By Bruce Mohi / December 2, 2010
Republican Charlie Baker may not have won the race for governor, but his idea to import more hydroelectric power from Canada isn't going away.
Canadian Provinces are eager to do business and several Massachusetts business groups are quietly talking the idea up. They see Canadian hydropower as the best way to keep electricity costs stable while meeting the state's environmental goals on renewable energy and reducing greenhouse gas emissions. One business group hasn't gone public yet but is drafting legislation that would classify large-scale Canadian hydro as renewable and therefore eligible for renewable energy subsidies paid for by utility ratepayers.
Most people would agree that hydroelectricity is as renewable as rain and a very low emitter of greenhouse gases, but Massachusetts officials chose not to designate large-scale hydro as renewable when they passed the Green Communities Act of 2008. Their decision was based less on concerns about the environmental impact of dam-created reservoirs on habitat and wildlife, and more on the fear that low-cost hydro from Canada would overwhelm the renewable energy market in Massachusetts, depressing demand for more expensive wind and solar projects that the state was eager to jumpstart.
Massachusetts and most other New England states operate a subsidy system designed to encourage the development of renewable energy. Companies that produce qualifying renewable energy generate renewable energy credits, or RECs, for each kilowatt hour of power they produce. The RECs are sold to companies that sell electricity to customers. The state currently requires the electricity sellers to buy RECs equal to 5 percent of their sales. The mandate rises one percentage point a year, so that by 2025 the electricity sellers will have to buy RECs equal to 20 percent of their sales.
During the gubernatorial campaign, Baker said the rising demand for renewable energy and the scarity of supplies mean electricity prices will keep going up. He said the state should designate large-scale hydro-power from Canada as renewable as a way of meeting the state's environmental goals and holding electricity prices down.
But Gov. Deval Patrick said he didn't favor paying subsidies to large-scale hydro produces in Canada who could afford to sell their electricity in New England without subsidies. He also feared the inclusion of Canadian hydo would dampen enthusiasm for home-grown wind and solar projects.
Canadian provinces are eager to become much bigger players in the New England energy market. Quebec-owned Hydro-Quebec is working with Northeast Utilities and NStar to gain approvals for a transmission line that would deliver approximately 1200 megawatts of hydroelectricity to a substation in New Hampshire. Nalcor Energy, which is owned by Newfoundland and Labrador, is developing a hydro power station in Labrador and a transmission line that would deliver the power to Nova Scotia and eventually New England.
A spokesman for Hydro-Quebec declined to comment on whether the company would like to see its hydroelectricity qualify for renewable energy credits. A spokesman for NStar also declined comment.
But sources say the utilities are quietly laying the groundwork for a legislative change. Some industry officials even suggest Hydro-Quebec may need the subsidies to make its power competitive in the New England market.
Hydro-Quebec signed a 26-year power deal with Vermont utilities this summer to supply approximately 225 megawatts of electricity to the Green Mountain state. Terms of the deal were not disclosed, but Hydro-Quebec President Thierry Vandal was quoted as saying the intial price in 2012 would be 6 cents a kilowatt hour, a third of what Cape Wind power will cost. The Vermont deal also gave Hydro-Quebec a public relations victory when the Vermont legislature passed a law recognizing large-scale hydro as a form of renewable energy. Quebec Premier Jean Charest, at the official announcement of the Vermont deal in August, used the Vermont designation to make his case for expansion into the New England states.
"We do not want large-scale hydro to be discriminated against," Charest said. "Our view is that the United States will not be able to meet the objectives of a low-carbon economy without this energy. So it represents a win-win for everyone."
No comments:
Post a Comment