Massachusetts can meet its increased renewable and clean energy commitments between 2030 and 2050 with relatively small increases in the retail electricity rates charged to residential and commercial consumers, according to the U.S. International Trade Commission (USITC) in a report released today.
The report, Renewable Electricity: Potential Economic Effects of Increased Commitments in Massachusetts, was requested by the House Committee on Ways and Means.
As requested, the USITC, an independent, nonpartisan, factfinding federal agency, assessed the potential economic effects of increased renewable energy commitments and the role of renewable electricity imports in meeting these commitments. The report includes:
- an overview of electricity market trends in New England and Massachusetts,
- a quantitative analysis of the potential effects of the increased commitments in Massachusetts on electricity prices for consumers and greenhouse gas emissions, and
- case studies on the U.S. Columbia River Basin, New York, northern Minnesota, and Denmark that examine the potential effects of imports of hydroelectricity.
- As New England -- particularly Massachusetts -- has shifted away from electricity generation derived from coal, oil, and nuclear energy, it has increased both its reliance on electricity imports and its renewable energy generation. Massachusetts increased its Renewable Energy Portfolio Standard in 2018 and created a Clean Energy Standard in 2017, setting electricity sourcing commitments that gradually increase through 2050.
- The USITC’s economic analysis projects that Massachusetts can meet its increased renewable and clean energy commitments between 2030 and 2050 with relatively small increases in the retail electricity rates charged to residential and commercial consumers. In most of the scenarios modeled, there are no costs to consumers in later years of the commitments, due to declining costs of renewable energy technology that will make renewable generation profitable to build without any incentives.
- The increased renewable and clean energy commitments will help reduce greenhouse gas emissions between 2030 and 2050. Additional emissions reductions will happen naturally as the technology costs for zero-emission solar and wind resources continue to fall. Most of the projected emission reductions come from displacing natural gas-fired generation, as there are few coal-fired power plants remaining in the region.
- Case studies show the potential for hydroelectricity imports to help stabilize electricity prices, reduce costs to consumers, and make variable renewable energy (such as wind and solar) more profitable. When hydroelectricity imports are used to balance fluctuations in wind power generation, they reduce price volatility and can increase the revenue available to wind projects.
Renewable Electricity: Potential Economic Effects of Increased Commitments in Massachusetts (Investigation No. 332-574, USITC Publication 5154, January 2021) is available on the USITC’s website at https://www.usitc.gov/publications/332/pub5154.pdf.
USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.