Massachusetts Launches Green Power Partnership with $30 Million
The Massachusetts Technology Collaborative (MTC) announced an innovative program to support construction of new renewable energy facilities on June 4th. The program, called the Massachusetts Green Power Partnership, is the largest program of its kind in state history.
Under the partnership, the Massachusetts Renewable Energy Trust will purchase certificates from electricity generators using renewable energy resources and, in turn, offer them for sale to residential and commercial electricity customers. These customers buy the certificates as their participation in the green power program. The purchase by the trust will have the effect of providing a price floor for the certificates, which enables the generators to sign long-term contracts with electric power distributors. Long-term contracts are a hallmark of the financial dealings of renewable energy suppliers because their costs, although fixed over the long term, are more heavily loaded toward the beginning of the contract periods than are those of power generators using fossil fuels. On the other hand, ongoing costs for fuel and maintenance are often much lower for renewable generators, which allows them to compete with conventional generators over longer periods.
MTC manages the Renewable Energy Trust, which is funded through a small surcharge on the electricity bills of Massachusetts consumers. The purpose of the program is to enable the state to meet the Massachusetts renewable portfolio standard, which requires that the state produce 4% of its electricity from renewable resources by 2009.
Robert L. Pratt, executive director of the trust, said the agency will spend $30 million buying certificates from renewable power generators. Over time, he expects these sales to earn a profit and spur development renewable energy and green power projects worth $200 million, enough to supply electricity for 150,000 homes.
To understand better how green power certificates work, see an explanation on DOE's Green Power Network.