40 Cities group noted the climate solutions adopted by cities. They are laudable: more energy efficiency, more solar, and other clean energy technologies.

But these solutions alone do not increase energy resiliency.  Reducing building energy use through efficiency or installing solar panels on buildings does not enable those buildings or the surrounding communities to bounce back and recover in the face of severe weather events and the crippling power outages that they bring. Without power, communities are brought to their knees.

This is most important for critical facilities that serve the public. Hospitals, fire stations, shelters, nursing homes, public housing and other places where the public looks for protection need critical loads up and running during emergencies. It is the basic duty of government to protect people from harm, and that means keeping the power on during disasters.

But keeping the power on requires more than just energy efficiency and traditional solar power.

Many people do not realize that solar electric systems don’t work during a power outage; unless the panels are hooked up to a battery and configured to island from the grid during an outage, they are useless in severe weather. The combination of solar with battery storage is a new technology approach that is power resilient and, with the use of new business models, can be cost-effective as well. But without storage, you just have an expensive power system on your roof that does not work when you might need it the most.

It is not resilient.

Neither is energy efficiency power resilient. It is good to reduce energy bills and environmental emissions. While that might reduce demand on the energy grid, it does nothing in the face of power outages for the individual customer sitting in the dark. Efficiency does not keep the lights on or the elevator running when the grid goes down.

It is not resilient.

Power outages cause harm to the most vulnerable populations. We have learned from recent extreme weather events that a community without dependable and reliable power is a community at risk. The consequences of losing power are stark, especially for low-income residents, the elderly, and disabled, who have a much harder time recovering from lost time at work, lack of access to emergency services, or who can’t get out of their buildings because elevators aren’t working.  (See “Court Finds NYC Disabled Not Adequately Protected After Sandy; Disaster Planning Must Include Vulnerable Populations.”)

So what is needed to address climate risks from severe weather are energy technologies like solar and energy storage that will run when the utility power does not.  And we need them to power our critical facilities to protect our most vulnerable populations. It is that simple.

For these facilities, cities need to adopt more resilient power solutions like solar with energy storage or fuel cells or combined heat and power systems that generate electricity during severe power outages.  These clean energy sources work before, during, and after power outages, which is what they are designed to do. (See “Solar Storage: The New Resilient Clean Energy Technology.”)

There are excellent new examples of states moving forward on resilient power solutions in the Northeast. They understand the need for these new solutions and know that what we currently have in place doesn’t work. In the last few months, these states have committed over $135 million in new power resilient solutions like solar storage, smart grids, and combined heat and power systems. They know new technology strategies are urgently needed.

These proven clean energy technologies can be both climate mitigation and adaptation:  they are good climate mitigation solutions because they reduce harmful emissions – and are also climate adaptation strategies because they can keep our homes and business powered when the grid goes down.

The city planners and the environmental community and their supporters need to catch up with the innovation occurring at the state level. They should look seriously at these new ways to address resilient power problems.

Calling energy solutions “resilient” when they don’t work during power outages leaves us in the dark again.

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This blog post was also published in the Huffington Post.