Tuesday, May 05, 2020

Renewable Energy for Princeton -- Real Electrons and Abstract RECs

After researching the Princeton Community Renewable Energy (PCRE) program that takes effect on May 6, I can say with some assurance what it will not do.
  • It will not affect PSEG's profitability, since PSEG does not generate electricity. Instead, it makes money from providing the wires and other infrastructure needed to deliver electricity supplied by someone else. Each customer is free to choose a supplier. In this case, Princeton is choosing our supplier for us, unless we opt out.
  • It will not change the source of the electricity that comes into our houses. The electrons that power your appliances and light bulbs are largely produced from fossil fuel and nuclear plants, and will continue to be. If any of the electrons you're using are renewable, it's probably because one of your neighbors has solar panels that are feeding solar energy electrons into the grid.
What Princeton's PCRE energy program will do is require the chosen energy supplier to buy Renewable Energy Credits (RECs) for 50% of the electricity participating customers buy. Understanding what that actually means is not easy. The concept is abstract, and its benefits vary. RECs are defined by Sustainable Princeton as "the industry-standard means to assign a financial value to the environmental benefits of clean energy production." Requiring the supplier to buy them will "support the development of renewable energy generation," and "accelerate the installation of renewable energy infrastructure faster than would otherwise happen."

Princeton has hired a consultant to answer people's questions about the program. When I sent a question to the help desk (PCRE-ingo@gabelassociates.com), I was told that "purchase of RECs does not change the amount of renewable energy being produced in real-time." Rather, the program will "create the incentive for more renewable energy to be built in the future." (fuller quote further down)

In other words, Princeton is not buying renewable energy. Instead, it is encouraging the building of renewable energy in our region and elsewhere in the country. A government article entitled "The Role of Renewable Energy Certificates in Developing New Renewable Energy Projects" states that "the importance of RECs in building new projects varies."

When I tried to give input on Princeton's sustainability plan, I approached the problem of renewable energy from a physical perspective. Renewable energy falls on Princeton in the form of sunlight. We can capture that energy with solar panels, trees, and by capturing solar energy through our windows in the winter. To physically reduce our town’s greenhouse gas emissions by 80% by 2050, we need to utilize that solar energy. The approach instead seems to focus on encouraging others to produce the energy elsewhere, through RECs. Though this is laudable, it's not the same as actually reducing our own greenhouse gas emissions.

There's a lot of misinformation out there. Michael Moore's recent movie, "The Planet of the Humans," is a shockingly skewed polemic, but buried within its willful distortions are a good point or two. Renewable energy is not perfect. Giant wind generators and fields of solar panels are industrial installations that can radically alter the landscape. They are a great improvement over fossil fuels, but if built in quantity, their impact on ecosystems can be substantial. 

These realities suggest that Princeton would best reduce its greenhouse gas emissions from electricity use primarily by minimizing consumption through efficiency and good energy management at home, and maximizing its own production, mostly through rooftop solar. Rooftop solar does not disrupt habitat, and in fact provides shade that can keep a building cooler in the summer. Encouraging production elsewhere through buying RECs is beneficial to some extent, and I'd encourage residents to participate, but it is less certain in its overall impact. 

Even on cloudy days, electrons from your neighbor's rooftop solar array are pouring into the wires outside of your home. Some of those electrons then enter your home and power your furnace, A/C, refrigerator, etc. Those solar panels will keep producing renewable energy for many decades. You can get them installed for free, essentially by leasing your roof for energy production for 20 years, or you can buy a system that will pay for itself in around seven years, after which all the energy produced is gravy. That, for me, is real. 


Average home electrical use in New Jersey: 700 kWh per month. How does your management of your home energy use compare?

A fuller quote from the town's consultant:
The PCRE program requires that the program supplier purchase and retire an additional amount of RECs above and beyond that required for compliance with the State’s RPS. By requiring the purchase and retirement of additional RECs – taking those additional RECs out of circulation - this mechanism takes additional supply of RECs out of circulation, thereby creating the need for additional RECs to be created in the future to satisfy future requirements, and providing the financial incentive for development of future renewable energy projects. Thus, purchase of RECs does not change the amount of renewable energy being produced in real-time; rather than taking renewable energy away from other customers as you postulate, a program such as this will actually create the incentive for more renewable energy to be built in the future.
Followup questions I asked the consultant, with no response as yet:
  • I think what you're saying is that if Princeton and other entities enter into contracts that require an energy company to buy and retire more SRECs than are currently available, then the company is obligated to purchase those SRECs at some point in the future when they become available. But the contract has a fixed end point. Who will enforce the company's obligation to buy and retire any SRECs not purchased during the duration of the contract?
  • The links below suggest that there's some question as to how much SRECs encourage the development of renewable energy projects, and also say that the SREC program will be ending in NJ. Does the ending of the program affect Princeton's contract?
This link suggests that the role of SRECs in encouraging the development of new renewable energy projects seems to depend.

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