Connecticut to phase down value of biomass, landfill gas RECs

By Erin Voegele | February 16, 2018

On Feb. 8, the Connecticut Department of Energy and Environmental Protection finalized its Comprehensive Energy Strategy, which aims to build an energy system that lowers costs for homeowners and businesses while reducing carbon emissions to help achieve the state’s climate change goals.

Regarding bioenergy, the CES includes a phase-down of biomass and landfill gas renewable energy credits (RECs) in Class 1 Renewable Portfolio Standard.

The CES notes that 76 percent of Connecticut’s Class I RPS requirements were met with RECs from biomass and landfill gas in 2014. “While these facilities provide certain societal benefits, most qualifying units are existing resources that began operation before the RPS program was launched in 2003,” said the DEEP in the CES. “DEEP believes the first priority should be to restructure eligible Class I technologies to focus on development of new zero-carbon resources in New England. As recommended in the 2014 IRP and consistent with Section 5 of P.A. 13-303, DEEP will begin phasing down the REC value of biomass in 2019.”

Within the CES, the DEEP said it appears that there will be a surplus of regional renewable generation through 2020. In addition, the overall capacity situation in New England is also projected to be in a surplus position. DEEP said it therefore believes it is a good time to begin phasing down the value of biomass and landfill gas RECs. “Doing so will reduce emissions of the resources that Connecticut purchases for Class I RPS compliance to help fulfill the goals of the GWSA and provide opportunities for new renewable-energy sources,” said the DEEP in the CES.

To implement the phase-down, DEEP has indicated that eligible generation for Class I biomass and landfill gas RECs will be reduced after 20 years for new facilities and 15 years for existing facilities from the time they were approved as a Class I renewable energy source in Connecticut.

After the initial license period ends, the amount of generation eligible as a Class I resource will be reduced for each biomass and landfill gas project, which will gradually reduce the value of Class I RECs to all biomass and landfill gas facilities, said DEEP in the SEC. Class I RECs will be generated as they have been, but the amount of generation eligible as a Class I resource in Connecticut will decline to 50 percent of the actual generation output from the facility each year. One MWh would still be required to be produced to receive a REC. A REC for a Class I biomass facility would be priced the same as other Class I resources,” the DEEP expected in the CES. “The other 50 percent of the annual generation output, which is not eligible in Connecticut, will still be eligible to be sold to meet RPS requirements in other states. For example, New Hampshire recently enacted legislation that would increase the ACP price for its Class III resources, which includes biomass, from $45 to $55 per REC.”

The CES also takes a wide variety of actions not related to bioenergy. The plan includes eight key strategies designed to further efforts to bring cheaper, cleaner and more reliable energy to the state. These include:

- Ensure sustainable and equitable funding for efficiency

- Advance market transformation of the energy efficiency industry

- Grow and sustain renewable and zero-carbon generation in the state and region

- Expand deployment of all cost-effective distributed generation (“behind the meter”) in a sustainable manner

- Continue to improve grid reliability and resiliency through state and regional efforts

- Reduce transportation greenhouse gas emissions by accelerating the adoption of low and zero emission vehicles and strengthening alternative-fueling infrastructure

- Increase mobility, connectivity and accessibility by advancing smart-growth, mixed-use transit-oriented development, and innovative transportation partnerships

- Modernize the grid

A full copy of the CES can be downloaded from the DEEP website.