All of the Above
The health of New England’s economy, communities and environment depends on reliable, sustainable, and affordable energy supplies. While much has been done in recent decades to strengthen the region’s electric power system, we now face an unprecedented challenge: We are beginning to experience shortages of natural gas, which is used to fuel about half the region’s power plants.
These shortages are not the result of nationwide scarcity. Rather, they are caused by capacity constraints on the pipelines that bring natural gas to New England. These shortages put New Englanders – including our customers – at risk of electricity price hikes, service disruptions and even brownouts or rolling blackouts – now, and in the years ahead.
But National Grid has a strategy to address these challenges: We advocate for an “all of the above” solution that includes renewables, energy efficiency and increasing natural gas transmission. We’re working on a wide variety of initiatives, from solar installations and delivery of large-scale renewable electricity sources to natural gas infrastructure investment, that will help the entire region move toward an affordable, clean, reliable energy future.
The shift to natural gas-fueled generation
New England’s energy challenge has its roots in an extraordinary success story. For many years, most of the region’s power plants burned oil, coal and other carbon-intensive fuels, which produced emissions that contribute to air pollution and climate change.
State and federal policymakers sought to reduce these emissions and promoted a shift to cleaner-burning natural gas and renewable sources of energy such as wind, solar, and hydropower. The US Environmental Protection Agency’s Clean Power Plan favored natural gas over more carbon-intensive fuels. In Massachusetts, the Green Communities Act established ambitious greenhouse gas emissions reduction goals that can be achieved only with significant use of renewable energy (supported by natural gas for reliability).
These policies have resulted in dramatic changes; the share of electricity generated by natural gas in New England tripled between 2000 and 2013, from 15 to nearly 50 percent.
The benefits have been substantial. Emissions that contribute to air pollution and climate change have been dramatically reduced. Wholesale electricity costs dropped by more than half between 2008 and 2012, saving energy customers billions of dollars and boosting the region’s economy as it struggled to climb out of the severe recession after 2008-09.
The trend toward natural gas generation will continue. Of the new electric generation projects currently proposed for construction in New England, 57 percent would be gas-fired.
Renewables and demand reduction initiatives
National Grid and other energy companies also have been working closely with policymakers to expand the use of renewables and promote initiatives that reduce demand for electricity. These actions also improve system reliability, which corresponds to increased customer expectations for consistent delivery of energy.
While the shift to renewable sources of energy has been slower than the move to natural gas, 14 percent of New England’s power currently comes from such sources, and nearly half (42 percent) of proposed new power projects would be generated by wind. The expansion of natural gas generation enables the increased use of renewables. Wind turbines do not work on calm days, and solar collectors are not effective on cloudy ones. Natural gas power plants can be brought online as substitutes much faster than those using oil or coal, and this makes renewables more viable.
National Grid is committed to delivering complementary sources of clean, abundant, and affordable energy such as solar, wind and hydropower. We recently announced an expansion of our solar facilities in Massachusetts and support the Deepwater Wind project off the coast of Block Island.
We are also proponents of the Maine Green Line, which would use a submarine cable to transmit wind power from northern Maine to Massachusetts, supplemented by imports of hydropower from Canada. Projects such as these would help New England meet its current clean energy targets by 2020.
Initiatives that promote conservation, increase energy efficiency, and support demand response are another important part of the effort to supply electricity in the region. New England has long been a leader in energy efficiency, with four of its states ranked among the nation’s top six for energy efficiency. Regional policies have resulted in more than $3.3 billion in energy efficiency investments that, in turn, are expected to yield $19.5 billion in economic benefits for energy customers.
National Grid and other providers support such initiatives and cooperate with programs that advance them. The Smart Energy Solutions Program, for instance, provides thousands of Massachusetts customers with a new level of choice and control over their energy use through advanced technology.
In Rhode Island, under a robust process for developing what is known as the Gas and Electric Infrastructure, Safety and Reliability Plan, we invested nearly $138 million last year in projects to enhance our local energy delivery network, including a new natural gas distribution system expansion program, now in its second year.
All of these initiatives are necessary and smart policies that have delivered substantial customer benefits. However, no conceivable increases in these programs could replace the lost generating capacity that would result from failing to ease constraints on gas transmission. We must add strategic new components to New England’s gas transmission infrastructure that provide a foundation for expanded renewable energy development and integration.
The challenge: Gas transport constraints
Meeting New England’s energy needs truly requires a three-part strategy of advancing renewables, managing growth in demand, and increasing gas transmission and support capacity. Without all three, the strategy will be ineffective, with substantial harm to the region’s citizens and their communities’ economic livelihood.
Natural gas is instrumental to this effort, but there is a clear challenge. Gas must be transported to New England via a pipeline system built decades ago and designed for much lower levels of consumption. This is especially true in winter when the demand for gas to fuel power plants competes with the need for gas to heat homes and businesses. Typically, utility contracts give priority to heating homes and businesses over supplying power plants.
Constraints on the gas transmission system have caused shortages and higher prices. After years of lower electricity prices, New England saw the nation’s highest natural gas prices in 2013, which in turn forced the region’s energy costs up by 54 percent. From December 2013 through February 2014, New England’s wholesale energy market totaled $5 billion. In comparison, the market for all of 2012 was $5.2 billion, reflecting the volatility of prices resulting from inadequate gas transport capacity.
Strategies to improve natural gas transport
Much already has been accomplished in planning for new or expanded gas pipelines. Among the currently proposed projects – which employ existing rights of way whenever feasible – are:
The Constitution Pipeline: Approved by the Federal Energy Regulatory Commission in December 2014, this $700 million, 124-mile project would bring gas from Pennsylvania to New England and New York.
The Northeast Energy Direct Project: Proposed by Kinder Morgan, this project would upgrade its existing pipeline system in New England and New York, with capacity that could be scaled from 800 million cubic feet per day to 1.2 billion cubic feet per day.
The Access Northeast Project: This $3 billion initiative proposed for New England by Spectra Energy Corp., Eversource Energy, and National Grid would upgrade existing pipeline facilities and utilize local area storage assets to deliver, on peak days, up to 1 billion cubic feet of natural gas for electric generation markets.
These projects all are awaiting various state and federal regulatory approvals; none has yet received a final go-ahead. Failure to advance these projects would result, as early as 2018, in a perfect storm of adverse economic, environmental, and consumer consequences.
In fact, the failure to provide more gas capacity to the region’s natural gas-fired generators could jeopardize a significant number of new and existing jobs, plus severe reductions in state and local tax revenue.
After years of hard work to improve New England’s energy, economic, and environmental landscape, we cannot risk these outcomes. Elected and appointed officials, regulators, citizens’ groups and energy companies, and their customers need to work together to invest in our future and support investment in a range of energy solutions, including gas transmission capacity.
Putting customers and communities first is essential to this endeavor. Only through this effort can we ensure that New England will have the reliable, sustainable, and affordable energy it needs. The risks are clear today; the time to start is now.