EPA confirms wind, solar only renewables to receive early credit

Source: Elizabeth Harball, E&E reporter • Posted: Friday, November 13, 2015

U.S. EPA is throwing cold water on hopes that renewables other than wind and solar might qualify for an incentive program designed to reward emissions reductions made before the Obama administration’s Clean Power Plan takes effect.

In an informational call Tuesday, Tina Ndoh of EPA’s office of Air Quality Planning and Standards shut down a suggestion that the Clean Energy Incentive Program (CEIP) could be used to give credits for hydropower, geothermal or other forms of clean power.

The CEIP “is for wind and solar as eligible projects,” she said.

The program as it is currently designed will give early action credit to wind, solar and energy efficiency measures installed in low-income communities in the two years before the Clean Power Plan compliance period begins in 2022. However, the agency also indicated it is open to a loose definition of “low income,” meaning businesses in those neighborhoods may also benefit.

Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, heralded the importance of renewables in the Obama administration’s plan to curb CO2 emissions from U.S. power plants by 32 percent by 2030.

“If you are familiar at all with the Clean Power Plan … you understand what a central role renewable energy and energy efficiency played in the design of that program,” McCabe said. “The rule is built on the transition that is already happening to a cleaner energy system for the future.”

But some said they were unhappy that EPA is not giving all forms of renewable energy a leg up.

A push for a broad definition of ‘low income’

“We deliver carbon-reducing renewables in addition to solar and wind, such as geothermal and irrigation-canal hydro,” Fred Gordon, director of planning and evaluation at Energy Trust of Oregon, said on the call. “We’re a little perplexed why they would not be eligible for early credits, and we suggest that they should be.”

The Geothermal Energy Association in September sent a letter to EPA arguing geothermal energy should qualify for credit under CEIP.

“Like wind and solar, some geothermal projects in the west can also be constructed relatively quickly and produce emission free power in low-income communities such as the Imperial & Coachella Valleys,” the letter stated, citing areas of Southern California.

“Without this amendment to the CEIP program, [the association] is concerned the way the current rule is written would shift investment away from geothermal projects in the west,” they wrote.

Although the agency this week insisted only solar and wind will qualify, EPA is open to flexibility in other areas of the incentive system.

In a document released in October, the agency posed a series of questions to stakeholders, seeking comment on how to implement certain aspects of the program. Among them: when the agency should award allowances or emission reduction credits to states and how a “low-income community” should be defined under the energy efficiency part of the program (ClimateWire, Oct. 23).

The latter question attracted a great deal of attention on Tuesday’s call, with most participants advocating for a broad definition.

Enough time to earn credits?

“In terms of defining the eligible low-income population … low-income families live in all different kinds of communities, so I think providing very broad definitions and opportunities for different types of folks to participate is crucial,” said Stan Greschner of GRID Alternatives, a nonprofit solar installer that serves low-income communities.

Valerie Strauss of the Association for Energy Affordability Inc. agreed, adding that “when we think about how to address the needs of low-income consumers and support energy efficiency … we need to think about multifamily buildings.”

Others on the call advocated for EPA to credit energy efficiency measures made in businesses located in low-income communities under the program.

Rick Umoff of the Solar Energy Industries Association said his organization supports the CEIP, but also aired concern about the program’s time frame.

“We are concerned on the current strict window of the Clean Energy Incentive Program in that it only provides a couple of years of time period in which states can earn credit for investment in renewables,” Umoff said.

“That could create distortions in the marketplace, just based on how project development occurs for solar projects. … attherefore, we are advocating for moving the start date up,” he said.