It’s a straight-forward problem with a complex solution.
Maine spends more than $4.5 billion a year on out-of-state fossil fuels that contribute to global warming. The fix is to power our economy with electricity from local, renewable energy sources.
The latest Maine Energy Plan sums it up: “While the electrification shift will increase Maine’s overall electricity use over time, total energy costs will decrease as Maine people spend significantly less on costly fossil fuels and swap traditional combustion technologies for more efficient electric options.”
But this solution, referred to as beneficial electrification, faces mounting obstacles. It assumes oil and gas costs will rise, electricity will be more affordable and new generation sources will be available on a schedule aligned with target dates.
And none of these aspirations account for the disruptions triggered by President Donald Trump’s war on renewable energy and the impact of shifting tariffs.
For instance:
Planners see offshore wind as the largest new source of Maine’s electricity in 2040. State goals call for 3,000 megawatts of capacity by then, the equivalent of three Seabrook nuclear plants. But a long-anticipated power contract for a floating offshore wind research project was recently put on hold, due in part to unpredictable costs and reversal of federal support for the industry. In mid-April the Trump administration issued an order seeking to stop the $7 billion Empire Wind project off New York, which is fully permitted and already under construction.
Northern Maine is a large, untapped source of wind power. Planners have been trying for decades to bring that power south. But the latest attempt to build a 1,000 megawatt wind farm connected to a $1 billion transmission line in Aroostook County failed in 2023, largely due to public opposition to the line and the inability to nail down the costs. Now the Public Utilities Commission is seeking a new proposal.
Transportation produces half of Maine’s greenhouse gas emissions. In response, Maine has aggressive goals for a rapid switch from gas-powered to electric cars. They include 150,000 electric cars on the road, five years from now. Maine has 1.2 million registered light-duty vehicles. Battery vehicles total 19,448, split almost evenly between all-electric and plug-in hybrids, according to the latest Recharge Maine figures. Together, that’s only 1.6 percent of the fleet, at a time when political and market forces beyond the state’s control are putting the targets farther out of reach.
In 2019, the Legislature approved ratepayer subsidies to attract commercial solar development. They worked so well that the state’s goal of developing 750 megawatts of “distributed generation” has already been exceeded. But the growing subsidies are becoming so costly to electric customers that lawmakers have been ratcheting back the program.
While acknowledging uncertainty in energy markets, notably offshore wind, the director of the Governor’s Energy Office, Dan Burgess, said renewable sources will over time help stabilize prices. As an example, he noted how charging electric vehicles at home when demand is low can increase utility revenue and lower the fixed costs of operating the grid.
Do goals matter?
Many of Maine’s goals are laid out in recently updated versions of the state’s climate action plan, Maine Won’t Wait, and the Maine Energy Plan from the Governor’s Energy Office.
They include generating all of Maine’s electricity with clean energy by 2040 and reducing oil use by 30 percent in 2030. Despite the progress Maine has made in cutting oil, petroleum still accounts for half the total energy consumed in Maine, chiefly for transportation and home heating.
“They almost don’t matter,” Rich Silkman, the former CEO of the Competitive Energy consulting firm in Portland, said of the various targets. “There’s no way we can meet those goals. We aren’t getting anywhere near where we need to be.”
Rising electricity prices can make the targets harder to hit. Heat pumps are an example. The state celebrated the installation of 100,000 units in 2023, two years ahead of its goal. Rebates from Efficiency Maine helped offset the cost to property owners, and will be instrumental for reaching the latest goal of installing 275,000 heat pumps by 2027.
But as heat pump penetration grows, Silkman said, so will electricity demand in the winter. Heat pumps only make sense if the electricity comes from cleaner sources and is less expensive.
While the state’s generation mix has been getting cleaner, that hasn’t been the trend for prices. Maine’s electric rates have risen sharply since 2021, following Russia’s invasion of Ukraine in 2022. Heating oil, meanwhile, has settled from the invasion highs, roiling heat pump economics.
In 2020, a home customer of Central Maine Power paid roughly 16 cents/kWh for electricity. The annual cost of running ductless heat pumps that year was $1,997, according to Efficiency Maine’s online calculator. Today, with electricity supply costs closer to 27 cents/kWh, the cost is $2,696 — a $699 price increase (unless the home is on a special heat pump rate, which has limited availability).
It’s still cheaper than burning oil at $3.60 a gallon in a boiler, which pencils out to $3,043.
But the narrowing gap worries Jim LaBrecque, a refrigeration expert who founded FlexWare Control Technology in Bangor. He convinced former Gov. Paul LePage to install heat pumps in the Blaine House in 2014.
“People who had a damn good return on investment with their heat pumps, that return has diminished,” LaBrecque said.
If electric rates rise, heating oil prices remain stable and financial incentives erode, LaBrecque doubts the state can meet its goals.
“The heat pump program is going to be damaged by these high electric rates,” he said. “You’re going to see sales falling off.”
Where will beneficial electricity come from?
Beneficial electrification also assumes the government will need to play a continuing role with subsidies and financing to help residents switch to heat pumps and electric vehicles. A report done last May for the utilities commission advised:
“While financing can help reduce the requirement for upfront capital, rebates or incentives are key to improving the business case of beneficial electrification products at point-of-sale and can ensure cost-effectiveness from the consumer’s perspective.”
Policymakers also are looking at other sources to meet Maine’s growing electricity demand, but some appear to be nonstarters.
Canadian power has contributed to New England’s energy mix for decades. The New England Clean Energy Connect line, set to be completed this year after overcoming legal fights, will bring 1,200 megawatts of new capacity into the region.
But the tariff chaos, a recent drought in Quebec and growing demand for electricity in the province suggest Maine can’t count on greater levels of exported Canadian hydro power in the near future.
In Maine, hydro power has long been a source of reliable electricity, accounting for roughly half of the state’s renewable energy production. But these dams are aging. Conservation interests see many of them as impediments to fish passage and healthy ecosystems, and want them removed. In any event, there are no big opportunities to expand hydro in Maine.
A planned revival of nuclear power in the United States is sparking interest in Maine. Utilities here closed Maine Yankee in 1997, after finding it was no longer economically viable. Today the focus is on small modular reactors. But while there are many designs and proposals, only a few are operating in the world, none are in the U.S., and the cost of power is unknown.
Clean energy advocates often note that many of Maine’s goals are codified in law. But that doesn’t assure they all can be realized. Land-based wind energy is a case in point.
A 2008 Maine law set a goal of installing 2,000 megawatts of onshore wind capacity by 2015. That didn’t happen. Even 10 years later, capacity is stuck at roughly 900 megawatts.
This story was originally published by The Maine Monitor, a nonprofit and nonpartisan news organization. To get regular coverage from the Monitor, sign up for a free Monitor newsletter here.
