Economic Benefits

Renewable competition strengthens Massachusetts clean energy future

Allowing different energy sources to compete would deliver the lowest-cost electricity to the state's families and businesses.
Renewable competition strengthens Massachusetts clean energy future
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Francis Pullaro is the Executive Director of RENEW Northeast (RENEW)- an association of the renewable energy industry and environmental public interest groups in New York and New England.

The Massachusetts state legislature is considering a forward-looking bill to further reduce carbon emissions and clean the air—something all of the state’s residents deserve.

The bill as amended by the state senate will benefit consumers by creating greater competition between electricity sources and allowing all forms of renewable energy to meet more of the state’s clean energy needs. Throughout New England, large-scale renewable energy projects are the most cost-competitive way to generate clean electricity, and larger wind farms deliver the lowest prices.

The U.S. Department of Energy reports that by growing wind energy, Massachusetts’s ratepayers could save $355 million on their electric bills. Another $4.57 billion dollars in savings could be realized because wind energy protects consumers from conventional fuel price spikes. For example, during 2014’s polar vortex weather event, wind saved ratepayers across the Midwest and Mid-Atlantic over $1 billion in just two days. Analysis shows wind power has a similar effect across New England.

This works like a fixed-rate mortgage. Utilities purchase wind through fixed-rate contracts, so prices are guaranteed years in advance. If there are fossil fuel price shocks, renewable energy is able to act as a hedge and help keep electricity costs low.

Former DPU Chair Ann Berwick explained how wind purchased under the Green Communities Act benefitted Massachusetts residents, noting, “these contracts are an absolute win-win for the Commonwealth and for distribution company customers…They help the Commonwealth meet its renewable energy and greenhouse gas reduction requirements, provide a hedge against volatile natural gas prices, and reduce customers’ bills.”

Wind energy also helps deliver these savings because it has become increasingly cost-competitive. Technological improvements that allow wind turbines to reach stronger, steadier winds, as well as advances in American manufacturing, mean it’s more economical in more places. That’s why today wind is 66 percent cheaper than it was just six years ago.

Currently the Senate is proposing to increase Massachusetts’s renewable portfolio standard (RPS). A recent study found Massachusetts’s RPS– designed to increase wind and other renewables while keeping costs low for families and businesses and attracting private investment into the local economy– has a three-to-one benefit-to-cost ratio, creating annual net benefits exceeding $215 million. Rhode Island’s legislature just last week approved an increase in its RPS.

Cleaning our electricity sector is a noble goal. It will help create a better tomorrow for Massachusetts and a less polluted world for our families. As the state’s Senate has shown, this doesn’t need to be an unnecessarily expensive endeavor. Allowing competition between all clean energy sources means we’ll be able to breathe fresh air and lighten our energy bills at the same time. That’s the solution all our lawmakers should get behind.

 

Economic Benefits

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