Home Energy system State’s New Energy Strategy Focuses on Affordability and Aims to Take a Market-Based Approach

State’s New Energy Strategy Focuses on Affordability and Aims to Take a Market-Based Approach

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The New Hampshire Department of Energy released a long-awaited update to New Hampshire’s 10-year energy strategy last week. The document, which is updated every three years, outlines the state’s priorities for key issues such as how we get around, heat our homes and keep the lights on.

The two main thrusts of the strategy – affordability and a technology-neutral, market-based approach to energy policy – ​​have remained largely the same since its 2018 version, along with much of the language and objectives. . But the update reflects new data and industry changes, such as the growing prevalence of electric vehicles.

As New Hampshire becomes increasingly hot and humid, the state’s strategy update indicates that climate change is a real and growing issue that is tied to our energy system, unlike the 2018 document. But clean energy advocates say it lacks specific recommendations on how to address this reality.

“It seems the strategy is trying to have it both ways, recognizing that we have an environmental crisis on our doorstep, there are causes that are attributable to our energy strategy, but we’re not going to make any specific recommendations on the how we solve this crisis through our energy system and change it,” said Chris Skoglund, director of energy transition at Clean Energy New Hampshire.

Who uses this strategy?

This state energy strategy update – the first from the new New Hampshire Department of Energy – identifies principles that should guide state energy policy and “establish a framework for policy makers and stakeholders stakeholders” who engage on these issues.

“It is not part of New Hampshire law, but it is a very important document for its persuasive value. It basically lays out what I think the administration’s approach to energy is,” said New Hampshire consumer advocate Don Kreis.

What are the goals of the state?

The plan sets out 10 goals for New Hampshire’s energy policy, which are nearly identical to the goals set by the state in 2018. As many Granite Staters experience spikes in energy costs, affordability tops the list.

“Expensive energy – or the pursuit of policies that increase the cost of energy – has a direct and negative impact on New Hampshire families and businesses and the quality of life in our state. As such, the main objective of this strategy is to pursue cost-effective energy policies,” the document states.

For the purposes of the strategy, the state defines cost-effectiveness using only the basics, said Josh Elliott, director of the Department of Energy’s Policy and Programs Division.

“That’s the simple math of it. Will this investment be profitable or at least will it be neutral over the assumed life of the investment? he said, noting that the decision to include the kinds of costs caused by climate change in this calculation would be up to the legislator.

The strategy also emphasizes a market-based approach to energy, saying that government policies should avoid “preferential quotas and mandates” and that the state should support regional policies that ensure that the energy policies of other states do not impact costs in New Hampshire.

All New England states except New Hampshire have mandated greenhouse gas emission reductions to spur renewable resource development.

The strategy claims that renewable mandates and subsidy programs from other states are “creating upward pressure on electricity prices,” and the Department of Energy says there is a possibility that those costs could be passed on. on New Hampshire taxpayers.

But the report also highlights emission reductions in New Hampshire, without acknowledging that these were largely achieved through other states’ actions on climate change.

“Other states are seeing their energy consumption and therefore their energy costs drop. We benefit from a greenhouse gas perspective, but overall our state is still using the same amount of energy as before,” Skoglund said.

A market-based approach in a heavily regulated industry

New Hampshire leaders have explored a market-based approach to energy policy for the past few years, said Sam Evans-Brown, executive director of Clean Energy New Hampshire. The idea behind this approach is “if we just let the markets act, we will get cheaper electricity,” he said.

But that misses the reality that energy is already a highly regulated sector of the economy, Evans-Brown said. New England’s grid operator, ISO-NE, is responsible for designing and overseeing certain energy markets, and bodies such as state utility commissions set rules and regulations. that shape these markets. They also give a yes or no to the decisions that utility companies – the major players in the market – want to make.

Skoglund added that the current energy strategy appears to encourage the state to leave existing regulations in place.

“It’s not necessarily a free market or an open market. It’s a market that’s kind of skewed towards the old energy system,” Skoglund said. “Without identifying a direction, goals and targets, we cannot identify the kinds of policies needed to help the market move in that direction.”

Evans-Brown said there is a need to rethink the current regulatory system. The updated strategy supports such an overhaul, including a section on network modernization.

“But if you really want to put meat to the bones of this kind of general nodding, there’s still a lot of work to do,” Evans-Brown said.

In a section on siting, the strategy also outlines an overhaul of a structure that determines much of New Hampshire’s energy future: the process of choosing where new energy projects are built.

The strategy says the current committee responsible for evaluating sites has a “heavy structure” and needs work – including clarity on jurisdictional issues and “a consistent and well-informed membership”.

What about transportation and heating?

Transportation and home heating account for the largest share of New Hampshire’s greenhouse gas emissions, and climate action advocates have stressed the need for progress in these areas.

A major change reflected in the update is the adoption of electric vehicles over the past three years across the country.

The Department of Energy has stressed that building electric vehicle charging infrastructure should come from federal funds rather than taxpayer dollars, and that some of those investments should be focused on rural areas that may not not attract private companies to install chargers.

As more people use electric vehicles, the strategy also highlighted the need to develop different electricity rate structures that reflect the changing cost of charging these vehicles over time. During off-peak hours electricity is cheaper, but charging during peak hours – when people come home from work, turn on the lights or cook – would cost more.

In terms of heating, the strategy says the use of heat pumps, wood and renewable natural gas will likely increase due to “carbon reduction efforts,” but does not specify who those efforts will be aimed at. .

“Replacing heating systems is a huge cost to homeowners and business owners. State and local policies should not force the early, uneconomical replacement of these systems or unreasonably interfere with a home or business owner’s choice of fuel source,” the document states. .

How does this strategy address climate change?

The Intergovernmental Panel on Climate Change has made it clear that urgent change is needed to reduce greenhouse gas emissions and protect humans from increasingly devastating levels of global warming. We have the tools to limit global warming, says the IPCC, including energy-generating technologies that don’t emit the greenhouse gases that cause climate change.

The cost of these technologies is also falling, although in New Hampshire, the Department of Energy says, they are not yet able to compete on a large scale. The strategy argues that the government should be technology neutral when developing its energy policy.

“The most effective way to reduce emissions and protect our natural resources from climate change is to achieve a market where low-emission resources are economically competitive without government mandates or subsidies,” the strategy states.

While the document acknowledges the reality of climate change, the steps New Hampshire leaders need to take to address it remain unclear, clean energy advocates said.

The Department of Energy says renewables will continue to grow in importance and that “market selection” should drive investment in these resources.

“Rapid changes in public policies are difficult, and care must be taken when changing policies and incentives that impact existing investments and resources,” the strategy says, but notes that the use of policies to allow older technologies to “freeze out competition” is not acceptable, and that some newer technologies could be “wise investments in the near future when cost curves are more competitive”.

But, the paper says carbon-based fuels “will likely remain the most important overall fuel type in New Hampshire’s resource mix for decades,” and says policies should let existing resources compete for shares of market.

These articles are shared by partners of The Granite State News Collaborative. For more information, visit collaborativenh.org.