Maine utility regulators are soliciting proposals from qualifying combined heat and power projects that use wood fuel to generate electric heat and power for industrial or space heating purposes to sell energy, capacity or renewable energy credits (RECs) to Maine's investor-owned transmission and distribution utilities.
Cogeneration, or combined heat and power (CHP), involves the generation of electricity in ways that also enable the productive use of heat from the generation process. Cogeneration can provide significant efficiency advantages compared to standalone electric power generation using thermal fuels, because typical standalone electric power plants cannot capture as much of their fuels' energy content as can CHP plants.
A law enacted by the Maine legislature in 2022 requires the state's Public Utilities Commission to establish a wood-fired CHP program. The law, An Act To Establish a Wood-fired Combined Heat and Power Program. P.L. 2021, Chapter 604, creates opportunities for qualifying combined heat and power projects to seek Commission-ordered long-term contracts to sell electricity or RECs to Maine's investor-owned transmission and distribution utilities.
To implement the Act, the Commission has issued a Request for Proposals in Docket No. 2022-00342. To be a qualifying combined heat and power project for this RFP, a generation facility must meet the requirements of Section 3 of last year’s new law, including the following:
To participate in this RFP, a project must meet the eligibility requirements specified in the Act. Specifically, a project must be a combined heat and power project, which is defined as a facility that uses wood fuel to generate electric heat and power that is used for industrial or space heating purposes. Wood fuel is defined as biomass derived from: (1) forest products manufacturing residuals, including, but not limited to, mill chips, sawdust, bark, shavings and fines; (2) harvest residues, including trees or portions of harvested trees that are too small or of too poor quality to be used for wood products; or (3) downed trees from weather events and natural disasters, nonhazardous landscape or right-of-way trimmings, and plant material removed for purposes of invasive species control.
The Act and the RFP impose additional requirements, including that qualifying projects must be connected to the Maine electric grid; have an in-service date after November 1, 2022; satisfy the limits on net generating capacity of no less than 3 MW and no more than 10 MW in any hour; be highly efficient, as determined by the Commission; and not be a participant in net energy billing under Maine law.
Under the RFP, bidders selected by the Commission will enter into contract(s), with one or both of Maine's investor-owned utilities, for a term of up to 20 years. The RFP prescribes that the Commission will evaluate proposals based upon the requirements and objectives stated in the Act and the RFP, which include 30% for efficiency and heat utilization, 40% for total cost, and 30% for certain other policy-based factors (like alignment with waste diversion and renewable policies, economic impact including jobs, net greenhouse gas emissions, location and local electric demand, and alignment with load patterns expected from beneficial electrification).
According to the RFP, responsive proposals must be submitted to the Commission by 11:59 PM on March 3, 2023.
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