Governor Deval L. Patrick
“Shaping Our Energy Future” - As Delivered
Wednesday, May 30, 2012
I can’t think of a single thing in our history that Americans believed was important that we chose to leave entirely to chance. When we believed that settling the west was important, we created land grant programs and built the transcontinental railroad. When we decided that educating our children was important, we developed public schools and universities. When we believed liberty for all was important, really important, we freed the slaves, gave women the right to vote, and sometimes even went to war abroad. We tend to shape our own future rather than just let it happen to us. That’s what Americans do and why we lead the world in so many different ways.
As a nation that also loves to argue, rarely do we agree on the perfect solution to what’s important. But progress comes when we stop being stuck choosing between the perfect solution and no solution at all. Progress comes when we try something, when we step forward boldly, thoughtful about our options and our opportunities, learning from our mistakes, and with our eye firmly on where we are going, on the kind of future we want to inhabit.
That’s how in Massachusetts in the last five and a half years we expanded health care access to everyone; how we introduced unprecedented innovations and higher achievement to our schools; how we simplified our transportation bureaucracy and got back into the business of rebuilding our infrastructure; and how we made our public pension system sustainable. That’s how we moved an economy from being stuck in neutral to growing at a rate twice as fast as the nation’s, and emerged from recession faster than most. On each of these issues and others, we made a decision about what kind of future we want, and then worked together to shape it and because of that our generation and the next will be better off.
Four or five years ago now, we in Massachusetts took a fresh look at our energy future, starting with our current realities. Massachusetts has long been a high-cost state when it comes to energy. With no oil, coal or natural gas of our own, we are at the end of the pipeline and as such are subject to the whims of a global energy market. We bear the costs associated with finding, extracting and transporting fuels from all corners of the world.
Our businesses and residents spend $20 billion annually on energy costs – and $18 billion of that leaves the Commonwealth. That’s nearly $8,000 for each and every Massachusetts household that we send to other states and other countries to meet our energy needs.
Not only that, but the future we faced was tied to hydrocarbons that damage the environment and threaten life on earth. It was also a future where few local people worked and few local entrepreneurs invested.
So, working together with many of you in this room, we set out to shape a different future. We dared to imagine a new way to do things. We set ambitious goals for changing how much and what kind of energy we consume, and gave business, families and governments the tools we need to get there. The bills had compelling names – “The Green Communities Act;” “The Green Jobs Act;” “The Global Warming Solutions Act” – and even greater objectives: to make Massachusetts the undisputed leader in the clean energy revolution that is already sweeping the world. Because with this leadership comes jobs, more stable energy costs, and protection of our environment for future generations.
Four years in, I asked you to come together to say one very simple thing, it is working.
Today in Massachusetts we lead the nation in energy efficiency. We’ve seen dramatic increases in the amount of renewable energy produced here in the Commonwealth. We are attracting tremendous amounts of private capital – second only to California in venture capital investments in clean tech – and creating thousands of jobs.
When we create energy locally, we don’t pay high economic and environmental costs to transport it here. Building clean energy here not only cuts greenhouse gas emissions but it also frees us from the volatile pricing of fossil fuels. Resources like wind and solar have zero fuel cost – so we know the price of the power will be stable.
We also focused on energy efficiency, making that our “first fuel” to meet new energy needs. The Green Communities Act made a fundamental change by requiring our utilities to “buy” energy efficiency whenever that is cheaper than building more power plants. So far, we are already investing about five times more in energy efficiency annually than we were in 2008 – and we are just getting started. Because of the progress we’ve made already, we are in a position to meet future development growth and power needs without having to increase power generation capacity, imagine that. That’s one of the reasons why last year, the American Council for an Energy Efficient Economy ranked Massachusetts first in the nation for energy efficiency, the first time any state has surpassed the great state of California.
For the $2 billion in energy efficiency investments we are making over three years, we are generating $6 billion in benefits for consumers – industrial, commercial, and residential. That’s a rate of return I will take any day – and it is just the beginning. The challenge now is to make sure every business and household takes advantage of these opportunities to save money, protect the environment and live more comfortably.
120 communities across the state have adopted clean energy building codes. That means they are poised to achieve up to 20 percent savings in any new construction. We are testing new approaches to build zero net energy buildings at competitive costs, and stretch codes that can pay back in energy savings in less than two years.
The deep energy retrofit of the 500-unit Castle Square Apartments in Boston’s South End is a national model. One tenant told us that before the upgrades she used her stove to heat her apartment. The project is expected to save residents $430 a year on their energy bills, save the complex overall $225,000 a year on heating and power, and create 200 jobs. With new insulation, windows, air sealing, and an energy efficient roof, Castle Square Apartments cut energy consumption by 72 percent and ensured that tenants will now use their stoves just for cooking.
The investments we make in energy efficiency are also dollars spent right here at home in Massachusetts, not sent out of state or out of the country. That means jobs. Jobs in energy efficiency grew by 9% last year. Take Next Step Living is a beautiful example. Located here in the Innovation District and founded just a few years ago, Next Step already employs 350 people in MA and plans on adding another 100 more in the next twelve months. You want to raise your estimates now? Now is the time. There are similar examples across the state. These are good jobs, at good salaries. They don’t all require advanced degrees or training in science and math. Not only does energy efficiency improve our environment – and help us meet our goal of reducing greenhouse gas emissions by 25% -- but it’s a big part of the reason why Massachusetts is coming out of the global recession faster and stronger than our competitor states.
If you ever wondered whether people want the opportunity to go green, consider this. A “Green Community” as many of you here know, is a designation created by the Green Communities Act, but it is not easy to achieve. The law set out tough statutory standards that require applicant communities to make a serious commitment to energy efficiency and other reforms. Today, nearly half of all of the people who live in the Commonwealth of Massachusetts now live in a Green Community. As of May 1st, 86 communities -- representing 42 percent of the population or 2.7 million residents -- have met this high standard, and received assistance from the state to reach higher. Communities from Pittsfield to Provincetown to Scituate, have committed to cutting municipal energy consumption by 20 percent – the equivalent energy consumption of more than 13,000 Massachusetts homes and the greenhouse gases from more than 16,800 cars. We will reach 100 Green Communities by this summer here in the Commonwealth of Massachusetts.
Since the Green Communities program started, 24 municipalities have finished projects such as lighting upgrades in schools and public buildings, solar installations, and energy education. These investments are projected to save more than $1.2 million a year in costs. That’s money municipal governments can use to fund schools, police and fire departments and other operating needs.
Here’s another way we’re getting off the pipeline – generating electricity from resources we have right here, like wind and solar. When I took office, Massachusetts had a nominal commitment to renewable energy, but had gotten precious little done. Indeed, we had a combined total of only about 6 megawatts of solar and wind energy here, barely enough to power a community college campus.
By the end of this month we’ll have 115 megawatts of solar power alone. That’s the equivalent of taking 9,500 cars per year off the road or producing enough electricity to power more than 18,000 homes. By the end of this year, we will be more than halfway to our 2017 goal of 250 megawatts, with five years left to hit the target.
We are doing this through initiatives like the Clean Energy Results Program, which has granted permits to more than 50 cities and towns to place solar panels on top of closed landfills, turning an environmental liability into a generator of energy and revenue.
State government is leading by example as well. The state auto fleet is increasingly powered by cleaner compressed natural gas. In four years, we have gone from 100 kilowatts of solar power at state facilities to more than 6 megawatts. We’ve installed panels at state colleges and universities, public health facilities, airports and water treatment plants. Doing that has cut state energy bills by over $800,000 a year already.
Solar panel costs have plummeted by two thirds in less than five years and, thanks to our incentives, the solar installation industry has boomed here in Massachusetts. Solar is now on its way to becoming a major employment engine for our state as well, and I am committed to maintaining a vibrant market here. This fall, we will review our progress toward our goals. And, in the short term, we are working with the Legislature to address the need to increase the net metering cap. I expect to see that on my desk soon and thank our friends in the Senate and House for their work on this.
As in solar, Massachusetts has also moved forward on wind power. We’ve seen a twenty-fold increase to 59 megawatts in just four years, enough to power nearly 19,000 homes. What is striking is how much of it has come from individual municipal wind turbines like the one that Patricia described in Scituate. Cities and towns are learning that they can save money from wind and are moving forward aggressively. And, we have seen companies like First Wind, headquartered here in Boston, become a major player in wind development around the country.
Here, too, we need to make some adjustments in our laws to keep up with the pace of success under the Green Communities Act. We are working closely with the Legislature for an increase in the long-term contracts requirements so that more projects get built in the next few years. And sooner or later, we will need a siting bill so we have a uniform predictable mechanism for local residents and developers alike to work out where wind installations do and do not belong.
Off-shore wind is still an opportunity worth pursuing and my support for Cape Wind is unshaken. Every single state along the East Coast is working to develop off-shore wind. The U.S. Department of Energy estimates it will create 43,000 new jobs by 2030. States with Democratic, Republican and Independent Governors are working with the Obama Administration on a collaborative process to responsibly site future offshore wind projects. But let me be clear: they are every one of them all racing for second place, Massachusetts will be first.
Following two and a half years of planning, consultation and public engagement, the Obama Administration and its Bureau of Ocean Energy Management has issued its final map of the Massachusetts Wind Energy Area. The area is located in federal waters some 14 miles south of Martha’s Vineyard. This is the largest proposed offshore wind development area along the East Coast and has already attracted responses from 10 offshore wind development companies.
If these projects are developed in a cost effective manner, we estimate the area could generate up to 4,000 megawatts of wind energy. To put that into context, 4,000 megawatts is enough electricity to power 1.7 million households in the Commonwealth Massachusetts and is equal to the electricity currently generated by every single coal-fired power plants currently operating in Massachusetts combined, we need to get this done.
We should also push forward into new areas of renewable power. Germany is famous for its commitment to wind and solar, but the remarkable fact is that they get more renewable power from “biogas” derived from food and yard waste than from the other two combined. My agencies are now putting in place the rules to create a similar boom in Massachusetts. The fact is we are throwing energy away today down the disposal or into the trash bin. Massachusetts companies like Harvest Power, which was founded just five years ago, now employ over 300 people and are building large facilities in places like Ontario and British Columbia. I want to see that investment here at home and I am confident we will become the best state for biogas production in the next few years.
I understand that some people think investments in clean energy cost too much. But that view is short sighted and doesn’t take in the costs of inaction. Electric bills of most Massachusetts ratepayers are down some 40% in the last three years. That won’t last: demand for oil and natural gas continues to grow in Asia and Latin America. So, we have a perfect window right now to make clean energy investments. To get different long-term results we have to do something different! We invest in energy efficiency to save money by using less energy. And we invest in homegrown renewable power to free ourselves from the rollercoaster of fossil fuels imported from out of state and out of the country, sometimes from places hostile to the United States.
By the way, ours is not such a breakaway approach to energy policy if you think about it in historic terms. In America, we have rarely left our energy future entirely to chance. From whale oil to petroleum, from distributing coal to distributing electricity, we have moved forward by examining our options and our opportunities, learning from our mistakes, and keeping our eye on what kind of future we want. And government has always had a role in that. Through R&D grants, tax credits and other mechanisms, state and federal governments have helped to stimulate the technological advances that brought about today’s lower prices. What we are seeing today is not a result of government inaction but rather of government support and partnership. As we shift away from fossil fuels to clean and renewable sources, government must continue to play its proper role.
And as we do, we are enabling a clean tech industry in Massachusetts and many of you are part of it. With our combination of brainpower, research universities and venture capital, we are perfectly positioned to be the global leader in clean tech the same way we are today in health care, the life sciences and high tech. If we get this right, the whole world will be our customer. And we’re getting it right.
We’re here at FastCap today and we thank Ricardo for welcoming us here today. Spun out of MIT and supported by grants from the federal government, as well as funding from the state the Arunas Chesonis Family Foundation, FastCAP is trying to use domestically abundant raw materials seeks to drive down the cost of electrified drivetrain vehicles. In 18 months they’ve grown from 2 employees to 25, and plan to double in size within the next year. They are bringing advanced manufacturing right here to the innovation district, and will begin installation of its proprietary pilot manufacturing line this summer.
FastCap is just one Massachusetts clean energy company. We’ve seen new companies in solar, energy storage, lighting, wind and biofuels. Take a walk around Greentown Labs as we did this morning if you want to see just how green energy is expanding here in Massachusetts. We are seeing international leaders in clean energy establish and expand their presence in Massachusetts. Today, 5,000 clean tech companies in Massachusetts employ 64,000 people. Those companies reported a 6.7% increase in hiring last year and expect to do it again this year.
Our strategy of fostering a clean tech industry is sometimes derided as “picking winners and losers.” In fact government is doing what it is supposed to do: helping the state make the most of our competitive advantages. Investing in innovation, education and infrastructure. Putting policies in place that encourage private investment to meet our shared needs, creating jobs and leaving the Commonwealth better than we found it. And as I said, it’s what Americans have always done to shape our energy future.
And by the way, let me tell you that I have heard enough about Evergreen – and for that matter about Solyndra. We are not always going to score. But we are never going to score if we don’t get in the game. One company that comes up short hardly discredits an initiative that has spawned 5,000 thriving companies and nearly 70,000 jobs and counting. Critics would do well to remember that I used to work in the oil industry, an industry that frequently drills dry wells. When the critics are ready to talk about the massive subsidies for Big Oil even when they drill dry wells, then I am ready to have a serious conversation about the tiny subsidies we use to foster a new, American-grown industry in alternative energy.
Whether we like it or not, there are going to be winners and losers when it comes to clean energy in the 21st century. The winners will be those places that did everything they could to be ready for change, that created an atmosphere for and a culture of innovation.
Make no mistake about it: I want Massachusetts to be a winner.
Winners don’t stand still, and if we want Massachusetts to stay a winner in clean energy, there is much more for us to do.
We need to put solar panels on more rooftops and closed landfills. We need to extend contracts to large-scale renewable energy developers.
We need to redouble our commitment to squeezing every bit of efficiency out of our energy use.
We need to continue our support of and participation in the Regional Greenhouse Gas Initiative, the single most successful cap and trade market in the country.
We need to stop throwing food waste into landfills and start turning it into renewable energy.
The Senate has approved a forward-looking bill that will keep Massachusetts a clean energy leader. I want the House to act on a similar bill, and help build on the state’s clean energy leadership and to do it before the end of this term.
There is no single path to a clean energy future. We need a portfolio of solutions that meet our energy needs, hold down our costs, and reduce our emissions. Massachusetts is well on its way. Wind, solar, hydro, and above all, efficiency – this is our clean energy future. But we do not know all of the elements of that future, people are thinking up new ideas, technologies and solutions every day. Massachusetts is showing the way. And by the way, our residents are reaping the benefits.
Last night, when I was home working on this speech, someone from an environmental organization knocked on the door. She asked for Mrs. Patrick and when I told her she was out, she started in on her appeal anyway. She said that she wanted us to renew our household membership because, she told me proudly, Massachusetts is first in America in energy efficiency and the course we were on she said was critical to our energy and environmental future. I said, “You know what I agree.” I thanked her and hustled her out the door – so I could get back to writing this speech. I should add that, when I finished my work on the draft, I renewed our membership online.
I have travelled the world promoting Massachusetts. We are known for being an innovator, a leader in defining the future. And I can tell you that everyone wants what we have. They admire us but they are not letting that stand in the way of their own ambition. From Santiago to Shanghai, from Maryland to Texas, everyone wants what we have. Thanks to the work and foresight of many of you in this room, we are well-positioned to ensure that the Commonwealth’s future is bright. That’s what this work is about. That’s what we’re trying to do here: leave our state a little better than we found it and meet our responsibility to the next generation. And I thank all of you for being a part of that.
Thanks very much I look forward to the conversation.