By Brett Rosenberg
November 1, 2004

The Municipal Waste Management Association's 2004 Fall Summit began with two timely presentations about important benefits that waste-to-energy facilities (WTEs) stand to realize through the use of renewable energy credits (RECs). Maria Zannes, President of the Integrated Waste Services Association and Robin Davidov, Executive Director of the Northeast Maryland Waste Disposal Authority provided their perspectives on trends involving challenges and opportunities in promoting the advantages of WTEs.

Waste-to-energy facilities combust municipal solid wastes to reduce their volume, produce energy, and recover materials. These facilities, according to Zannes, serve two major public needs: they provide an environmentally sound, reliable means of solid waste disposal, and provide clean, renewable power. The federal government and several states allow consumers to purchase renewable energy credits, which certify that a given amount of electricity is produced in a renewable manner, such as at a WTE facility, through wind power or biomass, for example. REC buyers include utilities trying to meet state renewable energy standards; the federal government, as a means to meet its renewable energy goals under Executive Order 13123; brokers playing the market; and even homeowners.

Buying renewable energy credits offsets energy produced from conventional fossil fuel processes. REC prices differ from state to state, and generally range from $0.50 to $5 per megawatt hour. Prices depend on market trends and state laws, according to Zannes. How states define what constitutes renewable energy often affects prices; the more diverse a renewable portfolio, generally the lower the price available to REC buyers. "To the extent that sources are excluded, for example, WTE, the better the price that those [renewable sources] included can get," Zannes said, indicating that limiting a renewable energy portfolio's scope drives up REC prices.

Zannes wrapped up by urging the MWMA to encourage the federal government and the states to support renewable energy credits (RECs) for waste-to-energy (WTE) facilities to promote a growing market for RECs. "Eventually, a renewable energy portfolio standard will allow existing facilities with renewables to make a little more money," Zannes said. Currently, many states have different definitions of what constitutes renewable energy; a portfolio standard would better integrate state renewable energy credits programs.

Robin Davidov, Executive Director, Northeast Maryland Waste Disposal Authority, expanded upon Zannes' themes. In noting that at least 15 states have renewable portfolio standards that allow public and private entities to purchase RECs to offset electricity consumption from traditional sources, Davidov expressed several advantages of REC programs. First, RECs provide a cost efficient renewable energy system. RECs also encourage competitive technological development to generate renewable energy, and they can be used to reduce greenhouse gas intensity

"RECs spur new technology, creating more efficient ways of meeting state and federal guidelines," Davidov said. In doing so, they create several opportunities. Namely, residential customers can opt for a "green pricing" program offered by local utility or distant utility; an organization can buy RECs to make a specific event "emission free" and a company may decide to purchase a quantity of RECs equivalent to a certain percentage of electricity consumption.

Davidov's advice regarding REC acquisition includes adopting a mentality similar to public procurement processes: "If you don't get the price you like, you don't have to sign the contract." While she also recommends hiring a consultant that understands the REC process, she also said there is money to be made by using the existing marketplace. For states without REC programs, Davidov encourages MWMA members to work with state legislatures to establish such programs, being especially careful when it comes to building a consensus among stakeholders in defining renewable so that it includes waste-to-energy facilities.