An Unplugged Guide to Energy in NH

Ideally, all a Granite Stater needs to know about electricity is where they hide the light switch to the bathroom at the diner. But if you really want to light up a room with your knowledge, then here’s a place to plug in.

Let’s just imagine you’ve been invited out for drinks by an acquaintance. Blithely, you assent, because he says there will be free mozzarella sticks. But then the details begin to emerge. This isn’t any ordinary soirée; it’s a networking event hosted by an energy company (and it could be one of many: Eversource, TransCanada, North American Power — pick your poison) and nearly everyone in attendance will be hip deep in the arcana of our electricity markets.

You are going to have to make small talk. Doomed, right?

Well, read on, intrepid adventurer. Hopefully, by the end of this article you’ll be well enough equipped to at least ask some smart questions while you munch those mozzarella sticks.

Cheat sheet: Jump to charts or the glossary

The Very Basics: the Grid

Electricity gets to us through a tangled network of poles, wires, transformers and capacitors known collectively as “the grid.” It comes to us as alternating current, which — for those of you who have watched any of the dozens of Internet videos about the Tesla vs. Edison battle — is what the uncharismatic genius Tesla was pushing. 

There are really several grids, each at a different voltage, bound together by transformers, which are like the bridges between the different voltage levels. Higher voltage can be transmitted more easily and cheaply over long distances, and lower voltages are less likely to fry you or your electronics, making them safer for homes and residential streets.

The whole operation works through basic physics: Electrons are unleashed at the point of generation and flow inexorably toward the point of use (the “load”). The easiest way to visualize how this works is like a series of hoses, full of water. High-voltage transmission lines are like big, high-pressure hoses, and the wires get smaller and smaller until they are like a tiny straw charging your smartphone.

And just as a heads-up, a lot of people at this party will probably be talking about “energy” when what they really mean is “electricity.” Energy also includes things like fuels burned for heating and transportation and running factories. You probably shouldn’t call them out on this, but you can think smugly in the back of your mind that you’ve got something you can lord over these wonks.

Oh, oh — also don’t confuse energy and power. That will be really embarrassing. Energy is the “capacity to do work” and in electrical terms it’s often expressed in a watt-hour (or kilowatt-hour or megawatt-hour). Power is the rate at which that energy is produced — as in a 10-megawatt power plant, running for an hour, produces 10 megawatt-hours of energy. Dig?

Where does it come from?

Around here, electricity increasingly comes from burning natural gas. Since the late ’90s, more than 13,000 megawatts of new gas plants have come online; we’re talking about more than 50 natural gas-fired plants. As of last year, 44 percent of the region’s electricity came from gas, compared to 15 percent in 2000.

The big losers, in that time frame, have been coal and oil power plants, which have dropped from 40 percent of generation to 6 percent. This is mostly because gas has become so cheap, while coal and oil became more expensive.

This trend is likely going to continue, with coal and oil generators being joined in their decline by some older nuclear power plants. By 2018, more than 4,200 megawatts of coal, oil and nuclear power plants are set to retire, which is more than 10 percent of the region’s total power plants. The region’s grid operator, ISO New England, which functions something like an air traffic controller, except for electricity, is worried that another 6,000 is at risk of following.

Where will electricity come from in the future?

To replace the retiring power plants, 6,700 megawatts worth of new facilities (mostly wind farms and natural gas-fired) have bid to be built in coming years.

There are also several efforts to connect New England to Canadian hydro-power using high-voltage transmission lines, including (perhaps you’ve heard of this?) the Northern Pass. The project that is farthest along in the permitting process is a 1,000 megawatt line that’s being buried under Lake Champlain in Vermont; it should be finished in 2019. Northern Pass expects to be not far behind, assuming it gets built, and is not held up by legal challenges. More projects, perhaps multiple power lines, have been talked about in Maine, where huge amounts of wind-energy could be developed if there was enough transmission to get it to market.

But that’s just the large-scale power plant side of things. Meanwhile, the price of solar power has dropped dramatically, which combined with some state-level policy changes means we are in the midst of a solar boom. It looks like New Hampshire is headed toward a 400-percent increase in the amount of solar panels, and the ISO predicts that by 2024 there will be 2,400 megawatts of solar feeding the grid.

Making large amounts of “variable” power generation part of the grid kind of freaks out the engineers who are used to being able to turn power plants on and off to meet demand. More on that later.

What about all of this pipeline business I’ve heard about?

Just as a heads-up, this debate is totally fraught. Similar to religion, this may not make great small talk at your networking shindig. (See more here.)

All of those new natural gas power plants will need to get their fuel somewhere. In the summer, when the pipelines are basically empty because nobody is running their furnace, this isn’t really a problem. In the winter, though, these pipelines are already maxed.

A group created to act as boosters for natural gas pipeline development into New England has pointed to the last three winters to argue that we are already in the midst of an energy crisis. They say that lack of space in New England pipelines has led to electricity rates that are among the highest energy rates in the contiguous United States. A report this group commissioned says the region is paying a premium of more than $1 billion a year in higher electricity costs by failing to build a new natural gas pipeline (see this chart for more information).

But despite this argument, pipeline developers have so far failed to recruit power plant owners to sign on to “firm agreements” for space in the pipeline.

And there may be a reason for this. A recent report commissioned by the Massachusetts Attorney General’s office concluded that building a new natural gas pipeline would not be the most cost-effective way to meet the region’s winter electricity needs. Rather, the authors conclude, it would be best to increase spending on energy efficiency and “demand response” (turning off big sources of electric load at key moments in the day).

And then there’s this whole climate change thing that has been in the news lately, which makes some question the wisdom of building fossil fuel infrastructure with a 40-year lifespan.

So, what about the big ideas?

You mean, like, the “Smart Grid” or “Grid 2.0”? People have been talking about this for a long time, and we’re really only just barely starting to see it emerge, but yeah, let’s talk about these ideas.

There’s a lot embodied in those terms, but at the heart of it, this is the idea that we could solve many of the problems we see today on the grid by dealing with supply issues on the demand side as well as the supply side.

You’re confused, I can see. Let’s take a step back.

The grid’s biggest problems are during a few hours a year of peak demand. Typically, we’re talking about the third day of a heat wave, when air conditioning is really cranking in everyone’s home. Nearly everything on the grid is designed to power these exceedingly infrequent peaks: the thickness of the metal of the power lines, the size of the transformers and, yes, the number of power plants.

This means there’s a lot of infrastructure that for most of the year is just sitting around gathering dust. Natural gas-fired “peaker” plants only run about 5 percent of the year. (Don’t worry. They get regular maintenance, waiting for their time to shine — and you, through your electric bills, pay for all of this.)

The premise of the smart grid is that it would flatten those peaks, requiring less of that infrastructure. There are a lot of ways that could happen.

On the really simple end of things, we could reward consumers for doing non-time-sensitive tasks — like running the dishwasher or laundry machine — at night when action on the grid is relatively quiet instead of during the day when it’s going like gangbusters. On the more exotic and expensive end of things, we could charge up batteries at night and discharge them during the peaks. In between these two solutions, there are likely thousands of other possibilities and accompanying products.

These technologies could make it easier to deal with wind and solar power too. If a utility has control over 100,000 electric water heaters, and a cloud goes over the sun for five minutes, instead of firing up the natural gas back-up, it can just turn the heaters down a few degrees for a few minutes.

This is tricky in two ways.

First, making this happen requires regulatory reform so that someone can actually make money by rolling this technology out. Currently, it’s really hard for a lot of these technologies to participate in markets. And whenever you change rules, there are losers who fight the change: Think of the people who own and operate the power plants that run twice a year, for starters.

Second, the technology hasn’t really been tested on a large scale yet. Talking about adjusting 100,000 hot water heaters on the fly is a lot easier than doing it minute by minute every day.

Which is why, after decades of talking about these ideas, you don’t really see them anywhere yet.

Go Forth and Schmooze

So there you have it! Your pocket guide to the current moment in the world of New Hampshire’s (and New England’s) electricity. Rip it out and keep it as a reference so you can study up before you get stuck in a particularly confusing conversation. And remember, if you find yourself getting in over your head, you can always excuse yourself to get some more mozzarella sticks and call this article up on your smartphone.

Assuming you were smart enough to remember to charge it before leaving the house.

Word Power

Amp up your small talk with a jolt of jargon

AC/DC: This one goes all the way back to the great battle of ideas between Thomas Edison (promoter of DC) and Nikola Tesla (who invented an AC generator). The easiest way to visualize the difference between AC and DC is to imagine an electrical wire as a hose: If you’re running AC, the water in that hose is sloshing back and forth, while if it’s DC power, the water would be flowing in a continuous loop. AC power is what comes out of most power plants and generators, while batteries and solar panels push out DC power.

Base Load/Peak Load: You can imagine these two terms as representing the maximum and minimum amounts of electricity the grid needs to provide. The quintessential base load power plant runs all the time, day and night. They stop only for maintenance and refueling (which for the Seabrook nuclear power station happens only once every 18 months). Meanwhile, power plants that provide peak load — times when many people are turning on air conditioners, for instance — typically turn on very quickly and only run until the peak dies down again, such as when everyone starts to go to bed.

Brownout/Load Shedding: In the very rare instance that the grid starts to get overwhelmed because of too much demand, grid operators can restrict the power in certain areas in order to avoid overloading some circuits. If demand is rising to the point where a power line could be overloaded and trip off the lights to all of Greater Boston, the control room can decide to preemptively cut off power to just a few neighborhoods to take stress off the line: That’s load shedding. Alternatively, they can just let voltage drop below what is normally allowable, causing the lights to dim, thus the term “brownout.”

Capacity Factor: A nuclear plant runs almost year-round, but a wind turbine only spins when the wind is blowing. A theoretical power plant that ran all the time (which none do) would have a capacity factor of 100 percent. Large wind turbines in the US average 34 percent, coal plants average 61 percent and natural gas plants 48 percent.

Capacity Market: The grid needs to be able to provide the power that people demand. So it needs enough power plants to provide that power on the hottest day of the summer when the air conditioners are cranking. In New England, we ensure that will happen with a capacity market, which pays power plant owners to be ready to deliver power in the future (the auctions are run three years in advance). By bidding into the capacity market, power plants are being paid for the promise that they will be available to meet the demand on the date they are paid to be ready for.

Demand Response: When days of peak demand arrive, it used to be that the only option was to turn on more power plants. Generators that sit around for 11 months of the year doing nothing aren’t cheap though, so then came the idea of paying certain big users of electricity to shut down on days when the grid is stressed. Some businesses — like big sawmills — accomplished this by just sending workers home early (usually they would get the call around three in the afternoon); others — like municipal water pumping stations — would turn on their diesel back-up generators and power themselves.

Load Shifting: Everything on the grid — power plants, transmission lines, distribution networks — has to be designed to meet peak demand. One way to save money on all that infrastructure is to not necessarily use less energy, but just use it more evenly throughout the day to decrease the spikes in demand. There are many ways to this could be done. Need air conditioning? Make ice at night when demand is low and then use it to chill air. Need to run the laundry? Load the machine and then set it to run when power is most plentiful. And of course, the holy grail would be to develop a battery cheap enough to install at grid scale to use to smooth out the peaks.

Smart Grid: The idea of the smart grid can encompass many technologies: thermostats that can be controlled from afar and combined together into a virtual power plant; meters that can report back to the utility when there is a power outage or can show how much energy costs from hour to hour; even hot water heaters that can be set to automatically run when energy is most inexpensive. Reforms would be needed to make many of these technologies work, and many utilities remain unconvinced that they are worth the trouble.

Substations/Transformers: The reason that AC won the “Battle of the Currents” is because it is much easier to increase or decrease its voltage. Wherever you see a substation (those things on the side of the road that look kind of like a bunch of industrial monkey bars surrounded by boxes on concrete slabs), electricity is changing voltage. Typically, it’s going from high voltage — which, because it can travel more easily through a conductor, is used to transmit electricity long distances — to low voltage. The transformers out on the utility pole in front of your house are stepping voltage down even further, so that it doesn’t fry your appliances.

Transmission/Distribution: Transmission lines are the very tall towers operating at high voltage that don’t necessarily follow the roads. They carry large amounts of power to different distribution networks in different parts of the state. The smaller wires on smaller poles that often are next to the sidewalk are the distribution network, which operates at a lower voltage and actually brings the energy to your house.

Power Struggles

Some ideas can be shockingly controversial

Canadian Hydropower: This controversy has a different flavor in each New England state. In New Hampshire, the central focus is the impact that a new, mostly overhead, high-voltage power line stretching from north to south would have on the state’s rural appeal, home values, tourism, etc. In Massachusetts, Connecticut and Rhode Island, the fight is between those who believe bringing in more hydropower would help reduce carbon and electric rates at the same time, and those who worry that hydropower would undercut local renewable energy initiatives. In Vermont, the only proposed power line was entirely buried, and no serious controversy ever emerged.

Environmentalists point to the millions of acres of boreal forest flooded by the massive impoundments in Northern Québec. But grid operators like the lower carbon impact of dams and the ease with which the floodgates can be opened to respond to spikes in demand.

New Natural Gas Pipeline: There are two major interest groups that have been pushing for expanding natural gas pipelines in order to fuel New England’s ever-growing fleet of gas-fired power plants: First, energy-intensive businesses whose expenses are driven up by New England’s highest-in-the-contiguous-US electricity prices. Second, the Independent System Operator, who has grown increasingly concerned that on some cold winter days as much as half of those natural gas-fired plants have not been able to get enough fuel to run.

The clamoring of these groups has attracted pipeline developers putting forward competing projects to alleviate this supply crunch. Kinder Morgan has proposed the Northeast Energy Direct, which would cross southern New Hampshire; Spectra and National Grid have teamed up to propose the Access Northeast, which would expand an existing pipe crossing Connecticut, Rhode Island and Massachusetts; and most recently, the Portland Natural Gas Transmission System has floated the idea of expanding a pipe that connects Montreal to Maine, crossing northern New Hampshire.

Opponents to expansion have argued that there are less-expensive ways to ensure the grid can maintain reliability on cold winter days — namely, ramping up spending on energy efficiency and demand response or relying on imported liquefied natural gas for a few days each year — and that these pipelines aren’t in line with the region’s goals of reducing carbon dioxide.

Net Metering: Net metering was a billing arrangement that came to NH back in 1998 as a way to help small-scale solar panel owners pay for their investment. Any power they don’t use in their own home as soon as it was generated could be sold onto the grid and show up as a credit on the bill. The amount of solar that could take part in this arrangement was capped at 50 megawatts, divvied up between the state’s four utilities.

Fast-forward to today, when falling solar panel prices has led to a boom in solar installations. Most of the state’s utilities are approaching the cap and say net metering needs a rethink. They argue that solar customers are still using the poles and wires of the grid, but net metering’s generous credits mean many solar customers aren’t paying for them.

Solar owners have pushed back, arguing that since solar is generating during the hottest parts of the day when the electricity is most valuable, it’s possible that the rate they are being paid may actually be under-compensating them. They say, without an expansion of net metering, the solar industry will wither away in the state.

You’ve gotta have charts (Miles and miles and miles of charts) 

These infographics are designed to present the data you need in a convenient package, but to make it even easier for you, we’ve provided a brief explanation of the most significant details.

New England has long had some of the highest electric rates in the country. In general terms, we can say this is because we are a region that is literally and metaphorically at the end of the pipeline. There are no major sources of fossil fuels nearby, so they must all be trucked or shipped from far away, driving up the costs. The cheapest electric rates in the country are found in the Pacific Northwest, which, starting during the New Deal, built dozens of large hydro-electric dams, most of which are still in operation.

During the summer months, there is enough space in the pipeline networks feeding New England to meet the demand of both residents and industry burning gas for heat as well as natural gas-fired generation. But in the winter months, the pipelines get filled up, and have to be supplemented with liquified natural gas, brought in by tankers from overseas. Constraints on the pipelines can lead to extreme price spikes.

The falling cost of solar panels, along with a suite of local and federal incentives, have driven a huge spike in the number of solar panels being installed in New Hampshire. This has led the state to bump up against its 50 megawatt cap on net metering — a key program to making solar power cost effective — and an effort is under way in the Legislature to pass a bill that would lead to the replacement of net metering.

Since the markets were deregulated in 2000, dozens of natural gas power plants have been built, which has resulted in a massive shift in the fuels that supply our electricity. While natural gas use has soared, coal and oil use has plummeted. This is (along with energy-efficiency programs) where most of the region’s reductions in carbon dioxide emissions have come from, but it has led to headaches for power grid operators.