On April 27, 2012, the Massachusetts Department of Energy Resources (DOER) proposed final regulations governing the eligibility of biomass energy for Renewable Energy Credits (RECs) for compliance with the Massachusetts Renewable Energy Portfolio Standard (RPS). Key provisions of DOER's proposed final regulation include:
- The proposed final rule would define "eligible biomass woody fuel" to exclude whole tree chips unless from certain thinning activities and include only slash, tops and branches with additional eligibility criteria based on the soil quality at and the size of the harvest site.
- To be eligible for RECs, biomass generation units must demonstrate an overall efficiency of 60% to achieve a full credit; units achieving 50% efficiency earn only half a REC. It is our understanding that few, if any, stand-alone biomass power plants would meet the efficiency thresholds and that only a limited number of cogeneration units may meet this threshold.
- Qualifying units must file an annual report documenting compliance with the biomass eligibility criteria.
- Biomass power plants would be required to conduct life cycle emissions analyses and demonstrate greenhouse gas emissions reductions of at least 50% over 20 years.
Based on preliminary discussions with industry sources, we understand that the proposed final DOER regulation would make it infeasible, if not impossible, for most biomass power plants to qualify for Massachusetts RECs. It is too soon to know what implications the DOER rule will have on the future of the Regional Greenhouse Gas Initiative, which currently applies only to fossil fuel-fired units, or to Connecticut, Rhode Island, and Maine RPS programs, which currently allow RECs from biomass generators to meet their state RPS requirements.
A 30-day public comment period on the proposed final DOER regulation will begin on May 19, 2012.
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