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Vermont’s New Energy Plan Aims to Leverage Economic Growth from Environmental Protection

Vermont released its new Comprehensive Energy Plan (CEP) in mid-December, which is structured around a clean-energy target that can claim to be the most ambitious in the U.S. — obtaining 90 percent of the state’s total power supply from renewable resources by 2050.

Already a leader in energy efficiency and renewable electricity, Vermont aims to leverage innovative financing mechanisms, technologies, regulatory policies, and public-education efforts to expand its clean-energy economy, keeping dollars from flowing out of state and freeing residents from the volatility of fossil-fuel prices, according to the plan.

The CEP crowned a year of hard work by multiple state agencies in conjunction with regional planning commissions, town energy committees, business leaders, non-profit groups, and the public-at-large who submitted over 9,000 comments for consideration.

“I am proud of the incredible work put in by the many agencies involved and the thousands of citizens who took the time to participate in shaping the ideas and actions that are included,” said Gov. Peter Shumlin in a press release.

“Vermont needs to move forward to protect our environment, gain greater energy independence, and drive innovation and jobs in the energy sectors,” he said. Shumlin praised the CEP for putting the state on that path.

While acknowledging Vermont’s success to date in reducing demand for electricity and increasing the amount of renewable energy fed into the grid, the plan concentrates on strengthening weak areas in current efforts. Most importantly, it notes that the state will fall short of meeting previously set goals to reduce greenhouse-gas emissions by 25 percent in 2012 and 50 percent in 2028, relative to a 1990 baseline. In order to close the gap, the CEP recommends an expanded focus from electricity generation to the development of an “all fuels” or “total energy standard.”

Within the proposed broader scope, Vermont must tackle its heavy reliance on imported oil and diesel for heating and transportation, sectors that account for two-thirds of the state’s total energy consumption. Transportation alone generates 47 percent of its greenhouse-gas emissions and accounts for $1 billion worth of expenditures, dollars that mainly leave the state. An additional $600 million go toward imported heating fuel. Limitations of current programs, infrastructure and policy measures all contribute to the lack of progress in these areas, the CEP says.

Despite success in lowering residents’ heating and electricity costs, Vermont’s efficiency programs have only improved the energy performance of about 6,700 houses since 2008. The CEP calls for an aggressive push to raise that number to 8,200 annually, so that the state legislature’s mandate of retrofitting and weatherizing 82,000 residences by 2020 is met.

Fuel change is also a central part of the CEP. The report recommends adding incentives to displace the fossil fuels currently used for heating with local biomass, and further proposes a significant expansion of infrastructure for transmitting and distributing natural gas, which now only fills five percent of Vermont’s energy needs. Because gas is the cleanest-burning fossil fuel with the lowest carbon footprint, and increasingly comes from domestic supplies, the CEP advocates a push to increase its availability for use in space heating and heavy transportation, and to fill in gaps in the electricity supply.

But still more is needed to reach the target of 90 percent by 2050. Transportation that relies on fossil fuel must be replaced wherever possible by plug-in electric vehicles, powered by batteries charged with renewably generated electricity, says the plan. To orchestrate this sweeping change, it recommends setting up a task force to address the complex network of elements – technological, financial, regulatory and attitudinal – that must be in place for such a transformation to be successfully made.

Construction, too, must be revolutionized.  As a first step, the CEP recommends an increase in the quantity of new homes that meet U.S. EPA’s ENERGY STAR specifications, from the current 33 percent to 60 percent by 2020. Then, further steps must be in place to move new construction beyond these standards into the cutting-edge territory of zero net energy buildings that are not only maximally efficient, but also cover their own energy needs through onsite distributed generation from renewable solar, wind and geothermal resources.

The plan recognizes that innovative policies and regulations will be an integral part of meeting these ambitious goals. To leverage energy improvement, it advocates exploring more sources of potential funding such as utility on-bill financing or dedication of some of Vermont’s Qualified Energy Conservation Bond allocation to that purpose. It also suggests building on lessons learned from the state’s current Sustainably Priced Energy Enterprise Development program (SPEED) in order to create better Standard-Offer contracts for small-scale renewable distributed generation, and recommends the adoption of a mandatory Renewable Portfolio Standard for electricity, tailored specially for Vermont but in line with other New England states.

The CEP even addresses the opportunities that can be found in adversity – in this case, the destruction left last August in the wake of Tropical Storm Irene. The likelihood of future increases in severe weather events makes it critical to align local, regional, and state policies so that rebuilding and growth add greater resiliency to the infrastructure of Vermont’s towns and villages, and contribute to reduced carbon emissions, says the plan. Prior to Irene, Vermont had set a goal of a five-percent reduction in energy usage across state government. Given the current need for significant infrastructure repair and rebuilding, the plan recommends that the state use the occasion to make government buildings more efficient, while strategically deploying renewable-energy systems.

True to the plan’s title, the new recommendations are comprehensive and offer a challenging set of goals for the state to consider. The authors suffuse these challenges with a spirit of optimism about what Vermont can achieve, based on past experience. They stress that the state’s steps toward greater energy efficiency so far have resulted in five dollars of economic growth for every one dollar of investment plus the equivalent of 43 full-time jobs, on average, for every one million dollars its programs disbursed annually. And despite Vermont’s small size, the authors believe that in doing its part to address climate change, the state would set a powerful example and in their words, “show how environmental choices can lead to economic prosperity.”

— By Eleanor Saunders

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