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Recent Study Shows Supply Will Exceed Demand in Massachusetts

A recent study completed by NECEC revealed a significant problem with the Commonwealth’s current renewable energy plans and policies.  NECEC, the Northeast Clean Energy Council (a nonprofit business member organization) and NECEC Institute (a nonprofit focused in industry research, innovation, policy development and communications initiatives) discovered an imbalance between supply and demand.  According to the study, under base case assumptions, without changes to the Renewable Portfolio Standards policy,  CO2 emissions would decrease but supply will continue to exceed the demand for Renewable Energy Credits (RECs).

The price for Renewable Energy Credits (RECs) is determined by market transactions and is affected by the relative balance of demand for RECs—created by the RPS—and renewable energy supply.   Recent policy enhancements have increased supply but policies that affect demand have not ‘kept pace.’  Without an increase in RPS demand, REC prices may be insufficient to support the projects initially built in response to the RPS program.

If the Commonwealth’s annual RPS growth rate is increased by 2 to 3 percent they can diversify energy generation, create thousands of jobs, lower prices, and meet their goal to reduce greenhouse gas emissions.

Knowing is only half the battle…  What policy changes can we expect to see from the Commonwealth?  Can Massachusetts really increase RPS by 2 percent, create thousands of jobs and lower electricity prices?  NECEC have been contacted for further comment on these findings. What’s your reaction to this recent discovery of imbalance and the solutions proposed to correct it?  Please share your thoughts in the comments.

Nevelyn Black's picture

Thank Nevelyn for the Post!

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