First State RPS to Grant Renewable Heat Energy Same Incentive as Renewable Electricity.
The Biomass Thermal Energy Council (BTEC) today applauded New Hampshire Governor John Lynch and the state's Senate and House of Representatives for their passage of legislation (NH Senate Bill 218), a bill that adds thermal renewable energy to the state's renewable portfolio standard (RPS).
RPS programs have been adopted in some 29 states and the District of Columbia to provide incentives to develop energy from renewable resources such as wind, solar and biomass. Traditionally, these programs are implemented through electric utilities and focus exclusively on electricity.
New Hampshire is the first state to fully incorporate renewable thermal energy into its RPS program, and grant incentives to biomass, solar and geothermal project developers that are equivalent in value to those for developers of renewable electricity projects. Renewable energy certificates (RECs) will be worth up to $29 per megawatt-hour of useful thermal energy produced by qualified thermal projects, and the program is authorized at least through the year 2025.
"This is an important step forward in efforts to gain equal consideration for thermal energy," said BTEC Executive Director Joseph Seymour. "With little happening on energy policy in Washington, efforts must focus on state policy to achieve a more fuel and technology neutral incentive structure for renewable energy. New Hampshire has led the way in showing the nation that it is possible to enhance state RPS programs by adding thermal energy."
Examples of projects that will qualify are wood or wood pellet boilers heating commercial or institutional buildings, solar hot water arrays on hospital rooftops, or geothermal heating and cooling systems for nursing homes or correctional facilities. The NH provision will be available to residential, commercial and industrial applicants. Qualified projects will be able to utilize the revenues from the sale of RECs to finance the often high capital cost of these advanced renewable technologies, thus greatly reducing the payback time on initial investment.
The RPS will now offer the same incentives to local, community scaled high-efficiency biomass thermal projects that biomass-to-electricity plants currently have in many states.
The New Hampshire effort was spearheaded by NH Senate Majority Leader and former US Congressman Jeb Bradley, a long-time energy policy expert. Governor John Lynch, who in 2006 publicly endorsed the national goal of 25% of all energy from renewable resources by 2025 and backed the passage of the RPS in 2007, worked with the NH Public Utilities Commission in support of the legislation. BTEC member company New England Wood Pellet of Jaffrey, NH developed the concept and led efforts to organize advocacy in support of the provision.
"Now is the time for other states to consider New Hampshire's leadership," said Seymour. "Thermal energy represents over one-third of all energy consumed in America. Energy policy that only focuses on electricity or transportation fuels ignores the tremendous economic and environmental benefits of displacing our dependence on fossil heating fuels with renewable energy."
Some eight states have limited thermal provisions in their RPS programs (AZ, IA, MA, MD, NC, OH, VA and WI), but they are generally narrowly restricted. Several states, notably MA, MD and VT, are considering expanding their RPS programs to include thermal. The U.S. Energy Information Administration has estimated that the northeast US exports over $20 billion in consumer wealth annually due to its regional dependence on imported heating oil.
With passage of the bill, the NH Public Utilities Commission will now undergo administrative rulemaking to implement the thermal provision. Thermal projects will not qualify for the new incentives until after January 1, 2013.
"BTEC will be actively promoting the concept across the country through facts sheets, webinars and other promotional materials" added Seymour. "The addition of thermal to state RPS programs has been a major objective of BTEC. We will continue the fight to bring parity in energy policy to the use of wood and agricultural biomass in advanced heating technologies and combined heat and power."