VIA ELECTRONIC DELIVERY [email protected] March 27, 2015 To the Specified State Agencies and Electric Distribution Companies in Connecticut, Massachusetts and Rhode Island Regarding the Draft Request for Proposals (RFP) for Clean Energy and Transmission To Whom it May Concern, Thank you for the opportunity to comment on the Draft RFP for Clean Energy and Transmission. We congratulate the states of Connecticut, Massachusetts and Rhode Island for embarking on this regional procurement, which will create new, affordable opportunities for renewable energy development while offering rural economic development benefits throughout New England. BPA is the national advocate for sustainable biomass power. BPA’s 43 member companies include nearly all New England-‐based facilities including biomass facility owners and operators, suppliers, equipment manufacturers, project developers, supporting industries and other associations. Our members provide the country with enough electricity to power nearly 820,000 homes and businesses, and provide nearly 4,800 Americans in 20 states with full-‐time jobs. Here in New England, biomass represents 33% of the installed capacity of all renewable energy, second only to on-‐shore wind. Biomass power production has been a major contributor to meeting the states’ requirements for renewable energy ever since they were established in 1998. Biomass plants create power by combusting residues from harvesting operations such as tree tops, trunks and limbs (that are otherwise left in the forest to decompose and emit carbon), or woody material from land clearing or wood product manufacturing (that is otherwise sent to landfills where it decomposes and releases methane, a highly potent greenhouse gas). Every year, new wood growth in New England’s forests exceeds the wood removed. By purchasing wood waste material, biomass power plants provide a vital source of revenue for landowners. It keeps forest land economically valuable and lessens the pressure on owners to clear their land for shopping malls or housing subdivisions. Retention of forested land is critical to meeting New England’s carbon reduction goals because healthy, growing forests absorb huge amounts of carbon. Additionally, the production, collection and delivery of wood waste material create a significant number of jobs for persons with forestry and waste handling skills. 1. The Energy Benefits of Biomass Power Biomass power plants are a valuable source of base load renewable power, making use of waste wood that is continuously regenerated and is one of the only fuels indigenous to New England. Biomass plants are a “baseload” power source, meaning they produce electricity whenever it is needed. Other renewable technologies such as wind turbines and solar panels are “intermittent” power sources because they only produce electricity when the wind is blowing or the sun is shining. Intermittent power requires other generation sources to provide “back up” power to achieve a continuous and reliable supply of power (often causing additional carbon emissions). Biomass power also contributes to fuel diversity, serving as a hedge against the region’s challenges with respect to price volatility, reliability and overreliance on natural gas. Promoting biomass generation through the RFP is important given the Region’s energy challenges. New England faces unprecedented challenges in meeting its electricity needs. ISO-‐NE estimates that by 2017 some 3,300 MWs of current generation, roughly 10% of existing capacity, will shut down, and by 2020 an additional 5,000 MWs are at risk of closure. Meanwhile, using natural gas for annual power generation has increased from 18% in 2000 to 46% in 2013.1 Not since the dominance of hydroelectric power in pre-‐Civil War New England has a single fuel dominated our electric generation mix as completely as natural gas does now. Constraints on the ability to deliver sufficient gas supply to the state has resulted in large increases in electricity prices last winter, this winter and for several winters to come. Denying RPS eligibility for biomass power plants at the same time these challenges are bedeviling the region makes no sense. 2. The Environmental Benefits of Biomass Power There is a growing consensus among scientists and policymakers that sustainably sourced “waste” biomass—the tops, limbs and byproducts of forestry harvests – does not introduce new carbon into the existing natural carbon cycle and in fact plays an important role in climate change mitigation. a. Federal Biomass Policy Both the White House and EPA have emphasized the importance of biomass energy in reducing carbon emissions from fossil fuels, and highlighted the need for states to rely upon biomass in meeting carbon reduction goals under the Clean Power Plan. The White House, in its National Climate Assessment released in May 2014, called attention to the role of sustainable forest biomass: Forest biomass energy could be one component of an overall bioenergy strategy to reduce emissions of carbon from fossil fuels, while also improving water 1 Gordon van Welie, ISO-‐NE President and CEO, presentation to the New England Electric quality and maintaining lands for timber production as an alternative to other socioeconomic options. 2 Critically, the report noted the role of biomass in keeping forests healthy enough to continue to serve as a carbon “sink” that can capture hundreds of millions of tons of carbon per year. It also observed that bioenergy has the potential of displacing a not insignificant 30 percent of the nation’s current U.S. petroleum consumption. More specifically, a recent memorandum from the U.S. EPA’s Acting Assistant Administrator of the Office of Air and Radiation to its regional air division directors states: ...the Agency expects to recognize the biogenic CO2 emissions and climate policy benefits of waste-‐derived and certain forest-‐derived industrial byproduct feed stocks, based on the conclusions supported by a variety of technical studies, including the revised [Framework for Assessing Biogenic CO2 Emissions from Stationary Sources]. In addition, given the importance of sustainable land management in achieving the carbon reduction goals of the President’s Climate Action Plan, the EPA expects that states’ reliance specifically on sustainably-‐
derived agricultural-‐ and forest-‐derived feed stocks may also Biomass Policy in New England. 3 b. Biomass Policy in Massachusetts Regionally, the question of how to treat biomass CO2 emissions was addressed by the Massachusetts Department of Energy Resources (DOER) in 2010, when it hired the Manomet Center for Conservation Sciences to prepare a study of the scientific, economic and technological issues related to the use of forest biomass for energy generation. The Study found that the greenhouse gas implications of using biomass to produce energy depend heavily on the characteristics of the technology used to burn biomass, the fossil fuel power generating technology that biomass displaces, and the biophysical and forest management characteristics of the areas where biomass is harvested, saying: [I]t is interesting to consider the “harvest” and use of just tops and limbs. While this may not be directly applicable to forest management in Massachusetts (due to poor markets for pulpwood and limited opportunities for log merchandizing), it may be representative of situations involving non-‐forest biomass sources, such as tree trimming/landscaping or land clearing. The results in this case … indicate rapid recovery, with nearly 70% of the carbon losses “recovered” in one decade. Thus, all bioenergy technologies—even 2 National Climate Assessment 2014, Section on Bioenergy Potential 3 Environmental Protection Agency Acting Assistant Administrator Janet McCabe’s memo to states accompanying Framework for Assessing Biogenic CO2 Emissions from Stationary Sources, November 19, 2014. biomass electric power compared to natural gas electric—look favorable when biomass “wastewood” is compared to fossil fuel alternatives. 4 In particular, the Study confirmed there is a vast difference in the carbon emission profiles of whole trees and wood residues. From an emissions perspective, the use of wood residues for power generation is highly preferable compared to leaving these materials to decompose in the forest or in landfills. While the debate continues on the national level about how to account for carbon emissions from natural forests, there is universal agreement that “waste” biomass represents a “low carbon fuel” and its use for energy production should be encouraged. Even scientists who oppose EPA’s recent policy supporting sustainably-‐sourced trees for energy encouraged the use of wastes and residues “which can result in lower net emissions compared to fossil fuels.”5 Unfortunately, changes to the Massachusetts RPS in 2012 failed to distinguish between harvesting “natural forests” and “waste” biomass. While limiting feedstocks to “sustainable” sources, the regulations also imposed an unachievable efficiency standard. Biomass power plants must demonstrate a fuel conversion efficiency of at least 50%. (For special projects that “advance” innovation in biomass power generating technology, a lower efficiency of 40% is allowed), regardless of whether the biomass is a “waste” or a merchantable tree. The 50% rate, or a rate even close to it, cannot be achieved by existing plants, and therefore, existing biomass plants—using “waste” biomass that is unequivocally a “low carbon fuel” —will become ineligible to earn RPS credits as of January 1, 2016. Oddly, current Massachusetts law acts as a disincentive to utilize the very type of biomass that scientists and environmental advocates believe to be “low carbon” compared to fossil sources. c. Biomass Policy in Connecticut Finally, the region would benefit from a procurement of renewable energy under the unused authority under Section 8 of Connecticut Public Act 13-‐303. As such, we urge additional procurements of energy, capacity and Class I REC hedges under Section 8 either as part of this RFP or as a Connecticut RFP in the very near future. An additional Section 8 procurement would secure much-‐needed renewable energy capacity and broaden the scope of both supply and demand, yielding a more competitive and robust procurement. In addition, we encourage the Soliciting Parties to consider a timeframe that is more expeditious, and to consider revising the evaluation criteria to incentivize the development of in-‐state renewable energy projects and the repowering of idled assets that could be converted to renewable assets. 4 “Biomass Sustainability and Carbon Policy Study,” Manomet Center for Conservation Services, June 2010, p. 110. 5 Letter from Dr. Viney P. Aneja, et al. to Gina McCarthy, February 9, 2015, pg. 2. **************** In summary, biomass offers enormous energy and environmental benefits, and yet a policy flaw in the Region’s largest State—the Commonwealth of Massachusetts—actually forecloses biomass as a qualifying resource. The end result is an RFP process that fails to leverage the full value of the Region’s biomass assets and severely limits the ability of biomass producers to benefit from what is otherwise an important and worthwhile endeavor. Thank you for the opportunity to submit these comments. Sincerely, . Robert E. Cleaves, IV President and CEO, Biomass Power Association