Undoing the Wasteful Incentives of the Energy World, Giving Innovators a Shot: A Talk With State Energy Secretary Ian Bowles

11/24/09Follow @wroush

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solved, or we’ll put them in touch with the consumer affairs division at the Public Utility Commission and ask them to look into it, and in more cases than not, we can solve the problem. But all of that goes back to my point about the rate structure. The utilities have historically not wanted to see installation of these distributed power sources because they simply lose revenue. That’s why the new rate design is so important—to make them essentially disinterested in that question, so that their job is reliability and quality of service. That said, there are cases where—given the design of urban networks—connecting certain types of power devices can produce voltage problems. But wind power is a great example where this is a very difficult state to build in, period. All three major wind farms in Massachusetts are tied up in court right now. David Abel, in the Boston Globe last week, wrote a story about pending legislation that would dramatically streamline the process for siting and approval of wind power in Massachusetts. That is very much needed to make it easier to build things here.

X: On top of the resistance from utilities, you’ve got a patchwork of local regulations, a very strong tradition of home rule, and, as you were just indicating, a lot of legal strategies available to NIMBY groups. I’ve heard many entrepreneurs complain that when it comes to actually building clean energy facilities, this is not an innovation-friendly state.

IB: We do have a new building code in Massachusetts that is much more energy-efficient than the old building code—so we’ve been picking away at some of those problems. We’ve also been working with the MWRA [the Massachusetts Water Resources Authority] and Mass Development [the state's finance authority] on finding places that are “plug-and-play”—meaning a place where you’ve already looked at the interconnection issues, the real estate transactions are minimal, and you have the capacity to run with whatever you’re doing without a lot of complexity. There’s one in New Bedford where a number of clean energy companies have been working, and there is increasing interest in a number of municipalities and regions to come up with ideas like that. The Charlestown wind turbine blade testing facility, which is breaking ground next month, is going to be a place where we’re going to test other new wind technologies. And part of the mandate for the Massachusetts Clean Energy Center, where I chair the board, is building regional innovation areas where people can find plug-and-play spaces for their technologies.

We’ve got very strong environmental laws, but they shouldn’t be used for NIMBY purposes. They should be used for the betterment of environmental quality. The wind siting reform bill gets right at this point. It will consolidate the town approval process and limit judicial appeals. If a town wants to proceed [with a project], opponents are not going to be able to tie it up in court for half a decade.

X: You mentioned the Massachusetts Clean Energy Center. That’s the energy sectors’ equivalent of the Massachusetts Life Sciences Center. But when the life sciences center was authorized, it got a billion dollars in funding over 10 years, whereas far less funding was attached to the clean energy center. So how does the center go about doing its job?

IB: It will have a $20 million trust, plus $25 million a year that the Renewable Energy Trust currently gets. I think that’s the right level of funding. What we have available in the energy area that is not available in some of the other areas, like life sciences, is the regulatory component. In the case of solar, we set out to get 22 megawatts of solar installed in the Commonwealth through the solar rebate program funds from the Renewable Energy Trust, and in the course of the two years of the program, 29 megawatts ended up getting built. And now we are transitioning to a solar credit program where there is a mandate on the electric utilities to buy a certain amount of power from solar sources. That’s a case where a regulatory mandate will look like a subsidy to the solar installers, but it doesn’t require grant funds. The Governor has now set a goal of 250 megawatts of solar by 2017. Our expectation is that … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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