2019 EAN Annual Progress Report for Vermont: Key Findings

2019 EAN Annual Progress Report for Vermont: Key Findings

2019 EAN Annual Progress Report for Vermont: Key Findings

1. Bold action is needed to meet Vermont’s energy and emissions commitments

The Energy Action Network and the State of Vermont share a commitment to achieving the goals set forth in Vermont’s 2016 Comprehensive Energy Plan (CEP), including having 90% of our total energy use come from renewable sources by 2050. The increasing renewability of our electricity sector has brought us very close to achieving the first CEP milestone — 25% renewable by 2025.2 This represents real and important progress. However, reaching 90% by 2050 will require far more progress in the transportation and thermal energy sectors.

After trending upward between 2010 and 2015, Vermont’s greenhouse gas (GHG) emissions finally began declining in 2016. However, as of 2016, we are still 13% above our 1990 levels. Almost 60% percent of the reduction in statewide GHG pollution in 2016 came from a decrease in the use of fuel oil and propane for home and building heating, largely due to a warmer winter. Vermont’s increasingly clean electricity sector also played an important role in the decline and was responsible for 40% of the reduction in statewide emissions from 2015-2016. Forecasts for 2017 and 2018 show that electricity sector emissions will continue to experience a durable and precipitous decline—to 83 percent below 1990 levels by 2018—primarily due to Vermont’s Renewable Energy Standard, which went into effect in 2017 and requires an increasingly clean and renewable electricity supply through 2032.4 The RES should help get us more than a quarter of the way toward meeting our commitment to the Paris agreement.

1.Vermont Department of Public Service. 2016 Comprehensive Energy Plan. 2. Vermont Department of Public Service. 2016. Comprehensive Energy Plan 2016. 3. Vermont Agency of Natural Resources. Department of Environmental Conservation: Air Quality and Climate Division. January 2020. 2019 Greenhouse Gas Emissions Inventory Brief (1990-2016). 4. Vermont Department of Public Service. 2020. Annual Report on the Renewable Energy Standard.

2. We have the technology and know-how

In our 2018 report, EAN modeled one path that Vermont could take to reduce emissions and meet our commitment to the Paris Climate Agreement using currently available energy technologies and proven best practices. The model builds upon original targets set in the Comprehensive Energy Plan and increases them proportionally to meet our emissions reduction target. For this year’s report, we have updated the model to account for decreased emissions between 2015 and 2016.

In the chart below, you can see how all these strategies collectively reduce emissions leading up to our 2025 target. If Vermont puts fewer than 90,000 EVs on the road, for example, we would have to make up the difference elsewhere to meet our goal.

The “Other Reductions” section of the model above recognizes the need for additional carbon reduction strategies beyond those listed, including:

1.Vermont Agency of Natural Resources. January 2020. 2. Transportation data is the latest available from the Energy Information Administration (EIA) (2019), Vermont Agency of Transportation/UVM Transportation Research Center (2019), and Drive Electric Vermont (Oct 2019).3. Thermal data from EIA (2019), Efficiency Vermont (2019), Department of Public Service (2019), Biomass Energy Research Center (2019), Department of Forests, Parks & Recreation (2019). 4. Electric data from the Department of Public Service (2019) and ePUC (Certificates of Public Good: September 2019).

3. Getting off fossil fuels is good for Vermont’s economy

Over the last decade, Vermont has spent an average of about $2 billion a year on fossil fuels, with 75% of those dollars draining right out of state. For context, Vermont’s entire Gross State Product was approximately $33 billion in 2018.

The Vermont Agency of Commerce and Community Development (ACCD) estimates that if Vermont achieves the scale and pace of energy transformation modeled in EAN’s “Path to Paris” for the transportation and thermal sectors, we will reduce the amount of dollars sent out of state by over $1 billion between 2020–2035, primarily as a result of buying less fossil fuels.1 We would also increase direct investment in the VT economy by about $323 million, primarily from increased investments in weatherization.

Since Vermont imports 100% of the fossil fuel we use, the vast majority of the money we spend on fossil fuels (up to 80 cents of every dollar, depending on the fuel) leaves the state. In contrast, all of the efficient and renewable alternatives keep a much higher share of our energy dollars recirculating in Vermont, helping employ our neighbors and improving our state economy.

It’s good news for Vermont consumers too

For the Vermonters who take these efficient and renewable energy actions, individual savings will vary but could be nearly $10,000 per household from 2020–2035, or over $650 per year.2

All together, if the transportation and thermal actions in EAN’s Path to Paris were completed at scale by 2025, the Vermonters who undertake them are projected to save a total of nearly $800 million between 2020-2035. To achieve this, from here on out we have to stop purchasing new gas and diesel vehicles and new fossil fuel heating systems. We need as many as possible of the approximately 12,500 heating system replacements per year in Vermont to be renewable and as many as possible of the 35,000 to 40,000 new vehicles purchased in VT each year to be EVs.

Vermonters who opt for an EV instead of a gas vehicle or install a cold climate heat pump heating system to displace fossil fuel use save money over the lifespan of the investment because of the low and stable prices that electricity offers.

An equitable transition

While some Vermonters have the means to make more climate-responsible purchasing decisions that will save them money in the long run, many others lack the funds to make the up-front investment to change their vehicle or heating system. That is why, to ensure an equitable energy transition, it is imperative that assistance—from incentives to low-interest financing—is provided to lower and middle income Vermonters, so that we can all benefit from the savings this transition offers.

1.Vermont Agency of Commerce and Community Development. 2020. Dollar Figures in Present Value, 2020 dollars. 2. Assumes purchasing a new EV instead of a new fossil fuel vehicle, installing a multi-head cold climate heat pump system (36,000 BTU) to displace 75% of fossil fuel use for home or building heating, and replacing an old electric water heater with a heat pump water heater. Savings are lifetime savings (2020-2035) represented in 2020 dollars.

4. Vermonters can reduce their emissions and save money

On average, each Vermonter is responsible for over 15 tons of GHG pollution per year.1 Fossil fuel use is the primary driver of these emissions. The biggest single source of our pollution comes from how much and in what kind of vehicle(s) we drive. The average Vermonter is responsible for between 5-6 tons of carbon emissions from driving, with those who drive more miles and/or less efficient vehicles being responsible for the most pollution and those who primarily walk/bike or use public transit being responsible for the least.

The next largest source of GHG pollution comes from how we heat our homes and buildings, with the average Vermonter responsible for 4-5 tons of GHG emissions, with those who heat inefficiently and/or with fuel oil, propane, or natural gas responsible for the most pollution and those who heat efficiently, especially with advanced wood heating technology or cold climate heat pumps, responsible for the least.

It’s simple: fossil fuels are the problem and most of our fossil fuel use is from vehicles and heating systems. For those Vermonters who have the means, investing in one or more of these actions can reduce emissions in a cost effective way. For those who don’t have the means, existing and additional incentives are necessary, both practically speaking and in the interest of equity. Both ACCD and the Public Service Department have found that our fossil fuel dependence is much more costly to Vermonters and the Vermont economy than the efficient and renewable alternatives, even without accounting for the “social costs” of greenhouse gases, from health impacts to other “externalities.”

We have already reached the point where, even on a direct cost/benefit basis, the majority of the time it saves you money and improves the Vermont economy to invest in weatherization, purchase an electric vehicle instead of a new fossil fuel vehicle, install a heat pump water heater, and choose cold-climate heat pumps and/or efficient wood heating systems instead of installing new fossil fuel heating systems.

1. Vermont Agency of Natural Resources. January 2020. To align with international standards, every state or country that conducts a GHG inventory uses a “sector-based” approach that ac- counts for the emissions that occur within the boundaries of its territory. This approach avoids double-counting of emissions in reporting to bodies like the United Nations’ Intergovernmental Panel on Climate Change (IPCC). However, we also know that when we purchase goods and services, our consumer demand makes us responsible for emissions throughout a supply-chain, back to the sources of where and how they were produced. That is why some states — includ- ing Minnesota and Oregon — supplement their official “sector-based” GHG inventory with a “consumption based emissions inventory” (CBEI), to provide a fuller view of how its state is responsible for climate pollution. Vermont currently only utilizes a sector-based inventory. How- ever, based on the results of other consumption-based emissions inventories, it is very likely that no matter how you measure Vermont’s emissions, the two largest sources of our climate pollution come from vehicles and heating appliances. 2. Sources: Household Savings: Agency of Commerce and Community Development, Tons of CO2 Avoided: Public Service Depart- ment. 3. Assumes, as the State of Vermont does, that wood is a carbon neutral fuel source. Also assumes use of wood pellets sourced from the Northeast. If you prefer the life-cycle emissions calculation approach, as utilized by SIGNAL on pg. 22, the tons of CO2 avoided figures for wood heat presented here might decrease by half. Either way, locally sourced wood pellets are a much less carbon intensive heating source than fuel oil, propane, or natural gas.

5. We need a total energy policy framework

In 2019, EAN brought together the Vermont Energy Future Initiative, a diverse, cross-sector group of leaders to explore how Vermont can meet its 2025 total energy and emissions reduction commitments while creating a more just, thriving, and sustainable future for Vermonters. The group concluded that what is most needed at this crucial point in time is a total energy policy and regulatory framework that covers transportation and thermal as well as electricity.

Policy + technology can lead to rapid change

Members of the Initiative explored the history of the transformation of Vermont’s electricity sector, which shows that maturing renewable energy technology, coupled with the adoption of a policy and regulatory framework (such as Standard Offer, Net Metering, and the RES) that provides concrete goals, can drive a very rapid transition in our market economy. The group looked at similar case studies of transformation in the transportation sector in Norway and in the thermal sector in Upper Austria. In each case, once a baseline of technological capability existed, the next key intervention that unlocked progress was a policy and regulatory framework that mandated certain targets be met, sending clear market signals to spur rapid adoption of clean technology.

Expanding success in the electricity sector to the transportation and thermal sectors

One of the greatest barriers to meeting our renewable energy and emissions reduction commitments is that Vermont policy and regulatory requirements are primarily focused on just one of our energy sectors: electricity generation. However, our continued use of fossil fuels to meet our transportation and thermal energy needs means that overall emissions continue to increase, with these two sectors currently accounting for over 70% of Ver- mont’s GHGs. To meet our goals, Vermont needs to create the policy and regulatory framework to require fossil fuel reduction, promote efficiency, and invest in the adoption of efficient and renewable transportation and heating alternatives, especially for low-income Vermonters who might not be able to access them.

1.Vermont Community Energy Dashboard and Lawrence Berkeley National Laboratory. 2019. 2. Vermont Agency of Natural Resources. January 2020.