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A Low Carbon Fuel Standard for Heating Fuels

A Low Carbon Fuel Standard for Heating Fuels. Charlie Niebling General Manager, New England Wood Pellet LLC October 27, 2009. Some Background.

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A Low Carbon Fuel Standard for Heating Fuels

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  1. A Low Carbon Fuel Standard for Heating Fuels Charlie Niebling General Manager, New England Wood Pellet LLC October 27, 2009

  2. Some Background • 5 billion gallons of #2 heating oil used annually in northeast for res/comm/ind heating (EIA) resulting in exporting over $10B annually from the Northeastern Economy • Low carbon biomass fuels (pellets and chips) can realistically and sustainably offset at least 10% of this demand (= 4.2 million ODT) just using Northeastern resources • Can be sourced from a variety of biomass feedstocks: forest/ag/urban/ residual/CLEAN C&D • European (and soon American) heating technology now exceeds 90% efficiency, super clean emissions: central heating, district heating, community-scale CHP • Bulk delivery makes fuel affordable and economical

  3. Source: NESCAUM (draft)

  4. Challenges • Technology comparatively expensive (scale) • Few incentives, unlike other renewables • Regulatory/other market barriers (e.g. ASME) • Adoption very price sensitive to conventional fossil heating fuels • Technical competency in fuel manufacturing, uniform regional distribution • Bulk fuel delivery infrastructure represents huge capital hurdle (“build it and they will come”)

  5. 2. Sufficient Storage • 1-3 deliveries a year • Attractive and/or unobtrusive • 4. Easy Installation/Service • Simple venting • Simple, once-a-year maintenance includes ash removal The Future…..not that far off, but we need help! • 1. Home or Business Delivery of Pellets in Bulk • - Much like oil, gas, or propane • Convenient - you don’t need to be there • 3. Fully Automated Central Heating System • Boilers and furnaces support existing distribution system • Automated feed system • Self-ignition and self-cleaning • Safety that is superior to propane or gas

  6. Applications

  7. Opportunity • YES to a low carbon fuel standard for heating fuels – policy must be fuel/technology neutral across different energy types • A standard (mandate) combined with incentives will help to build the market • Very difficult to implement in same way envisioned for transportation fuels • The simplest approach is a modest “system benefits charge” on high carbon heating fuels, proportional to carbon intensity (gCO2e/MJ), implemented uniformly across region (e.g. RGGI) • Use proceeds to catalyze market transformation, reduce capital hurdle, assist heating oil industry in diversifying • Eliminate/phaseout charge once benchmark goals of mandate have been met

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