Testimony in Support of Thermal Energy in Maryland's Renewable Portfolio Standard

HB 931 – Renewable Energy Portfolio Standard - Thermal Energy

Date: February 20, 2014
Committee: Economic Matters
SUPPORT

John Ackerly, President
Alliance for Green Heat
6930 Carroll Ave., Suite 407
Takoma Park, Maryland 20912
301-841-7755

Email: jackerly@forgreenheat.org

Position:

The Alliance for Green Heat urges the Economic Matters Committee to issue a favorable report on HB 931 either in its present form or with amendments offered by Delegate Stein.

Comments:

Thank you Chairman Davis and member of the Committee for this opportunity to testify.

We would also like to thank the Maryland Thermal Energy Task Force for the work they did and  we support their recommendations. While it was disappointing that the bill to include thermal woody biomass in the RPS last year did not pass, the creation of this Task Force was an excellent process to bring more coherence and consistency to thermal energy pathways in the RPS.

Any RPS that focuses on only one renewable energy pathway – electricity – creates unfair and mostly unintended consequences for other energy pathways, notably heat energy. If an RPS excludes heat energy, we lose leverage over a huge piece of the energy pie. Including thermal energy gives us many more ways to reduce fossil fuels and bring more renewable technologies to the table so that we can achieve even more aggressive renewable energy goals.

Delegate Dana Stein, sponsor of
HB 931

The Alliance for Green Heat focuses on residential wood and pellet heating which is by far the largest contributor of residential renewable energy in Maryland and the United States.

There are 12 million installations of wood and pellet heating appliances in the United States, compared to less than half a million solar panel installations. Biomass heat can tap into this huge residential renewable energy market because it is far more affordable than solar or geothermal. The problem is that most homes in Maryland and the US that use wood heat have old stoves that are too polluting. Including residential thermal biomass in the RPS will help thousands of Maryland families to be able to afford an upgrade to modern, cleaner and more efficient technology.

We have focused our incentives on solar and geothermal, which favor wealthy families and left out rural middle and low-income families who heat with wood and pellets. Including residential thermal biomass in the RPS will extend the benefits of the RPS to average Maryland families and not just focus those benefits on the wealthy families that install solar and geothermal and who are typically concentrated in Montgomery and Howard counties.

We believe all Maryland households should have the option to participate in our renewable energy future and that means including technologies like new, high efficiency EPA certified wood and pellet stoves in the RPS. We commend the Maryland Energy Administration for starting a grant program for wood and pellet stoves, like they have for solar, but this rebate is simply not enough for many families to overcome the initial purchase price of a system that can effectively heat their entire home. Residential thermal RECS will enable lower and middle-income Maryland families to benefit from this economic framework just like wealthy Maryland families.

For these reasons, we strongly favor reforming the RPS to be more cost effective and more technology neutral in achieving the renewable energy goals that are important to Maryland’s economic and environmental health and well-being. 

HB931 creates an incentive to more efficiently utilize our finite biomass resources, putting less pressure on the sustainability of our forests to meet increasing energy demands. HB931 will increase jobs, wealth, and economic benefits associated with using biomass for energy in Maryland.

We support the 65% efficiency minimum. If anything, with respect to residential wood and pellet heating, 65% is on the low side. Most residential wood and pellet heaters achieve 70% efficiency and the best ones are over 80%, measured in higher heat value (HHV) using the EPA endorsed CSA B415.1 calculation. Given the diverse stakeholders impacted by this legislation, we think 65% efficiency is fair and achievable for new, thermal systems.

We also strongly support excluding wood waste that includes treated or painted wood because most non-utility scale plants do not have the emission control systems that could handle wood waste without creating air quality problems.

Thank you and I would be happy to take any questions.

Click here for a pdf copy of the Fiscal Note analyzing the costs of this bill.

Generous Wood Stove Incentives May Return in France

Written by John Ackerly, President
Alliance for Green Heat

The recent election of Socialist François Hollande as France’s next President may herald a return of generous incentives for renewable energy, including wood and pellet stoves and heaters.

Ousted President Nicolas Sarkozy, a conservative, was a staunch supporter of nuclear power. Under his presidency, incentives for renewables were drastically reduced.

Unlike the United States, France and most of Europe includes thermal energy in its renewable energy standards. In France, wood heat was projected to produce 7.2 Mtoe (million tons of oil equivalent) of energy by 2020, whereas geothermal and thermal solar was only projected to produce a combined 2.9 Mtoe.

France has been active in promoting residential wood heat through its policies, which have so far been effective in increasing the number of households using wood. For instance, the country developed an extensive program to encourage the use of wood fuel for heating in collective housing and as a result, experienced an increase of 37.5% in this area between 2006 and 2007. In individual households, the Wood Energy Plan  in 2007 led to an increase of 82.5 % of the wood energy equipment sales.

In 2005, tax credits were set at 50% for equipment using renewable energy sources including efficient wood fired boilers, masonry stoves, etc. The sustainable development tax credit was planned through 2012, but the rates fell rapidly from 50% to being phased out altogether. For more info.

In 2005, stoves that were eligible for tax credits had to be at least 65% efficient. This standard was later increased to 70%. France uses the Flamme Verte eco-label, which sets some of the lowest standards of any eco-label in Europe, according to stove experts.*

In the US, the nationally recognized, government sanctioned label Energy Star doesn't have a program for wood and pellet stoves yet, so federal and state incentive and change-out programs are left to determine what emission and efficiency standards government funds should incentivize.

The national tax credit that expired at the end of 2011 set a 70% lower heating value threshold, but it did not stipulate how efficiency should be measured, nor did it require independent third party testing and reporting. Manufacturers were allowed to certify that their own products met the threshold (virtually every stove did).

It's far too early to tell whether incoming President Hollande will also work to increase efficiency and emission standards in France or whether the incentives will return to the 50% level any time soon. It may be more likely that the incentives would be in the 20 - 40% range.

Hollande also says that he will work to reduce France’s dependence on nuclear power to 50 percent by the year 2025. Currently, 75% of France's power comes from nuclear. It also exports some to Germany and other countries.

* Many European countries have adopted their own eco-labels to serve as minimum standards for the equipment that receives government incentives. Some of the stoves that met the 65% and 70% efficiency thresholds in France are widely regarded as being very basic stoves and would not receive incentives in many other European countries.