Boosting Renewable Energy; The Sources of National Grid's Power

Nov 24, 2008 - Providence Journal

Enclosed with this month's electricity bill from utility company National Grid, customers will find an invitation to pay more for electricity than they're already paying.

It's not a trick or a scam. The mailing invites customers to participate in National Grid's GreenUp program, which was established to help speed development of renewable-energy projects in the region.

Those who join agree to pay an extra 2.4 cents per kilowatt-hour of electricity they use. For a typical household, which National Grid defines as one that uses 500 kilowatt-hours of electricity per month, the extra cost is about $12 a month.

The benefit to the customer is the knowledge that that premium will go toward supporting new renewable-energy projects, such as wind farms.

"This is about as altruistic as you can get," said Katrina Lutz, deputy director of People's Power & Light, one of two companies that administer the program for National Grid.

Customers who sign up won't notice anything different about their electricity service, beyond paying more for it. It will still be delivered and billed by National Grid.

"But there is a difference in the world, and we can document that," Lutz said. "There is an increased amount of renewable power coming onto the grid."

That extra power, which may come from a wind turbine or a hydro- electric plant, amounts to the same amount of power that a customer uses, Lutz said.

Here's how the program works. Customers have two choices: People's Power & Light, a nonprofit energy company based in Providence; or Community Energy, a marketer and developer of wind energy generation, based in Radnor, Penn.

Both companies are listed with a check box on the GreenUp card enclosed in electricity bills. A customer who signs up is billed the extra 2.4 cents per kilowatt-hour.

At the end of October, People's Power had signed up 3,456 customers in Rhode Island, Lutz said.

While the bill is collected by National Grid, this extra payment goes to the company the customer has chosen.

Lutz said that the money is then used to buy "renewable-energy certificates" -- a piece of paper that documents that a certain amount of electricity has been generated by renewable resources. The certificates are sold by project developers and are used as an extra revenue stream to help finance projects.

Many states, including Rhode Island, have laws that ramp up the amount of renewable energy bought by local utility companies. They satisfy those requirements by purchasing renewable-energy certificates.

People's Power has entered into contracts to buy these certificates from two wind projects -- the Portsmouth Abbey wind turbine in Portsmouth and from a municipality-owned wind farm in Princeton, Mass.

Lutz said that raising extra money to support renewable energy is vital to spurring its growth. "The idea is that the government requirements are not moving the market fast enough," she said.

The vast majority of the money needed for a wind-energy project is the up-front cost of actual construction. A developer that can show a bank that it has contracts in place to sell the electricity and the renewable-energy certificates will have an easier time getting the needed financing, she said.

As it stands now, very little of the electricity distributed by National Grid -- the dominant power distributor in Rhode Island -- comes from renewable resources.

National Grid's most recent "disclosure label," which lists the sources of the electricity it provides, says that about three- quarters of the electricity comes from three sources: 33.2 percent is generated by natural gas, another 28.2 percent is from nuclear power plants; and 12.3 percent is generated with coal.

The remaining 26 percent is made from oil, jet fuel, diesel fuel, trash-to-energy plans, wood, landfill gas and a host of other sources.

The biggest source of renewable energy is hydro-electric power. But that amounts to only 3.2 percent of the total amount delivered in the state. National Grid said that none of the electricity it bought for its standard offer customers came from wind or solar panels.

Power Source

Natural Gas

Nuclear

Coal

System Mix

Oil

Hydroelectric/Hydropower

Jet

Diesel

Trash-to-Energy

Wood

Landfill Gas

Biomass

Efficient Resource

Municipal Solid Waste

Digester Gas

Fuel Cell

Solar

Photovoltaic

Wind

Source: National Grid

A new program from National Grid allows customers to contribute to renewable-energy projects, such as wind farms, by paying extra for their electricity use. Right now, very little of the electricity distributed by National Grid comes from renewable resources. AP / ROBERT F. BUKATY

Originally published by TIMOTHY C BARMANN, Journal Staff Writer.

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