Renewable Portfolio Standard (RPS)

Transcription

1 Renewable Portfolio Standard (RPS)

2 A Brief Overview RPS bill passed in 2004 Intent: (1) recognize the economic, environmental, fuel diversity, and security benefits of renewable energy resources; (2) establish a market for electricity from these resources in Maryland; and (3) lower the cost to consumers of electricity produced from these resources. Substantive Intent: Bring large amounts of utility scale wind, solar, other zero-carbon resources into the Maryland Grid. Maryland one of the first states to pass an RPS Today, 30 states and DC have enforceable RPS 7 states have voluntary goals

3 New Jersey 2011 Tier-I Compliance Solar 6% Biomass Gas 1% Landfill Gas 18% Wind 75% Source: PJM-Gats: RPS retired certificates

4 Illinois 2011 Tier-I Compliance Waste Coal 5% Landfill Gas 11% Hydro 11% Wind 73%

5 Delaware 2011 Tier-I Compliance Solar 0% Black Liquor 4% Landfill Gas 14% Hydro 8% Wind 74% Source: PJM-Gats: RPS retired certificates

6 Ohio 2011 Tier-I Compliance Ag. Byproduct 0% Biomass Liquid 0% Compressed Methane 0% Solar 3% Wood Waste 12% Black Liquor 20% Landfill Gas 16% Wind 46% Biomass Gas 2% Hydro 1% Source: PJM-Gats: RPS retired certificates

7 Maryland 2011 Tier-I Compliance MSW 4% Blast Furnace Gas 1% Wood Waste 12% Solar 1% Black Liquor 33% Wind 14% Landfill Gas 9% Hydro 26% Source: PJM-Gats: RPS retired certificates

8 What is Black Liquor? Industrial by-product of the pulpwood and paper mill process. Although it is not clean, black liquor is a waste product that would otherwise be discharged into the environment. In 1930s, G.H. Tomlinson invented a recovery boiler to turn black liquor into electricity. All black liquor facilities that qualify as renewable energy in Maryland were built in1950s, 60s, 70s, and 80s without extra ratepayer assistance

9 What is Wood Waste? Includes - but not limited to - mill residues, brush, yard waste, pallets, and left overs from saw timber forestry. Incineration of wood waste releases CO2, nitrogen oxides (NOx), particulate matter (PM), hazardous air pollutants (HAPs), lead, sulfur oxides (SOx)Volatile Organic Compounds (VOCs), and Carbon Monoxide (MO) The average age of wood waste facilities that that qualify for MD s RPS is 32-years old, with a range from 18 to 65 years old. The efficiency of wood wasteto-energy facilities ranges from lows of below 20% to highs above 90% Year Net State Generation, MWh From Combustible Fuel Sources CO2 Emission Factor, kg/mmbtu (EPA) Tire Derived Fuel (TDF) Black Liquor (BLQ)* Wood Waste (WDS)* Bituminous Coal (BIT) Municipal Solid Waste (MSW) Residual Fuel Oil (RFO) 78.8 Waste Oil (WO) 74 Distillate Fuel Oil (DFO) Natural Gas (NG) Landfill Gas (LFG) 52.07

10 Black Liquor and Wood Waste Facilities that Qualifying for Maryland s RPS Black Liquor: P.H. Glatfelter Spring Grove, P.H. Glatfelter Chillicothe, Luke Mill, Covington Facility, Hopewell Mill, Franklin Mill, West Point Mill. Only 1 out of 7 of these facilities (Luke Mill) is located in Maryland All of these generating facilities began commercial operation between 1958 and Wood Waste: Covington Facility, Hopewell Mill, Coshocton Mill, Multitrade of Pittsylvania LP, Viking Energy of Northumberland None of these facilities are located in Maryland All of these generating facilities began commercial operation between 1980 and 1994.

11 Solution Pass a bill that: Removes all old and polluting biomass facilities from Maryland s tier-1 RPS. Ensures that only new high-efficiency biomass systems qualify for tier-1 in the future. This would help to ensure that renewable energy dollars go to new facilities using the best technology. Investing in new clean technology instead of old dirtier facilities promotes cleaner air, economic growth, job creation, and energy security.

12 2020 MD RPS Compliance (Current Trajectory) 2020 MD RPS Compliance (without black liquor and wood waste) Other Bio 0.4% Solar Blast Furnace Gas 11% 1% Waste Incineration 5% Hydro 4% Landfill gas 6% Blast Furnace Gas 1% Other Bio 0.4% Waste-to- Energy 5% Hydro 4% Landfill gas 6% Solar 11% Black Liquor 9% Wind 54% Wind 73% Wood Waste 10% 2020 GGRA Reduction: 6.9 MMtCO2e 2020 GGRA Reduction: 8.3 MMtCO2e DIFFERENCE: At least 1.4 Million Metric tons of Greenhouse Gas Emissions

13 What is the jobs impact? Removing millions of black liquor and wood waste credits from the regional RPS market will necessitate the construction of new facilities to keep pace with increasing regional RPS requirements. According to the Maryland Energy Administration, that will encourage the construction of up to 1,400 megawatts of new wind power. That means thousands of temporary and permanent well-paid union jobs. The Western Maryland Building & Construction Trades Council built the Criterion Wind Farm and the Roth Rock Wind Farm in Western Maryland. It is reasonable to conclude that steel workers and building trades workers would benefit greatly from the passage of this bill.

14 What is the ratepayer impact? According to the Maryland Energy Administration: None Maryland participates in an interstate market for renewable energy where the price of compliance is set by available supply and each state s RPS demand. There is currently excess supply in the regional renewable energy market. As RPS requirements increase, new supply will be needed. Evidence shows that the growth in renewable generation will be met with new wind power. That new wind power will set the cost of compliance for ratepayers and utilities. The eligibility of black liquor and wood waste has no effect on the future price of wind power. Ratepayers will pay the same amount in 2022 regardless of what happens to black liquor and wood waste. Restricting black liquor and wood waste ensures that RPS money is spent on new clean energy instead of subsidizing old polluting energy.

15 What about Maryland s paper mill? Maryland s Luke mill would be grandfathered in Tier 1 through After 2018, the Maryland plant will be kept whole with guaranteed state resources equivalent to what they would have made by staying in the RPS. That Maryland facility Luke Mill is the only company in Maryland that could be conceivably impacted by this bill, and it will continue to receive support in perpetuity.

16 Conclusion Reasons to limit qualifying biomass These facilities have operated for decades without ratepayer assistance. These facilities divert investment away from new clean energy like wind power. Black liquor and wood waste release more CO2 and other pollutants than fossil fuels per unit of energy produced, and they suppress investment in zero-carbon energy. Their removal will reduce at least1.4 million metric tons of greenhouse gas emissions annually. Restricting these sources will create jobs and economic growth by directing RPS investment towards new clean energy. There will be virtually no ratepayer impact. Maryland s only paper mill is protected in perpetuity