Experts ponder future of biomass industry

By Phil Reese, Reese-Chambers Systems Consultants, and Bill Carlson, Carlson Small Power Consultants By Phil&

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Leveling the playing field

To proliferate nationwide, biomass power plants must find a way to pay for the haulage and processing of waste materials from farms and forestry operations, instead of relying on milling residues or landfill wood diversion for their fuel. Expanding the fuel supply will not only expand the market for biomass power; it will also ratchet up the public environmental benefits of the technology.

For instance, millions of tons of agricultural residue (such as stalks and prunings) are burned openly in the U.S. each year. These could become acceptable fuels for biomass power production—if the economics can be made to work. In addition, federal agencies have identified nearly 200 million acres of federal forest and range land that are in dire need of thinning to restore forest health and reduce wildfire risk. Most of the potential billions of tons of the removed material would have no use, other than as fuel.

A biomass facility that burns fuel sources such as these would require a stronger revenue stream than it is likely to obtain from winning an all-source RPS auction. Making the federal PTC for biomass power production equal to that for wind and geothermal production would bridge much of the gap.

If only Washington were to share states' and utilities' growing recognition of biomass power's environmental benefits. Some states now give biomass supplies double credits toward RPS compliance, and some utilities have held "biomass only" RPS solicitations. The firm capacity that biomass power can provide, which is rare among renewables, is beginning to be valued more highly in some locales. The rapid ratcheting up of many RPS programs (1%/year of total utility load) will expand markets for biomass power plants, which will have additional value when—no longer if—a regional and/or national carbon cap and trade system is put in place (see sidebar "Biomass plants' negative GHG profile").

Biomass plants' negative GHG profile

Biomass power plants use waste wood for fuel, burning it under controlled conditions to generate electricity. The use of wood waste as fuel eliminates the need to dispose of it in any of the more traditional ways. Each of the alternate disposal paths generates far greater levels of overall greenhouse gas (GHG) emissions because many of those emissions are of more potent GHGs than the CO₂ that is essentially the only GHG emitted by a biomass power plant.

Urban wood wastes have traditionally been disposed of in landfills, wasting their potential energy and using up valuable landfill space. Furthermore, the natural biodegradation of the woody wastes in landfills generates methane, a GHG that is 20 to 25 times more potent than CO₂ in terms of its contribution to global warming. Use of these wood wastes as biomass plant fuel eliminates the generation of methane and saves landfill volume for other wastes that cannot be recycled or burned.

Open burning of agricultural wastes produces copious quantities of criteria air pollutants, substantial amounts of methane, and some nitrous oxide. Leaving forest wood wastes to rot on the forest floor has the same downside as landfill disposal, and burning them produces negative effects similar to the burning of agricultural residues.

For this reason, biomass power plants have a net negative GHG profile. A study by Future Resources Associates has calculated this benefit as about one ton of net negative GHG emission per megawatt-hour of electricity generated by a biomass power plant. That's in addition to the GHG reductions achieved by the capacity of fossil-fueled generation that the biomass plant displaces.

The California Public Utilities Commission has recognized this fact. The following passage is extracted from its January 2007 decision on biomass plants' GHG emissions that implements California SB 1368, the state's GHG emissions performance standard:

In particular, the record shows that electric generation using biomass (e.g., agricultural and wood waste, landfill gas) that would otherwise be disposed of under a variety of conventional methods (such as open burning, forest accumulation, landfills, composting) results in a substantial net reduction in GHG emissions. This is because the usual disposal options for biomass wastes emit large quantities of methane gas, whereas the energy alternatives either burn the wastes that would become methane or burn the methane itself, generating CO₂. Since methane gas is on the order of twenty to twenty-five times more potent as a GHG than CO₂, and since methane has an atmospheric residence time of twelve years, after which it is converted to atmospheric CO₂, trading off methane for CO₂ emissions from energy recovery operations leads to a net reduction of the greenhouse effect.

Many of the 900 MW of proposed or studied biomass projects that we have identified would utilize these farm and forest fuels. To improve their economics, the industry must continue to educate governments about the myriad benefits of this renewable fuel. Even utilities are entering the biomass market. For example, Public Service of New Hampshire recently spent $75 million to convert a 50-MW coal-fired power plant to burn wood. It expects to earn $15 million a year in renewable energy credits from sales to Massachusetts utilities while increasing the number of timber-industry jobs in the area. The plant began commercial service in January 2007.

It has been nearly 20 years since we have been able to talk about an expanding biomass power industry in the U.S. (and Canada). Although the resurgence has largely bypassed California, in places such as the Pacific Northwest, the Upper Midwest, and New England, a strong comeback is under way, fueled by innovative state programs, the JOBS Bill's PTC, and rising fossil fuel prices. More work still needs to be done in Washington, however (see sidebar "Inside the proposed IRS "netting rule"). Substantial expansion of biomass power production beyond its traditional forest products and urban wood fuel base awaits a full PTC and more-widespread recognition of the technology's societal and environmental benefits.

—Phil Reese is a partner of Reese-Chambers Systems Consultants Inc., an industrial permitting, air quality, and risk management consulting firm based in Somis, Calif. He also is a principal and director of Colmac Energy Inc. and chairman of the California Biomass Energy Alliance. Reese can be reached at phil@reesechambers.com. Bill Carlson is the principal of Carlson Small Power Consultants, a biomass power consulting firm based in Redding, Calif. He also is chairman of the USA Biomass Power Producers Alliance. Carlson can be reached at cspc@shasta.com.

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