Eyeing Obstacles, Dykes Offers Optimism for State’s Green Energy Goals

“This goal of 100 percent, zero emissions resources is achievable, it’s feasible, and we’re already well on our way,” Department of Energy and Environmental Protection Commissioner Katie Dykes told CT Examiner in a recent interview. “The key is, how do we continue to make progress?”

The latest draft of Connecticut’s Integrated Resources Plan — a semi-annual assessment of the state’s electric supply needs and possible sources of energy supply — is being touted by the department as the first to identify sources of supply to meet the state’s goal of zero-carbon electric generation by 2040.

The plan highlights a variety of challenges and variables that the state could face in meeting that goal — chief among them, is a regional electric grid operator that Dykes says is out of step with the state’s goals.

“Because Millstone is so large, the possibility of it shutting down will have big implications for the amount of new resources that we would need to substitute for it,” Dykes said. “Understanding what the future will be for nuclear power and other baseload resources like large-scale hydro power is going to be a question that has to get resolved.”

That said, Dykes says she is optimistic that the state can meet its targets, an optimism that is also reflected in the Integrated Resources Plan. Already, 65 percent of the electric supply under contract is renewable or nuclear, and that will increase to 91 percent by 2025.

According to Dykes, Connecticut has already made a “tremendous amount of progress” towards achieving its 100 percent, zero-carbon electricity.

Dykes told CT Examiner that in past years, the state’s plan focused on the number of wind and solar energy projects that would need to be built to meet the state’s renewable targets, but now as progress is being made toward procuring that capacity, the department is instead taking a broader view of some of the outside forces that could affect the state’s path to carbon-free electric generation.

Latest plan takes major variables, like the future of Millstone Nuclear Power Station in Waterford, and models how much renewable power the state would need to procure, and when.

Whether Millstone continues to run after its ratepayer-subsidized state contract ends in 2029 also plays a major factor in Connecticut’s renewable energy goals, considering it meets about half of the state’s energy needs and is the largest zero-carbon generator in New England. The fate of Millstone is one of the biggest question marks, and it weighs heavily on the plan – referenced 130 times in the 173-page document

“Because Millstone is so large, the possibility of it shutting down will have big implications for the amount of new resources that we would need to substitute for it,” Dykes said. “Understanding what the future will be for nuclear power and other baseload resources like large-scale hydro power is going to be a question that has to get resolved.”

Another major variable is how increased electrification of technologies traditionally powered by fossil fuels — everything from vehicles to home heating systems — will affect electric demand. 

Despite advances in energy efficiency, the plan assumes that the state’s demand for electricity will increase by 2040, and more renewable generation will be needed to keep pace

“It also underscores why the 100 percent zero-carbon electric target is important, because the cleaner our electric supply is, the more emissions we reduce when we plug in a vehicle or heat our home with an air source heat pump,” Dykes said.

“It is not sustainable for us to continue to pay for, essentially, two different markets – the ISO-New England market that has embedded preferences for conventional fossil generation, and the market states have had to create to drive investment in clean energy resources that we need to clean our air and reduce carbon emissions,” Dykes said.

Those factors are significant, and discussed in detail in the resource plan. They’ll impact how much renewable generation the state builds out, how quickly it does so, and how much it will cost – but the department’s modeling doesn’t show a scenario where these factors will make it impossible for the state to meet those zero-carbon goals.

What could pose a barrier, Dykes said, is the regional grid operator, ISO-New England, which Dykes said isn’t compatible with the energy goals of the New England states it serves and that needs major changes to its infrastructure in order to integrate offshore wind and battery storage projects, and to keep up with increased electrification of everything from vehicles to home heating systems.

“It is not sustainable for us to continue to pay for, essentially, two different markets – the ISO-New England market that has embedded preferences for conventional fossil generation, and the market states have had to create to drive investment in clean energy resources that we need to clean our air and reduce carbon emissions,” Dykes said.

Market reform

A conversation about energy with Dykes will always come back to ISO-New England.

The regional market operator has ratepayers paying for natural gas plants in the name of reliability, without accounting for the generation from renewable sources that ratepayers are also paying for through state contracts, Dykes said. 

“Even setting carbon aside, you don’t need a carbon mandate to recognize the criticality of Millstone in a grid that has become dangerously dependent on one fuel – natural gas,” Dykes said. “Yet the ISO had no plan and no mechanism within their market to value that resource, even though their own studies demonstrated the grid was in danger of rolling blackouts if it were to retire.”

“I don’t think it’s as simple as saying, ‘can we afford clean energy preferences on top of a conventional market that produces reliable generation, or reliable electric supply?’ – because we don’t even have that market today,” Dykes said.

Dykes said the fact that Connecticut had to take on the entire burden of keeping Millstone open shows that the ISO market doesn’t even meet its primary goal of ensuring a reliable electric supply despite the investment it drives in natural gas.

“I don’t think it’s as simple as saying, ‘can we afford clean energy preferences on top of a conventional market that produces reliable generation, or reliable electric supply?’ – because we don’t even have that market today,” Dykes said.

Whether the market requires wholesale changes or smaller tweaks is a question a coalition of five New England states, including Connecticut, is looking to answer as part of a coordinated effort to reform the regional market the states claim is in conflict with their clean energy goals – but Dykes is clear that change is needed.

“We owe it to the ratepayers to ensure we have a market that works, not Band-aid fixes, solving for one problem, only to have to solve for the unintended consequences of that for other major resources,” Dykes said. “We have to look at this comprehensively.”

A regional grid needing upgrades

Along with ISO-New England’s market design, the coalition of states has taken issue with what they say is ISO’s lack of investment in regional infrastructure, despite per-mile transmission construction costs that are among the highest in the country, according to Dykes.

Dykes said the regional transmission system is a legacy network that was designed around fossil fuel plants. The system is not optimal for integrating big offshore wind projects, battery storage and behind-the-meter rooftop solar projects, all of which will be integral to a reliable, zero-carbon network, she said.

“It’s important for us to consider strategies for investments in transmission and changes to market rules for investments in things like storage, demand response and energy efficiency, that can keep the grid operating when the wind isn’t blowing and the sun isn’t shining,” Dykes said.

Dykes said the high transmission costs can be explained in part by a lack of competition in how transmission projects and repairs are selected at the regional level. Transmission planning also hasn’t been aligned with renewable energy goals, she said, leaving ratepayers paying for expensive transmission projects that don’t help integrate renewable resources.

“The result is that we’ll see a lot of what we call ‘spillage,’ where the transmission system is too constrained to be able to deliver all of the power being generated offshore,” Dykes said.

While already planned projects for offshore wind energy should be able to connect into the grid, Dykes warned that as offshore wind energy expands, ISO will need to make changes to the grid to accommodate them.

“It’s important for us to consider strategies for investments in transmission and changes to market rules for investments in things like storage, demand response and energy efficiency, that can keep the grid operating when the wind isn’t blowing and the sun isn’t shining,” Dykes said. “If we’re going to meet our goals 24/7, 365, and not just when the renewable resources are in operation.”

What does zero-carbon mean?

In the eyes of pro-renewable advocates, the department’s roadmap to zero-carbon electric generation is at odds with its recent approval of permits for natural gas plants – including a pipeline to feed a controversial gas-fired plant in Killingly, that would likely operate even after 2040 if it is built.

Dykes has said stopping the plant isn’t up to her department, and pointed to it as another example of how ISO-New England’s market supports natural gas despite state opposition. 

“That’s why we’ve been focused on reforming the ISO, that’s the entity that has that role of selecting resources we need for reliability,” she said.

Still, it’s clear that for Connecticut to technically achieve its zero-carbon electric supply, it does not need to eliminate carbon-generating sources of energy.

Because Connecticut shares an electric grid with the other New England states, the type of resources providing power in 2040 will be a reflection of the cumulative goals of those states, as well as the regional market operator. 

“When we think about the fossil resources we’re hosting in Connecticut, especially if you think about those resources that are located in environmental justice communities, those older resources that are emitting large quantities of air pollution, that’s what we have to consider,” Dykes said.

Connecticut is a net exporter of energy. More electricity is produced here than is used. So, the state can take credit for renewable resources within the state, while still sending energy out of state, and meet its zero carbon goals. By this calculation, zero-carbon means producing enough renewable energy to fully meet the state’s electric needs.

“It’s possible that in 2040 we could still have some fossil fuel generation operating, but that would be reflective of goals of states that are not Connecticut,” Dykes said.

How much fossil fuel generation is actually retired before 2040 depends on the variables outlined in the resource plan and how much of those baseload units is needed to balance intermittent resources like wind and solar, Dykes said. If Millstone continued operating through 2040, for example, the model shows more fossil fuel plants shutting down than if Millstone closes in 2029.

“When we think about the fossil resources we’re hosting in Connecticut, especially if you think about those resources that are located in environmental justice communities, those older resources that are emitting large quantities of air pollution, that’s what we have to consider,” Dykes said. “What is the path that will maximize retirements of those resources, not just preventing new things from being built, but being able to ensure that the oldest and most polluting resources are not going to be left online.”

Dykes pointed out that 5-10 years ago, nobody could have expected that the costs to build solar and offshore wind projects would decline as quickly as they have. Technologies in the energy sector continue to advance every day, she said. 

“It highlights the importance of doing these resource plans frequently, because as costs for resources like battery storage come down, we’ll be poised to adjust our strategies to take advantage of the lower cost,” she said.

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