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An Analysis of the Massachusetts RPS
Massachusetts has long been a national leader in efforts to capture clean energy economic development opportunities, enhance energy security, and reduce emissions. The state’s Renewable Portfolio Standard (RPS) legislation is an important part of this leadership in combatting climate change. RPS policies are the foundation for clean energy markets and a proven policy tool to support successful, cost-effective renewable energy development at the state level. An RPS is a market-based mechanism that creates demand for clean energy, which can be met by a variety of cost-effective resources.
Synapse Energy Economics joined with Sustainable Energy Advantage (SEA), as well as members from NECEC, Mass Energy Consumers Alliance, E4TheFuture, and other organizations to analyze the current state of regional renewable portfolio standards in light of many of new policy actions that have been put into place over the last several years. These policy actions include new legislation requiring long-term contracting for renewables and other resources in Massachusetts, Connecticut, and Rhode Island, revised incentives for distributed generation resources, changes to RPS polices in other states in New England, proposed Massachusetts-specific CO2 caps, and newly-revised forecasts for electricity sales that take the full impact of new energy efficiency measures into account.
Synapse and SEA found that in this new business-as-usual future, the supply of RPS-eligible resources is likely to significantly increase in the future, above and beyond the demand required under each state’s RPS policy. This supply and demand imbalance means that the RPS will cease to act as a long-term driver of renewable energy through at least 2030.
Given this, Synapse and SEA modeled a number of other scenarios in which the Massachusetts RPS is adjusted to increase by 2 percent per year, rather than 1 percent per year, as it does today. This adjustment is enough to bring the supply / demand imbalance back into line, and will allow the RPS to drive renewable energy by the late 2020s or early 2030s.
But, more action is likely to be needed for the New England states to meet their ambitious requirements and goals for clean energy and greenhouse gas emissions. Increasing the Massachusetts RPS to 2 percent at the same time as Connecticut increases its RPS to 1.5 percent per year will drive the demand for renewables even higher, resulting in 2,000 MW of new renewable construction by 2030; increasing the Massachusetts RPS to 3 percent at the same time as the Connecticut RPS is adjusted can drive up to 4,100 MW of new renewables throughout New England by 2030.
In addition to driving more renewables and reducing emissions, an increased RPS policy can reduce wholesale electricity prices, act as a hedge against high, volatile natural gas prices, and add up to 3,000 jobs per year. And, depending on the level the RPS is adjusted to, residential electricity consumers will only see bill impacts between $0.15 and $2 per month. To read the full report click here: An Analysis of the Massachusetts Renewable Portfolio Standard.