New England Energy Landscape Update, October 3, 2016
In August 2015, Daymark Energy Advisors1 (Daymark) and the Economic Development Research Group (EDR) prepared a report for the New England Coalition for Affordable Energy (the Coalition) , The Economic Impacts of Failing to Build Energy Infrastructure in New England. The August 2015 report was prompted by business and industry concerns about high prices and price volatility that led to development of the Coalition.
That report examined a five-year horizon through 2020 and found that energy costs could be $5.4 billion higher in the absence of new infrastructure based on specific assumptions about natural gas pipelines, electric transmission lines and electric generation fueled by wind and natural gas. The impacts on jobs, capital investment and personal income were also modeled.
Original Report: Economic Impacts of Failing to Build Energy Infrastructure in New England, August 25, 2015
New England has among the highest natural gas and electricity prices in the U.S., a distinction that is increasingly being driven by inadequate energy infrastructure. In fact, energy infrastructure constraints have reportedly cost the region at least $7.5 billion over the past three winters alone.
Since 2000, New England’s reliance on natural gas to generate electricity has increased dramatically and is now used to fuel over 40% of the region’s generation, which determines electricity prices a majority of the time. Pipeline infrastructure has not kept pace with this increased demand and is reaching maximum capacity, especially during the winter months, to meet both electricity generation and space heating demands.
The economic consequences of failing to build natural gas and electricity infrastructure to serve New England’s energy needs over the next five years (2016 to 2020) can be characterized in three ways: the cost of electricity and natural gas, the region’s employment, and disposable income.