ANNAPOLIS, Md. — The Renewable Energy Portfolio Standard - Renewable Energy Credits - Geothermal Heating and Cooling bill has passed the state legislature in Maryland. The legislation makes geothermal heat pumps (GHPs) an accepted technology for utilities to use toward earning Renewable Energy Credits (RECs) under the state’s Renewable Portfolio Standard (RPS).

The Maryland RPS stipulates that electricity suppliers (utilities and competitive retail suppliers) use renewable sources of energy like wind, solar and biomass to generate a minimum portion of their retail sales, in annual percentage increments to a level of 20 percent by 2022. Electricity suppliers demonstrate compliance with the RPS by accumulating RECs that are issued by the state for the renewable power they provide to their ratepayers. With the new law, GHPs offer yet another option for utilities to meet their renewable energy purchase requirements and earn RECs under the state’s RPS mandate.

Among many industry and agency stakeholders, the Geothermal Exchange Organization (GEO) lent support and written testimony to aid in the success of the measure. In late 2011, Doug Dougherty, GEO president, started work with the Maryland Energy Administration (MEA) to change the state’s policy and legislation regarding GHPs. In addition to its support for including GHPs under the state RPS, MEA is working on possible changes to life cycle analysis that could increase existing incentive amounts offered by the state for residential and commercial installations.

Doug Hinrichs, MEA geothermal program manager, noted several advantages that would be gained by including GHPs as an electric utility compliance option under the Maryland RPS:

• Adding another technology option to meet renewable energy procurement mandates;

• Potential utility support could help reduce the first cost of GHPs for home and business owners;

• Increasing local economic development (drillers, heat pump installers, HVAC industry); and

• Reducing the use of conventional energy supplies, including coal, nuclear, and fuel oil.

In testimony supporting the Maryland legislation, Dougherty said that GHPs should be an option for utilities to meet their obligation for renewable energy purchases in the state. “GHPs are the least-cost means of earning RECs, and are proven to avoid more retail electricity sales during utility peak load periods,” he said. “In other words, utilities that harness this distributed, thermal renewable energy resource at a scale large enough to earn Renewable Energy Credits will also improve their annual load factors. Higher annual load factors provide a downward pressure on electricity prices.

“Maryland is the first state in the country to recognize GHPs as a renewable energy source giving electric utilities credit for the thermal load avoided,” said Dougherty. “The measure will not increase GHP sales immediately, but it will help us gain support and promotion by utilities of GHP technologies, and provide a model for other states to begin supporting GHPs.”

Publication date: 05/07/2012