The state of Massachusetts needs to add gas capacity or face constraints and higher power prices on the coldest days of the year, according to a study released by outgoing Gov. Duval Patrick (D).
The analysis, which had been slated for release in late December, became a point of contention between green energy advocates who believe the region is already overly-reliant on gas and larger energy consumers who say fossil fuels are still needed in the region. According to the study, completed by Synapse Energy Economics, in 2020 the state could need an additional 600 MMcf/d and by 2030 the deficit could be 900 MMcf/d.
Massachusetts' average daily natural gas consumption for January 2014 was 1.8 Bcf. However, illustrating the possibility for constraints, the report notes demand on January 3rd, 2014, for natural gas heating only was 2.2 Bcf.
In a document released alongside the report, Massachusetts notes "inclusion of incremental energy efficiency and renewable energy (over and above levels supported by existing policies) in the analysis reduces combined electric and thermal demand for natural gas by 18% in 2030. However, additional alternative resources could be called upon at a higher cost than that of additional pipeline."
A spokesperson for state's Executive Office of Energy and Environmental Affairs would not say why the assessment was delayed, but explained that the Massachusetts Low Demand Study was completed to inform the incoming administration about the state's energy needs.
Gov. Charlie Baker (R) took the oath of office on Jan. 8.
"This study demonstrates the need to continue investing in energy efficiency and pursuing clean, base load power, like large hydro and wind, to ensure affordability and reliability for Massachusetts ratepayers," said Communication Director Mary-Leah Assad. "In light of power plant retirements – Massachusetts will also need natural gas to meet demand in the coming years."
New study echoes Black & Veatch findings
In 2013 Black & Veatch completed a study for the New England States Committee on Electricity, examining the natural gas supply picture throughout the region. Ultimately the report found the region was about 1.2 Bcf/d short of gas, and determined a cross-regional gas pipeline would be the most economical solution.
The study found grid reliability concerns were a potential, in part because the region was increasingly dependent on gas-fired power produced by generators without long-term contracts. Major issues included a lack of synchronization in natural gas and electric nomination schedules, constraints in the physical operation of natural gas pipelines in meeting the intraday swing of gas generators, and maintaining schedules for natural gas pipelines that reduce pipeline capacity during periods of peak electric demand.
"The current electric market does not provide financial incentives for generators to purchase firm natural gas capacity, which would, in turn, produce incentives for infrastructure development," Black & Veatch said in an analysis of the region's energy challenges.
According to Tony Buxton, spokesperson and general counsel to the Coalition to Lower Energy Costs, that means gas constraints are driving up the price of all power, not just gas-fired generation.
"If you look at the numbers, on a cold day New England needs about 4.5 Bcf/d, just the residential and commercial heating needs. None of that goes for electricity," Buxton said. "You get into three or four cold days and you have a real problem."
"When gas is constrained on the pipeline, gas sets the price not just for the gas-power that's being sold but for all the hydro and nuclear and solar and wind," he said. "So the relatively simple answer is to build enough pipeline capacity to meet our existing heating needs."
The state has import capacity of about 3.5 Bcf/d, so "we're upside down," he said. "I don't know why they chose to release the study today, but the delightful irony is that it's 2 degrees and New England is burning 4.5 Bcf/d. You can use storage for a couple of days, but then you have to burn coal."
Critics wary reliance on gas
The new study, however, looks solely at Massachusetts' demand. Critics of additional natural gas reliance in the region pressed Gov. Patrick to consider a new study following the Black & Veatch report, saying they wanted a greater focus on renewables and conservation potential. The report was supposed to be released Dec. 23, but was delayed after final stakeholder meetings were pushed to late in the month.
Rosemary Wessel, founder of No Fracked Gas In Mass, raised objections to the final models which were shown at a Dec. 18 stakeholders meeting.
"The final models used for the study, which were refined during the period of time when public participation was postponed, have many assumptions that are simply not rooted in the real world," Wessel said in comments filed on the preliminary report. Her organization was one of the groups which lobbied Patrick for a new study.
But Wessel, in an email, said the delayed and now-final report appears to be an improvement over the draft but "still has many caveats, which are cited throughout the study. These make it difficult to reconcile with the actual energy decisions that will need to be made."
Wessel noted many factors which will go into the state's energy decisions, including the need to account for emissions targets local, permanent jobs which could be created "if clean energy solutions were fully embraced to meat these needs, revealing their true economic feasibility."
Wessel also pointed to the regional nature of New England's energy markets, a point which some skeptics of the study say
The Acadia Center's Peter Shattuck, who heads up the group's clean energy initiative in Massachusetts, said the study failed to include regional factors which make a gas pipeline look overly favorable. And because the state is only short gas on the coldest of days, the pipe would be be underutilized most of the year.
"Where is that gas going the rest of the time?" he asked. Possibly to the Canaport LNG in Canada, which has proposed reinventing itself as an export terminal. "There's a real risk ratepayers would essentially be backstopping a pipeline that could be largely used for exports," Shattuck said.