Monday, February 18, 2019

Canada, New England Talk Energy Infrastructure

By Michael Kuser

BOSTON — New England’s transition to a clean energy future may depend more on new transmission lines from Canada than on new or expanded natural gas pipeline capacity, panelists said at a regional energy conference last week.

New England-Canada Business Council gas pipelines natural gas

Infrastructure Panel (left to right): Donald Jessome, Transmission Developers Inc.; Martin Imbleau, Gaz Métro; David Pasieka, Liberty Utilities; Will Hazelip, National Grid; DOER Commissioner Judith Judson; and Attorney Kevin Conroy of Foley Hoag | © RTO Insider

Speaking at the New England-Canada Business Council’s 25th Annual Energy Trade & Technology Conference, Massachusetts Department of Energy Resources Commissioner Judith Judson said the region is heavily dependent on gas-fired generation, which puts stress on the system at times of peak demand in winter.

“A lot of those generators end up switching to oil and emissions become extremely high,” Judson said. “It also means that we see some very high prices, and one of the challenges is balancing a clean energy future with affordability.” However, a key way to reduce greenhouse gas emissions in the heating and transportation sectors is to electrify, she said.

Massachusetts regulators are at the heart of the current Canada-New England energy conversation. In January, the state will select bidders responding to its July request for proposals for 9.45 TWh/year in renewable energy generation. Hydro-Québec partnered separately with Eversource Energy, Avangrid and Transmission Developers Inc. on three different transmission projects for the Massachusetts RFP and has agreements with Boralex and Gaz Métro to add wind power into the energy mix on each project at the state’s request. (See Hydro-Québec Dominates Mass. Clean Energy Bids.)

TDI CEO Donald Jessome agreed that something special is happening between Canada and the U.S. His company is partnered with Hydro-Québec on the New England Clean Power Link, a 154-mile underwater and underground transmission line that would transmit 1,000 MW of Canadian hydropower under Lake Champlain to Vermont. The project bid into the Massachusetts RFP.

“This has been going on for over a decade, discussing how we will connect the two regions, [and] how do we bring clean energy in from Canada,” Jessome said. “How do we get that infrastructure in place? A decade ago, when New England governors and Canadian premiers started talking about this and making that a key issue, people started to take notice. In a lot of ways, it’s happening already today.”

William Hazelip, vice president of business development at National Grid, said, “Market-based solutions are very complicated in design and take time [and] a lot of buy-in from stakeholders. … Long-term contracts are really the key to moving forward with financing renewable energy projects.”

Weak Case for Gas?

Slow growth in retail natural gas consumption could weaken the case for increasing New England’s pipeline capacity, according to one panelist.

“The region needs more gas but not necessarily more infrastructure because we’re adding 2% of new clients every year, but the overall load, yearly based, is not really increasing just because of the economics of energy efficiency,” said Martin Imbleau, vice president of operations for Gaz Métro.

New England-Canada Business Council gas pipelines natural gas

Pasieka (left) and Hazelip | © RTO Insider

Liberty Utilities COO David Pasieka disagreed.

“When you look at the growth for this particular region, with 1 to 2% growth in customers, when you do the long-term projections, we’re out of gas,” Pasieka said. “There are in Massachusetts a couple of LDCs [local distribution companies] that went into moratorium mode, not being able to expand their customer base. As an LDC operator, I need more customers to be able to justify the spend that I’m currently doing.”

Canada used to get gas from the north, but “all those offshore pockets are drying up,” he said. “Between Marcellus and Utica, this is one of the largest producers of natural gas in the world and the price point reflects it. This will be good for customers if we can figure out how to move it from that part of the world to this part.”

Imbleau countered: “The shoulder months are decreasing, but the peak period is increasing, so maybe what we need is seeking a solution not necessarily in underground facilities with a load factor of 100%, but in facilities that are designed to meet the peak load. They may be more expensive, but [they] make more economic sense in the long run, also in a social sense, including LNG peaking spots differing in different regions.”

Technology to the Rescue

Meanwhile, energy storage is fast replicating some of the attributes of gas-fired generation, Hazelip said.

“National Grid just today announced a 6-MW, or 48-MWh, Tesla battery in Nantucket to help defer the need for a third subsea cable to connect the island to the mainland,” Hazelip said. “National Grid Ventures is also developing two 40-MW batteries on Long Island, which will replace gas feeders. That’s something we’ve seen really pick up speed out in California as well. It’s gotten to the point [that] in some parts of the country, constrained parts of the system, where it’s very difficult to site gas infrastructure, batteries are a great choice. They’re becoming cost-effective, and you can get them built in a much shorter amount of time, and they provide other great benefits that the gas peakers wouldn’t.”

National Grid partnered with Citizens Energy on the Granite State Power Link, an HVDC transmission line to deliver 1,200 MW of new wind power from Canada, and the Northeast Renewable Link, a 23-mile AC line from Rensselaer County, N.Y., to Hinsdale, Mass., to deliver 600 MW of new wind, solar and small hydro into the New England grid.

Imbleau highlighted what Gaz Métro subsidiary Green Mountain Power is doing in Vermont by installing rooftop solar panels and including them in the rate base, as it does with batteries.

“The concept is that it benefits the overall system,” Imbleau said. “It’s a classic example of where the regulatory regime followed technology. Honestly, it’s not happening generally because technology’s probably at 4.0 and regulatory regimes are at 1.0, if we’re generous, so just allowing a regulated entity to play a role, not in the R&D sector, not in the technology that’s available off the shelf, but in the middle spot where there’s a barrier of entry and the technology has a social, economic and environmental benefit.”

Already Happening

New England-Canada Business Council

Judith Judson (left) and Conroy | © RTO Insider

Attorney Kevin Conroy of Foley Hoag noted that all of the top 100 largest corporations in the U.S. have set individual renewable energy goals — and many are seeking 100% renewables.

“How are they going to get 100% in some of the communities that they’re operating in?” Conroy said. “Guess what’s happening? Small hydro and solar developers are out meeting with Amazon and Walmart and everyone’s putting solar panels on their roof or doing community solar initiatives. Those things are happening, and it’s happening quite rapidly in California, and I see it in Missouri and see it moving very quickly to this part of the world.”