Thursday, July 12, 2012

State Sovereignty: New Hampshire’s Bold RPS Move

Better BTU is launching a series of blog posts that will appear over the next few months to examine RPS standards in some of the 29 states that have them and how it helps or hurts the development of the biomass industry as a whole. We’ll also examine the pros and cons of establishing a national RPS and invite you to contribute your own thoughts to this discussion.

New Hampshire has received a lot of press in the past two weeks after Governor John Lynch and state government passed legislation that adds thermal renewable energy to the state’s renewable portfolio standard. By granting the same incentives to biomass, solar thermal and geothermal projects that have been available to renewable electricity projects, the Granite State becomes the first state to fully incorporate renewable thermal energy into its RPS program.

“This is an important step forward in efforts to gain equal consideration for thermal energy,” Biomass Thermal Energy Council Director Joseph Seymour said as he pointed out that thermal energy makes up more than one-third of all energy consumed in the U.S. 

This is a bold move for New Hampshire. Only eight other states have thermal provisions in their RPS programs and they are often limited, such as the rule that a facility must provide combined heat and power in order to qualify for RECs in North Carolina.  The eligibility of thermal projects will likely drive the price of RECs down, as more projects are able to qualify for the credit. The benefit is that thermal technologies that might have been on the edge of economic viability before will now be viable as a result of the extra funds it will receive from selling RECs.

Former US Congressman and current New Hampshire Senate Majority Leader Jeb Bradley was the brainchild behind the addition of thermal energy to the RPS standard. He probably noted the same thing Better BTU has – that steam only projects weren’t getting financed in the North because of the low price of natural gas. The change means that beginning on Jan. 1, 2013, approved thermal energy projects will receive renewable energy certificates that will be worth up to $29 per Mh of useful thermal energy. The program has been authorized through 2025.

What we will likely see in New Hampshire is a shift from electricity to thermal energy projects over the next few years until the state can fill its RPS quota. We think this could be a great move for the present but could have potential side effects in the long run for the program.

Before the state changes its official motto to “Live Free and Make Thermal Energy” we’d like to hear from you. Do you think this move poses New Hampshire as a leader in RPS standards? Do you see this as a good move and how will it affect the development of the industry?

For Further Reading:

NH Adopts Full Thermal Incentive for Renewable Portfolio Standard –Biomass Thermal Energy Council; June 27, 2012

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