Sharon Peterson of Apple Oil (West Haven), John Bowman of FF Hitchcock (Cheshire), Steve Sack of Sack Energy (West Hartford), Eli Patterson of Kolmar (Bridgeport), and Chris Herb of CEMA all testified before the Energy Committee in support of a bill that would help promote the use of Bioheat® in Connecticut. The bill seeks to create a Thermal Renewable Energy Credit program (TREC) that is similar to existing programs that have helped increase the use solar and other renewable energy sources. Ultra low sulfur heating oil blended with as little as 2 percent biodiesel is widely used in Connecticut and this bill would help CEMA members increase sales and prevent conversion to other fuels. Below is more information on what TRECs are.
What are RECs?
Traditionally, RECs are renewable energy certificates that represent a megawatt-hour (MWh) of electricity produced from renewable energy. There are currently three classes of renewable energy sources, “Class I,” “Class II,” or “Class III,” each of which generates a corresponding class of REC.
RECs are tradable credits that allow the environmental attribute of the renewable energy to be bought and sold separately from the energy itself. A generator of renewable energy will either sell its energy “bundled” with the accompanying environmental attribute directly to an electricity provider, or it can “unbundle” the environmental attribute, via the REC, and the energy and sell them separately in the market to electric providers.
What is the proposed Connecticut T-REC?
The proposed Connecticut T-REC program would allow Class I RECs be generated on the basis of useful thermal energy generated from biodiesel delivered in Connecticut to an end user and used for heating, cooling, humidity control, process use, or other valid thermal end use energy requirements for which fuel or electricity would otherwise be consumed, including blending of biodiesel into home heating oil.
How is the Connecticut T-REC different from traditional RECs?
Since traditional RECs are generated on the basis of renewable energy used for the production of electricity, the energy is normally “metered” which allows the electric provider to precisely measure each megawatt-hour of energy produced by the renewable energy. T-RECs are generated on the basis of useful thermal heat generated at the homeowner level, i.e. for home heating. Metering for useful thermal heat in each home would be impractical. Thus, HB 5348 requires a formula be established to calculate the conversion of thermal energy output produced by homeowner generated thermal energy to megawatt hours—consistent with how similar programs work in Massachusetts and New Hampshire.
How would a Connecticut T-REC be generated?
To simplify the generation of Connecticut T-RECs, home heating oil dealers would be permitted to aggregate the thermal energy produced by the biodiesel they delivery directly to homeowners for the purpose of generating T-RECs. Once the applicable state agency approved the records provide by the home heating oil dealer, New England
Generation Information System certificates would be generated and distributed to home heating oil dealers for sale in the REC marketplace.
Who would have to buy Connecticut T-RECs?
Connecticut T-RECs would be part of the pool of Class I RECs that electric providers have to buy to comply with the Connecticut RPS requirements. By adding T-RECs into this pool of credits, electricity providers will have greater flexibility in meeting their renewable energy requirements.