Vermont and renewable energy

Summary: Vermont has relied largely on fuelwood as a source of energy in the past and continues to have a comparatively high demand for renewable energy, which includes nuclear, hydropower, and efficiency resources in addition to biomass.

Prior to the arrival of European settlers in the 1600s, Vermont and the rest of New England were almost entirely forested. Wood was the primary source of energy for both indigenous groups and early settlers. As the region’s population grew over the course of the eighteenth century and as towns and agricultural lands expanded, widespread deforestation occurred.

During the mid-1800s, westward migration left cleared lots fallow, and new growth began to creep back. Around the same time, preservation and forest management began, and efforts to harvest timber at more sustainable levels gained momentum. As of a 2024 estimate by the government of Vermont, 78 percent of Vermont’s total land area was forested. Woody biomass continues to be a major source of fuel for Vermont, accounting for roughly 20 percent of its net generation. The Biomass Energy Resource Center (BERC), based in Montpelier, the state capital, is a national nonprofit organization that advocates for the sustainable use of biomass as a source of energy.

The Energy Information Administration ranked Vermont in the bottom sixth of states in per capita energy generation. About 30 percent of its total energy demand is for residential purposes, largely for heating during the state’s cold winters. Nearly 34 percent of the state’s energy is consumed by the heating industry.

Electricity

Vermont has a relatively low-carbon electricity mix. Its primary source of electric power, as well as energy overall, is nuclear energy. About 55 percent of the electricity consumed in the state used to be generated at the Vermont Yankee Nuclear Power Plant, a 1,912 megawatt boiling-water reactor located in the southeastern corner of the state. By mid-2017, renewable energy sources, including biomass, wind, solar, and landfill gas, accounted for 99.6 percent of the net electricity generated in the state and approximately 45 percent of the electricity consumed. One major source is imported Canadian hydropower. The remainder of the state’s electricity generation was fueled by petroleum and natural gas. Vermont has also led the nation in energy production from methane digesters. Through 2024, Vermont maintained its status as the state with the largest share of its electricity generated through renewable means.

First licensed in 1972, the Vermont Yankee Nuclear Power Plant faced substantial opposition over the years. In 2010, after radiation leaks were detected outside the plant, the state legislature voted to deny the plant an extension of its license, which was set to expire in 2012. Despite public disapproval, the Nuclear Regulatory Commission announced in 2011 that the plant would be relicensed for another twenty years. This announcement was particularly unpopular because it was made the day after an earthquake and tsunami caused the disaster at Japan’s Fukushima reactors, which were of the same design and had been built around the same time as Vermont Yankee. Ultimately, Vermont Yankee ceased operations in December 2014, and full closure was slated for 2030. The challenge of storing the spent fuel remains, however.

Efficiency

Vermont is the first state in the country to have an “efficiency utility.” Efficiency Vermont is administered by the Vermont Energy Investment Corporation (VEIC) through an appointment by the Vermont Public Service Board. VEIC is a nonprofit energy services organization founded in 1986 whose mission is to reduce the environmental, social, and economic costs of energy consumption by promoting cost-effective renewable and efficient energy resources. It administers a number of energy efficiency programs and also has the ability to sell energy efficiency resources to the power grid.

Vermont is part of the greater New England power grid, which has established incentives to encourage the use of energy efficiency to ensure the reliability of electric power. In the 1990s, Congress and the Federal Energy Regulatory Commission (FERC) decided to restructure the wholesale power market to allow generation services to be provided competitively, in the hope of driving down prices and improving the quality of services. FERC established Independent System Operators (ISOs) to oversee this restructuring and manage the competitive supply market on a regional basis. ISO New England (ISO-NE) is responsible for ensuring that there is always enough electricity at any given moment to meet demand in the six New England states: Connecticut, Maine, Massachusetts, New Hampshire, Vermont, and Rhode Island.

One of the ways ISO-NE ensures that the lights are kept on in New England is by buying long-term-capacity contracts on the Forward Capacity Market (FCM), which was launched in a final phase in July 2010. This is a fairly straightforward process: ISO-NE estimates how much electricity it will need in a few years and then pays suppliers for the promise that they will be able to produce enough to meet those needs. ISO-NE’s FCM also recognizes demand resources (energy efficiency, distributed generation, and load management) as capacity eligible for these long-term contracts, an innovative approach that enables competition between conventional suppliers and suppliers that have simply found a way to commit to reducing demand for power. VEIC participates in this market by submitting a portfolio of energy conservation measures to be implemented over a period of time and estimating how much capacity these measures will be able to reduce. ISO-NE then runs the portfolio through a screening process and decides which measures to approve. Proceeds from the contract that is negotiated are retained by the utility, Efficiency Vermont, and used to benefit ratepayers in Vermont.

Bibliography

International Organization for Standardization New England. “History.” www.iso-ne.com/aboutiso/co‗profile/history/index.html. Acessed 12 Aug., 2024.

Jenkins, Cheryl, Blair Hamilton, and Chris Neme. “Playing with the Big Boys: Energy Efficiency as a Resource in the ISO New England Forward Capacity Market.” Paper presented at the ACEEE Summer Study in Energy Efficiency in Buildings, Pacific Grove, California, August 17–20, 2008.

"Overview of Vermont's Forests." Vermont, 2024, fpr.vermont.gov/forest/vermonts-forests. Accessed 12 Aug. 2024.

"Vermont." Energy Information Administration, 16 Nov. 2023, www.eia.gov/state/analysis.php?sid=VT. Accessed 12 Aug. 2024.