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Updated renewable energy standards go into effect on October 1, 2019 and Governor Hogan promises a new clean energy initiative.
The State’s renewable energy portfolio standards do not apply directly to you and me. But they do affect us, and our county governments, in several indirect ways.
- Counties use energy to deliver critical services to residents and power their facilities, so new laws have the potential to affect the costs of providing government services or catalyzing internal operational changes to reduce energy use.
- Counties protect open spaces and heritage sites from development, and new laws may encourage more solar farms and other infrastructure that threatens environmental and cultural preservation.
- Counties support economic development opportunities for their region, and new laws have the potential to incentivize or deter economic investment in renewable energies, some of which are better suited to certain regions of the State than others.
- Counties protect residents’ quality of life, part of which can be mitigating the costs of homeowners and business owners, and new laws have the potential to increase or decrease energy bills for residents and businesses.
- Some counties produce energy through for their own operations, selling the excess back to the energy grid, so new laws have the potential to increase the value of renewable energy production by counties.
- Some counties tax solar installations and laws that encourage additional solar power use may result in new revenues for those counties.
Current Law – 25% Renewable Energy by 2020
Utilities must show that a certain amount of the electricity they sell in Maryland is derived from sources that fit in the State’s definition of “renewable,” or they are penalized with a fee. The amounts are set by law.
The statewide Renewable Energy Portfolio Standard was originally enacted in 2004. Under this law, there were two categories of renewable energy, Tier 1 and Tier 2.
Tier 1 Renewable Energy Sources
- Solar energy, including energy from photovoltaic technologies and solar water heating systems;
- Qualifying biomass;
- Methane from the anaerobic decomposition of organic materials in a landfill or wastewater treatment plant;
- Geothermal, including energy generated through geothermal exchange from or thermal energy avoided by, groundwater or a shallow ground source;
- Ocean, including energy from waves, tides, currents, and thermal differences;
- A fuel cell that produces electricity from a Tier 1 renewable source under item (3) or (4) of this subsection;
- A small hydroelectric power plant of less than 30 megawatts in capacity that is licensed or exempt from licensing by the Federal Energy Regulatory Commission;
- Poultry litter-to-energy;
- Refuse-derived fuel; and
- Thermal energy from a thermal biomass system
Tier 2 Renewable Energy Source(s)
- Hydroelectric power other than pump storage generation.
You may notice that there are significantly fewer Tier 2 sources than Tier 1 sources. There has also been a shift in emphasis to Tier 1 – current law states that by 2020, the State utilities must be providing electricity from 25% Tier 1 sources, none from Tier 2.
New Law – 50% Renewable Energy by 2030
The General Assembly update the renewable energy laws this year with new percentages that will go into effect on October 1, 2019. The news standards:
- Grow the renewable energy requirements for electric utilities from 25% to 50% in 2030;
- Increase the percent of solar energy that the total must comprise from to 17% (although they provide electric cooperatives more flexibility with regard to solar requirements);
- Allow a small portion of the renewable energy goal to be made up of power from hydroelectric
power plants in 2019 and 2020 (only); and
- Require utilities to increase their overall wind power capacity from 2026 to 2030.
CARES Initiative – 100% Renewable Energy by 2040
While the Governor is letting the new renewable standards become law without his signature, he also set forth his own clean energy initiative. The Clean and Renewable Energy Standard (CARES) aims for 100% clean energy by 2040.
According to the Governor’s Press Release, the goals of the CARES plan include:
- Increasing the strategic use of zero- and low-carbon clean and renewable energy sources;
- Recognizing the clean and safe aspects of nuclear energy;
- Supporting hydropower, coupled directly with maintaining environmental stewardship;
- Advancing emerging technology for carbon capture and storage; and
- Utilizing the role of energy-efficient combined heat and power.
The Governor uses the term clean energy, which is slightly distinct from the word renewable. While renewable energy is derived from natural resources that naturally regenerate or do not run-out, such as wind, rain, sunlight, geothermal heat, and tides, clean energy includes any form of energy that is created without polluting the earth.
The Administration also specifically mentions nuclear power and hydropower. There is no current law requiring utilities to use a certain percentage of nuclear power, and although small hydroelectric power plants are a Tier 1 energy source, larger hydroelectric plants are a Tier 2 energy source. According to the US Energy Information Administration, Calvert Cliffs Nuclear Plant currently produces 44% of Maryland’s electricity, and large hydroelectric producers, mainly the Conowingo, produces between 5 and 10%.
Next Steps – Renewable and Clean Energies Jockey for Place
In the coming months, MACo anticipates hearing more about the Governor’s CARES initiative and the Administration’s intentions with regard to supporting and encouraging clean energy use in Maryland. The specific callout to nuclear energy, and the emergence of new forms of “modular nuclear energy” may be elements there.
MACo also anticipates legislation this year regarding the components of the Tier 1 energy category. The inclusion of waste-to-energy sources, some of which use incineration, was an unresolved point of contention in the General Assembly in the 2019 Session. Finally, it is yet to be determined the percentages that the Public Service Commission will set with regard to offshore wind power and how that industry and the mix of other renewable energy sources. A push for consideration of large hydroelectric power plants as a Tier 1 renewable source could also be possible and mesh with the Governor’s goals.