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March 20, 2013

Connecticut to Raise its Standards for Renewable Energy



A draft study issued by Connecticut’s Department of Energy and Environmental Protection (DEEP) this week proposes to strengthen the state’s commitment to renewable energy by raising its Renewable Portfolio Standard (RPS) goal from 20 percent of the total energy mix by 2020 to a target of 25 percent by 2025. In addition, the plan would source more varieties of green energy and would ensure that Connecticut ratepayers are paying as little as possible for the state’s higher level of renewable energy commitment.

Under DEEP’s the new plan, subsidies would be phased out for older biomass plants and landfill gas that do not provide optimal economic or environmental benefits. In addition, all Class I renewables could compete for power contracts—based on price—in the “contracted tier.”

Past Is Prologue

  • The Constitution State’s existing RPS dates to 1998, and mandates an escalating level of commitment to renewable generation designed to:
  • Reduce dependence on fossil fuels,
  • Create a hedge against volatile oil and natural gas prices,
  • Diminish emissions, and
  • Promote clean energy jobs and economic development.

The RPS approach was designed to allow more expensive renewable technologies to secure the financing necessary for development by guaranteeing a market for the power they generate. According to the findings of the study, “The vision that motivated the launch of the RPS in 1998 remains valid, but the incentives and framework need to be updated and their focus sharpened. In particular, the state needs a refined approach to renewable energy that [us] up to push past an era of subsidies for clean energy and reward those technologies that are able to compete with— and ultimately out-compete— conventional fossil fuel electricity generation.”

For example, the per-kilowatt-hour installed cost of solar photovoltaic (PV) systems has declined by 35 percent in the past decade, and some experts expect solar PV systems to cost less than retail rates for electricity purchased from utilities within the next five years, even without subsidies.  The strategy proposed reflects the need to better harness market forces, and to use policy to drive innovation in the market and maximize deployment by rewarding the lowest-cost renewable generation.

Finding Faults

The report finds the following three major faults in the current standard:

  • In-state renewable projects account for only 11 percent of Connecticut’s Class I energy resources. This means that 89 percent of the investment is being made is being spent outside of the state, and Connecticut does not enjoy the economic benefits associated with in-state projects.
  • A total of 76 percent of Connecticut ratepayers’ investment is going to support biomass plants—described as “among the least-clean Class I energy resources– located primarily in Maine and New Hampshire.
  • Another 13 percent of Connecticut’s Class I requirement currently is provided by landfill gas projects—again, located primarily out-of-state (and already counted toward New York’s renewable goals.

Thus, the analysis of compliance with the current RPS reveals that Connecticut ratepayers are in immediate danger of shouldering a growing economic burden while receiving little of the environmental or economic benefits envisioned when the original RPS was adopted.

Accordingly, the DEEP study, prepared under Public Act 11-80, concludes that “There are numerous steps that can be taken to re-craft Connecticut’s RPS so as to better achieve those objectives and do so in a more cost-effective way.”

Next Steps

DEEP Commissioner Daniel C. Esty commented, “Implementing the recommendations of this study will align Connecticut’s 15-year-old RPS strategy with our latest energy initiatives and Governor Malloy’s effort to bring cheaper, cleaner, and more reliable power to our state. Our new RPS strategy focuses on innovative approaches that minimize costs for electric ratepayers, while bringing us the benefits of cleaner air, a more diverse and reliable power supply, and support for in-state projects that grow our economy and create jobs right here in our state.”

A public hearing will be held on April 11. In addition, DEEP has scheduled a technical meeting on the draft study to take questions and comments on its analysis and recommendations.  The study will then be finalized and submitted to the state’s General Assembly.

Image via Shutterstock




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