Paris and the GWSA: Resetting our Targets

The Paris Agreement
The recent Paris Agreement represents tremendous progress in the fight against climate change; countries around the world have agreed to take real action to limit warming to no more than 2°C (3.6°F) while making efforts to keep warming below 1.5°C (2.7°F). The 1.5°C goal is important; the mantra “1.5 to stay alive” started with small island nations that understand 2°C means disaster for low-lying countries. 2°C may also spell disaster for coastal cities like Miami and New Orleans, where rising seas associated with 2°C warming would inundate these cities by 2100. In short, the 2°C goal is inadequate to protect vulnerable communities from climate change—or as Naomi Klein writes, “It’s a target that is beyond reckless.”

The Paris Agreement is progress, but analysis of the non-binding nationally determined contributions (NDCs) made by each country as part of the Agreement shows they are insufficient; the NDCs on their own would leave us with warming of 3.5°C (6.3°F) by 2100. COP21 brought the world together to take action, but it’s not yet enough.

Climate Interactive—a non-profit run by Systems Dynamics experts associated with MIT—has modeled various global greenhouse gas (GHG) emission scenarios and outlined 2030 emission reduction requirements for both the 1.5°C and 2°C thresholds. 2030 is a critical date from a climate perspective; if we don’t cut emissions sufficiently by this point, taking the action necessary to curb emissions will become prohibitively difficult. Analysis from Climate Interactive shows the U.S. must reduce emissions by 60% from 2005 levels by 2030 to keep warming to 1.5°C, with a 45% reduction required if we’re willing to take our chances with 2°C. Current U.S. pledges aim for emission reductions of 26% by 2025, far from either target.

Massachusetts Goals Lacking
What does this mean for Massachusetts? If we look to our current (and legally binding) Global Warming Solutions Act (GWSA) emission reduction targets, we find they are not sufficient to meet either the 1.5°C or even the 2°C national targets. Although no firm 2030 GWSA target has yet been set, a recent bill passed by the state senate aims to set a “firm” 2030 reduction goal of 35-45% from 1990 levels. The high end of this range would keep Massachusetts in-line with the 2°C Climate Interactive targets—if the state attempts to reach it. The Climate Interactive reduction targets for 2°C and 1.5°C normalized to the GWSA 1990 baseline are 44.13% and 59.37% respectively.1

GWSA_2030_goalsComparison of a potential Massachusetts GWSA 2030 target with Climate Interactive requirements

The good news is that the outer range of the 2030 proposal for the GWSA is nearly sufficient to meet the 2°C target. The bad news is that Massachusetts is efficient, environmentally progressive and has tremendous offshore wind potential that has yet to be tapped. If a state like Massachusetts can’t hit the 1.5°C reduction target for 2030 or even the 2°C target with certainty, how can we expect other states to do it?

A New Goal for 2030
Massachusetts should take the bold and necessary step of setting a goal for 2030 commensurate with the need: a 60% reduction of greenhouse gas emissions (using the GWSA 1990 baseline) by 2030. Anything less and we resign ourselves to 2°C warming—at best. Insufficient Massachusetts goals alone won’t push the U.S. over national emission limits, but this is an issue of commons. If every state limits its actions and goals to those that appear politically feasible, we have little hope of keeping warming below even 2°C without federal regulation. And hoping for federal intervention is not an ideal contingency plan given the partisanship and proliferation of science doubters and deniers in Congress. States like Massachusetts must lead.

A strong 2030 emission goal for Massachusetts is an opportunity—a chance to boost the economy, create jobs and improve resiliency by generating electricity with regional renewable resources and improving the efficiency of our building and transportation sectors. A study by Synapse Energy Economics modelled policies required to reach a 40% reduction of emissions by 2030 for states that participate in the Regional Greenhouse Gas Initiative (RGGI). These policies resulted in lower energy costs and thousands of new jobs for participating states. A 60% reduction will almost certainly yield greater economic benefits, but this scenario needs to be modelled in order to demonstrate feasibility and a path to implementation. We must show that not only is a 60% reduction goal necessary, it’s possible and beneficial.


1 Note: the 1990 and 2005 emissions baselines for Massachusetts are relatively close (94.5 and 96 MMT). Please see the 2015 update of the Clean Energy and Climate Plan for more details:

Running From the Sun in Massachusetts?

We’re at a critical juncture in the development of solar as a source of clean energy for the commonwealth. 2015 saw the introduction of four different solar bills to the Massachusetts legislature, each intended to expand the existing net-metering cap (of approximately 1,000 MW) and/or restructure the method by which distributed solar generators are reimbursed for the energy they send to the grid.

Each of these bills has a different emphasis, ranging from simply expanding the cap and keeping net-metering compensation the same (basically at retail rates—the rates we pay on our utility bills), to expanding the cap while imposing minimum bills and slashing net-metering reimbursement to average wholesale rates (the rates utilities pay for the energy generated by power plants). According to National Grid, moving to wholesale rates would drop net-metering compensation from about 19 cents per kWh to 4 cents, a 79% reduction in compensation.

What’s the problem?

This depends on your perspective—which itself is part of the problem. The one concrete issue that all parties (appear) to agree on is the need to expand the current net-metering cap. The cap has already been reached in National Grid territory and there’s no clear consensus on what to do about it. This is limiting new investment in solar projects, which in turn has a negative impact on jobs, carbon emissions and energy production. Although the issue is extremely complex, there is one dynamic underlying all the consternation: Solar installations in Massachusetts are growing exponentially.

The incentives intended to spur growth of the solar industry have worked—solar capacity in Massachusetts has grown over 89% per year (on average) over the last 5 years. This is alarming utilities, which see this growth as a threat to their stable and profitable business model. The state had 841 MW of installed solar capacity as of May of 2015, growing rapidly from a paltry 41 MW in 2010. If we assume 20% annual growth going forward, the state will reach its goal of 1,600 MW of installed solar capacity by the end of 2018—well ahead of the current 2020 target.

Mass_Solar_20percent_growth_v2Massachusetts Solar capacity projections assuming 20% annual growth from 2016 to 2020.

Of course if the cap is not lifted, growth will stop completely. That’s unacceptable from a climate perspective—we need just this type of growth in renewable energy generation to have any hope of avoiding catastrophic climate change.

And the real problem isn’t growth, it’s the uncertainty that comes with rapid growth or change. Can the grid handle significant distributed generation? Who will pay for necessary grid enhancements? Will storage allow us to use solar energy more effectively in the future? What will happen to electricity rates for non-solar ratepayers?

These uncertainties point to the need for a better understanding of the value of solar and the costs of using the grid over time. Solar generators do not currently pay distribution charges for grid use, which is an understandable concern for utility companies given the rates of growth we are seeing. A comprehensive and public study should be conducted in order to determine the true value of solar, which is dynamic and will change over time as solar capacity increases.

The uncertainties associated with rapid solar growth have generated a knee-jerk reaction from utilities: kill the growth. Utility companies in Massachusetts see solar as a threat rather than an opportunity (apparently they fear change as much as the rest of us), and have decided that the way to address the threat is to smother its growth. And it’s not just Massachusetts; we’re seeing similar activity to slow or stop solar growth in many different states. This national attack on solar net-metering has been initiated by utility companies and fossil fuel interests that see renewable energy as a threat to their profits and business.

Solar growth is good for the citizens of Massachusetts, the climate, and ultimately the utility companies (although they may not see this yet). Several studies show that solar provides benefits to both the electric grid and society that far exceed the retail net-metering rates received today. However, utility companies will need to be compensated for the grid services they provide to distributed solar generators if this growth continues. And the growth should continue, just not forever. It’s not physically possible or economically practical to maintain these growth rates indefinitely, and eventually the value of adding solar to the grid will decline as solar penetration increases. Fortunately we’re a long way from having to worry about an overabundance of solar on the grid.

Any legislation enacted must expand (or better yet remove) the net-metering cap and continue to compensate and incentivize solar adequately. Let’s hope that solar advocates and the utility companies can come to an agreement that will prevent the collapse of the solar industry in the state. Moving to a wholesale rate without grandfathering existing systems is killing solar in Nevada, where solar companies are leaving the state in droves after a change to wholesale net-metering compensation.

Mass_Solar_5percent_growth_v2The “Nevada” Scenario: Massachusetts solar capacity projections assuming 5% annual growth from 2016.

We should thank Nevada regulators for showing us what will happen if we drastically reduce net-metering compensation in Massachusetts, and it’s clear we don’t want to follow Nevada’s lead if we hope to meet the greenhouse gas reduction requirements of the Global Warming Solutions Act. We’re at a key decision point for the state: do we want carbon-free solar to become a central component of our future electricity system, or do we want to extend our reliance on the fossil fuels that scientists tell us we must stop consuming?

Author’s note: The graphs in this post were updated on January 29th 2016 to reflect better estimates of 2015 solar installation data and a 20% growth rate.