Maine considers thermal RPS

At least two bills pending before the Maine legislature would impose new "thermal renewable" requirements on suppliers of electricity. Here's a look at how a thermal renewable portfolio standard might fit into Maine law.

Since Maine's restructuring of its electricity sector in 1997, Maine law has required competitive electricity providers to comply with statutory renewable portfolio standards. These laws require suppliers to obtain renewable energy credits or RECs representing the environmental attributes of qualifying generation, in quantities sufficient to cover defined portions of the supplier's portfolio. For example, as of March 2019, the renewable portfolio standard requires providers to source 10% of their power from qualifying "Class I" renewable resources built or refurbished after 2005, plus another 30% from other "Class II" renewable resources, for a total mix containing at least 40% renewable power.

Like Maine, most states have adopted renewable portfolio standards for their electricity sector. But some states are also exploring the inclusion of renewable thermal power in their standards, in the hope of supporting the development of thermal renewable resources like solar thermal or biomass projects. As of 2018, fourteen states had adopted some kind of thermal renewable components for their renewable portfolio standards, including New Hampshire.

The Maine legislature is now considering proposals to add a thermal component to Maine's renewable portfolio standard:

• LD 1465, An Act To Diversify Maine's Energy Portfolio with Renewable Energy, includes unallocated language directing the Public Utilities Commission to develop a plan for implementing a thermal renewable resource portfolio standard. The bill would require the thermal standard to require each competitive electricity provider to account for 4% of its portfolio of electricity supply sources with "thermal renewable resources." While the Commission would define eligible resources, the bill would require the inclusion of commercial and industrial pellet and wood heating systems, residential biomass systems and combined heat and power systems fueled by biomass. The bill would also require the Commission to establish a renewable energy credit value for net thermal energy produced by eligible resources, and to allow thermal renewable energy credits to be used to satisfy suppliers' statutory portfolio requirements.

• LD 1494, An Act To Reform Maine's Renewable Portfolio Standard, would add a new thermal renewable portfolio requirement. It would require each competitive electricity provider to purchase thermal renewable energy credits in amounts that increase from 0.4% of retail supply in 2020 to 4% of retail supply by 2029. It would award thermal renewable energy credits to qualifying producers of useful thermal energy at the rate of one credit per 3,412,000 British thermal units of thermal energy.

Like most states, Maine's adoption of its electric renewable portfolio standard was driven by a desire to require that electricity consumed in the state come from a mix of resources that includes renewables. Adding a thermal renewable portfolio standard would broaden Maine's existing law to incentivize the use of wood and other thermal renewable resources for heating. While some facilities, like a biomass-fired power plant located where its waste heat can be used, might qualify under both the electric and thermal requirements, adding a thermal component to Maine's law would tend to shift a portion of REC revenues away from generators of renewable electricity and toward producers of thermal renewable energy.