Worcester Business Journal Special Editions

Worcester Business Journal • www.wbjournal.com • 2017 Economic Forecast 17 E N E R G Y More renewables Next year, the picture will become clearer how Massachusetts' aggressive push for offshore wind will impact energy prices Y ears of talks about making renewable resources a bigger part of Massachusetts' energy consumption started to pay off this year, when the state government passed a new law with a strong empha- sis on renewables. The law requires utilities to enter into 15-20 year contracts with power providers to bring 1,600 mega- watts of offshore wind power and 1,200 megawatts of other renewables, including onshore wind, solar, and hydropower, to Massachusetts. As contracts are solicited, Massachusetts businesses will start to see some answers to the many questions still out there about the future of the energy landscape. More clarity on wind and hydropower pricing Critics of the new energy law say it disrupts compe- tition by effectively hand- ing over a third of the state's energy market to hydropower and offshore wind, which is expensive. This, they said, could lead to unprecedented price increases. Right now, it's hard to say what those increases could look like, but by the middle of next year this will be more clear. Utility companies have until the end of June to solicit proposals for offshore wind, and the beginning of April to seek contracts for other renewables. As contracts start to roll in, so will more answers. Energy storage targets A less-discussed part of the new ener- gy law calls for the state to develop ener- gy storage targets and initiatives this year, and more and more local companies are working on batteries and other innovations that could lead to major break- throughs in this space. By law, the state has to set energy storage goals this year, so there will continue to be emphasis in this area. Uncertain future for natural gas transmission The push for more natural gas capacity hit a major bump in the road this year when the state Supreme Judicial Court ruled that utilities can't ask electric ratepayers to cover new pipeline construction costs, rendering new projects effectively lifeless. But since nearly 50 percent of the region's current energy supply comes from natural gas, it's hard to imagine new pipelines will become a thing of the past. Merger enhances Canada's role in Mass. energy puzzle The expected interest from Hydro Quebec in delivering hydropower to Massachusetts under its new renewable energy law isn't the only aspect of the local energy puzzle that's shifting northward. Houston-based Spectra Energy, which is pushing a controversial pipe- line project to deliver more natural gas to New England, announced in September it expects to merge with Enbridge Inc., a Canadian company, to create "the largest energy infrastructure company in North America" valued at $127 billion. Al Monaco is president and CEO of Enbridge Inc., and Spectra president and CEO Greg Ebel will become chairman of Enbridge following the closing of the transaction, the compa- nies said. Ebel said the combined company would "support a large capital program to fund the continued development of Spectra Energy's existing, preeminent project inventory in addition to allow- ing the combined company to compete for and win the most attractive new growth projects." According to Enbridge, it "operates the world's longest crude oil and liquids transportation system across Canada and the U.S., and has a significant and growing involvement in natural gas gathering, transmission and midstream business, as well as an increasing involvement in power transmission." It owns and operates Canada's largest natural gas distribution company, serv- ing customers in Ontario, Quebec, New Brunswick and New York. And it has interests in nearly 2,000 megawatts of net renewable and alter- native generating capacity, and is expanding into wind, solar and geo- thermal power. In late August, Spectra officials were undeterred by news that Eversource and National Grid withdrew related applica- tions for approval of natural gas trans- portation and storage contracts. P H O T O / H Y D R O Q U E B E C Top energy stories of 2016 BY LAURA FINALDI Worcester Business Journal Staff Writer Massachusetts has three possible offshore wind sites. An energy storage system Gas companies encounter local resistance to pipelines. Onshore wind and hydroelectric are the cheapest forms of renewable energy in terms of building power plants, at $65 and $68 per megawatt hour, the U.S. Energy Information Administration said. The new energy law calls for utility compa- nies to bring 2,800 megawatts of clean ener- gy, including hydropower, to Massachusetts. Continued on Page 18 P H O T O / C O U R T E S Y

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