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December 24, 2007

Energy: Taking Action On Energy Issues

 

 

State initiatives to encourage businesses that use alt. energy supplies

By Taryn Plumb

Special to the Worcester Business Journal                                                                                                                   

There's no question that concerns over energy - most notably, where it's going to come from and how we can seek out a source that will last for generations - have been building for some time.

But while in the past we may have been relegated to ruminating over options, 2008 and 2009 will be about taking action, according to those in the industry.

That results from a cooperative realization that current energy sources are very much finite - crude oil has ridden a rocky rollercoaster over the past three years, and although projections for 2008 are hazy, it's believed that oil will stay on its volatile course.

"No one thinks oil will fall down below $50 a barrel, $60 a barrel again," said Ian Bowles, Secretary of the Massachusetts Office of Energy and the Environment.

The price of natural gas, meanwhile, has temporarily stabilized, according to Bowles, and within the next year there will be a new local source of supply from Suez Energy North America, which has been licensed by the federal government to operate a liquefied natural gas port off the coast of Gloucester.

Supply Chain Hiccups


Shortfalls and increases in various supply chains will also continue to affect electricity prices in the coming year, as the largest plants in the state are fueled by coal, natural gas, nuclear power and petroleum, according to Chris Kallaher, director of government and regulatory affairs at Direct Energy, an energy retail company in Boston.

Nationwide, he said there may also be a question of resource adequacy when it comes to electrical plants.

"It's definitely becoming an industry with more and more complexities," noted Richard Domaleski, CEO of World Energy Solutions, an energy brokerage company in Worcester. "It's becoming more and more volatile."

Ian Bowles, Secretary of the state Office of Energy and Environmental Affairs.
But wide-sweeping solutions are starting to take shape.

For starters, Massachusetts legislators recently unveiled a clean energy act that would require significant adjustments by 2020 - including beefing up the state's energy from renewable resources to 20 percent and cutting emissions of greenhouse gases by the same amount. Other measures under the bill would provide financial incentives for businesses and residences that observe green practices, such as installing solar panels or wind turbines and driving hybrid cars.

Linked with that is the Regional Greenhouse Gas Initiative, which Gov. Deval Patrick signed into law in January. The effort aims to curb carbon dioxide emissions from power plants by 10 percent by 2019. Governors from Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York and Vermont also signed.

Bowles explained that the eight states will charge power plants fees for carbon dioxide emissions starting in 2009, and each state will be given allowances for emissions. Bowles said Patrick plans to auction off the allowances and create a new program to encourage energy savings. Those auctions will begin mid-year, he said.

"Energy will continue to be a real economic factor of major public policy debate," noted Bowles, adding that there are a large number of firms active in energy alternatives and solutions in Massachusetts. "It will be a major issue in the years to come."

There are numerous other actions in the pipeline as well: U.S. Congressmen are considering a "cap and trade" system that would limit carbon emissions by American companies, and federal legislators also hammered out a new energy bill that imposes tougher standards on auto makers, farmers and oil refiners.  

With the legislative changes, some say we'll also likely see a broader embrace of alternative energy sources, such as ethanol, solar power and wind energy, in the coming year.

The latter is one of the fastest growing segments in the industry, according to Jonathan Ricker, CEO of Mass Megawatts Wind Power in Worcester. Wind power has grown 20 to 30 percent per year over the last several years, he asserted.  

Cheaper Air


Because of that, costs are decreasing in areas of high wind; that factor may contribute to towns and municipalities loosening their grip on zoning laws dealing with wind turbines, Ricker said.

Indeed, some municipalities are already doing that. The town of Harvard, for instance, recently appointed a committee that will look into the feasibility of allowing wind turbines as an accessory at businesses and residences. The Worcester City Council also passed an ordinance this year that would allow turbines as tall as 265 feet in Worcester.

Other factors that could encourage renewable energy in the coming year are the outcome of the November election and the rapidly expanding clean energy market overseas, Ricker contended. (Germany, for example, gets 20 percent of its energy from wind power, he said.)

In any case, Ricker noted, the important thing is that businesses, lawmakers and the general public are going to pay greater attention to energy in 2008.  

"People are taking (energy) more seriously," he said. "It's going to be more progressive."        

              

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