By Willem Post | Watchdog Commentary
Vermont’s goal of attaining 90 percent of its energy from renewables by 2050 would require capital investments of at least $33.3 billion during the 2017-2050 period — about $1 billion per year, according to Vermont Energy Action Network’s 2015 annual report.
That’s not counting interest and finance charges and replacements and refurbishments due to wear and tear.
That burden is far in excess of what the near-zero real-growth Vermont economy can afford.
It took at least $900 million to go from 11.53 percent total renewable energy (EAN number) in 2010 to about 15 percent in 2016. That includes electricity, transportation energy and heating and cooling. This was made easier because it was highly subsidized. That level of subsidies will be less going forward because wind and solar subsidies are being reduced.
Most of that spending affected the electrical part. As a result, Vermont utilities likely will meet 55 percent renewable energy electricity supply by 2017 and 75 percent by 2032.
It would require a minimum of about $950 million per year between 2017 and 2050 to meet the 90 percent renewable goal.
Where would the many billions of additional money come from to do the remaining electrical part plus the much more expensive thermal and transportation parts?
Vermont is a relatively poor state with a stagnant population, a growing population of elderly and dependent people and state budget deficits year after year. The last thing Vermont households and businesses need is a doubling or tripling of energy prices to make the Vermont economy even less competitive.
If we were to reduce the goal to 40 percent renewable by 2050, it would still be a formidable task. That goal would require a minimum of about $420 million per year between 2017 and 2050.
The 40 percent goal would be more in line with other New England states and much less costly. There would be no need for a regressive carbon tax. With the 40 percent goal, source energy could be reduced, similar to the 90 percent goal, by getting more low-cost, near CO2-free, hydro energy from Hydro-Quebec. Hydro energy’s source factor is only 1.0, whereas nuclear’s source factor is 3.0, and biomass is 3.3. The source energy could also be reduced by increased energy efficiency.
Renewable portfolio standards require utilities to have a percentage of their electricity supply from renewable sources. Two states, Hawaii and Vermont, require much higher percentages of renewable energy than any other state in the nation. (Hawaii requires 30 percent by 2020, 40 percent by 2030, 70 percent by 2040, and 100 percent by 2045.)
Unlike Vermont, Hawaii is much closer to the equator, has steady trade winds and much sunshine, and has the highest electric rates in the United States. The Hawaii goal is reasonable, but the Vermont goal is pure rah-rah and hutzpah, and economically unwise.
Vermont utilities could satisfy the 75 percent requirement within a few years (well before 2032) by buying more hydro energy from Hydro-Quebec. That would require no subsidies and near-zero capital costs, because private corporations would design, build, own and operate the high voltage transmission lines from Quebec to Vermont.
However, Green Mountain Power, which controls 77 percent of Vermont’s electricity market, refuses to buy more hydro energy for business reasons.
Willem Post is a retired engineer who has more than 40 years of experience in the design and project management of energy systems. He writes about energy issues and is a founding member of the Coalition for Energy Solutions.