Study of Decarbonization Efforts in Mass. Authored by Analysis Group Consultants Shows a Path Forward for Other States
July 23, 2019
Analysis Group, one of the largest international economics consulting firms, released a new report detailing the fuel and emissions portfolio of municipal light plants (MLPs) throughout Massachusetts, in the context of the commonwealth’s efforts to reduce greenhouse gas (GHG) emissions. The analysis reveals that the MLPs’ GHG emission profile is 60% lower than that of the state’s investor-owned utilities (IOUs), and 40% lower than that of the New England region.
The study, “Fuel Mix and Greenhouse Gas Emissions of Municipal Electric Light Plants in Massachusetts,” is a performance audit relative to Massachusetts’ aggressive pathway to achieving decarbonization of its energy sectors, a plan that would reduce GHG emissions by at least 80% by 2050. The study points out that energy and environmental policies affecting the electric sector are increasingly aiming to reduce the carbon intensity of electricity generation. In Massachusetts, such programs include caps on carbon dioxide emissions from power plants, support for investments in energy efficiency, and the promotion of growth in renewable and other low-carbon generation through policies including net metering and long-term contracts.
“Our analysis shows that the MLPs are well ahead of the New England region when it comes to the transition to a lower-emitting resource mix, with a lower-carbon emission portfolio and proactive investment in advanced energy technologies,” said Paul Hibbard, Analysis Group Principal and a coauthor of the report. “As Massachusetts seeks to reduce GHG emissions in the coming decades, it is clear that MLPs have been and will continue to be an active partner in decarbonization efforts.”
Data and analysis from the study point to the key drivers of MLPs’ progress with respect to fuel mix and emissions:
- MLPs’ Business Structure Supports Financing for Renewable Resource Development. As local, nonprofit, and vertically integrated utilities, MLPs can plan for power system growth on an integrated basis, have direct access to local permitting and zoning processes, and can quickly invest at a lower cost of capital. These traits enable MLPs to pursue resource investment and operational decisions with an eye toward both local customer expectations and state policies, and can make the financial commitments leading to “steel in the ground” renewable projects.
- MLP Resource Commitments are Dominated by Low- and Zero-Carbon Resources. The most important indicator of the role MLPs play in helping transition to a lower-emission resource mix is reflected in the resources that the MLPs own or have under contract. A blended owned/contracted portfolio of wind, solar, hydro, and nuclear assets leads to an MLP resource portfolio of 94% non-emitting generation infrastructure. Even blending in shorter-term wholesale market transactions (where the resource mix is out of the MLPs’ direct control) yields a 75% non-emitting resource mix, compared to 47% for the commonwealth’s IOUs.
- MLP Structure and “Home Rule” Foster Early Adoption of Advanced Energy Technologies. Massachusetts MLPs have implemented significant energy efficiency programs, and have been early investors in renewable, storage, and electric vehicle technologies due to their attention to local customer and state interests, and driven by their integrated planning, financing, and decision-making advantages. Policies affecting this long-standing model could be counterproductive to both local interest/autonomy and statewide decarbonization efforts.
The report was funded by the Municipal Electric Association of Massachusetts (MEAM), which represents 40 MLPs throughout the commonwealth. It can be accessed here.