Commentary: Abandoning Low Cost Hydro for Costly Renewables

by Willem PostDSCN0866_0

Gov. Shumlin has decreed that Vermont must obtain 90% of its total energy from renewable sources by 2050, to ”make Vermont energy independent, fight global warming and climate change, do our part, and be a leader”, and Act 56 of 2015 requires utilities to market electricity that is 55% from renewable sources in 2017, increasing to 75% in 2032.

In its pursuit of these goals, Green Mountain Power, the state’s largest electric utility, has significantly decreased its low-cost, renewable, near-zero CO2 emitting hydro energy. In its place GMP is buying high-priced, variable, intermittent, heavily subsidized wind and solar energy.

In 2013, GMP bought nearly a third of its energy from Hydro-Quebec. That contract expired in October. It was supplanted with a contract signed in 2012 that began at 8 MW a year and will increase to 148 MW in 2018.

The effect of these changes will be a decrease of 53% of energy purchased from Hydro-Quebec (from 1.87 MWh to 1.0 MWh) between 2011 and 2017.

Some of that shortfall will be made up by nuclear energy, which is ironic since the renewable energy advocates led the decades-long campaign to drive Vermont Yankee out of operation. When its Vermont Yankee contracts terminated in 2012, GMP bought replacement power from the Seabrook nuclear plant, starting at 15 MW and increasing to 60 MW at the start of 2016.

In retrospect, it appears the greatest problem of  Vermont Yankee was that it supplied Vermont with about 250 MW of safe, reliable, low-cost electricity – thereby decreasing by 250 MW the potential market for wind and solar power produced by the renewable energy interests that clamored for Gov. Shumlin’s “90% renewable by 2050” goal.

In sum: The Vermont State government is obsessed with achieving Gov. Shumlin’s “90% renewables by 2050” goal, and is making the utilities unload low-cost, dependable, near-zero CO2 emitting hydro energy, and replace it with high-cost, variable, intermittent and increasingly unpopular wind and solar energy, and thus enrich the promoters of the renewable energy sector.

In doing so, we have created the arcane Public Service Board as a fourth branch of government. The legislature delegates enormous power to the PSB. Its deliberations are shrouded in complicated proceedings, and the only effective players are the Department of Public Service (beholden to the Governor), the utilities and their lawyers, and businesses that want exemptions from burdensome requirements.

Most legislators have little or no idea how this administrative labyrinth works.  This has been called “government by unaccountable strangers”, and for good reason.

If Vermont really wants to reduce its carbon dioxide emissions, its best approach would be to encourage increased energy efficiency of buildings and vehicles, which together produce about 70% of the state’s CO2 emissions.

There are already Vermont-based companies that will design and install energy efficiency improvements, and take payment over time from the customer’s energy savings. Many people (aided by tax advantages) are reducing their fuel consumption by operating hybrid or plug-in vehicles. Given good information and a free market, people will act to reduce inefficient expenditures because they can find better uses for the savings.

It’s time for the legislature to reconsider the implications of Gov. Shumlin’s “90% renewable by 2050” decree, and to reduce the PSB to a more traditional role of assuring reliable energy supply and protecting the people against monopoly power.

The legislature’s job is not to make sure that the heavily politicized renewable energy sellers pocket huge profits, but to establish a policy to set Vermont on a path to assure safe, reliable and competitively priced energy that will make possible a strong, competitive and growing economic base, both for the creation of new wealth and income for the people of the state, and for expanded tax revenues to enable the state to meet its fiscal obligations.

– Willem Post is a retired mechanical engineer who lives in Woodstock and frequently posts to The Energy Collective blog.

 

{ 1 comment… read it below or add one }

Paul Beane January 28, 2016 at 9:55 pm

My take on this is that it’s all about money. A few people are going to get rich on this renewable energy thing.

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