Can clean energy power CT's economic recovery?Never let a good crisis go to waste
In mid-April, as COVID-19 was paralyzing the northeast, Massachusetts made an eyebrow-raising announcement. The state’s Department of Energy Resources, in what it called an emergency order, doubled the capacity of its key solar program and declared its solar industry an essential service.
While states like Connecticut included the solar sector in their stay-at-home ranks – contributing to what would become a more than 620,500 loss of clean energy jobs nationally by the end of May – Massachusetts kept its solar people working.
“We need to give clarity long term for the solar industry,” said Patrick Woodcock, commissioner of the Department of Energy Resources. “We wanted to signal this was going to be a priority for Massachusetts.”
The paperwork to make that happen had to be filed physically. “I remember the drive into Boston. It was an absolute ghost town,” he said.
Now, with northeastern states endeavoring to jumpstart their economies following the flattening of COVID-19’s spread, a question being asked by many here, as well as world-wide, is whether renewable and clean energy can be the key economic driver to do that.
“Absolutely,” Woodcock answered, calling offshore wind alone one of the foundations of the Massachusetts economy.
While Massachusetts has a head start in leveraging renewable and clean energy as economic engines, Connecticut’s approach during the height of the shutdown, and its vision of clean and renewable energy’s potential, has been more subdued. There have been no broad declarations about it as an economic driver from Department of Energy and Environmental Protection Commissioner Katie Dykes. She has focused instead on the state’s current commitments, such as its considerable entry into offshore wind, which includes plans to revitalize ports in New London and Bridgeport, and a final plan released in April on how to accelerate electric vehicle adoption – known as the EV Roadmap –as a way of reducing greenhouse gases.
Should clean energy be the white steed that we use to ride out triumphantly from the COVID pandemic? And the answer is – among the many rides we could choose – this is a very good one. It’s a good one because it affects everyone.”
“Even before this crisis we’ve been on a path of dramatic expansion of clean energy resources, of electric vehicles and other policies that can help us continue to meet the needs of the climate crisis,” she said. “A consistent commitment to our policies is one of the most important things we can do to ensure that utilities and also the private market continue to make investments in reducing carbon emissions and delivering a cleaner and more affordable grid.”
But there are many who see not only an economic potential, but an opportunity – even with its unfortunate origins in a pandemic – to go big. In the spirit of never letting a good crisis go to waste, these environmental experts want Connecticut to make faster, harder and more ambitious energy changes than the state has been pursuing.
In the nearly 10 years since Connecticut has been pursuing clean energy in earnest, there has been repeated criticism that pilot projects are too conservative, time has been wasted with studies of technologies other states have already evaluated, and that balky utility companies have driven policies. Coupled with this is criticism that the state’s laser focus on electric rates has blocked state officials from recognizing that investments – actually spending money – would create jobs and revenue.
The state also faces a steep environmental climb to reach its clean energy and greenhouse gas emissions goals: a 100% clean energy electric grid by 2040 and emissions 80% below 2001 levels by 2050. And now there is empirical evidence from the world-wide COVID shutdowns that such measures make a difference – the steep drop in the use of fossil fuels did lower emissions of all sorts.
“I do think this is a very useful pivot point,” said Ken Gillingham, an economics professor at Yale who specializes in energy and environmental economics as well as energy and climate policy modeling. He was also a senior economist for energy and the environment for the White House Council of Economic Advisers during the Obama administration.
Karl Rabago, a senior advisor at the Pace Energy and Climate Center who has advised Connecticut on energy and climate policy for years, agreed.
“Should clean energy be the white steed that we use to ride out triumphantly from the COVID pandemic? And the answer is – among the many rides we could choose – this is a very good one,” Rabago said. “It’s a good one because it affects everyone. It’s a good one because it starts paying a serious down payment on the severe changes we need to address with climate change.”
“Shame on us if we go through all this hell just to come out being the same greedy selfish consumers we were before.”
Experts know a low-carbon economy is on its way, that the country is heading into a recession and that clean energy is a good bet for growth purposes right now, Gillingham said. The technologies are already proven and their costs are coming down, he added, but they still have costs.
When asked whether he believes Connecticut’s leaders understand the concept of spending money to make money, especially when money is tight like it is now, he said, “I think it’s pretty clear that they don’t.”
“When you’re in a downturn, government expenditures can have a disproportionately useful effect, bringing in jobs when they’re most sorely needed,” Gillingham said.
Adherence to a balanced budget requirement is often one excuse for not spending money, but it can cause even more problems, Gillingham said, because that means when tax revenues drop, government spending drops: “which is exactly the opposite of what you should be doing.”
Better, he said, would be a balanced budget over a period of time. “You don’t need a perfectly balanced budget as long as the economy is growing,” he said. “How in the world are they going to have a balanced budget next year? There is something to be said for spending money to foster growth.”
Eric Brown at the Connecticut Business and Industry Association, who also sits on the Connecticut Energy Efficiency Board and on the board of the Connecticut Green Bank, doesn’t see it that way. “Energy doesn’t drive the economy; the economy relies on affordable and reliable power,” he said. “If you want to get the economy going – the issue is to make sure we have the energy we need to grow.”
It’s not just Connecticut
There is precedent in the U.S. for using renewable and clean energy projects as economic drivers to overcome a recession.
In 2009, more than $27 billion of the $800 billion American Recovery and Reinvestment Act went towards renewable energy.
In the last few months a slew of reports – national and international – have made the case that the renewable energy sector and efforts to mitigate climate change have huge economic potential.
To name just a few:
- A three-year Sustainable Recovery Plan for the post-COVID world developed by the International Energy Agency and the World Bank stated “governments have a unique opportunity today to boost economic growth, create millions of new jobs and put global greenhouse gas emissions into structural decline.”
- A report by the University of California at Berkeley offered a path to a 90% carbon-free grid by 2035, stating that doing so would provide “a huge opportunity for economic recovery — a fantastic way to invest in a healthier economy and support new jobs, without raising electricity bills.”
- The U.S. Green Building Council released its concept called Healthy People in Healthy Places showing how sustainable building could help mitigate climate change and contribute to the global economic recovery.
- Studies from England to New England’s Acadia Center have also touted the economic role of renewable energy.
Congressional stimulus measures enacted so far during the pandemic have notably not covered renewable energy sector jobs specifically. The Democratically controlled U.S. House of Representatives included loads of renewable energy initiatives, and by extension jobs, in its $1.5 trillion economic-recovery infrastructure bill – which passed and was sent to the Senate, where Majority Leader Mitch McConnell, R-KY, promises it has zero future.
When you’re in a downturn, government expenditures can have a disproportionately useful effect, bringing in jobs when they’re most sorely needed.”
So, as has been the case throughout the Trump administration, renewable energy efforts will largely have to come from the states.
Connecticut’s neighbors aren’t waiting.
In addition to Massachusetts keeping its solar industry going as COVID-19 peaked in the Northeast, New York repeatedly doubled down on its commitment to clean energy growth with Gov. Andrew Cuomo, in one of his daily briefings, even saying renewable energy would “jumpstart the future.” Just last week, Cuomo announced the state would begin research and development to improve air quality in buildings as a way to mitigate COVID and improve efficiency, which would mean using less power. And last month before his state had even reopened, New Jersey Gov. Phil Murphy unveiled plans to build the first offshore wind-specific port in the U.S. that he said would make the state the “national capital of offshore wind” – a jobs generator and economic driver for sure.
Even with a pandemic raging, Maine’s Climate Council managed to complete a massive seven-month effort to come up with strategies for its State Climate Action Plan – with no change to its Dec. 1 deadline for bringing a full plan to the governor and legislature.
“This work hasn’t skipped a beat,” said Jeff Marks, Acadia Center’s Maine director and senior policy advocate. “And really it’s an economic development plan for the future. Everything we’re doing now as far as the climate action plan, we’re looking at through an economic development lens.”
Connecticut extended the deadline for some existing renewable energy programs, but a number of key issues that were to have been addressed during the legislative session, which was cancelled, will probably have to wait until next year. There are no plans to deal with any energy issues in the upcoming special session.
The regulatory process through the Public Utilities Regulatory Authority (PURA) continued to work its way through a series of linked proposals that comprise a grid modernization effort – known by shorthand as the grid mod docket.
It’s a coordinated effort to update the more than century-old electric grid that relies on power distributed by long wires on poles. Depending on how ambitious PURA gets in reimagining how electricity is provided as a component of addressing climate change, providing resilience and offering electricity users all kinds of flexibility in the not-too-distant future, it could also generate tons of jobs, new businesses, income, tax revenue and all manner of economic goodies.
The really great thing about clean energy, to my mind, is a lot of it has to be localized.”
No one is putting that outcome past PURA’s new chair – Marissa Gillett – who has demonstrated a take-no-prisoners attitude, including in February when she leveled scathing criticism at both Connecticut utilities for sub-standard filings, gave them a new deadline and threatened them with fines if they didn’t comply.
She has taken on grid modernization with equal vigor – plowing through the first six of its 11 dockets in virtual hearings and other sessions on such subjects as energy storage. Even with the legislative session cancelled, Gillett says she and PURA have plenty of authority to make changes.
But, she said, it won’t work without a strategy that will link the utilities serving the state with the state’s environmental and energy policies – to bolster stability, predictability and business.
“The utilities and their investors need long-term signals that can be relied on and are stable, so that the utilities can get cash capital and other things at decreased rates which help our ratepayers,” Gillett said. “The really great thing about clean energy, to my mind, is a lot of it has to be localized – which means that clean and renewable energy is almost synonymous with an economic development opportunity because the jobs are going to be local and sustained.”
That notion of local jobs is a theme heard over and over by those advocating a harder push into renewable energy. But it still takes a Herculean effort to get everyone on board – lawmakers, regulators, the public, energy producers and the utilities.
The first step, Gillett said, is to figure out what we have now and what we need. And the best way to do it, she believes, is through an advanced metering infrastructure – AMI – so everyone, including the public, can see how much energy is being used, as well as when and where.
She considers it the most critical grid modernization component and the one that should be first off the blocks, but that doesn’t mean it will happen quickly, which could hold up everything else.
The big ideas
When the coronavirus shutdown hit in Connecticut, Leticia Colon de Mejias’ company, Energy Efficiencies Solutions, basically ground to a halt. It was her second punch in the last few years.
She’d already been forced into a 30% cutback in 2017 when the legislature authorized a sweep of about half the utility ratepayer fees that should have gone toward energy efficiency, along with clean energy funds that would have gone to the Connecticut Green Bank.
This time was different.
“It required a total shutdown,” she said. In some cases, she could switch from in-person to virtual home energy assessments, but the low-income community she services was largely excluded. “It’s very hard to do virtual assessments they when don’t have virtual,” she said. “Low-income has really been shut off.”
But Colon and many others see the future of clean and renewable energy in Connecticut, if not the state’s economic future generally, in companies like hers. Energy efficiency is widely considered the frontline in lowering energy usage – and, by extension, the cost of power and helping to stem climate change. And it creates a cascade of jobs, many of which would go to people left unemployed by the pandemic.
“Get these folks who lost jobs in restaurants,” Colon said, adding that they can be trained in all manner of energy efficiency jobs and a lot of the remediation that goes with it, such as asbestos removal, fixing gas leaks and making general repairs that are often needed in lower income housing.
When re-imagining the big renewable energy ideas that could help Connecticut’s economic recovery from COVID-19, energy efficiency is inevitably the first stop.
“For a quick return to economic activity, job restoration and job creation, priming the economic pump – if you take any range of energy options side by side, you realize that something like weatherizing a house is top of the freakin’ list in terms of meeting those qualifications,” said Rabago, of the Pace Energy and Climate Center.
“It’s high labor,” he said, referring to the vast numbers of workers needed for the job. “It’s sophisticated and efficient supply chains. It’s local dollars multiplied in the local economy. As a business proposition – the business of getting the state running again – it works really well.”
After that, a little imagination is helpful as well as regulatory and/or governmental approval and — let’s face it — money. But more and more private investors are seeing the wisdom in getting behind renewable energy and little-to-no point in getting behind additional fossil fuel development.
To that end, the Connecticut Green Bank has created Green Liberty Bonds – lower denomination bonds that investors can begin purchasing today and will be used to finance clean energy projects. And, of course, more projects means more jobs, more tax revenue and so on.
The initial offer will be $16 million and is modeled on the war bonds offered during WWII.
Among other suggestions offered that Connecticut could use to ramp up clean energy and spur economic growth: a larger capacity for and investments in solar power of all kinds – grid-scale, commercial, residential – but especially community solar, which has the potential to scoop up renters, multi-family units, low and moderate income households and all manner of people whose properties can’t accommodate solar panels.
Community solar has been on the books in Connecticut for several years but has had a painfully slow rollout through small pilot projects.
The list of suggestions also includes placing a greater emphasis on energy storage, especially combined with intermittent renewable energy like solar; demand-response system design which makes it easier and more efficient to run power only during peak needs; and buildout of microgrids to help decentralize the grid and make it more reliable during severe weather. The state could also require all kinds of resilience features as the utilities upgrade or repair their systems – including putting wires underground and coming up with non-wires-alternatives to expensive repairs or additions.
Experts have also floated the idea of using heat pumps as efficient replacements for old heating systems – especially those that use oil. The Connecticut Energy Marketers Association – whose main function has been home heating oil and gas delivery — is already turning to that for many of its 600 members.
Other ideas include building out anaerobic digestion to deal with waste disposal by transforming food and farm waste into power, configuring the large grid changes that will be needed to accommodate the heavy loads of electric vehicle charging systems, and retrofitting homes and commercial structures for greater energy efficiency and to withstand climate change impacts.
“I think it’s inherently going to have to be a policy mix or a mix of technologies,” said Yale’s Gillingham. “These are technologies coming to play that are being implemented around the world. There’s no reason for Connecticut to be behind the curve.”
It also means all levels of jobs, from basic construction and sales to sophisticated engineering, data analytics, computer capabilities and research and development. And it includes steps like retraining auto dealers and local garages for dealing with EVs, but first it will require training the workforce that can educate those folks.
But it can’t be done without getting Connecticut’s utility companies on board.
“We can’t go back to normal; we have to go back to better,” said Amy McLean Salls, Acadia Center’s Connecticut director. “The utility business model is in need of complete reform – that’s just got to happen.”
Utilities on notice
There are lots of ideas about how to reform the utilities. Broadly those ideas rely on shifting the paradigm of how utilities make their money and what they consider valuable. Changing how the system works now – utilities receive payment for transmission and delivery of power and system maintenance – could, for example, include non-wire alternatives to new substations or transmission lines.
Connecticut’s two utilities, Eversource and Avangrid, have been grudging participants in grid reform efforts in Connecticut. In Massachusetts, where Eversource also operates, it is participating in exactly those sorts of modernizations. It is building battery storage systems on Martha’s Vineyard and Cape Cod, for example, instead of a far more expensive and disruptive transmission lines.
There’s an opportunity for the utilities to be the heroes in this. Instead of being mandated to change, come to the table and make these changes voluntarily. It’s 2020. We shouldn’t be planning it – we should be implementing it.”
But with serious mandates on the horizon from PURA, neither utility may have much choice. And there are those who say if the utilities aren’t willing and can’t be forced to innovate and take risks, perhaps the time has come to turn to third parties that are.
Jennifer Schilling, vice president of grid modernization at Eversource, conceded the grid is becoming more modular and customer-centric in which users will be able to control what they use and even generate, when and how.
“We absolutely support the development of a modern grid, and we are actively working to identify and to engineer our plans and operations,” she said.
Avangrid’s vice president for regulatory affairs for Connecticut, Pat McDonnell, said as far as getting pushed by PURA, “I’d be disappointed if we had to be.”
He sees the electrification of transportation as having the greatest potential for changing the grid – with a need for additional power in different locations and times.
All of it comes with jobs, but with initial costs that some wonder whether the state has the political will to embrace even if it saves money and addresses climate change in the long run.
“I would love the support of elected officials – but I don’t need it. I feel I have the jurisdiction,” said PURA Chair Gillett. “What we need to be looking at is how we’re going to use the regulatory hooks that PURA has to help us make the utilities a platform to move forward.
“I don’t think anything we were thinking pre-pandemic is suitable for post-pandemic. I think it all deserves re-thinking.”
Many of those on the frontlines, who have fought for clean energy and jobs for years, see even greater opportunities for both through bringing such services to economically at-risk populations. And they recognize that there is a pivot-point due to the current crisis that is too good to pass up.
“We know we need clean energy – let’s build a grid that manages that,” said John Humphries, outgoing executive director of the Connecticut Roundtable on Climate and Jobs, who has championed the development of offshore wind as a big economic driver for the state. “If we need a different utility business model, let’s do it.”
“There’s an opportunity for the utilities to be the heroes in this,” said Brenda Watson, executive director of Operation Fuel. “Instead of being mandated to change, come to the table and make these changes voluntarily. It’s 2020. We shouldn’t be planning it – we should be implementing it.”
Watson believes one of the biggest impediments to reforming the energy system is the state’s siloed approach to how it runs – especially when it comes to low and moderate income customers. Overlapping departments often don’t talk with each other – a reality she said COVID-19 has illuminated.
“If we don’t learn that in our lessons from COVID,” she said, “that would be the biggest loss.”
This story has been supported by the Solutions Journalism Network, a nonprofit organization dedicated to rigorous and compelling reporting on the responses to social problems, through funding from The Barr Foundation, whose mission is to invest in human, natural, and creative potential, serving as thoughtful stewards and catalysts.
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