For Immediate Release - May 03, 2011

Patrick-Murray Administration Files Proposed Biomass Energy Regulations

BOSTON - May 3, 2011 - The Patrick-Murray Administration today unveiled proposed regulations that would require large, wood-burning electricity generators to meet strict greenhouse gas emissions standards for clean energy financing, while paving the way for smaller, more efficient biomass plants to earn renewable energy credits. Filed with the Legislature for review today, the proposed regulations would ensure that only the most energy efficient wood-burning electricity generating plants will benefit from state-sanctioned clean energy financing.

"The product of rigorous scientific study and a robust public process, these regulations demonstrate, once again, that Massachusetts is way ahead of the pack nationally when it comes to clean energy policy," said Energy and Environmental Affairs (EEA) Secretary Richard K. Sullivan Jr. "With these regulations, we will ensure that limited dollars for renewable energy projects flow only to electricity generators that are helping the Commonwealth meet its nation-leading greenhouse gas reduction targets."

The Department of Energy Resources (DOER) regulations would set the stage for the Commonwealth to make up the difference in its Renewable Portfolio Standard (RPS) through the development of cleaner renewable energy technologies, especially land-based and offshore wind power and solar power.

In place since 2002, the Massachusetts RPS provides financial support in the form of Renewable Energy Credits (RECs) for new sources of clean, renewable energy. Under current law, the RPS requires Massachusetts utilities and other electricity suppliers to purchase 6 percent of their electricity from DOER-qualified renewable energy sources in 2011, with that requirement increasing 1 percent per year without limit.

"Unlike wind and solar power, biomass is a form of renewable energy that emits carbon," DOER Commissioner Mark Sylvia said. "These new regulations are designed to better align the state's financial incentives for clean energy with sources of power that will help us meet our goals."

DOER undertook to revise its RPS regulations last year, following an agency-commissioned independent study that looked at the environmental sustainability and carbon profile of burning wood to generate electricity. The six-month study was conducted by a team led by the Manomet Center for Conservation Sciences of Plymouth following issues raised by the public about proposed development of woody biomass generation units in western Massachusetts. DOER suspended consideration of qualification of biomass plants under the RPS pending the outcome of the study and resulting regulatory changes.

Concluded last June, the Manomet study found that the use of sustainably-harvested forest biomass to replace oil heat would likely begin to yield benefits in greenhouse gas emissions reduction in as little as five years. The same is not true for large-scale biomass-fired electricity, however, which, when compared with coal-fired electric plants, would result in a 3 percent increase in emissions by 2050, according to the study. Under the Global Warming Solutions Act, Massachusetts has set a greenhouse gas emissions target of 25 percent below 1990 levels by 2020, and is mandated to reduce greenhouse gas emissions across the economy 80 percent by 2050.

Based on the study results, the EEA Secretary directed DOER to revise its regulations governing eligibility of biomass plants for qualification under the RPS. The first draft of those regulations was completed in September and then revised following a public comment period to produce the draft final regulations filed with the Legislature today.

The proposed DOER regulations will be reviewed by the Committee on Telecommunications, Utilities and Energy for 30 days. The Committee's comments will then come back to DOER and the agency will further review the regulations for another 30 days before filing the final rules with the Secretary of State for promulgation early this summer, at which time they will take effect.

While the regulations do not impact permitting or ban the development of biomass energy in Massachusetts, they do set a high bar for qualifying to earn RECs under the Renewable Portfolio Standard. Class I RECs - which biomass energy plants were eligible to earn before DOER suspended qualification in 2009 - currently trade for $15 to $20 per megawatt hour (MWh) of energy produced, and are capped at just over $60 per MWh. Among the proposed changes is a mandate that, in order to qualify under the RPS, biomass plants must provide lifecycle greenhouse gas emissions analysis and be able to demonstrate emissions reductions of at least 50 percent over 20 years.

Another key provision requires biomass electricity facilities to operate at overall efficiency of 40 percent in order to qualify to receive one-half REC per MWh of generation, increasing to a full credit once a plant achieves an efficiency rate of 60 percent. Since current biomass electric-only power plants operate at efficiencies in the 20 to 25 percent range, it is expected that none of the five biomass plants - all outside of Massachusetts but within the New England power grid - will remain eligible for RECs under the Massachusetts RPS until they demonstrate compliance with the new rules.

Similarly, as currently designed, several proposed biomass electric plants in western Massachusetts would be ineligible to earn project financing through RECs.

This portion of the regulation is designed to redirect the biomass industry to projects that can operate effectively as combined heat and power (CHP) units - providing both electricity and thermal energy to displace fossil fuel used for heating, cooling, and industrial processes. These CHP projects tend to be smaller and designed to serve the on-site needs of industrial parks, institutional campuses, and community energy districts. The Manomet study found that the use of biomass for CHP facilities would result in a 25 percent reduction in greenhouse gas emissions in 2050 compared with heating oil.

Other key provisions of the proposed regulations would expressly exclude construction and demolition waste as an eligible biomass fuel under the RPS, and would limit RPS-eligible forest-derived fuel to primarily forest residues, limited thinning, and forest salvage resulting from storms or pest infestations, as opposed to harvesting whole trees for fuel. The regulations would also place a strict limit on the weight of eligible biomass fuel that can be removed, to ensure that sufficient soil nutrients remain in the forest.

Along with the draft final regulations, DOER today released two Guideline documents, "Forest Derived Eligible Biomass Woody Fuel Guideline," and "Guideline for the Calculation for Overall Efficiency and Lifecycle GHG Analysis." Once the regulations are promulgated by the Secretary of State, DOER will provide outreach and webinar training to both the forestry and biomass industries.