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Ohio could pit cogeneration against wind farms

We made an error of omission in last week’s regional round-up of RPS legislation, leaving out a significant bill that’s working its way through the Ohio legislature.

Ohio’s Senate is expected to begin testimony next week on SB 315, which, among other things, would change the definition of renewable energy to include combined-heat-and-power, or cogeneration, projects.

Cogeneration can create big energy savings by simultaneously generating electricity, mechanical power or thermal energy. A 2008 report by the U.S. Department of Energy’s Oak Ridge National Laboratory identified Ohio as one of five states with the most CHP technical potential.

Wind advocates worry that classifying energy from cogeneration projects as renewable will pit them against wind farm developers, some of whom have already invested years of planning in projects to meet the state’s renewable targets.

“The rules of the game are changing after they’ve already invested tens of millions of dollars,” says Dayna Baird, a lobbyist who represents the American Wind Energy Association (AWEA) in Ohio.

A little background on Ohio’s renewable portfolio standard:

The 2008 law requires Ohio utilities to draw 25 percent of their electricity from “alternative energy” sources by 2025. The portfolio is split in half, with an expectation that 12.5 percent come from renewable sources and another 12.5 percent come from “advanced energy resources,” which includes nuclear, “clean coal,” and combined-heat-and-power. On the renewable side, there is another requirement that half of the standard, or 6.25 percent of a utility’s overall portfolio, comes from in-state projects.

The problem for cogeneration supporters is that in the “advanced energy” portion of the portfolio standard, unlike with renewables, there are no incremental benchmarks that utilities need to meet. Utilities don’t have any requirements under the law until 2025, and as a result there has been virtually no activity.

The thought among provisions backers is that by moving cogeneration over to the renewable column, utilities and industries will begin investing in projects.

But Baird wouldn’t expect a quick reaction even if the bill passes in its current form. That’s because on the renewables side, where utilities have annual benchmarks to meet, there has already been enough investment to satisfy all of the in-state renewable requirements through 2015.

About half a dozen major wind farms are in the planning stage — and have been for years — to help utilities meet their requirements after 2015. Allowing utilities to opt for cogeneration projects instead could threaten the economics of some of those projects.

“There’s just not enough headroom in the in-state [renewable] requirements to include both,” says Baird.

The bill, which contains several other energy related proposals, is widely expected to pass, probably in the next five to six weeks. Renewable energy advocates are working to incorporate compromise amendments, though.

Jed Thorp, chapter manager for the Sierra Club in Ohio, says his and other environmental organizations are generally supportive of cogeneration and want to see it deployed wherever possible, but they don’t want to see it pitted against other forms of renewable energy.

“We don’t want to hurt the wind folks,” says Thorp. “If cogeneration were to be called renewable, that would, I think, put a serious dent in wind in Ohio.”

Instead of the current proposal, the Sierra Club is trying to build support for leaving cogeneration classified as an “advanced energy” source, but adding new year-by-year benchmarks in that category.

Baird says AWEA would support that route, but she doesn’t believe it’s politically feasible. One of the other potential compromises she is pushing for would add cogeneration to the renewable category but also increase the the size of the in-state portfolio from 6.25 percent to something higher.

The Ohio Senate Energy and Public Utilities committee was expected to begin proponent testimony on the bill on Wednesday.

Dan Haugen is an Energy Journalism Fellow at Midwest Energy News. Contact him at dan@danhaugen.com.

Photo by Jimmy Emerson via Creative Commons

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