In 2012, New Hampshire became the first and only state to add a carve-out for renewable thermal technologies to its renewable portfolio standard (RPS). This carve-out requires electricity providers to support a minimum amount of renewable thermal energy each year that is produced by eligible biomass, solar thermal, and geothermal technologies. Since this law passed in 2012, the New Hampshire Public Utilities Commission Sustainable Energy Division developed rules to govern the metering, monitoring, and quantification of thermal renewable energy credits (T-RECs). New Hampshire’s T-REC program has provided substantial economic and environmental benefits for the state, and serves as a model that other states can use to support a wide range of clean energy thermal technologies.
A First-in-the-Nation Program to Promote Heat from Renewables
An RPS is a state target for renewable energy generation, generally focused on electricity. Even though many states have come to recognize that renewable thermal heat has many of the same benefits as electricity-generating renewable technologies, few state programs include thermal technologies in their RPS.
With New Hampshire’s cold winter climate, access to clean, reliable, and affordable heating systems is a concern for the state’s residents and policymakers. Currently, most of the estimated $6 billion that New Hampshire spends annually on fossil fuels leaves the state. New Hampshire’s T-REC program capitalizes on locally produced energy resources, keeping financial resources in state. The program requires electricity providers to secure renewable thermal generation equivalent to 1.3 percent of electricity sales in 2016, increasing gradually to 2 percent in 2023. This represents the first time a state has set a target within its RPS for thermal output. The useful thermal energy generated must be delivered in New Hampshire.
Local Resources, Local Benefits
The T-REC program expands New Hampshire’s economy by supporting the renewable thermal industry and by developing its work force. The T-REC program has benefitted the geothermal, solar thermal, and biomass industries by providing an additional revenue stream to make these technologies more cost-effective. A typical large commercial facility generates approximately 2,500-6,000 T-RECs (measured in MWh equivalent).
The economic benefits of the T-REC market go beyond the renewable energy sector. Androscoggin Valley Hospital, for example, displaced approximately 280,000 gallons of number-two fuel oil over the past two years with 7,043 tons of wood chips purchased through a local distributor. Since biomass facilities generally source wood products from New Hampshire’s North Country, an area that is heavily dependent on the forest product industry, the T-REC program supports local jobs in forestry, logging, pellet manufacturing, and transportation industries.
The environmental benefits of the T-REC program are substantial. Renewable thermal technologies are often more efficient than conventional heating and cooling systems, and biomass technologies are held to more stringent emissions criteria than would otherwise be required. In addition, these thermal technologies typically replace older, oil-burning technologies, which results in overall emission reductions (greenhouse gas, nitrogen oxide, sulfur dioxide, and particulate matter).
A Model for the Country
Incorporating renewable thermal into RPS programs presents a challenge, because RPSs were originally designed to measure electrical output. Some states allow some renewable thermal technologies to be eligible for their RPS, and many states offer other support for this developing market. However, New Hampshire is the first state to take on the challenge of developing from scratch a program with metering requirements, emissions qualifications, and defined rules; and its T-REC program is the most comprehensive initiative to support renewable thermal technologies in the country.
States across the country are looking to New Hampshire as a model for supporting renewable thermal technologies. This program can serve as a template for other states to adapt for use in their RPS or incentive programs. The metering standards could be duplicated, as could the framework of the rules. Massachusetts, for instance, has monitored the development of the New Hampshire T-REC program and looked to it as it develops a thermal standard. Other states have asked for assistance and feedback when considering the addition of useful thermal energy in their RPS.
- The New Hampshire T-REC program has certified 18 thermal facilities with a total capacity of more than 36 MMBTU/hr from the installation of biomass and geothermal technologies.
- Over 10 megawatts-equivalent of renewable thermal energy capacity have been added to New Hampshire’s RPS since the program began in 2012.
- The NH PUC Sustainable Energy Division has provided over $2.2 million in grants to 12 projects that will develop thermal alternatives and create T-RECs with a total investment of over $11.3 million.
New Hampshire’s Useful Thermal Energy Certificate (T-REC) Program was a recipient of a 2016 “State Leadership in Clean Energy Award,” presented by the Clean Energy States Alliance (CESA). You can learn more about this program and other award recipients at http://cesa.org/projects/state-leadership-in-clean-energy/2016/.
CESA hosted a webinar highlighting New Hampshire’s T-REC program on July 13, 2016 – slides and a recording are available at http://cesa.org/webinars/state-leadership-in-clean-energy-award-winning-programs-in-new-hampshire-and-rhode-island/.
This blog post was also published in Renewable Energy World.