Updated January 5, 2018
By Rick Wackernagel and Laura Mistretta
To avoid the worst effects of global warming, we need to transform our energy system, replacing fossil fuels used in producing electricity, heating and transportation with renewable energy. Vermont has already set goals for these changes. In 2011, Vermont made getting 90% of its energy from renewable sources by 2050 a goal. In 2016, Vermont’s Comprehensive Energy Plan laid out paths to 90%. Since electrifying heating and transportation are big parts of this plan, we will need to generate substantially more renewable electricity than we currently generate. Our renewable-electricity-generation system has not been expanding fast enough to reach the 90%-renewable goal, however.
In 2015, Vermont used about 5.5 billion kilowatt-hours (kWh) of electricity i. About 2.5 billion kWh came from renewable sources – hydroelectric dams, wood, wind turbines, methane digesters and photovoltaic solar panels ii. We will need to replace the 3 billion kWh of fossil-derived electricity and, to substitute electricity for fossil fuels used in heating and transportation, we would need to add another 8 billion kWh i,iii.
Vermont’s Comprehensive Energy Plan 2 and Total energy study iv plot three possible paths to 90% renewability in 2050. They include expansion of our current 550 megawatts (MW) of in-state renewable generating capacity by 1,000 to 1,700 MW 2. To finish by 2050, we need to be adding 26 to 46 MW of generating capacity each year. In 2011 and 2012 we added about 120 MW v. From 2013 to 2015, however, we averaged about only 11 MW per year. This pace will not get us to our goal. We will be short 600 to 1,300 MW.
These plans include significant growth in in-state renewable-energy production, rather than simply increasing purchases of power from Hydro-Québec. In addition to increasing self-sufficiency and local resiliency to extreme weather, these plans acknowledge undesirable features of Hydro-Québec power. The power Hydro-Québec currently sells to Vermont is surplus over that used in Québec vi. It’s price, thought to be around 7 US cents per kWh vii, is substantially discounted. Increasing purchases of power from Hydro-Québec would require new dams. Bringing power from a new dam to the Vermont border is estimated to cost about 12 cents per kWh viii. Hydro-Québec would not be able to discount the price for this power, since it wouldn’t be able to offset the discount with revenue from in-province sales. In addition, Hydro-Québec power, tho renewable, is not carbon free. Boreal forests sequester more carbon than any other terrestrial ecosystem. The valleys Hydro-Québec floods are boreal forests. Flooding them eliminates their ability to sequester more carbon and gradually releases the carbon they have sequestered ix.
The growth in renewable-energy capacity in 2011 and 2012 shows that sufficiently rapid expansion is technically feasible. A major reason for the slowdown after 2012 is local resistance – for example, to wind projects in Swanton x and solar projects in Bennington xi. The reasons for resistance vary and include aesthetics, health, tourism and environmental impacts, and the relative influence of communities and developers in permitting processes. Many of these could be called dissatisfaction with the current distribution of costs and benefits from producing renewable energy. Could we structure development of generation capacity, so host communities capture more of the economic benefits – e.g., cheaper electricity and jobs? Could these communities have more input into decisions, so new systems meet local goals, such as resilience in the face of extreme weather events? And how can we equitably share benefits so, regardless of income, property ownership or political access, all who call Vermont home stand to gain?
Act 174 already gives towns more voice in renewable-generation siting decisions. It should be allowed to continue. However, it’s impact on distribution of cost and benefit is limited. We need to address distribution directly. Creative minds will come up with many ways to improve the distribution. We offer four to start the conversation.
- Deepen the engagement of communities by creating pathways to local ownership. Allowing partial local ownership has been an effective strategy in Germany and Denmark for accelerating expansion of renewable generation. Denmark now requires developers to allow local residents to provide 20% of the investment in large projects xii. Research shows this shared ownership has reduced local pushback xiii.
- Replace policies that restrict the ability of individuals and communities to benefit from renewable energy. Limits on the size of net-metered generation systems keep them at uneconomical sizes. Economies of scale in electricity generation are substantial xiv. Allowing community members to be co-owners of utility-scale systems will reduce the cost of power for all Vermonters, as well as providing a better return on investment than they currently can receive. Community solar should refer to ownership structure, not size of generation system.
- Think creatively about alternative ways to compensate host-community residents for the costs they bear. Different people will find different methods of compensation attractive. Having a menu of acceptable methods will allow negotiations to proceed more quickly. Power producers already make lease payments and pay property taxes. They also could make other payments to neighbors and communities. Residents of host communities could receive discounted prices for electricity or get credits on their bills. The prices or credits could depend on the kind and size of generation system, and the degree to which the community is self-sufficient in electricity. Low electricity rates would be an economic-development catalyst.
- Develop policies and incentives that benefit Vermont’s most vulnerable populations. The Vermont Solar Market Pathways report found huge potential benefits for low-income households from community solar projects with interest–rate buy–downs or on-bill financing to reduce barriers to participation xv.
Institutional changes that allow more equitable distribution of costs and benefits of renewable energy will help open the bottleneck preventing us from producing the renewable energy we need. That will help fill the 600 to 1,300 MW gap in our projected renewable-energy generation capacity.
Rick Wackernagel is a member of the Energy Committee of the Sierra Club Vermont Chapter.
Please address questions and comments to both Laura and Rick at:
Live links to sources are available in a version of this proposal at www.greenenergytimes.org.
i U.S. Energy Information Administration. 2017. State Energy Data System (SEDS): 2016 updates by energy source.
ii Vt Department of Public Service. 2016. 2016 Vermont Comprehensive Energy Plan.
iii Wackernagel, Rick. 2017. Impact of electrification on tax revenues, Excel worksheet based on energy use data from State Energy Data System at U.S. Energy Information Administration.
iv Vermont Public Service Department. 2014. Total energy study: Final report on a total energy approach to meeting the state’s greenhouse gas and renewable energy goals.
v U.S. Energy Information Administration. 2016. Electric Power Annual, Existing capacity by energy source, by producer, by state back to 2000 (annual data from the EIA-860).
vi Masterson, Kathleen & Mitch Wertlieb • Jul 17, 2015. New Hydro-Quebec CEO aims to boost sales of surplus power. Vt Public Radio.
vii Post, Willem. 31-Jan-17. More Energy From Hydro-Quebec is Best For The Vermont Economy. Ethan Allen Institute.
viii Conservation Law Foundation. July 2014. New England could pay more than $800 million above market prices every year for Hydro-Québec/Northern Pass hydropower.
ix FAO. 2001. State of the World’s Forests (SOFO), Climate change and forests.
x Freese, Alicia. 27 November 2017. Developers withdraw Swanton wind project proposal. Seven Days. https://www.sevendaysvt.com/OffMessage/archives/2017/11/27/developers-withdraw-swanton-wind-project-proposal
xi Therrien, Jim. 27 November 2017. Bennington energy plan moves ahead despite developer’s warning. VTDigger.org.
xii Ramsay Dunning. 1 December 2014. Citizens need a legally enforced right to invest in renewable energy.
xiii Warren, Charles R. and Malcolm McFayden. 2010. Does community ownership affect public attitudes to wind energy? A case study from south-west Scotland. Land Use Policy (27:2).
xiv Lazard. 2017. Lazard’s levelized cost of energy analysis – Version 11.0.
xv Hill, David et al. 2016. Vermont Solar Market Pathways.