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June 23, 2014

Clean-energy firms may reap benefits from new EPA curbs

James Dumas, of Solect Energy, in Hopkinton, said new federal regulations designed to cut carbon dioxide emissions can create an opportunity for firms such as his to gain business outside the Bay State.

New proposed federal regulations that would cut carbon dioxide emissions by 30 percent from 2005 levels by 2030 are expected by some to have catastrophic effects for the coal industry, making it too costly for many coal plants to comply with caps on emissions.

But there could be beneficial implications for clean energy companies, and local economies in general.

Jennie Stephens, associate professor of environmental science and policy at Clark University in Worcester, put it this way: Large, fossil fuel-based power plants typically are owned and operated by wealthy companies that offer a relatively small number of jobs. By placing caps on emissions, the Environmental Protection Agency (EPA) is effectively creating more opportunities for smaller scale power generation that is cleaner and more likely to create jobs.

“Massachusetts has a robust and growing … clean-tech economy, but this will encourage its long-term growth,” Stephens said of the proposed regulations.

The regulations on emissions face a tough fight from the coal industry, and politicians from coal-mining states such as Wyoming, West Virginia, Kentucky and Pennsylvania. But Stephens believes the proposal will survive with relatively few major amendments.

Carbon dioxide emissions are known to cause health problems and are the main contributor to climate change, so Stephens said nationwide regulation is long overdue.

“We need to start regulating power plants,” Stephens said. “It's only a matter of time.”

Some states have taken steps to reduce carbon dioxide emissions ahead of the EPA's proposal. Massachusetts is one of them. A member of the Regional Greenhouse Gas Initiative (RGGI) Massachusetts and eight other member states are on track to reduce carbon emissions 40 percent by 2030, exceeding the goal outlined in the EPA's proposal. Other state initiatives, like Gov. Deval Patrick's goal to generate 250 megawatts of solar energy by 2017, have further bolstered clean energy consumption, thereby reducing consumption of energy generated from fossil fuels.

Like Stephens, Massachusetts Department of Environmental Protection (MassDEP) Commissioner David Cash views regulation of carbon emissions as a local economic driver.

But it's not just the clean energy industry that wins, according to Cash. Clean energy adoption — chiefly solar, in Massachusetts — saves businesses and consumers money, which can be used elsewhere. For companies, those include hiring and research and development, Cash said. At last check, in 2009, Cash said the nine states participating in RGGI enjoyed $1.6 billion combined in energy savings. “Those are energy dollars that stay in Massachusetts and drive the economy,” Cash said.

The EPA will distribute a draft of the proposed regulations for comments. While changes will likely be made, Cash hopes the rules will be adopted.

“I think even when coal states see … some of the potential opportunities in terms of energy savings and cost savings, we're hoping they'll get on board,” Cash said.

But the response from the coal industry has been chilly. The American Coal Council (ACC), which represents the interests of the U.S. coal industry, issued a statement June 2 calling the EPA proposal “another unfortunate chapter in the push to restrict the use of coal in America.”

“This rule will have serious negative impacts on economic and social conditions, compounding the difficulties faced by an American economy struggling to come out of a prolonged downturn,” its statement read.

The ACC cites a Commerce Department study that estimated the EPA regulations will result in 224,000 lost jobs annually, a $289-billion jump in electricity costs, and a $500-billion decrease in household incomes. The ACC went on to say that the federal government should couple carbon-emission regulations with a commitment to develop new coal technology that would help preserve the industry.

Mark Durrenberger, president of New England Clean Energy in Hudson, said this lends itself to new opportunity for clean energy companies.

While the Massachusetts solar energy market is already robust, thanks to the state and regional initiatives, Durrenberger said new EPA regulations will probably lead to more clean energy adoption as the costs of carbon emission compliance will eventually be passed on to customers. But clean energy sectors outside Massachusetts probably have more capacity to grow, he said.

“If you were trying to replace coal in Massachusetts, it's a pretty small part of our energy mix — it's something like 12 percent,” Durrenberger said.

Could this lead to out-of-state expansion opportunities for clean energy firms based in the Bay State?

James Dumas, principal at Hopkinton-based Solect Energy, a solar electricity company, said it's likely. There are still ample opportunities to sell solar electricity systems to Bay State customers, but Dumas said his form is looking at serving more customers in other states, where the markets are largely untapped.

“I do think that can create a market opportunity for us,” he said.

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