In an earlier post, I described how, in general, the low caps on utility net metering rules undermine the goals established in a state's Renewable Portfolio Standard (RPS). Now, I will take a look at the specific case of Massachusetts, which has an aggressive RPS program and already has utility companies running into the net metering cap.
In this post, I shall provide some background on the Massachusetts RPS. Then, in the next post, I will delve deeper into some of the reasoning behind putting a cap on net metering rules in the first place before finally discussing a possible solution to the issue.
| Class I Resources |
| In Massachusetts, eligible Class I resources include: photovoltaics (PV); solar thermal-electric energy; wind energy; ocean thermal, wave or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain new hydroelectric facilities, or certain incremental new energy from increased capacity or efficiency improvements at existing hydroelectric facilities; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative material, energy crops, algae, biogas, liquid biofuels; marine or hydrokinetic energy; and geothermal energy. |
| As described by DSIREUSA.ORG |
Since 2003 Massachusetts has had an RPS, which has been increasing by 1% per year since 2008 and shall continue to increase by 1% per year without a legislated limit. By the end of 2012, the Massachusetts RPS requires that utility companies ensure at least 7% of the electricity they sell is produced by Class I resources.
Also, since 2010, the Massachusetts RPS has included a Solar Carve-Out, which specifies that a certain portion of the RPS must be met using energy produced by in-state solar photovoltaic (PV) generation systems that are 6 MW or less. Under the current legislation, the Solar Carve-Out in Massachusetts is ultimately limited to 400 MW of total installed capacity.
However, the requirement that each system must be 6 MW or less means that at least 400 MW of solar distributed generation (DG) systems (officially defined as generation systems 20 MW or less) will need to be installed over the next several years. As we discussed in the previous post, the primary means of DG installation is through net metering interconnection with the local utility company, so it is likely that the 400 MW of solar DG systems will be net metered. Furthermore, even after the Solar Carve-Out is fulfilled, solar DG systems may still be used to meet the general Class I requirement of the RPS.
| 1% Per Year |
| The Massachusetts RPS quota is mandated to continue to grow at an overall rate of 1% per year. This breaks down to roughly 580,000 MWh of additional Class I electricity generated per year.1 If the entire Class I requirement were met only through solar PV systems, roughly 482 MW of new solar PV generation capacity would need to be installed each year.2 Likewise, if the entire Class I requirement were met only through wind turbine systems, roughly 265 MW of new wind generation capacity would need to be installed each year.3 |
It is unlikely that any single Class I technology will fulfill the entire annual RPS increase during any particular year. Instead, each year a combination of new Class I technologies will need to be installed on a massive scale. But what does that mean? Consider some examples of renewable energy installation projects at a scale comparable to the annual increase in the RPS:
- If the Cape Wind project (420 MW) were fully operational, it would only fulfill roughly one and half years worth of the increase in the RPS requirement.
- When the entire Solar Carve-Out (400 MW) is met, it will not cover an entire year of the increase in the RPS requirement.
- The Sihwa Tidal Power Plant (254MW) is the largest wave powered generator in world, which produces 552,000 MWh per year. It is located in South Korea and is part of a tidal barrier that stretches nearly 8 miles in length across a tidal inlet creating an artificial lake.
As a result, such mega-scale renewable projects can take years before they begin and can cause massive, localized environmental disruptions. On the other hand, hundreds of micro-scale DG projects (such as those mandated by the Solar Carve-Out) can be installed with relative ease, provided that they make financial sense and the regulatory hurdles do not turn into stone walls.
Unfortunately, even before the Solar Carve-Out requirement has been met, utility companies - such as National Grid - have already received enough DG interconnection applications to cause concern about their net metering cap. In this case, the net metering cap regulatory hurdle may simultaneously stonewall projects and make them less financially viable. In the next post, I will take a look at the net metering cap in Massachusetts.
Sincerely,
Sean Diamond
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Notes from the "1% Per Year" Box:
| 1) | Estimate based on available data from the US Energy Information Administration (EIA) Electricity Data website - spreadsheet: Retail Sales of Electricity by State by Sector by Provider (EIA-861). |
| 2) | Estimate based on the PV Watts generation calculator, which suggests that 1 MW of solar PV capacity aligned south at a 20 degree inclination can produce about 1,202 MWh/MW per year in Boston, Massachusetts. |
| 3) | Estimate based on information provided on the National Wind Watch website, which suggests a generation rate of 2,190 MWh/MW per year is not unreasonable given a 25% capacity factor. |
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