February 1, 2010

Level the Playing Field for Open-Loop Biomass

Dr. Robert Peltier, PE

Congress snubbed the biomass power industry in 2004 when open-loop biomass power plants were given only half the production tax credits (PTCs) received by other renewable sources, such as wind, solar, and geothermal. It further dissed open-loop biomass plants by authorizing the credit for only five years (it expired December 31, 2009) rather than the 10 years given to other renewables. Why is the biomass power industry not getting the policy respect and equity with other renewable technologies that it deserves?

Biomass Plants Don’t All Get Equal Treatment

There are two types of biomass plants. Closed-loop plants are those burning organic material from vegetation planted exclusively for use as a power generation fuel stock. Open-loop plants (the vast majority) use a variety of agricultural-, forest product –, and construction-related wastes for fuel. Current renewable PTC rules have seated open-loop biomass power generation in the caboose of the PTC gravy train.

Not only were these biomass combustion technology plants singled out for rough treatment, but there also appears to be little momentum in Congress to right the wrong. Time is of the essence, as the PTC for open-loop biomass-fueled power plants placed in service prior to August 8, 2005, expired at the end of last year.

The loss of the PTC is a body blow to the entire biomass industry, as a strong majority of the biomass plants in the U.S. entered commercial service prior to 2005. In California, the number approaches 90%. I’m at a loss to explain why policy makers have relegated these proven power plants to second-class status and perhaps delivered a death sentence to this part of the biomass industry.