A Long-Term Approach to Securing Rhode Island’s Energy Future
Rhode Island’s long-term energy plan, Energy 2035,1 lays out three key goals for the state’s energy system: security, cost effectiveness, and sustainability.(a) Meeting these objectives will ensure that consumers and businesses in the state have consistent access to reliable energy at a low cost. This will boost the state’s economy as well as residents’ quality of life. The sustainability goals will also preserve Rhode Island’s environment and help the state do its part to prevent some of the more devastating consequences of climate change, such as unpredictable weather events and rising sea levels.(b)
(a) Energy 2035 was developed by an advisory council assembled by the State’s Office of Energy Resources, and was released in October 2015.1 The plan defines energy security as encompassing adequacy, safety, reliability, and resiliency. Cost effectiveness incorporates affordability, stability, economic growth, and employment. Sustainability includes climate change, air quality, water use and quality, and land and habitat considerations.
(b) The potential impacts of climate change in Rhode Island, a coastal state, are of serious concern. Storms have already disrupted the state’s electricity infrastructure multiple times during the past decade. Long-term sea level increases could destroy much of its coastal region and waterways.
The goal of this article is to help Rhode Island evaluate its options for producing electricity and determine what power sources best meet its goals. One major concern is addressing costs. Rhode Island’s current electricity price of 15.41 cents per kWh (18.28 cents per kWh including taxes and fees) is the fourth-highest rate in the continental United States.2 Lower electricity costs would provide relief to consumers and might help attract businesses and economic development to the state.
Future energy security and sustainability also require fortifying the state’s infrastructure against both transient weather events like storms and the lasting, long-term effects of global climate change.(c) This could be achieved through a shift to non-polluting and sustainable energy sources, which would eliminate the 11 million tons of carbon dioxide (CO2) Rhode Island’s energy consumption currently generates.1
How can Rhode Island create a clean, sustainable energy infrastructure that reliably and cost-effectively meets its energy needs?
(c) The most recent worldwide climate agreement, the 2015 Paris Climate Accord, aims to limit average global temperature increases to 2.7 °F (1.5 °C) by significantly reducing carbon dioxide emissions over the coming decades. Current Rhode Island law, however, does not directly address the elimination of CO2 emissions.
This article examines the state’s energy needs and how they are currently being met.3 It then explores promising options for a sustainable, secure energy future.
The Demand for Energy in Rhode Island
Rhode Island’s energy consumption is the third lowest in the nation, after the District of Columbia and Vermont. The state uses less energy than a handful of other states with smaller populations, such as Wyoming and Delaware.4
Altogether, Rhode Island consumes 190 trillion BTUs of energy annually, at a cost of approximately $3.6 billion. A third of that energy goes toward electricity; another third to heating, primarily in the form of natural gas; and the final third to transportation, mainly powered by gasoline.1
Demand for electricity has been relatively flat over the past decade in Rhode Island,5 and overall energy needs are projected to remain fairly constant in the state and the region over the next decade.6 While energy efficiency efforts and other technological advances will reduce energy use in the coming years, these savings will be offset by growth in consumer demand, so the state’s net energy use will remain relatively consistent.(d)
(d) New England states currently spend $900 million a year on energy efficiency measures.6
One key target for lowering energy use is improving the energy efficiency of buildings. Nearly half of all energy and three-quarters of all electricity produced in the United States is used to operate buildings.7 Efforts to reduce the energy footprint of buildings could therefore have a large potential impact on the energy demand and overall climate outlook of the region.
Some studies suggest that building-related energy efficiency measures such as insulation improvements and better lighting systems are among the most cost-effective ways to reduce greenhouse gas emissions.8 A recent pilot program to retrofit 42 homes in Massachusetts and Rhode Island resulted in average energy performance 50% below the regional average for the Northeast.9 Energy efficiency measures have upfront costs, however, which must be either paid by consumers and businesses or subsidized by taxpayer-funded government programs.
Where Rhode Island’s Electricity Comes From
Rhode Island’s primary electricity sources are natural gas and nuclear energy imported from out of state.(e)
The United States as a whole has undergone a significant shift to natural gas in recent years as the fuel has become substantially cheaper. While natural gas is the largest source of electricity in Rhode Island, its growth here compared to in other states has been hampered by a lack of pipeline infrastructure and power plants.
(e) All of Rhode Island’s electricity comes from National Grid, the sole transmitter and distributor of electricity in the state. The company does not produce electricity but instead buys it from producers in an open market. Recent changes to state law now permit other brokers to buy electricity in bulk on the market and resell it to consumers through the National Grid distribution system.
Like much of the country, New England states have rushed to deploy natural gas pipelines and power plants, while retiring and replacing polluting coal power plants. Consequently, the region has attracted an additional 15 gigawatts of lower-emission natural gas electricity generation capacity in the past two decades.10
Fig. 1 Sources of Electricity in New England
Source: ISO New England (2016)10
Rhode Island has partnered with other states in the region to pursue new energy sources like natural gas, including a significant expansion of the capacity to purchase and import electricity from Canada.(f) While the option of importing electricity from Canada is attractive, this energy is not subject to the same environmental, safety, and reliability standards as domestic energy sources. Rhode Island also relies on Massachusetts and Connecticut power plants for a significant portion of its electricity needs.
Below we discuss Rhode Island’s main sources of electricity and the current status of each.
(f) The source of energy imported from Canada is unknown. Electricity imported from abroad is not subject to U.S. rules and regulations requiring disclosure of the fuel used to produce the electricity or its environmental impact.
Fig. 2 Sources of Electricity in Rhode Island
Source: National Grid Energy Disclosures
Base-load power plants are the backbone of the electricity system. They consistently produce constant energy at extremely high levels of reliability, efficiency, and safety, and, most importantly, at the lowest cost. Base-load plants are typically powered by coal and nuclear. As coal is phased out, new sources of reliable, consistent electricity production will be needed to replace capacity and meet baseline energy demands.
Coal has been targeted for elimination because, of all energy sources currently in widespread use, it is the highest emitter of CO2 and other pollutants. With little to no industry, jobs, and consequently political dependence on the coal industry, Rhode Island has had an easier time moving away from coal than other regions of the country that are more economically dependent on it. Rhode Island has no coal-fired power plants, and its import of coal electricity from neighboring states will be entirely eliminated when coal plants in Massachusetts and Connecticut that are currently slated to close cease their operations.
Nuclear energy has been the other key source for base-load electricity production over the past several decades. More than a third of New England’s electricity and one fifth of Rhode Island’s electricity is produced by nuclear power. Nuclear electricity is imported into Rhode Island from plants in Connecticut and Massachusetts. Nuclear power has the distinction of being the only base-load electric power source that has zero CO2 emissions. It is among the most reliable, secure, and economical sources of electricity. It requires a scarce and nonrenewable resource, uranium, but current estimates of the world supply of uranium extend nuclear power availability 6,000 years into the future. However, a long-term national plan is needed for how to store the spent nuclear fuel elements produced from nuclear power plants and address other safety and environmental concerns.
Fig. 3 Greenhouse Gas Emissions of Various Fuel Sources
Source: U.S. Energy Information Administration (2016)11
Natural gas has been on the rise in recent years, promoted as a “bridge” in the transition from fossil fuels to energy sources that do not produce CO2. Production has increased tremendously over the past decade as a result of new techniques of horizontal drilling and hydraulic fracturing (“fracking”), resulting in an oversupply and therefore low costs compared to other energy sources.
However, while natural gas burns more efficiently and produces approximately 44% less CO2 and fewer side pollutants than coal, it still produces a significant amount of greenhouse gases.11 Natural gas (methane CH4) is a greenhouse gas itself. The latest techniques for extracting natural gas, particularly fracking, also have other negative environmental impacts, such as contaminating water supplies.
Another major concern about natural gas is its ability to consistently and reliably meet energy needs. Nuclear power plants generally operate at more than 90% of their potential full capacity and coal plants operate around 60%,12 a measure known as the capacity factor.(g) In comparison, conventional natural gas combustion turbine power plants – such as the one at Manchester Street Power Station in Providence – typically operate at less than 10% their full capacity.12 While natural gas plants with turbine technology can meet peak demands and rapidly changing demands in electricity, they have relatively low reliability, and some question whether they are suitable for continuous operation as base-load power plants.
U.S. natural gas electric power prices are also subject to significant volatility. From August 2015 to August 2016, the price fluctuated from a low of $2.05 to a high of $3.08 per thousand cubic feet.13 This type of price change creates uncertainty about future costs and the long-term viability of natural gas as a primary source of energy.
Renewable forms of energy (including solar, wind, and hydroelectric) currently account for 17% of the electricity consumed in New England but only 4% of the electricity in Rhode Island. Those numbers have grown very little over the past 15 years. Federal and state subsidy programs have resulted in increased deployment of wind turbines and solar photovoltaics, but these sources still only produce a small share of the state’s overall electricity. The main barriers for solar and wind energy are high cost, low reliability, and low capacity factors.
Renewable sources such as wind and solar produce zero emissions and can make a supplemental contribution to the electricity supply. However, given current technology, they are not continuous energy sources and therefore are not suitable for base-load power supply. The capacity factor of both solar and wind is around 30% nationally.13
As of 2013, Rhode Island had 13.0 MW of solar photovoltaic and 9.1 MW of wind energy production capacity, with more under development.1 In recent years, several wind turbines have been constructed in the state and solar energy systems have been installed on residences, public and government buildings, and commercial properties. Rhode Island’s Energy 2035 plan recommends expanding subsidy programs to increase solar and wind generation to more than 500 MW over the next two decades.1
Other renewable forms of energy are less promising for Rhode Island in the long run. Geothermal energy is very site dependent and is not suitable for the state. Because Rhode Island’s rivers are relatively small and the landscape is fairly flat, the potential for hydroelectric power is limited and has already been developed out. In addition, hydropower can have negative environmental impacts. Other “renewable” energy sources such as biofuels and biodigesters often create CO2 emissions, depending on how they are implemented.
Promising Options for Rhode Island’s Energy
Though energy demand in New England is expected to remain stable in the near future, new generation capacity will be needed as current sources, such as coal and nuclear plants, are retired. Figure 4 provides an assessment of Rhode Island’s energy options in relationship to the three strategic goals identified in the state's Energy 2035 plan: security, cost effectiveness, and sustainability. The table offers a simplified overview of data from an extensive analysis performed annually by the U.S. Energy Information Administration (EIA).14
The primary indicator of sustainability in the table is whether the energy source produces CO2 emissions, which contribute to climate change. Security is measured by the capacity factor and the transmission investment, the per-kilowatt-hour cost of the infrastructure needed to transmit the energy to consumers.
The key indicator of cost effectiveness is the levelized cost of electricity (LCOE), which measures the per-kilowatt-hour cost to build and operate a plant over the course of its lifetime.15 This includes the capital cost to build a plant and bring it online, as well as the ongoing operations and management costs. According to the EIA, LCOE “is often used as a convenient summary measure of the overall competitiveness of different electricity-generating technologies.”
(g) The capacity factor measures the actual output of a power plant in comparison to its potential output if it were operating at full capacity at all times.
Fig. 4 Energy Options for Rhode Island
Source: US Energy Information Administration (2015)14
Considering the options in the table in relationship to Rhode Island’s strategic goals of cost effectiveness, sustainability, and security, the most promising technologies are Natural Gas-Fired Advanced Combined Cycle (NGFACC) with Carbon Control and Sequestration (CCS), Advanced Nuclear Power, and Land-Based Wind Turbine.(h)
All three technologies are viable for Rhode Island but require planning, policy, and partnerships to guide their development and deployment.
Natural Gas-Fired Advanced Combined Cycle (NGFACC) with Carbon Capture and Sequestration (CCS)
Over the past several years, cheap natural gas has impacted short-term energy strategy across New England and the country. The transition from coal to natural gas has benefits of better air quality, lower CO2 emissions, and potentially cheaper power. However, natural gas is still a nonrenewable resource that emits greenhouse gases and therefore only delays reaching irreversible global climate change.
If we cannot do without fossil fuels such as natural gas as an energy source in the short term, however, NGFACC is one of our best choices. It uses technology that burns natural gas more cleanly than traditional systems, achieving a much higher thermodynamic efficiency resulting in fewer emissions per unit of fuel consumed. This can be paired with carbon capture and sequestration (CCS), which removes CO2 emissions from a plant’s exhaust stream and injects them into mines deep underground to prevent their release into the atmosphere.
One challenge of NGFACC is ensuring access to a reliable supply of natural gas for electricity-generating plants as well as residential and commercial heating. Rhode Island’s current pipeline infrastructure is inadequate, and the western region of the state has no natural gas power plants or major pipelines at all, so transmission infrastructure is a major consideration.
(h) While hydroelectric power is also promising as an energy source, it is not a good fit for Rhode Island’s geography, as previously discussed.
Text Box 1. Expanding Natural Gas Infrastructure
Advanced Nuclear Power
Nuclear power is one of the most reliable, secure, and economical sources of electricity, and it produces no CO2 emissions. In the past two decades, a number of innovations have advanced nuclear power design and operations. These next-generation systems are more reliable and efficient, allowing for longer refueling times, less maintenance, and improved cost effectiveness. They are safe enough that they do not need external, offsite power for cooling and safety management. Advanced nuclear systems can be acquired and installed in modular form as power demands increase, and can be distributed to provide better power density across large geographic areas.
Despite these advantages, Rhode Island has not considered advanced nuclear power in any of the current scenarios for its energy future. While countries like China and India are planning and building new nuclear power stations to lower their CO2 emissions, nuclear power is on the wane in the U.S. because of the low price of natural gas. Two nuclear plants in New England, Pilgrim Nuclear Generating Station in Massachusetts and Vermont Yankee Nuclear Power Plant, have announced plans to close within the next five years. Because it costs approximately six billion dollars and six years to build a new 1400 MW nuclear plant, planning would need to start now if New England states wanted to replace this nuclear capacity.16
Land-Based Wind Turbine
Land-based wind power is one of the few clean, renewable energy options that is close to cost competitive with traditional energy sources. The national average total LCOE for land-based wind energy is $64.50 per MWh,15 compared to Rhode Island’s current residential electricity purchase price of approximately $40 per MWh.17 There are concerns about the reliability and grid stability of wind, however, as wind turbines typically have a capacity factor of between 30% and 40%.12
In Rhode Island, land-based wind turbine development is currently conducted on an ad hoc basis as opportunities arise. Wind energy production in the state began in 2006 with the construction of the Portsmouth Abbey turbine. Since then, 11 small land-based turbines (≤50 KW each) and 12 larger land-based turbines (>50 KW) have been built, for a total of 9.1 MW of wind electricity production.1 However, there are no known formal plans by the State Office of Energy Resources to pursue land-based wind turbine development as a coordinated strategy.
Rhode Island has also put significant resources into offshore wind technology. However, the cost for this electricity is significantly higher than other sources – $158.10 per MWh, more than double the cost of land-based wind energy.15 A five-turbine, 30 MW project was constructed in 2016 off the coast of Block Island.18 The development has met with some opposition regarding its potential environmental impact and economic effects on Block Island tourism. On the positive side, in addition to producing energy, the project will connect Block Island to the Rhode Island electricity grid and provide cable television and internet services to the island. The performance of the project will likely influence whether future offshore wind projects will be considered for the New England region.
Text Box 2. Recent Renewable Energy Legislation in Rhode Island (2014-2016)
Charting Rhode Island’s Energy Future
Given the goals of Rhode Island’s Energy 2035 plan – security, cost effectiveness, and sustainability – my analysis suggests that the most promising options for the state are land-based wind turbines, advanced nuclear, and natural gas-fired advanced combined cycle with carbon capture and sequestration.
Because natural gas is cheap and abundant, it will likely continue to be in our near future, but more advanced, efficient systems that allow for carbon capture are preferable to existing conventional natural gas combustion turbine plants.
To develop the energy sources of the future, Rhode Island may want to partner with others in the region to attract large-scale projects that the state would not be able to tackle alone because of its small size. New England coordinates its energy planning and policy activities through several organizations that are actively planning energy strategies for the region. Rhode Island has partnered with Connecticut and Massachusetts to solicit proposals for solar, wind, and hydroelectric power generation projects, as well as expanded natural gas capacity.
As a low-lying coastal state, Rhode Island faces significant risks from the effects of global climate change. However, the state also has the opportunity to become a national leader and champion for clean (non-CO2 producing) energy, beginning with the goal of eliminating CO2 from our electricity production system. Cutting the emissions from energy production through carbon capture and non-CO2 producing energy sources, in combination with improving energy efficiency, can substantially reduce greenhouse gas emissions. In the long run, this approach can be less expensive, more reliable, and safer for the future of Rhode Island and its prosperity.
1. Rhode Island Division of Planning (2015) “Energy 2035: Rhode Island State Energy Plan,” Providence, RI.
2. U.S. Energy Information Administration (2016) “Electric Power Monthly with Data for May 2016,” Washington, D.C.: U.S. Department of Energy.
3. This research is based primarily on analysis of data on power production, consumption, efficiency, transmission, and sources of energy collected by the U.S. Energy Information Administration and ISO-New England, a non-profit agency created and authorized by the Federal Energy Regulatory Commission.
4. U.S. Energy Information Administration (2016) “State Energy Data System (SEDS): 1960-2014,” Washington, D.C.: U.S. Department of Energy.
5. ISO New England Inc. (2016) “Pricing Reports: Zonal Information [dataset],” Holyoke, MA.
6. Winker, Eric, David Ehrlich, and Eric Wilkinson (2015) “ISO New England Energy-Efficiency Forecast for 2019 to 2024,” Holyoke, MA: ISO New England Inc.
7. U.S. Energy Information Administration (2017) “Consumption & Efficiency,” Washington, D.C.: U.S. Department of Energy.
8. Kiely, T. (2010) “Energy efficiency: A compelling global resource,” New York, NY: McKinsey & Company. Creyts, Jon, Anton Derkach, Scott Nyquist, Ken Ostrowski, and Jack Stephenson (2007) “Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?” New York, NY: McKinsey & Company.
9. Gates, Cathy and Ken Neuhauser (2014) “Performance Results for Massachusetts & Rhode Island Deep Energy Retrofit Pilot Community,” Westford, MA: Building Science Corporation.
10. ISO New England Inc. (2016) “2016 Regional Electricity Outlook,” Holyoke, MA.
11. U.S. Energy Information Administration (2016) “How much carbon dioxide is produced when different fuels are burned?” Washington, D.C.: U.S. Department of Energy.
12. U.S. Energy Information Administration (2017) “Electric Power Monthly with Data for December 2016,” Washington, D.C.: U.S. Department of Energy.
13. U.S. Energy Information Administration (2017) “Natural Gas,” Washington, D.C.: U.S. Department of Energy.
14. U.S. Energy Information Administration (2015) “Annual Energy Outlook 2015,” Washington, D.C.: U.S. Department of Energy.
15. U.S. Energy Information Administration (2016) “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2016,” Washington, D.C.: U.S. Department of Energy.
16. The Nuclear Energy Institute (2016) “Nuclear Costs in Context,” Washington, D.C.
17. Rhode Island’s current residential electricity purchase price was estimated from National Grid’s average electricity charge to residential customers of 8.99 cents per KWh.
18. Abel, David (2016) “The nation’s first offshore wind farm takes shape off Block Island,” The Boston Globe, August 15.
19. For more on the Regional Greenhouse Gas Initiative, see Basu, Suchandra (2016) “Capitalizing On Cap And Trade: Long-Term Energy Sustainability For Rhode Island,” Providence, RI: The College & University Research Collaborative.
Type of Research