Northern New England has an abundance of natural resources and open space, and it is relatively sparsely populated. Southern New England is the opposite. Maine and New Hampshire generate ample renewable electricity, while Southern New England wants and needs more and more of it.
The states of Connecticut and Massachusetts have floated various concepts that encourage siting of renewable energy projects in northern New England and the siting of transmission lines through northern New England that would allow immense amounts of hydroelectric power to flow from Quebec to Southern New England. One proposed project, called Northern Pass, would have traversed New Hampshire — until New Hampshire killed that project last February. When that project died, the state of Massachusetts selected a very similar alternative proposal from Central Maine Power (CMP) and Hydro Quebec Energy Services (HQ) for power that would flow from Quebec over a 145-mile, high-voltage, direct current transmission line, called the New England Clean Energy Connect, or NECEC.
Maine now faces the same decision that New Hampshire faced. New Hampshire said “no thanks.” We encourage the Maine Public Utilities Commission to make the same decision.
ReEnergy owns and operates four biomass-to-energy facilities in Maine (in Ashland, Fort Fairfield, Livermore Falls and Stratton) that generate 155 megawatts of electricity. All of these facilities would be negatively impacted by the NECEC. If the NECEC project moves forward as proposed, it will cause new constraints on CMP’s transmission system that would materially limit our ability to deliver power into the grid. This would lead to substantial revenue losses and thus compromise our ability to continue to operate. The anticipated grid congestion would particularly affect renewable technologies with material variable costs, such as biomass energy, because these projects are more vulnerable to curtailment or shutdown due to adverse market conditions, disruptions or delivery constraints.
Because Maine has excess electricity, in-state generators rely on smoothly flowing transmission lines to ensure the energy market is orderly and efficient. When the transmission pathway heading toward Massachusetts and Connecticut is full, the system experiences congestion. Much like traffic congestion, transmission line congestion leads to negative outcomes for those stuck behind it.
NECEC, and the Canadian hydropower supporting it, would increase the frequency and intensity of transmission line congestion events seen in Maine. Hydro Quebec would be selling power to Massachusetts, but CMP would be building a transmission line that doesn’t even make it out of Maine. In order to get the power to Massachusetts, HQ and CMP would bully their way into using the existing transmission system, which wasn’t designed for this magnitude of flow. Since Massachusetts would be paying generously for HQ’s power, HQ would be willing to deliver it regardless of the prices seen in the market. That means HQ’s power would be first in line and the resulting congestion would limit the ability for Maine generators to deliver into the grid.
Although the project would harm all existing in-state electricity generators, the harm would be worse for facilities with higher variable costs, such as biomass facilities, which have thinner operating margins and are thus more likely to terminate operations in response to lower prices. When congestion occurs, some supply must back down in order for the market to reach equilibrium. The supply that would back down first would always be generators with higher marginal costs. Therefore, biomass plants would bear the brunt of these congestion events when production must be curtailed.
ReEnergy’s four facilities in Maine, when operating at full capacity in positive market conditions, together spend nearly $95 million per year, utilize nearly two million tons of biomass fuel, and support more than 100 direct jobs and an estimated 700 indirect jobs. The NECEC would put those jobs at risk.
We agree with many others that the NECEC project is a bad deal for Maine, and we urge the Maine Public Utilities Commission to deny a Certificate of Finding of Public Convenience & Necessity (CPCN). The project may benefit Massachusetts, but at the expense of Maine.
Mark Thibodeau is regional manager of ReEnergy Biomass Operations.