Diversifying Sources of Electricity
The majority of electricity in New England is generated by fossil fuels. Most notably, natural gas is the source of 40% of our electricity. This increasingly exposes the region to impacts from fuel supply disruptions and volatile electricity prices. By using clean energy, we reduce our dependence on these fuels and our risk of shortages and volatile prices.
Current Makeup
New England 's current sources of electricity are heavily reliant on natural gas and other fossil fuels. About 40% of our electricity is generated using natural gas, while other fossil fuels generate 48%. The remaining electricity is provided by nuclear energy, which generates about 6%, and clean energy, which also generates 6%.
Because fossil fuels are finite sources and are subject to potential interruptions in supply, our reliance on these fuels to provide 89% of our electricity presents both security and reliability concerns. In particular, the use of natural gas is expected to increase in coming years and further exacerbate our reliance on a narrow set of fuels.
Energy Security
Because of this reliance on fossil fuels, we are by necessity reliant on many foreign sources for these fuels. Events around the world in recent years have indicated a need for increased use of local energy and energy security. New England in particular has essentially no local supply of fossil fuels. Our only local energy resources are the clean energy fuels - biomass, wind, water, and the sun.
In the long run, a broader energy security problem will be created by depletion of fossil fuel sources. The most impactful way to achieve energy security today and in the future is by reducing and eventually eliminating our reliance on fossil fuels from both foreign and domestic sources. To achieve this, we must find alternative fuel sources to produce electricity, heat, and transportation power.
Clean energy technologies that use the sun, wind, water, and biomass as fuel offer a two-fold solution. First, these fuels are renewable, meaning that they cannot be depleted in the way that fossil fuels will eventually be depleted. Second, all these fuels are abundant in New England . The increased use of renewable and local fuels makes clean energy an ideal solution for energy security.
Supply Interruptions
Interruptions to local electric supplies due to a lack of fuel diversity can also cause near term issues. The ISO New England, which oversees electric generation and transmission in the region, has expressed concern about the region's increased reliance on natural gas for electricity production. Because natural gas is also used widely for winter heating, there is a particular risk of natural gas delivery shortages during cold spells, potentially leading to interruption of electricity service and increased gas costs.
In fact, predictions that natural gas supplies would not be sufficient to serve both needs on particularly cold winter days were borne out in mid-January 2004, when the region was hit by a severe cold spell. Natural gas generators throughout the region temporarily shut down because it became more cost effective to sell fuel for heating, and natural gas prices for heating skyrocketed due to high delivery demand.
To reduce the risks of natural gas supply shortages, the development of clean energy is essential to reducing our dependence on gas for electricity generation. As with broader energy security efforts, clean energy will not only reduce our dependence on this fuel but will also diversify the sources of electricity, ensuring that if one source is in short supply generators fueled by other sources can continue generating electricity.
Electricity Price Suppression
Dependence on natural gas presents another issue in terms of electricity prices. Since the Massachusetts electricity industry was deregulated to introduce a competitive electric market, electricity prices have become extremely volatile. This volatility has been partially attributed to the combination of our reliance of natural gas and our increased demand for electricity. As demand has increased, natural gas has been in shorter supply and its prices have become more volatile. In turn, this has made overall electricity prices more volatile.
Suppressing the volatility of these prices is an important benefit of adding new clean energy to the mix of electricity sources, particularly in New England. The region's electricity is purchased and delivered through a regulated market in which suppliers purchase electricity from various generators and sells it to customers at a standard price. Because clean energy offers reliable and consistent generation with minimal or nonexistent fuel costs, its prices are generally more stable than the prices for natural gas generation. When more clean energy is introduced into this market, it offsets purchases from sources with volatile fuel costs. This stabilizes the entire market and lowers electricity costs for everyone.
A recent study by the Lawrence Berkeley National Laboratory reviewed the potential impact of clean energy development on natural gas prices. It was found that by relieving natural gas from electricity generation, clean energy could cause gas prices to drop by a significant 2.5% nationwide. Notably, these savings would offset the cost of developing new clean energy electric capacity. Another recent study that focused on New England found that clean energy price suppression has the potential to save Massachusetts residents $12-$20 million per year.
How Clean Energy Can Help
A portfolio of electric generation with diverse fuel sources is better positioned to protect electricity consumers against energy security concerns, supply interruptions, and price instability. The clearest solution to New England 's diversity problem is the development of more clean energy. Because clean energy technologies use renewable, locally available fuels like the sun, wind, water, and biomass and represent a diversity of fuel sources within themselves, they are ideal for stabilizing our overall sources of electricity.
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