The Massachusetts Department of Energy Resources (DOER) on Tuesday filed draft rules with the state Legislature that could require large wood-burning power producers to meet strict greenhouse gas (GHG) emission standards before they can receive state financing. The rules were modeled on conclusions reached in a June 2010 study that burning forest trees for power is not carbon neutral.

The draft rules establish criteria that woody biomass facilities must meet under Massachusetts’ renewable portfolio standard (RPS)—but they also pave the way for smaller biomass plants to earn renewable credits. The 2002-issued RPS law provides financial support for renewable energy sources in the form of renewable energy credits (RECs). Under current law, the RPS requires Massachusetts utilities and other electricity suppliers to purchase 6% of their electricity from DOER-qualified renewable energy sources in 2011; that requirement increases 1% per year without limit.

The draft regulation that would require woody biomass facilities to cut carbon emissions before they can receive RECs was proposed after a study conducted by nonprofit research organization Manomet Center for Conservation Sciences that was commissioned by DOER.

The six-month-long study concluded that use of biomass for heating and for combined heat and power (CHP) facilities would result in a 25% reduction in GHG emissions in 2050 relative to oil, but biomass-fired electricity would result in a 3% increase in emissions over coal-fired electricity in 2050. The controversial study is titled “Biomass Sustainability and Carbon Policy Study.”

"Unlike wind and solar power, biomass is a form of renewable energy that emits carbon," DOER Commissioner Mark Sylvia said. As DOER stressed that the regulations do not impact permitting or ban the development of biomass energy, Sylvia added: “These new regulations are designed to better align the state’s financial incentives for clean energy with sources of power that will help us meet our goals.”

Class I RECs—which biomass energy plants were eligible to earn before DOER suspended qualification in 2009—currently trade for $15 to $20 per MWh produced, and are capped at just over $60 per MWh. Among the proposed changes is a mandate that, in order to qualify under the RPS, biomass plants must provide lifecycle GHG emissions analysis and be able to demonstrate emissions reductions of at least 50% over 20 years.

Another key provision requires biomass electricity facilities to operate at an overall efficiency of 40% in order to qualify to receive one-half REC per MWh of generation, increasing to a full credit once a plant achieves an efficiency rate of 60%. “Since current biomass electric-only power plants operate at efficiencies in the 20 to 25% range, it is expected that none of the five biomass plants—all outside of Massachusetts but within the New England power grid—will remain eligible for RECs under the Massachusetts RPS until they demonstrate compliance with the new rules,” DOER said. Similarly, several proposed biomass electric plants in western Massachusetts would be ineligible to earn project financing through RECs.

Other provisions of the draft regulation would explicitly exclude construction and demolition waste as an eligible biomass fuel under the RPS and limit RPS-eligible forest-derived fuel to forest residues, limited thinning, and forest salvage resulting from storms or pest infestations. The rules also propose strict limits on the weight of eligible biomass fuel that can be removed from forest floors to ensure sufficient soil nutrients remain in the forest.

DOER’s draft rules are now expected to be referred to the state’s Joint Committee on Telecommunications, Utilities, and Energy for its 30-day review. After that, the committee may provide comments on the regulation to DOER. DOER will then promulgate the final regulation after another 30-day period.

Sources: POWERnews, DOER