Dirty Truth about Maryland's Renewable Portfolio Standard

Maryland’s “green” renewable portfolio standard (RPS) law may not be so green after all. According to the latest reports from the Maryland Public Service Commission, state utilities are fulfilling their RPS mandates mostly through the use of dirty energy sources like black liquor, a byproduct of the wood pulping process, and burning waste wood products.

Maryland’s RPS law mandates that state utilities must procure 20% of their retail electric sales from renewable energy by 2022. The law was developed to “recognize and develop the environmental [read global warming] and consumer benefits associated with a diversity of renewable energy supplies to serve Maryland.” Qualifying energy sources are divided into two tiers. Tier 1 sources include biomass such as black liquor and wood waste. Utilities comply with the mandate through the purchase of renewable energy credits (RECs), which is equal to one megawatt-hour of energy generated from a qualified renewable source, or an alternative compliance payment penalty.

The 2010 and 2011 PSC reports (data years 2008 and 2009) found that “electricity suppliers used substantial amounts of qualifying biomass (e.g., waste wood and the mill residue known as black liquor).” In 2008, waste wood and black liquor composed nearly 70 percent of the RECs submitted for Tier 1 compliance, and nearly 60 percent in 2009.

Paper companies have used black liquor to power their plants for decades. More recently they’ve added diesel fuel to burning black liquor take advantage of billions in federal subsidies from a 2005 transportation bill. According to the Environmental Protection Agency a gallon of diesel fuel emits more carbon dioxide than a gallon of gasoline. Verle Sutton, a paper industry analyst was quoted in Bloomberg News saying, “It’s an absolute government boondoggle,” Sutton said. “These companies were not using fossil fuels. They only started because they needed it for the tax credit to work. So there’s a negative to the environment, not a positive.”

Ronnie Greene at iWatch News reported (hat tip Tim Carney) that there are serious doubts about whether wood waste is in fact a green source of energy. Greene’s article raises questions about carbon neutrality of wood waste energy, and reports on two wood burning California plants that “emitted nitrogen dioxide, sulfur dioxide, carbon monoxide, ammonia and particulate matter in levels exceeding permit requirements many times.”

Renewable portfolio standards are not beneficial for ratepayers, turns out they might not be that beneficial for the environment either.