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EBC Energy Resources Program:

Renewable Thermal
Welcome

John Wadsworth
Chair, EBC Energy Resources Committee

Partner, Brown Rudnick LLP

Environmental Business Council of New England


Energy Environment Economy
Program Introduction & Overview

Dwayne Breger, Ph.D.


Program Chair & Moderator

Director
UMass Clean Energy Extension

Environmental Business Council of New England


Energy Environment Economy
State Policy & Programs Update

Peter McPhee
Program Director
Renewable Thermal
MassCEC

Environmental Business Council of New England


Energy Environment Economy
Renewable Thermal in Massachusetts:
Motivations, Opportunities, & Programs
EBC Energy Resources Program Renewable Thermal
January 26, 2018

Peter McPhee
Director, Clean Heating & Cooling Programs
pmcphee@masscec.com
Snapshot of Heating in Massachusetts

GHG Emissions (MA)

 $1,500 – Average household


heating expenditure across MA

 $2,300 – Average household


heating expenditure with oil

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𝐶𝑜𝑠𝑡 𝑜𝑓 𝐸𝑛𝑒𝑟𝑔𝑦
𝐸𝑛𝑒𝑟𝑔𝑦 𝐵𝑢𝑟𝑑𝑒𝑛 =
𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝐼𝑛𝑐𝑜𝑚𝑒
Primary Heating Fuel Used Income Demographic Energy Burden
Higher-income 2.3%
Median-income 3.5%
Low-income 7.2%
ACEEE Report: Lifting the High Energy Burden
in America’s Largest Cities

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Massachusetts GHG Emissions
100

90
MMTCO2e

80

70

60
1990 1995 2000 2005 2010 2015 2020
Actual GHG BAU 2020 GHG Limit 2050 GHG Limit 8
Massachusetts GHG Emissions
100

80
MMTCO2e

60

40

20

0
1990 2000 2010 2020 2030 2040 2050
Actual GHG BAU 2020 GHG Limit 2050 GHG Limit 9
Case for Renewable Thermal
Clean Heating & Cooling: How is this relevant?
a multi-benefit solution  Decisions on heating systems today affect
1. Superior quality and comfort building performance for 15, 25, 50 years
2. Decreased operational costs  We have 1, 2, or 3 chances to get it right
3. Much lower GHG emissions  Achieving MA GHG goals requires tens of
thousands of new clean heating systems
per year
MA GWSA reduction targets:
 25% by 2020
 80% by 2050

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Technologies Supported

 Renewable thermal n.
(also known as clean  Air Source Heat Pumps
heating or renewable
heating) - a heating
 Ground Source Heat Pumps
system that directly uses
or amplifies naturally
occurring thermal
energy, such as sunlight,
ambient air or ground  Solar Hot Water
temperature, or
biomass/biofuels.  Modern Biomass Heating

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Renewable Thermal & GHG
Estimated Annual GHG Emissions – Example Small Building
10
CO2 Tons Per Year

8
6 Renewable Thermal
Technologies
4
2
0

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Air Source Heat Pumps
What is it? A system which transfers heat between spaces, involving a compressor
and a condenser to absorb heat at one place and release it to another.

Benefits:
• Provides both heating and cooling
• Use refrigerant distribution over ductwork
• Indoor units can be floor-, ceiling-, or wall-mounted
• Flexible configuration of indoor units  zonal control
• Operates efficiently in cold-climate regions
• VRF Heat recovery
• Lowest up-front installation cost of any clean heating & cooling technology
• Cost-competitive with traditional oil, propane, or electric resistance heat

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Ground-Source Heat Pumps
• Most common in new construction or full renovations
• Highest efficiency clean heating technology
• Provides both heating and cooling
• Vertical or horizontal wells
• 50+ year heating asset
• Typically forced air or VRF distribution
• Low cost to operate
• Best applications:
• Space heating & cooling
• Lower temperature process loads

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Central Biomass Heating
• Supported technologies are high-efficiency and clean
burning
• Pellet and wood chip boilers
• Fully automated systems
• Bulk fuel delivery
• Local fuel resource
• Stable, reasonable pricing
• Best applications:
• Replacement for hydronic heating systems, esp. oil
• Process heat (food processing, brewing, etc.)
• Agricultural heating, including greenhouses
• CHP?

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Historical Fuel Prices: Oil vs. Pellets
Massachusetts Heating Oil vs. Bulk Pellet Price

$4.50
$4.00

Fuel Price ($/gallon equivalent)


$3.50
$3.00
$2.50
$2.00
$1.50
Oil
$1.00
Wood Pellets
$0.50
$0.00
Jan-95 Jan-00 Jan-05 Jan-10 Jan-15

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Solar Hot Water & Solar Heating
• Primary end use is domestic hot water, but
heating and process applications also exist
• Ties in with most domestic hot water systems
• Roof or ground space needed
• Excellent applications:
• Housing
• Food production
• Washing process

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MassCEC Clean Heating & Cooling Program
August 2015: MassCEC made 5-year, $30 Million commitment
• Incentives for residential and commercial-scale clean heating
• Additional incentives for low- and moderate-income
Technology Maximum Residential Maximum Commercial
Incentive Incentive
VRF Air-Source Heat Pumps N/A $250,000
Mini-Split Air-Source Heat Pumps $6,000 $225,000
Ground-Source Heat Pumps $20,000 $250,000
Central Wood Heating $16,500 $250,000
Solar Hot Water $6,000 $101,500

Public awareness, infrastructure, community campaigns, training, etc.


Coordinating with other state agencies & utilities
Goal: support growth of industry into self-sustaining, mature market

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State Policy & Programs Update

Michael Judge
Director
Renewable & Alternative Energy Development
MassDOER

Environmental Business Council of New England


Energy Environment Economy
Creating A Cleaner Energy Future For the Commonwealth

COMMONWEALTH OF MASSACHUSETTS
Charles D. Baker, Governor
Karyn E. Polito, Lt. Governor
Matthew A. Beaton, Secretary
Judith Judson, Commissioner

Renewable Thermal Technologies in the


Environmental Alternative Portfolio Standard (APS)
Business Council
Michael Judge
January 26, 2018 Director, Renewable & Alternative Energy Division
Boston, MA
Alternative Energy Portfolio Standard (APS)
Background
• The APS was established as of January 1, 2009, under the Green Communities Act
of 2008
• Supports alternative energy technologies that increase energy efficiency and reduce
the need for conventional fossil fuel-based power generation
• The Green Communities Act specifically included the following as eligible
technologies:
 Combined Heat and Power
 Flywheel Storage
 Gasification with Carbon Capture and Permanent Sequestration
 Paper Derived Fuel
 Efficient Steam Technology
• Eligible technologies are able to generate one Alternative Energy Certificate (AEC)
for each MWh of electricity or 3,412,000 Btus of Useful Thermal Energy produced
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
What is the APS?
• State program requiring a certain percentage of the in-state electric load
served by Load Serving Entities (LSEs) come from renewable energy
• LSEs meet their yearly obligations by procuring Alternative Energy
Certificates (AECs)
• One AEC = 1 MWh (or 3,412,000 Btus)
• Obligation typically expressed as percent of total electric load

Example:
Utility serves 1,000,000 MWh of load in 2017 and has an obligation to
procure 4.25% of that through the purchase of AECs

1,000,000 MWh x 0.0425 = 42,500 MWh (number of AECs they must


procure)

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
AEC Pricing
• Market driven
• State sets two variables:
 Minimum Standard
 Alternative Compliance Payment (ACP) Rate
• Minimum Standard refers to yearly percentage
obligations placed upon compliance entities
• ACP rate is the price LSEs must pay for every
MWh they are short of meeting their obligation

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Summary of MA Portfolio Standard Programs
2017 ACP Rate,
RPS Class Sub Class Technology Minimum Standard
$/MWh
Wind, LFG, Biomass,
12% in 2017; increases by $67.70; increases with
Solar PV, Small Hydro,
1% each year CPI
AD, etc.

Class I Solar PV; 6 MW or less, in 1.6313% in 2017; set by $448; reduced annually
Solar Carve-Out
MA formula annually per 10-year schedule

Solar PV; 6 MW or less, in 2.8628% in 2017; set by $350; reduced annually


Solar Carve-Out II
MA formula annually per 10-year schedule

2.5909%; increases per $27.79; increases with


Renewable same as Class I
schedule in regulation CPI
Class II
Waste to Energy Plants, in $11.12; increases with
Waste Energy 3.5%; stays constant
MA CPI

CHP in MA, flywheels, 4.25% in 2017; increases $22.23; increases with


APS
storage, etc. to 5% in 2020 CPI

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
2014 and 2016 Statutory Changes
Chapter 251 of the Acts of 2014 required DOER to make changes to the
existing APS regulations, including:
• Adding the following generation and fuel sources as eligible renewable thermal technologies:
 Ground Source Heat Pumps (GSHP) and Air Source Heat Pumps (ASHP)
 Solar Hot Water (SHW) and Solar Hot Air
 Biomass, Biogas, and Biofuels
• Removing the following technologies as eligible:
 Gasification with Carbon Capture and Permanent Sequestration
 Paper Derived Fuel

Chapter 188 of the Acts of 2016 further required DOER to make changes to
the APS regulations, including:
• Adding the following generation and fuel sources as eligible technologies:
 Fuel Cells
 Waste-to-Energy Thermal

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Rulemaking Process
• Stakeholder meetings were held in late 2014 and early 2015 to discuss implementation of
statutory changes
• Regulation initially filed on May 19, 2016
 Public hearings were held on June 15, 2016 and June 17, 2016 in Amherst and Boston
 Written comments were accepted through June 30, 2016
 Over 50 sets of comments received
• Second draft of the APS Regulations incorporating 2016 statutory changes and changes in
response to the first public comment period was filed on June 2, 2017
 Public hearings were held on July 14, 2017 and August 7, 2017 in Boston and Holyoke
 Written comments were accepted through August 7, 2017
 Over 75 sets of comments received
• On October 13, 2017, DOER filed with the Clerk of the House of Representatives the
amended draft with changes in response to public comments. It was referred to the Joint
Committee on Telecommunications, Utilities, and Energy on October 16, 2017.
• After receiving no comments from the Joint Committee, DOER filed the final regulation with
the Secretary of State’s office on December 15, 2017
• Final regulation was promulgated and became effective on December 29, 2017

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Small, Intermediate, and Large Generators
• All renewable thermal generators are divided into three size
categories as follows:
Size Classification
Small Intermediate Large
Calculated net renewable thermal
Calculated net renewable thermal Calculated net renewable thermal Metered net renewable thermal
AEC calculation basis output based on direct metering of
output based on indirect metering output
fuel input
Solar thermal: evacuated tube and Collector surface area less than or equal Collector surface area between Collector surface area greater than or
-
flat plate solar hot water to 660 sq ft 660 and 4,000 sq ft equal to 4,000 sq ft

Collector surface area less than or equal Collector surface area greater than
Solar thermal: solar hot air - -
to 10,000 sq ft 10,000 sq ft

Solar sludge dryer - - - All

Capacity less than or equal to Capacity greater than 1,000,000 Btu per
Eligible Biomass Fuel - -
1,000,000 Btu per hour hour

Compost heat exchange system - - - All

Air source heat pump: electric motor Output capacity less than or equal to Output capacity between 134,000 and Output capacity greater than or equal to
-
or engine driven 134,000 Btu per hour 1,000,000 Btu per hour 1,000,000 Btu per hour

Output capacity less than or equal to Output capacity between 134,000 and Output capacity greater than or equal to
Ground source heat pump -
134,000 Btu per hour 1,000,000 Btu per hour 1,000,000 Btu per hour

Deep geothermal - - - All

• Classification determines whether the generators must directly meter thermal output
• No small and some intermediate systems are required to meter their thermal output, but
instead receive AECs per formulae established in DOER Guidelines
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Pre-Minting and Forward Minting
• Small heat pumps and solar hot water and air systems may choose to
pre-mint or forward mint AECs
• Pre-minting of AECs allows certain generators to receive 10 years of
AECs upfront in the first quarter of operation
• Forward minting of AECs allows generators to receive a pre-
determined number of AECs each quarter over a period of 10 years
• Both options allow generators to receive AECs without directly
metering their thermal output
• If the APS market is more than 25% undersupplied, Pre-minting is the
default option available
• If the APS market is less than 25% undersupplied, Forward minting is
automatically triggered for new generators
• Biomass, biogas, and liquid biofuel generators may not pre-mint or
forward mint their AECs

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Certificate Multipliers for Non-Emitting Renewable
Thermal Technologies
• The statute allows for DOER to establish certificate multipliers for “non-emitting
renewable thermal technologies”, which results in more AECs being earned for the
same 3,412,000 British thermal units of net useful thermal energy
• DOER has established the following multipliersAPSfor non-emitting renewable thermal
Renewable Thermal Generation Unit
technologies: Multiplier
System Size Small Intermediate Large
Active solar hot water systems used for 3 3 3
domestic hot water
Active solar hot water systems used for domestic 1 1 1
hot water, space conditioning or process loads
Active solar hot air systems - 5 5
Solar sludge dryer - - 1
Technology Type

Ground source heat pumps 5 5 5


Deep geothermal - - 1
Air source heat pumps (electric or engine driven)
– supplying less than 100% of building heating 2 - -
load
Air source heat pumps (electric or engine driven) 3 3 3
– all other
Compost heat exchange system - - 1
Biomass, biofuels, biogas N/A N/A N/A

Heat pumps installed in highly energy efficient homes, passive


homes or zero net energy buildings are eligible to receive an
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additional multiplier
Creating of 2, added
A Clean, Affordable, to theirEnergy
and Resilient baseFuture
multiplier
For the in the table
Commonwealth
ASHP- Small Generation Units-
AEC Formulas
If conditioned building area is less than or equal to 1,500 sf:

Useful Thermal Energy = 3.0 MWh/year


Example
Useful Thermal Energy = 3 MWh/yr * 10 (years) = 30 MWh

Apply multiplier:
ASHP, < 100%: 30 MWh * 2 = 60 AECs
ASHP, all other: 30 MWh * 3 = 90 AECs
ASHP, all other + 2 (Eff. Bldg): 30 MWh * 5 = 150 AECs
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
ASHP- Small Generation Units-
AEC Formulas
If conditioned building area is greater than 1,500 sf:
𝐴 − 1,500
𝑈𝑠𝑒𝑓𝑢𝑙 𝑇ℎ𝑒𝑟𝑚𝑎𝑙 𝐸𝑛𝑒𝑟𝑔𝑦 = 3.0 + (2.0 ∗ )
1,000

Where:
• Useful Thermal Energy = MWh/year
• A = Conditioned space in square feet (sf)

Example: 2,000 sf building


2,000−1,500
Useful Thermal Energy = 3.0 + (2.0 ∗ 1,000
) = 4MWh
4MWh * 10 (years) = 40 MWh

Apply multiplier:
ASHP, < 100%: 40 MWh * 2 = 80 AECs
ASHP, all other: 40 MWh * 3 = 120 AECs
ASHP, all other + 2 (Eff. Bldg): 40 MWh * 5 = 200 AECs
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Solar Thermal AEC Formula Using OG-100
Example:
Useful Thermal Energy = 2,445 (kWh/year) / 1,000 *
3 (collectors) * 1.0 * 1.0 * 10 (years)

Useful Thermal Energy = 73.35 MWh equivalent

Apply multiplier:
73.35 MWh * 3 (DHW only) = 220 AECs
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biomass Requirements
The statute requires DOER to do the establish requirements for the following with
respect to biomass technologies:
1. Adopt emission performance standards that are protective of public health
in consultation with MassDEP;
2. require a 50% reduction in lifecycle GHG emissions compared to a high
efficiency unit utilizing the fuel that is being displaced;
3. adopt requirements for thermal storage to minimize any significant
deterioration of efficiency or emissions due to boiler cycling, if feasible;
4. adopt fuel conversion efficiency performance standards achievable by
best-in-class commercially-feasible technologies; and
5. for forest-derived biomass, adopt requirements that fuel shall be provided
by means of sustainable forestry practices in consultation with DCR.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Feedstock Requirement
100% of APS wood must be Eligible Biomass Woody Fuel, meeting
sustainable forestry requirements.

DOER has established a minimum feedstock threshold of 30% forest-derived


materials in order to support the local and regional forest product industry.
Included in the required 30%:
•Direct from forest
•Post manufacturing (mill waste)

Not Included in the required 30%


Utility-derived residues
Agriculturally-derived residues
Urban wood waste
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Fuel Quality Specifications
Type I.
A boiler or furnace of less than 3MMBtu/hr. (rated input) without an emission
control device (e.g., electrostatic precipitator) must meet the following fuel
quality specifications:
Pellets Chips

Calorific value > 8,000 Btu per pound ≥ 5,500 Btu per pound

Moisture ≤ 8 percent ≤ 35 percent

Ash content by weight ≤ 1 percent ≤ 1.5 percent

Chip Size 75 percent or adhere to manufacturer’s


Not applicable
(percent retained by a ½ inch screen) protocol

Chlorides ≤ 300 parts per million Not applicable

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Fuel Quality Specifications Cont.
Type II
• A boiler or furnace of any size equipped with an emission control
device (e.g., electrostatic precipitator) is not constrained to the afore
mentioned fuel quality specifications (moisture content, sizing etc.).
This allows for green chips to be used.

Type III
• A boiler or furnace of greater than or equal to 3MMBtu per hour
rated heat input must receive a MassDEP plan approval pursuant to
310 CMR 7.02(5), which shall dictate fuel quality specifications.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biomass Supplier List
Depending on the characteristics of the fuel being displaced, there are
different requirements on the composition of the woody biomass that
must used by a biomass system.
Fuel Being Displaced Minimum Percentage of Residues

Natural gas, Electric resistance, Propane, Fuel oil


Class I 55%
#6 and #2

Class II Electric resistance, Propane, Fuel oil #6 and #2 50%

Class III Fuel oil #6 and #2 35%

If the fuel supplier does not report to the Department annually, or does
not meet the required minimum requirements for residue, the fuel
supplier will be taken off the list. Fuel suppliers may reapply to be
placed back on the list, if they can meet the Department’s standards.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Intermediate Generation Units-
AEC Formulas (cont.)
Example
• Wood Pellets- Boiler
• 5 tons of fuel
• 85% efficient
Useful Thermal Energy
= (8,000 Btu/lb *85% * 10,000 lbs)/3,412,000 = 19.9 MWh

19.9 MWh = 19 AECs


More information is available in Guideline on Metering and Calculating
the Useful Thermal Output of Eligible Renewable Thermal Generation
38 Units- Part 1
Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biofuel Requirements
• A liquid fuel that is derived from organic waste
feedstocks
 waste vegetable oils
 waste animal fats
 grease trap waste
 Others as approved by DOER
• May not include petroleum-based waste or Hazardous
Waste per 310 CMR 40.0006
• May blend with petroleum, but must have a minimum
of 10% Eligible Liquid Biofuel
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
General Requirements cont.
• All fuel must be registered as part of the EPA Renewable
Fuel Standard as Advanced Biofuel
 a D-code of 3, 4, or 5
• Must adhere to one of the following ASTM specifications:
 ASTM Standard D6751 (Standard Specification for
Biodiesel Fuel Blend Stock (B100) for Middle Distillate
Fuels
 ASTM D396 - 15C (Standard Specification for Fuel Oils)
• Must qualify as part of an aggregation
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Cap on the Available AECs for
Biofuel Generation Units
• In each Compliance Year the total number of AECs minted to
Generation Units using Eligible Liquid Biofuel may not exceed 20% of
the total projected annual compliance obligation for the Compliance
Year
 No more than 10% of the Attributes generated prior to July 1st.
• If 100% of the Attributes available prior to July 1st are not allocated,
the remaining number of available Attributes shall be rolled over and
allocated during either of the remaining quarters in that calendar year
• If the number of Attributes reported by Generation Units exceeds the
available Attributes, the number of available Attributes shall be
allocated on a prorated basis

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Cap on the Available AECs for
Biofuel Generation Units for 2018
2016 Aggregated APS Obligation 1,874,577

Total Attributes Available for Biofuel Generation Units (20% of 2016


374,915
Aggregated Obligation)
Total Attributes Available for Biofuel Generation Units in Q1 and Q2
187,458
2018

Attributes Minted for Biofuel Generation Units in Q1 and Q2 2018 -

Total Attributes Available for Biofuel Generation Units Q3 and Q4 No less than 187,458

Attributes Minted for Biofuel Generation Units in Q3 and Q4 2018 -

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biofuel Supplier vs Distributor
Biofuel Supplier: A person or entity who produces
Eligible Liquid Biofuel

Biofuel Distributor: A person or entity who does not


produce Eligible Liquid Biofuel, but buys and sells
Eligible Liquid Biofuel to an end user

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biofuels Supplier List
The Department shall establish and maintain a list of
suppliers of Eligible Liquid Biofuel on its website.

A fuel supplier must complete and submit an application


to the Department to be included on the Department’s
Eligible Liquid Biofuel suppliers list. Fuel suppliers must
be registered in the Environmental Protection Agency’s
Renewable Fuel Standard (RFS2), and must verify that
they produce biodiesel from organic waste feedstocks.

Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Biofuel Formula
Example.
1,000 gallons of a B20 blend delivered to a boiler

Useful Thermal Energy = ( 127,000 (Btu/gal) * 1,000


(gal) * 0.2 * 0.85) / 3,412,000

Useful Thermal Energy = 6 MWH equivalent or AECs


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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Appendix

Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Emission Performance Standards
Boilers or furnaces less than 3 MMBtu/hr. (input) must meet applicable emissions limits below:
Pellets Chips

≤ 0.10 lb PM2.5 per MMBtu input


≤ 0.08 lb PM2.5 per MMBtu input
or
or
if EN303-5 is used to verify emissions
Particulate Matter
≤ 0.05 lbs total PM per MMBtu input
emissions (PM)
≤ 0.03 lb PM2.5 per MMBtu input
or
at sensitive populations
≤ 0.03 lb PM2.5 per MMBtu input
at sensitive populations

Carbon monoxide (CO) 270 ppm at 7% oxygen 270 ppm at 7% oxygen

A boiler or furnace of greater than or equal to 3 MMBtu/hr. heat input must be:

Issued a Commonwealth of Massachusetts Department of Environmental Protection (MassDEP) plan approval, pursuant to 310 CMR
7.02(5). This requirement is irrespective of fuel type.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Lifecycle Greenhouse Gas Emissions Analysis
• Generation Unit owners that do not purchase fuel from
the Biomass Supplier’s List will need to provide an annual
analysis that shows, based on the type of woody biomass
used, that there was a 50% reduction in greenhouse gas
emissions over a 30-year time period.

• Analysis closely mirrors that used to demonstrate lifecycle


GHG compliance under the RPS and relies closely on data
from the Manomet Study.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Lifecycle Greenhouse Gas Emissions Tool

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Thermal Storage Requirements
Thermal storage is required for qualification within the APS
Lead boiler system size
Thermal storage required
(heat output)
< 80,000 Btu/hr 80 gallons
80,000 Btu/hr - 119,000 Btu/hr 1 gallon per 1,000 Btu/hr.
119,000 Btu/hr – 1 MMBtu/hr 119 gallons
> 1 MMBtu/hr. 2 gallons per 1,000 Btu/hr.

The thermal storage tank must have a minimum of R12


insulation with controls integrating with the central heater to
decrease boiler cycling.

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EPA NSPS must be met.
Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
System Performance Standards
All facilities must comply with the following fuel efficiency standards, which
ensure that only best in class commercially feasible technologies will be
installed:
Performance Requirement Pellets Chips

≥ 75% Higher Heating Value


Thermal efficiency or
≥ 85% Higher Heating Value
@ nominal output ≥ 80% Lower Heating Value if using
EN303-5 to verify particulate emissions

Start up Adhere to manufacturer’s ignition protocol

The system must automatically modulate to lower output and/or turn itself off when the
Modulation/shut off
heating load decreases or is satisfied

Pressurized elements Compliant with 522 CMR 4.00

Thermal storage Required, unless an exception is issued by the Department

Fuel storage The system must have covered bulk storage

Feedstock conveyance The system must be automatically fed from feedstock storage to the furnace or boiler

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Sustainable Forestry Definition
Practicing a land stewardship ethic that integrates the reforestation, managing, growing, nurturing,
and harvesting of trees for useful products with the conservation of soil, air and water quality,
wildlife and fish habitat, and aesthetics and the stewardship and use of forests and forest lands in a
way, and a rate, that maintains their biodiversity, productivity, regeneration capacity, vitality, and
potential to fulfill, now and in the future, relevant ecological, economic, and social functions at local,
national, and global levels, and that does not cause damage to other ecosystems.

Criteria for sustainable forestry include:


 Conservation of biological diversity
 Maintenance of productive capacity of forest ecosystems
 Maintenance of forest ecosystem health and vitality
 Conservation and maintenance of soil and water resources
 Maintenance of forest contributions to global carbon cycles
 Maintenance and enhancement of long-term multiple socioeconomic benefits to meet the
needs of societies
 A legal, institutional, and economic framework for forest conservation and sustainable
management
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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Forest Sustainability Verification
• Massachusetts forest derived products must have a DCR approved cutting plan under the
long term management option, signed by a state forester that attests to best management
practices, and the Forest Stewards Guild’s biomass retention guidelines.

• Non-Massachusetts forest derived products must either:


 Have a cutting plan that is approved by a licensed or certified (SAF or host state)
forester attesting that the harvest complied with Sustainable Forestry Management
definition, best management practices of the host state, and the Forest Stewards
Guild’s biomass retention guidelines.

 Biomass fuel is certified to an independent third-party certification that includes


Forest Stewardship Council (FSC) and Program for the Endorsement of Forest
Certification (PEFC), which includes the Sustainable Forestry Initiative (SFI) and
American Tree Farm System (ATFS).

• Self supply of fuel is also permissible, with registration.

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Creating A Clean, Affordable, and Resilient Energy Future For the Commonwealth
Technology Overviews, Applications,
and Market Overviews

Larry Lessard
Director
Achieve Renewable Energy

Environmental Business Council of New England


Energy Environment Economy
EBCNE Energy Resources Program

Ground-Source Heat Pump


Technology Overview
January 26, 2018
April 4, 2017

© 2018 Achieve Renewable Energy, LLC.


Current Massachusetts Sources of Current Massachusetts
Green House Gas Emissions GHG Goals

✓25% Reduction by 2020


✓80% Reduction by 2050

Requires:
➡Electrification of Transportation
➡Electrification of Heating
GSHP Markets and Installation
Photos
No Volcano Needed
Ground-Source Heat Pump Markets
in Massachusetts
‣ Residential and Small-Scale Commercial (<10 tons)
‣ 1 to 4-unit residential, Small Professional Office, Retail
‣ ‘Light’ Commercial (<83 tons)
‣ Professional Office, Multi-unit residential, Warehouse
‣ Commercial/Industrial (>83 tons)
‣ Varied larger heating load facilities
Vertical Closed-Loop GHSP Equipment
Technical Challenges and
Desirable Site Characteristics
GSHP Challenges

‣ #1a: Knowledge that GSHP is a feasible option


‣ #1b: Knowledge of savings and incentives
‣ Available space inside and outside the building
Desirable Site Characteristics
‣ New construction or renovation
‣ Existing distribution system
‣ Existing well of adequate capacity
‣ Process flow or liquid waste stream for heat exchange
‣ Heating and cooling loads not greatly imbalanced
‣ Available interior and exterior space
✓GSHP likely uses the least space of HVAC options
Savings:
Operating Cost, Lifecycle Cost
and GHG Emissions
Illustration: Updating a 1980’s
Affordable Housing Project
• 5-story brick building with 59 residential units
• Conditioned living space 45,500 sq. ft
• Limited insulation
• Existing heating is via electric baseboard
• Some window-mount air conditioners
• Peak Heating Load: 551,000 Btu/hr (46 tons)
• Peak Cooling Load: 487,000 Btu/hr (41 tons)
• Total nominal capacity approximately 55-65 tons
Why Geothermal?
• Offers Greatest Comfort with lowest operation
cost
• GSHPs have the lowest Carbon Footprint of
any heating and cooling system
• Project Location is in a Flood Plain which
restricts some conventional options
• Massachusetts Incentives offset most of the
incremental cost of GSHP compared to the
original WSHP plan
Incremental Cost of GSHP
• Existing conditioning is provided by electric
baseboard and some window-mount air
conditioners
• Renovation plans originally included a
conventional system using water-source heat
pumps with a boiler and cooling tower
• Estimated incremental cost of GSHP over WSHP
is $348,000 or less
Reduction in ‘Fuel’ Cost and Carbon Emissions

Note: Due to equipment longevity, GSHP has significant lifecycle cost advantages.
Financial Incentives
Applicable Incentives

Federal Investment Tax Credit


Accelerated Deprecation
Energy Efficient Building Deduction
MassCEC Base Grant
High Efficiency GSHP Adder
Municipal/Non-Profit Adder
Affordable Housing Adder
AEC Program
MassSave Incentives (in service area)
Net Project Cost
Pre-Incentive Incremental Cost $348,000

MassCEC Grant
(assumes 50% of Efficiency plus
Simple Payback
($195,500)
Non-profit and Affordable
Housing adders) Post-Incentive Incremental
$40,500
AEC Income (PV of 10 years less Cost
($112,000)
brokerage fee)
Annual Fuel Savings v.
$5,696
MassSave Incentives ($TBD) WSHP-Boiler-Cooling Tower

Post-Incentive Cost $40,500 Simple Payback v. WSHP 7 Years


Questions?
Larry Lessard
LLessard@AchieveRenewable.com
978-338-5548 x102

Go Pats!
Technology Overviews, Applications,
and Market Overviews

Adam Sherman
Senior Consultant
Biomass Energy Resource Center

Environmental Business Council of New England


Energy Environment Economy
Advanced Wood Heating
Technology, Applications, and Market Initiatives

EBC Energy Resources


Boston, Massachusetts

January 25th, 2018

Adam Sherman
Biomass Energy Resource Center (BERC)
Advancing the use of Local Wood Heat and CHP in North America

Technical Consulting
• Project feasibility studies
• Fuel supply assessments
Program Design &
and procurement Implementation
• Wood heat market expansion Advocacy
• Third-party expert review • Showcasing “best
• Develop and review of potential assessments practices” and case
standards • Program design and studies of successful
• Market assessments implementation support projects
• Training, and advisory • Tracking market growth
support services and impacts
BERC is a program of the Vermont Energy Investment Corporation
A mission-driven non-for-profit whose mission is to reduce the economic and environmental impacts of energy production
and consumption
Regional Dependence on Oil for Heating

Annual Gallons Gallons Oil/


Population
of Heating Oil Capita
Connecticut 473,000,000 3,500,000 135
Maine 263,000,000 1,300,000 202
Massachusetts 596,000,000 6,646,000 90
New Hampshire 137,000,000 1,320,000 104
New York 1,308,000,000 19,570,000 67
Pennsylvania 757,000,000 12,763,000 59
Rhode Island 131,000,000 1,050,000 125
Vermont 89,000,000 626,000 142
Total/Average 3,753,000,000 46,775,000 80

Source: Energy Information Administration (EIA) and 2010 US Census Data


Perceptions of “Biomass Heating”
Advanced Wood Boiler Technology

Cordwood system Pellet system Woodchip system


Advancements in Wood Combustion

Peak Efficiency (%)

Source: BioEnergy 2020+


Advanced Wood Heating Applications
Residential and Small Commercial Large Commercial/Institutional
60

Average Heating Fuel Price Trends (1991-2017)


($/MMBTU of heat after combustion)

Fuel Oil #2- Residential 50

Propane
Propane - Residential

Bulk Wood Pellets


40
Woodchips

Natural Gas -Commercial

$/MMBTU
Fuel Oil #2 30

Bulk Wood Pellets 20

Natural Gas
10

Woodchips

0
1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
Wood Pellet Production
Regional Pellet Production and Availability
Ashland
Lauzon

Lauzon Energex

Corinth

Curran Strong Athens

VWP
RFV
Over 1.4 Million
NEWP

NEWP
Tons of Annual
Dry Creek
Creek
Production
Addison NEWP Capacity
Specialized Pneumatic Bulk Pellet Delivery
Bulk Pellet Storage Options

Outdoor grain silos Fabric sacks

Metal bins Constructed rooms


Moisture Content Impact on Energy Value
9,000

8,000

7,000

6,000
Btu per pound

5,000

HHV
4,000
LHV
3,000

2,000

1,000

-
5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%
Moisture Content
Dried Woodchip Production
District Heating
Applegate Apartments – Bennington, VT
Advanced Wood Heating State Incentives
State Residential offers Commercial offers
New York Boiler Type: Wood Pellet Boiler with Thermal Storage Renewable Heat New York
Incentive Type: Rebate Program Boiler Type: Large Pellet Boiler with Thermal Storage
Incentive Amount: 25% (More than 300Mm Btu/hr)
Maximum Incentive: $20,000 (additional $2,000-$4000 possible for Incentive Type: Rebate Program
recycling old outdoor or indoor wood boiler. Incentive Amount: 20%
Maximum Incentive: $100,000
Vermont Boiler Type: Automatic Pellet Boiler Boiler Type: Automatic pellet boiler and wood chip systems.
Incentive Type: Rebate Program Also includes multiple boilers/furnaces.
Incentive Amount: $5,000 (flat fee) Type: Rebate Program
Amount: $3,000 or $1.25/sq-ft heated space
Maximum Incentive: $3,000 - $80,000
New Hampshire Boiler Type: Automatic Pellet Boiler Boiler Type: Pellet Boiler up to 2.5MM Btu/hr
Incentive Type: Rebate Program Incentive Type: Rebate Program
Incentive Amount: 40% Incentive Amount: 40%
Maximum Incentive: $10,000 Maximum Incentive: $65,000
Maine Boiler Type: Automatic Pellet Boiler
Incentive Type: Rebate Program
Incentive Amount: 33% Not available
Maximum Incentive: $5,000
Massachusetts Boiler Type: Automatic Pellet Boiler
Incentive Type: Rebate Program
Incentive Amount: Boiler 45%, Thermal Storage 100% TBD
Maximum Incentive: $12,000 (Income-Based Rebate Adder can
qualify for a total award of up to $16,500)
Vermont Energy Goal –
35% of Thermal Energy from Wood Heat by 2030
2016 THERMAL FUEL MIX 2030 THERMAL FUEL MIX
Thermal
Woodchips
Bulk Pellets Efficiency
Bagged Pellets Woodchips

Bulk Pellets LPG


LPG
Cordwood
Bagged
Pellets
Natural gas

Natural gas Cordwood


Heating Oil
(Fossil and
Bio)
Heating Oil
(Fossil and
Bio)
Electricity

Electricity
Vermont Market Deployment Scenario
Projected Thermal Energy Sources 2016-2030:
Expanded Use of AWH Boilers and Pellet Stoves
14,000,000

12,000,000
35%
10,000,000 Thermal Efficiency
MWh of Thermal Energy

Woodchips
8,000,000 Bulk Pellets
Bagged Pellets
6,000,000 Cordwood
Heating Oil
4,000,000 Electricity
Natural gas
2,000,000 LPG

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year
Forested Working
Landscape

Vibrant Communities & Clean & Renewable


Economic Development Energy
Adam Sherman, Manager
Biomass Energy Resource Center at VEIC
128 Lakeside Ave. Suite 401
Burlington, VT 05401
Tel: +1 802 540 7863
Email: asherman@biomasscenter.org
Web: www.biomasscenter.org

Contact Information
Extra Slides for Q&A
Annual PM Emissions for a
Typical Residential Heating System
300.00 281.34

250.00
POUNDS OF PM PER YEAR

200.00

150.00

100.00 85.62

50.00
29.97

0.51 0.80 1.96


-
propane boilers new oil boilers modern pellet modern pellet stove modern certified old non-certified
boilers wood stove wood stove or OWB

Source: EPA Burnwise program and BERC Analysis


Spectrum of Policies and Incentives Offered in NE
NY VT NH ME MA
Flexible Boiler Regulations √ √
Sales Tax Exemption on Wood Heating √ Partial Partial
Appliances
Sales Tax Exemption on Wood Fuel √ √ Residential only Residential only

State Income Tax Credit on Installed systems N/A

Pellet Boiler Incentives √ √ √ √ √


Property Assessment Financing √
Thermal Renewable Portfolio Standards √ √ √

State Grants for Wood Heat Projects √ √ √ √ √


Government “Lead by Example” for Biomass √ √
Thermal
System Benefits Charge on Heating Fuel Weatherization only

Mandatory Renewable Energy Targets Applied to


Building Codes
Source: http://www.veic.org/Media/berc/Summary-BT-Policy-Report10.30.13.pdf
Technology Cordwood Pellet Boilers Single District Industrial CHP
Boilers Facility Heating
Woodchip w/Woodchip
Heating Boilers

Typical heat 20kW – 20kW - 1MW 500kW – 9MW 1.5MW – 15MW 8MW - 150MW
output capacity 100kW

Applications Home Home heating & Schools, College campuses Merchant Power
heating and small commercial hospitals, office and downtown Plants
farm buildings buildings, etc. communities
buildings
Fuel Type

Annual Fuel Use 2-15 cords 2-20 tons 100 – 10,000 tons 500- 50,000 tons 1,000 – 500,000
tons

Fuel Sourcing Locally Premium pellets Paper grade and Bole chips and Whole-tree chips
harvested screened bole whole-tree chips and hog fuel
firewood chips

Average 65% 80% 75% 75% 28% - 40%


Efficiency
Upper Austria: “Carrots, sticks & tambourines” result in
wood for 15% of energy consumption, over 40,000 installations,
300 district heating systems, over 40% municipalities heating
with biomass.
Project Economics
YEAR 1 HEATING COSTS
Fuel Cost Debt Service

OIL HEAT BAU WOOD HEAT


Silviculture 101

Fast growth

Slow growth

Fast growth
Life-Cycle Cost Analysis
Project Economic Performance - Sensitivity Analysis
Woodchip System Configurations

Illustrations courtesy Schmid, Messersmith & Froling


Thermal Storage – Buffer Tanks
• Wood boilers run best when they are steady-
state and hot
• Longer run times translates to:
1. Better efficiency
2. Less emissions
3. Lower maintenance
• Longer runs are achieved by storing excess
heat in a water tank
• Allows easier solar hot water system
integration
• Allows further down-sizing of wood boilers
• Essential for cordwood boilers,
recommended for woodchip boilers,
sometimes beneficial for pellet boilers
District Heating – Heat Utility

Hospital
Town Offices
Nursing Home

School Hotel

Recreation Center

* Maximum annual volume of heat sales per number of interconnections per trench foot of pipe network
Typical Building District Heat Interconnection
The Carbon Cycle
Wood Heated Buildings vs. Fossil Fuel Heated Buildings
CO2 CO2
CO2 CO2
CO
CO2 2

CO2 CO2
CO2
CO2 Natural
Natural Carbon Fossil
Carbon Cycle Fuel
Wood Cycle CO2
Heated
CO2
Building
Heated
Building
CO2
CO2 CO2

Oil (fossil
Woodchips
carbon)
(forest carbon)
Underground Fossil
Fuel
Cumulative Debts and Dividends Over
Time – Thermal Applications

Atmospheric carbon levels


Big Dividend

Small Debt

0 1 5 10 20 30 40 50 60 70 80 90 100

Years
Integrated Approach

Legislative
Action

Regulatory
Framework

Program Financial
Support Support
Traditional Wood Heating Fuels
Chunkwood Green Woodchips Wood Pellets

• Requires hand firing • Automated fuel feed • Automated fuel feed


• Sold based on • Sold by the green ton • Sold by the ton
volume (4’x8’x4’) • Variable energy • Very consistent
• Wide range of energy value based on energy value (6-8%
value based on moisture (20-50%) moisture)
moisture (10 – 55%)
Technology Overviews, Applications,
and Market Overviews

Jamie Daudon
Research Analyst
Meister Consultants Group
A Cadmus Company

Environmental Business Council of New England


Energy Environment Economy
OVERVIEW OF THE CITY INDUSTRY BUILDING
ELECTRIFICATION INITIATIVE
PREPARED FOR THE ENVIRONMENTAL BUSINESS COUNCIL OF NEW ENGLAND
JAMIE DAUDON, THE CADMUS GROUP, LLC January 26, 2018

Con

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Overview | Changes to Heating and Cooling Markets

» Deep decarbonization requires new strategies


» Heating and cooling is a primary contributor to GHG emissions
» Strategic electrification is emerging as a leading decarbonization
strategy
» Cities (and states) continue to lead on climate action and policy
» Cities are leading on new RH&C strategies

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January 26, 2018
Overview | Building Electrification Initiative

» Four leading North American cities (NYC, Washington D.C., Boulder, and
Burlington) are exploring opportunities to scale up heat pump deployment
to meet energy and climate goals.

» Cities are working with


› Major heat pump manufacturers and industry leaders across the U.S.
› ~20 observer cities, located across the United States
› Other key stakeholders, including regional efficiency organizations, utilities,
philanthropic organizations, state agencies, technical consultants, and others

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January 26, 2018
Major shifts in energy, climate, policy and economics are influencing the
heating and cooling market
Heating and cooling sector is a primary
contributor to GHG emissions 2014 GHG emissions in New York City
» On-site fossil fuel combustion in buildings
accounts for 15-40% of citywide emissions
» Thermal energy use is the single largest source
of city GHG emissions in many heating
dominated climates.
» Energy planners note that grid decarbonization ~21.6 MtCO2 from
and building efficiency will be insufficient to on-site fossil fuel
combustion (44%)
achieve 80x50 goals (e.g. NYC 80x50 Roadmap,
Clean Energy DC)

Overview of City-Industry Building Electrification Initiative


Source: NYC (2016). Inventory of New York City Greenhouse Gas
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Emissions in 2014.
January 26, 2018
Major shifts in energy, climate, policy and economics are influencing the
heating and cooling market
Strategic electrification is emerging as a leading energy strategy to achieve a broad range of goals

Four Pillars of Strategic Electrification Drivers of Strategic Electrification

Low-carbon electricity Decarbonization


grid
Energy Security

High-efficiency Electrification
Energy Resilience
buildings of transportation

Economic Development

Electrification of heating Utility Business Models /


Load Growth
Adapted from Fig. 2 of NEEP Northeastern Regional Assessment of Strategic Electrification

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January 26, 2018
Major shifts in energy, climate, policy and economics are influencing the
heating and cooling market
Greenhouse Gas Emissions from Residential Heating by Fuel Type
300

250

200
lb CO2/MMBtu

150

100

50

0
Electric Heating Oil Propane Natural Gas Air Source Ground Wood Solar Hot
Resistance Heat Pump Source Pellets Water
Heat Pump
Sources & Assumptions: COP of 2.4 for ASHP, COP of 3.6 for GSHP, and AFUE efficiencies of 80% for oil, propane, and gas; 2014 ISO New England Electric Generator Air Emissions Report (range between annual
system and LMU marginal emissions); EIA Fuel Conversion; EIA (2016) Carbon Dioxide Emissions Coefficients; AEA (2009) Carbon factor for wood fuels for the Supplier Obligation

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January 26, 2018
Major shifts in energy, climate, policy and economics are influencing the
heating and cooling market

Cities are initially focusing on air source heat pump


deployment
» High-efficiency space heating + cooling at compelling price point
» New cold climate ASHPs are optimized for New England weather
» Flexible installation options ideal for urban home comfort
» Strong state and utility rebate support
» Core component of urban electrification strategies (pairs with
PV, EVs, etc.)
» Strong market growth emerging across the Northeast

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January 26, 2018
Heat pumps must
What does account for over 95% of
scenario residential sales and
modeling over 78% of commercial
show us? sales by 2035

Source: NEEP (2017).


Northeast Regional
Assessment of Strategic
Electrification.
Prepared by Synapse
Energy Economics and
Meister Consultants
Group. Retrieved from
www.neep.org.

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January 26, 2018
What does scenario modeling show us?

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January 26, 2018
Public private collaboration will be essential to achieve energy and
climate goals

How can cities and the private sector take joint


action to accelerate heat pump deployment and
thermally decarbonize the building sector?

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January 26, 2018
Why direct collaborations between city and industry leaders?

Cities and industry actors have a variety of complementary


strengths that can be leveraged to drive a market transformation

Cities Manufacturers
• Strong relationship with distributors
• Access to local datasets
Strengths

and contractors
• Access to and credibility with
• Resources for marketing
constituents
• Customer insights and technical
• Control/influence over building
expertise
codes and local regulations
• Drivers of technology innovation
Challenges

• Limited financial resources


• Limited financial resources
• Limited ability to affect
• Limited ability to affect
policies/programs
policies/programs outside sphere
• Strengthening supply chain/
of influence
contractor sales force

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January 26, 2018
Building Electrification Initiative (formerly the Thermal Decarbonization Initiative)

Concept Planning Launch Scale Up


2016 2017 2018

“Going to Thermal Decarb: “Going to


Thermal Decarb: Thermal Decarb:
Scale” Phase 1: Scale”
Phase 2 Program Phase 3: Going
Convening Roadmaps Convening
Design & Pilots to Scale (2018+)
(2016) (2016-17) (2017)

San Francisco & Boulder


Thermal Decarbonization
Study (2015-16)
?
“Bringing Renewable Thermal Solutions to Scale in New England”
Project
(2016-18)

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January 26, 2018
During Phase 1, cities completed a year-long road mapping process to
identify thermal decarbonization strategies
» Barriers and opportunities. What are the
barriers to deployment?
» Market segmentation. What buildings are
best suited for heat pump deployment?
» Local supply chain. What are the strengths
and weaknesses of the local supply chain?
» Policy and program options. What policies
or programs should cities pursue?
» Industry partnerships. How can we best
build industry partnerships to take action?

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January 26, 2018
Case Study| New York City

New York City’s Commitment to 80x50


» As of 2016, 18% reduction in emissions
from buildings

» Most actions to date have focused


on large buildings

» 800,000 1-4 family buildings account


for ~20% of GHG emissions

For 1-4 family buildings, • Estimated 600,000 must install ASHPs


by 2050… • Up to 750,000 must install HPWHs

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Sustainability January 26, 2018
Case Study | NYC market opportunities

176,000 1-4 family buildings citywide


identified as good candidates for ASHPs
» Most homes are heated by natural gas, but
lack central air conditioning

Staten Island: 70,742 high potential homes


for ASHPs
» 71% single family homes
» 86% owner-occupied
» 87% gas heated

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Sustainability January 26, 2018
Case Study | NYC market opportunities

Bronx: 19,240 high potential homes


for ASHPs
» 33% single family homes
» 52% owner-occupied
» 48% use heating oil

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Sustainability January 26, 2018
Case Study | NYC supply chain – large and fragmented

Local Cold Climate ASHP Supply Chain


NYC and Surrounding Counties (~25 mile radius)
» 17 NEEP-certified manufacturers
supply products locally
» At least 67 distributors with over
Manufacturer
200 locations in operation
» The top 8 distributors account for
roughly half of locations

Distributor
» Nearly 14,500 local HVAC
contractors
» Over 90% of firms employ 10 or
fewer employees

Contractor

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Sustainability January 26, 2018
In Phase 2, cities are designing and piloting programs that target key
market adoption barriers
While each city has different specific goals, general Phase 2 focus areas include:
» Consumer awareness. Develop strategies to increase consumer awareness and
refine value proposition for consumers (e.g. comfort, health, efficiency, etc.)
» Local supply chain development. Increase number and quality of contractors by
engaging existing and potential contractors and scoping contractor training
programs.
» Policy and program development. Identify or implement city policies or utility
programs that drive technology adoption.

Stakeholder engagement. Align key stakeholders to achieve Phase Two goals;


collaborate directly with Mitsubishi, utilities, state agencies, and other stakeholders to
develop successful models of public-private collaboration.
• Workshops between city stakeholders and Mitsubishi staff in Q1 2018 key first step

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January 26, 2018
Next steps

» Design and implement pilot


programs
» Assess challenges and successes of
public-private collaboration models
» Design programs to scale up
initiative across cities
» Launch Phase 3 in late 2018/early
2019

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January 26, 2018
Contact Info

Neil Veilleux | Principal


neil.veilleux@mc-group.com
Office: +1.617.849.9947
Mobile: +1404.863.6524

Meister Consultants Group, A Cadmus Company


One Center Plaza, Suite 320
Boston, MA 02108
www.mc-group.com

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January 26, 2018
Appendix

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January 26, 2018
Major shifts in energy, climate, policy and economics are influencing the
heating and cooling market
» Cities (and states) continue to lead on climate
action and policy
› 382 US Mayors (representing 68 million Americans)
have adopted the goals enshrined in the Paris
Agreement (and more ambitious ones)
» Drastically reducing carbon emissions from
buildings is critical to achieving these goals
› Cities across North America are exploring strategies
to scale up deployment of renewable heating and
cooling (RH&C) technologies, including:
› Air-source heat pumps (ASHPs)
› Ground-source heat pumps (GSHPs)
› Heat pump water heaters (HPWHs)

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January 26, 2018
Thermal energy emissions: the missing piece in achieving 80 by 50 goals

» Thermal energy City State Target City Target


accounts for over 1/3 Boston
80% by 2050
80% by 2050

of GHG emissions in Northampton


(1990 baseline)
80% by 2050
Somerville Carbon neutral by 2050
New England
Portland 75-80% by 2050 10% by 2020
» Achieving the deep
(2003 baseline)

75-85% by 2050
GHG reduction Providence
(2001~23%
In Somerville, baseline)
Carbon neutral by 2050
of all citywide emissions
targets set by New are from residential gas and oil usage
Residential
England cities and Buildings:
[VALUE]
states will require Gas – 18%

decarbonization of
Oil – 5%
energy used in
thermal applications
Sources: Boston Climate Action Plan Update (2015); Northampton Municipal Energy Reduction Plan (2010); Somerville Greenhouse Gas Inventory
Report (2016); Portland Municipal Climate Action Plan (2008); Providence Executive Order 2016-3;

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January 26, 2018
Why air source heat pumps?

» High-efficiency space heating +


cooling at compelling price
point
» New cold climate ASHPs are Technology Avg. $/ Avg. installed Avg. MassCEC
optimized for New England heating cost rebate
weather ton

» Flexible installation options ideal ASHP $3,800 $4,500 / $760 /


for urban home comfort
Space heating + cooling $11,600 $1,900
(optional GSHP $11,300 $51,000 $8,100 (+ ITC)
» Strong state and utility rebate water heating
add-on)
support Space heating Pellet boiler $4,400 $25,400 $11,700
SHW * $11,600 $2,400 (+ ITC)
» Core component of urban
Water heating only
electrification strategies (pairs
with PV, EVs, etc.)
» Strong market growth emerging
across the Northeast Notes: All values rounded; ASHP values are (1) average of one single-head system
and (2) average of all other systems; ITC of 30% for GSHP (now expired) and SHW;
pellet boiler $/ton based on maximum rated output

Sources: Cost data from small-scale MassCEC Clean Heating & Cooling Program and Commonwealth Solar Hot Water Program databases

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January 26, 2018
Why air source heat pumps?

» High-efficiency space heating +


cooling at compelling price
point
» New cold climate ASHPs are
optimized for New England
weather
» Flexible installation options ideal
for urban home comfort
» Strong state and utility rebate
support
» Core component of urban
electrification strategies (pairs
with PV, EVs, etc.)
» Strong market growth emerging
across the Northeast

Sources: Cadmus (2016) Ductless Mini-Split Heat Pump Impact Evaluation

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January 26, 2018
Why air source heat pumps?

» High-efficiency space
heating + cooling at
compelling price point
» New cold climate ASHPs are
optimized for New England
weather
» Flexible installation options
ideal for urban home comfort
» Strong state and utility
rebate support
» Core component of urban
electrification strategies
(pairs with PV, EVs, etc.)
» Strong market growth
emerging across the
Northeast
Sources: Photos of indoor ASHP units from Daikin, Fujitsu, and Mitsubishi

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Why air source heat pumps?

» High-efficiency space heating +


cooling at compelling price
point
» New cold climate ASHPs are
optimized for New England
weather
» Flexible installation options ideal
for urban home comfort
» Strong state and utility rebate
support
» Core component of urban
electrification strategies (pairs
with PV, EVs, etc.)
» Strong market growth emerging
across the Northeast

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Why air source heat pumps?

» High-efficiency space heating +


cooling at compelling price
point
» New cold climate ASHPs are
optimized for New England
weather
» Flexible installation options ideal
for urban home comfort
» Strong state and utility rebate
support
» Core component of urban
electrification strategies (pairs
with PV, EVs, etc.)
» Strong market growth emerging
across the Northeast

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Why air source heat pumps?

» High-efficiency space heating + Cumulative Rebates provided by MassCEC


cooling at compelling price (Q1 2012 – Q2 2016)
point 4500

» New cold climate ASHPs are 4000


optimized for New England
weather 3500

» Flexible installation options ideal 3000

for urban home comfort 2500

» Strong state and utility rebate 2000


support
1500
» Core component of urban
electrification strategies (pairs 1000

with PV, EVs, etc.) 500

» Strong market growth emerging 0


across the Northeast

ASHP GSHP SHW Pellet Boiler

Source: MassCEC Clean Heating & Cooling Program and Commonwealth Solar Hot Water Program rebate data

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Why air source heat pumps?

» High-efficiency space Cumulative MassCEC CH&C Rebates vs.


Expected annual system replacements (Q1
heating + cooling at 2012 – Q2 2016)
compelling price point 700,000

» New Despite
cold climate
the strong ASHPs
emergingare
optimized
growth of for Newmarket,
the ASHP England
fossil 600,000

weather
fuel systems still dominate the 500,000
replacement market. An estimated
» Flexible installation options
140,000 heating systems are due 400,000
ideal for urban areas
for replacement every year in MA 300,000
» Strong state and
(~20 year utility
lifetime).
Over 2,500 ASHP rebates
issued by MassCEC in
rebate support 200,000 2015 (<2% of expected
replacements)
» Core component of urban 100,000
electrification strategies
(pairs with PV, EVs, etc.) 0

» Strong market growth


emerging across the Est. annual replacements
GSHP
ASHP
SHW
Northeast Pellet

Source: MassCEC Clean Heating & Cooling Program and Commonwealth Solar Hot Water Program rebate data

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Building Electrification Initiative | Overview

» Cities across North America have set ambitious climate and energy goals, but achieving
these goals will require significant changes in thermal energy use in buildings.

» Four leading North American cities (NYC, Washington D.C., Boulder, and Burlington) are
exploring opportunities to scale up heat pump deployment to meet these goals.
› NYC: 600,000+ buildings need to install ASHPs by 2050
› DC: 10,000 high-potential homes identified
› Boulder: Must grow market to ~300 annual installs by 2020; 1,000+ annual installations by 2030
› Burlington: Displace 1,000 non-gas homes with ASHP; scale market to 300+ annual installs by
2030

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Building Electrification Initiative | Overview

» Collaboration between public and private sectors is essential to achieve high number of
installations required to meet city goals.

» The Building Electrification Initiative aims to develop effective strategies for public-private
collaboration to rapidly scale up ASHP markets across North America. Key objectives
include:
› Increasing customer awareness and number of leads
› Increasing number of qualified contractors to perform installations
› Improving understanding of technology performance and developing a compelling story for
wide-scale adoption

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Agenda

» What is the City-Industry Building Electrification Initiative?

» What are the challenges and opportunities that we face?

» How can we drive change?

» Where are we going next?

Overview of City-Industry Building Electrification Initiative


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January 26, 2018
Advancing the Industry and
Addressing Impacts on the Grid

Helle Gronli
Coordinator, Renewable Thermal Alliance

Associate Research Scientist


Yale School of Forestry and Environmental Studies

Environmental Business Council of New England


Energy Environment Economy
Renewable Thermal Alliance
Advancing an Industry Together

Helle H. Gronli
Associate Research Scientist, Yale University
Coordinator of the Renewable Thermal Alliance

Environmental Sustainability Council


January 26th 2018
Roadmap

The Power of an What has to Happen


The Opportunity
Alliance for This to Work

Roadmap
The Opportunity
NYS and NE Buildings

Estimations based on roadmaps and


feasibility studies in the region

• 1,700 Million MMBtu’s heating


and cooling demand
• $1,100 Million annual investments
• 18,300 job-years

The opportunity 149


Market Change – Norway
Air-to-
District Heating 1992-2016 Heat Pumps 1995-2016 water
Water-to-
Number of units water

Air-to-
air

Residential Industria Commercial


l
Source: Statistics Norway Source: Norwegian Heat Pump Association

The Opportunity
Building on the
Northeastern Strengths

• A large regional market


• Green financing tools and
mechanisms
• Abundant private money
• Learning from others

The Opportunity
The Power of an Alliance
The RTA Elements

Engagement & Seed Innovation Independent


Dialogue Grants Projects

The Power of an Alliance


What has to Happen?

Regional commitment Sustainable funding Growing the market

What has to Happen? 154


cbey.yale.edu/RTA

Contact to Register to the Distribution List: helle.gronli@yale.edu 155


Advancing the Industry and
Addressing Impacts on the Grid

David Lis
Director of Technology & Market Solutions
Northeast Energy Efficiency Partnerships

Environmental Business Council of New England


Energy Environment Economy
EBC Energy Resources Program;
Advancing the Renewable Thermal Industry and
Addressing Impacts on the Grid
Dave Lis, Director of Technology and Market Solutions
January 26, 2018
About NEEP
A Regional Energy Efficiency Organization

158
Northeast Energy Efficiency Partnerships

“Assisting the Northeast & Mid-Atlantic Region in Reducing


Total Carbon Emissions 80% by 2050”
Mission
Accelerate energy efficiency as an essential part of
demand-side solutions that enable a sustainable regional
energy system
Vision
That the region embraces next generation energy
efficiency as a core strategy to meet energy needs in a
carbon-constrained world
Approach
Overcome barriers and transform markets through
Collaboration, Education, and Enterprise
NEEP Initiatives related to Renewable Thermal

Regional ASHP Market Regional Assessment of


Transformation Initiative Strategic Electrification

160
Outline: Advancing the
Industry/Addressing Impacts on the Grid

• What does Electrification have to do with Renewable thermal?


• Defining “Strategic Electrification”
• Insight from Strategic Electrification Assessment Report
– Looking toward 2050: Modeling and Impacts; How the widespread
penetration of electrification technologies might impact regional
electric usage
• Next Steps to advance Strategic Electrification and the
Renewable Thermal industry

161
Region’s Aggressive Carbon Reduction Targets

162
Aren’t we on the path to 80% reductions?

GHG
reduction:
41% below
2001 levels

• Emissions are nearly triple the goal of 80% reduction


• Conclusion:
– Need to address direct emissions from end uses
– “New” Strategy is necessary… Strategic Electrification 163
Direct Fossil fuel use in New York and
New England
4.2 Quadrillion BTUs per year of direct fossil fuel use
85% addressable with electrification technologies assessed in this report

164
Decarbonization context

Efficiency
Condensing Space & Water Heat
Efficient Appliances

Low-Carbon Solar Hybrid Cars Electrification


PHEVs
Wind LEDs
Supply Run-of-River Hydro HP Space Heat
CHP
Urban Freight and Transit
Wood HP Water Heat Long-Distance Freight
Nuclear Bldg. Controls Resistance Heat
Ponded Hydro
Biofuels Smart Appliances Light Duty EVs

Biogas Batteries
Resistance WHs
Pumped Hydro
Interruptible Loads

Flexibility
Strategic
Electrification
165
“Strategic Electrification” means…

• powering end uses with electricity instead of fossil


fuels
• in a way that increases energy efficiency and reduces
pollution,
• while lowering costs to customers and society,
• as part of an integrated approach to deep
decarbonization.
166
• Looking Toward 2050
–Modeling of grid impacts

167
Max Electric Plausibly Optimistic Reference (AEO 2017)

2050 GHG reduction from 2001 77% 69% 24%


levels

2050 electric consumption 402 TWh 339 TWh 259 TWh

Electric energy efficiency ~2% annual savings via long-lived ~2% annual savings via long-lived ~1.1% annual savings via long-lived
measures measures measures

Clean electricity 95% in 2050 95% in 2050 61% in 2050

Residential heat pumps Delivered fuels: 96% sales share in Delivered fuels: 89% sales share in 6% total installed share in 2050
2035 2035
Natural gas: 95% sales share in 2035 Natural gas: 68% sales share in 2035

Commercial heat pumps Delivered fuels: 89% sales share in Delivered fuels: 80% sales share in 4% total installed share in 2050
2035 2035
Natural gas: 78% sales share in 2035 Natural gas: 66% sales share in 2035

Cars and light trucks 81% sales share in 2035 70% sales share in 2035 3% sales share in 2035

Medium and heavy-duty road 50% of miles electric in 2035 25% of miles electric in 2035 0.3% of miles electric in 2035
vehicles

Process heat and steam 16% fossil energy displaced in 2035 13% fossil energy displaced in 2035 None

168
Getting to 80% GHG reduction by 2050

Assume we do the “right” things on efficiency, flexibility, and


low-carbon electric supply:
–How fast do electrification markets need to transform to get to 80%
GHG reduction?
–What if we also plan to use some bioenergy?
–What are the electric supply needs?
–What impacts should we expect on the grid, and on consumers?

169
“Max-Electric” case: 80% via electrification
GHG emissions 78% below
Electric
2001 levels by 2050 consumption
electrifying heat and on-road rises 58%
transport (get the rest from from current
miscellaneous uses) levels

Markets need to transform fast


Residential Heat Pump Market Electric Car & Light Truck Market

170
“Pausibly Optimistic” case: 70% from electrification
Res. HP market penetration: 5-15
years slower than “all-in” case

Need biogas/biofuels to get to 80% reduction

Light EV same through 2025, but Annual electric consumption rises 32% from current
slower after

171
Shifting seasonal load shape

• January consumption
passes August in mid-
2030s
• Need more than
double the low-carbon
electricity currently
used in the region,
biased toward winter
• One grid challenge:
Reach and integrate
new variable supplies

172
Higher efficiency HPs have grid benefits

• Illustrative calculation
indicates that higher-
efficiency HPs can delay
the region’s shift to winter
peaking by 4-5 years
• Clustering on distribution
system => winter peaks
sooner
• Potential for substantial
T&D cost savings from
winter EE

173
Displacing natural gas
A long way from GHG goals:

• Biggest economic and


emissions win from
displacing oil in heating
and transportation, and
the market is going there
today (with policy help)
Much less electric system impact:

• What if we stop there,


and don’t electrify
natural gas end uses?

174
Shared infrastructure -> shared impacts

Electric load factor up

• Rate ($/kWh) relief possible, if peaks are managed well


• New flexible end uses could avoid some infrastructure costs

Gas load factor down

• Increased rate pressure; risk of self-perpetuating cycle


• Equity issues
• Stranded cost risk

Costs for enabling infrastructure

• Who pays; who benefits?


175
Next Steps:
- Policies and programs
- Data and research
- Thorny questions

176
Near-term policies and programs

Grow Markets

• Focus where it’s most cost-effective (with greatest emissions reduction)

Get on Track

• Heat pumps to half of delivered fuel heating system market by 2025


• Heat pumps displacing natural gas in 2025 where delivered fuel market is today
• EVs to 1/4 of sales by 2025 (ZEV Rule target)

Examples
• Set explicit targets, goals, and mandates for electrification to create certainty
• Launch or support marketing campaigns to increase customer awareness
• Support and expand incentives for EVs, heat pumps, and heat pump water heaters
• Expand EV charging infrastructure, particularly in multi-family housing, workplaces, and fast charging for
longer-distance travel
• Develop and scale new financing models for cost-effective electric technologies
• Continue characterizing technology performance
177
Data and research needs

• Data on the market uptake and performance of heat pumps and electric
vehicles
• Pilots on the control and capabilities of electrification technologies as
grid resources
• Analysis of the capacity of distribution circuits to meet electrification
needs before significant upgrades are required
• Analysis of power supply and transmission options for a very different
seasonal load shape, supplied by low-carbon resources, across the
northeastern United States and eastern Canada

178
Thorny Questions

• What are the appropriate roles for electric distribution utilities (including
regulated EE programs) in fostering electrification?
• Do these roles require changes in the utility business model or regulatory
paradigm?
• What is the right balance between biogas and electrification for current gas
uses?
• What is the future of the natural gas utilities and their pipeline networks?
• What rate structures would help to advance strategic electrification, and will
advanced meters be deployed if they are necessary to implement these rates?
• If incentives are going to play a significant role in advancing electrification,
where will the money come from?
179
Moving to Regional Action Plan

1. Breakout groups at Summit discussed most pressing near term


actions that Region should focus on in the near term

2. NEEP developing draft action plan

3. Working with Advisory Committee to finalize Action Plan

4. Publishing by end of September

5. NEEP to host a Leadership Committee focused on Strategic


Electrification in 2018

180
Regional Strategic Electrification Summit –
July 29th

181
Advancing Strategic Electrification/Renewable
Thermal Markets

182
Redefining De-Carbonization

183
Resources…questions

• Regional Assessment of Strategic Electrification Report (and Summary


Report); http://www.neep.org/reports/strategic-electrification-assessment

• Northeast/Mid-Atlantic ASHP Market Transformation Report;


http://www.neep.org/sites/default/files/NEEP_ASHP_2016MTStrategy_Report_FI
NAL.pdf

• Dave Lis, NEEP


– djlis@neep.org

– 781-860-9177 x127

184
Open Discussion
Moderator: Dwayne Breger, UMass Clean Energy Extension
Panel Members:
• Jamie Daudon, Meister Consultants Group
• Helle Gronli, Yale School of Forestry and Environmental Studies
• Mike Judge, MassDOER
• Larry Lessard, Achieve Renewable Energy
• David Lis, Northeast Energy Efficiency Partnerships
• Peter McPhee, MassCEC
• Adam Sherman, Biomass Energy Resource Center

Environmental Business Council of New England


Energy Environment Economy
EBC Energy Resources Program:

Renewable Thermal