Renewables in Burlington: Brighter Than Ever?
Tyler Ford
10/11/2016
On a typical day in Burlington, Vermont the Winooski River flows quietly on its way towards Lake Champlain, passing through the town of Winooski. Here the river is channeled through the Winooski One Hydroelectric plant where it thunders through the hydroelectric turbines and over the dam’s edge into the frothing depths below. Though seemingly irrelevant to Burlington, the Winooski hydroelectric plant represents an important part of Burlington’s electricity generation. In 2014 the Burlington Electric Department (BED), the provider of electricity for Burlington, purchased the Winooski plant and added 7.4 megawatts of power to the city’s electricity generation portfolio. This celebratory addition allowed Burlington to claim itself as the first city to use only renewable sources for its electricity generation. What this title fails to do is describe the complicated process the Burlington Electric Department goes through to secure its electricity in addition to obscuring some of the challenges arising for renewable generation.
According to BED, Burlington is powered by 43% biomass, 33% hydro, 23% wind, and 1% solar. The McNeil biomass plant, located right in Burlington, powers itself using wood fuel and generates 41% of Burlington’s electricity demand. The rest of the generation comes from a variety of hydro, wind, and solar generation. Projects range from Hydro-Quebec’s massive hydroelectric dams in Canada to the Sheffield and Georgia community wind projects built on ridgelines in Vermont. A small-scale Burlington solar project makes its own contribution to production, producing less than 1% of total electricity demand, but contributing to Burlington’s portfolio nonetheless.
Despite the focus on these sources of energy, they are not what allow Burlington to claim itself as “100% renewable”; instead, Burlington relies on its Renewable Energy Certificates (REC). A REC is a statement that says a certain amount of electricity was generated by renewable sources. The amount of electricity that can be claimed as renewable is dependent on the number of RECs owned because each REC is equal to a set amount of electricity. A REC is actually independent of the physical electricity that is produced by a renewable source. For example, a wind farm produces a set amount of electricity but it also produces an equivalent amount of RECs. The separation of the physical electricity and RECs allows RECs to be sold on the market. If a wind farm chooses to sell its RECs for profit, it can no longer claim its electricity as renewable because it no longer owns the RECs. On the other hand, the purchaser of the RECs is now allowed to claim their energy generation as renewable. So even while the same amount of renewable energy has been generated, who can claim they are using renewable energy has changed. Burlington takes full advantage of this process.
Initially, Burlington generates its electricity through renewable sources and is the owner of the associated RECs for this power. Instead of retaining these RECs however, Burlington sells them on the open market to other entities and purchases other RECs equivalent to the amount of electricity generated. Newer RECs, like the ones Burlington generates, go for a higher price on the market, which allows BED to sell its RECs for a high price and purchase lower cost RECs through the same market. This is an innovative way for Burlington to generate its electricity in a sustainable way without raising electricity costs substantially for consumers.
But buying and selling Renewable Energy Credits through the open market is not without its complications. It creates a system that contrasts with the idea of locally-generated electricity because money is exchanged far and wide on the REC market. It also means that Burlington is giving and receiving funds to sources that the people of Burlington have no control or awareness of. No description of Burlington’s REC providers is seemingly available online or within their Integrated Resource Plan. In addition, as demand for RECs increases, prices will rise and reduce the economic benefits of selling and rebuying RECs. According to James Mandel, an electricity principal for the Rocky Mountain Institute, the solution of buying and selling RECs will not work forever. As more communities transition to renewables, credit purchases and buying existing plants will not work because there simply isn’t enough supply. New sources of energy will have to be developed.
While some of the Burlington’s electricity sources were built explicitly for Burlington, others were purchased from other producers that were already using the energy. This means that Burlington is now using the renewable energy but the old operator, like the old operator of the Winooski One plant, can no longer claim that electricity as their own. During that transaction, no additional renewable energy capacity was created. In order for more communities to use renewables, more power sources will physically have to be developed and could require significant commitments of time and money. Currently, Vermont only generates 40% of its electricity that it consumes and relies on the New England residual mix for the rest, which includes coal and natural gas consumption. In order for other communities to follow Burlington’s example, Vermont will have to generate much more of its own electricity and expanded on its renewable energy grid.
As the renewable grid expands, another problem with renewables will have to be addressed: intermittency. Since the sun is not always shining and the wind is not always blowing, intermittency problems require Burlington to back up its generation sources with fossil fuel generation. Burlington still relies on the New England grid in times of high demand. So this expansion of renewable energy results in an overall increase in productive capabilities and not a resulting decrease in fossil fuel generation capabilities. In fact, all of Vermont has increased its production capabilities: Vermont’s production capabilities are estimated to increase through 2040, because of expanding renewable and natural gas production.
These points can be seen as both challenges and opportunities for cities like Burlington. Increased production means more energy generation overall but it also stimulates demand for new sources of energy. And while fossil fuels are still necessary to guarantee electricity 24/7, new developments in energy storage and smart grid design will offer new ways to ease back on fossil fuel consumption. While other communities strive to enhance their renewable energy generation, challenges will inevitably emerge. Yet with places like Burlington and power companies like the Burlington Electric Department to lead the way, the future of renewable electricity seems brighter than ever.
