Energy and
Environmental
Policy
Thermal Renewable
Energy and Efficiency
Act of 2010:
TREEA is intended to stimulate
investments in low-carbon
thermal energy infrastructure,
focusing on renewable energy to
meet heating and cooling needs.
Economics and impacts
Mark Spurr, IDEA Legislative Director
By the time this column is in print, I expect that the Thermal Renewable Energy and Efficiency Act of 2010
(TREEA) will have been introduced in both
the Senate (by Sen. Al Franken, D-Minn.,
and Sen. Kit Bond, R-Mo.) and in the
House of Representatives (by Rep. Betty
McCollum, D-Minn.). This article summarizes the rationale for the bill and projects
its impacts, per the June 9 version of the
bill, on energy use, greenhouse gas emissions and federal costs.
2005, 31 quadrillion Btu (quads), representing 31 percent, was used for heating and
cooling buildings and industrial processes
(fig. 1). Thermal energy is the key to unlocking a wide range of opportunities for reducing greenhouse gas emissions, including
renewable thermal energy sources as well
as combined heat and power and other
energy-efficient technologies.
Examples of use of renewable ther-
mal energy resources to reduce green-
house gas emissions include the following:
• Seattle Steam Co. found that directly
producing heat with its new biomass
heating plant was the most feasible
approach to making productive use of
waste wood, given specific pricing and
contractual issues with the power utility.
• District heating serving the Oregon
Institute of Technology uses low-temperature geothermal resources to
provide a clean, renewable source of
campus heat.
• Cornell University constructed a piping
system that uses naturally occurring
cold lake water for building air conditioning, cutting electricity consumption
by 87 percent.
• At the University of California, Los
Angeles, landfill gas is used for CHP,
producing heating, cooling and power.
Provisions and Overview
of Benefits
Why the Act Is Important
Figure 1. U.S. Primary Energy Consumption for
Thermal End Uses Compared With All Other
End Uses, 2005.
24% Heating
7% Cooling
69% Other
end uses
100% Total
Source: Analysis by IDEA using data from the U.S.
Energy Information Administration (EIA), Table 5. 2
End Uses of Fuel Consumption, 2002; EIA, Table 2. 3
Manufacturing Energy Consumption for Heat, Power,
and Electricity Generation by End Use, 2002; EIA,
Energy Market and Economic Impacts of S. 280, the
Climate Stewardship and Innovation Act of 2007;
Energy and Environmental Analysis Inc. and IDEA,
District Energy Services: Commercial Data Analysis
for EIA’s National Energy Modeling System, August
2007; IDEA member surveys, 2003-2009; IDEA, TREEA
Analysis Detailed Model, June 30, 2010.
TITLE I: THERMAL ENERGY
PRODUCTION TAX CREDITS
Background
The Internal Revenue Code (U.S.C.
26 Section 45) provides a production tax
credit (PTC) for generation of electricity
using certain renewable resources. Wind,
geothermal and “closed-loop” bioenergy
(which is powered by dedicated energy
crops) are eligible for a PTC of $0.022/
k Wh of electricity produced. Other technologies, such as “open-loop” biomass,
incremental hydropower, small irrigation
systems, landfill gas and municipal solid
waste, receive $0.011/k Wh.
What the Act Does
The Act expands the PTC to
production of renewable thermal energy.
Tax credits for thermal energy would be
© 2010 International District Energy Association. ALL RIGHTS RESERVED.
