The U.S. Energy Information Administration reported last week that natural gas in storage increased by 88 Bcf. There was an injection for the same week last year of 74 Bcf while the five-year average injection is 72 Bcf. Total U.S. natural gas in storage stood at 3,170 Bcf last week, 15.4% less than last year and 6.3% lower than the five-year average for this time of year.
Yesterday, acting Boston Mayor Kim Janey signed an amendment to the City’s buildings ordinance, establishing enforceable emissions standards for all Boston buildings over 20,000 square feet. Passed unanimously by Boston City Council last month, the “City of Boston Building Emissions Reduction and Disclosure Ordinance” aka “BERDO 2.0” impacts 4% of buildings in the city – but that 4% produce approximately 60% of Boston’s building emissions.
“We are going to decarbonize our large buildings over the next 25 years, full stop,” acting council President Matt O’Malley commented during the meeting. “Beginning in 2025, and following every five years thereafter, through this ordinance we’ll be setting aggressive but achievable metrics ... for buildings to reach a substantial cut in their greenhouse gas emissions.”
This is not the City’s first attempt to set goals for eliminating carbon emissions, as an earlier version of “Boston’s Building Energy Reporting and Disclosure Ordinance” or “BERDO” required all residential and nonresidential buildings 35,000 square feet and larger to report their annual water and energy usage, but it did not have legislative capacity to levy fines on buildings that fail to conform. The new passage referring to by some as BERDO 2.0 defines a more detailed process that included a diverse group of stakeholders and expands the number of covered buildings and setting fines for noncompliance of $150 to $1000/day, depending on building size and category of noncompliance. BERDO 2.0 also establishes an Emissions Review Board, two-thirds of which will comprise members nominated by community groups. In addition, an Equitable Investment Fund will be established for emission-reduction projects that benefit environmental justice populations in Boston.
The new standard requires buildings to comply with emissions standards on an annual basis according to their classification and measured in metric tons of carbon dioxide equivalent (CO2e) emissions per square foot. For instance, manufacturing and industrial buildings must not exceed 23.9 kg of CO2e/square foot/year through 2029 with the allowance gradually reducing to 3.2 kg for 2045-2049. A few exemptions apply, such as residential buildings equal to or greater than 20,000 square feet and 15 units but less than 35,000 square feet and 35 units, which do not have to comply with the standards until 2031Buildings under 20,000 square feet are not impacted by the ordinance.
One potential way to mitigate emissions is purchasing renewable energy certificates and securing renewable energy power purchase agreements. The ordinance also sets an initial alternative payment standard at $234/kg CO2e, which building owners could opt to select. The compliance payment amount will be reviewed every five years.
The passage of the ordinance marks Boston as the latest in a series of cities to put forward regulations that mitigate the effects of climate change by reducing or eliminating emissions from buildings, following the attempts of the cities of like Berkeley, San Jose, and Oakland in California. Please contact your SourceOne representative to discuss cost impact and compliance strategies associated with BERDO.
An analysis by S&P Global Market Intelligence found that gas-fired power plant additions, driven by market incentives and reliability requirements, are due to outpace additions from solar and wind in the PJM interconnection over the next 5 years. S&P cites the high potential profit margins that natural gas “peaker” plants can attain during times of peak demand as a the primary driver in the planned projects.
Approximately 22,000 MW of natural gas capacity from is expected to be installed in PJM from 2021 through 2026. In comparison, 14,384 MW of solar and 9,443 MW of wind generation is expected come online during the same time period.
According to S&P, natural gas accounted for 38% of total power generation in the U.S. in 2020, but is expected to drop below 30% by the early 2030s.
There are ongoing debates about what other sources can facilitate the clean energy transition while maintaining operational reliability in PJM. One resource that appear to be coming of age over the next 10 years is offshore wind. In PJM, the ambitious 2,640-MW Virginia Beach Offshore Wind Project launched by Dominion Energy Inc. is slated to be completed in 2024. However, the strong ongoing investment in gas plants indicates the expectation that offshore wind resources will require, at least in the midterm, flexible gas generation to balance their availability.
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