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Seeing the Forest and the Trees: Utilities and Regulators Consider Biomass Power Plants

As U.S. electric utilities continue to wrestle with how to cost effectively cut CO2 emissions and meet their renewable electricity goals, biomass could be starting to gain popularity as a clean energy technology that can help power suppliers do just that.

The EPA recently ruled that all biomass power projects will be exempt of emission caps for the next three years while the agency tries to figure out whether the technology is as clean as many report.  This means an opportunity for utilities to burn more biomass to power the nation and switch off some of the dirtier coal-fired plants they have been using for years. 

Bob Cleaves, president of U.S. Biomass Power Association, expects increasing numbers of utilities will begin investing in biomass facilities to take advantage of the EPAs exemptions.  "Biomass is very carbon friendly and it´s clear the government is going to make it harder and harder to use coal for energy generation as it works to lower greenhouse gas emissions," Cleaves notes. He also expects fewer coal plants will be built as biomass become more economically feasible for utilities. "No-one is building new coal plants," Cleaves said. 

Not only are plans to build new coal plants being shelved but the plants themselves are ramping down. Cleaves explains, “[Coal plants] are being curtailed because of carbon emission concerns.” He said “many view them as costly facilities to operate as the government steps up emission penalties in the future." 

One factor that could undermine biomass´s development is natural gas, the supply of which is quickly expanding. Natural gas could compete with biomass as the next clean-energy alternative, Cleaves pointed out. He added that biomass is not that easy to procure, making its production expensive, while natural gas is more abundant and could remain a cheaper alternative well into the future.  

Regardless of the cost, some utilities are already getting ahead of the game and fleshing out their biomass resources. One such firm is Dominion Virginia Power, which has asked the state of Virginia for permission to convert three aging and small coal-fired plants into biomass facilities.  

The coal plants are in Altavista, Hopewell and Southampton County and each currently have capacities of 63 MW but operate only during peak demand. When transformed into biomass plants, capacities will decrease to 50 MW each but will be running all the time, Dominion said in a statement. It added the plants´ capacity will soar about 92% over their 30-year lifespan, making them significantly cheaper than running coal in the long run. According to Dominion, the biomass plants will obtain most of their fuel from waste wood left from timbering operations and will comply with Virginia laws that regulate biomass for electricity generation.

The fuel switch would reduce nitrogen oxides, sulfur dioxide, mercury and particulate emissions, and all of the power plants would meet stringent new emissions standards established by the U.S. Environmental Protection Agency.

The total economic benefit of the project will be more than $350 million, including $30 million in local taxes, $180 million for the creation of more than 300 jobs in the state´s forestry and trucking industries and about $120 million paid to the 90 employees who will work at the overhauled stations, Dominion said.

It added the project would help the utility meet Virginian´s voluntary Renewable Portfolio Standard, which calls for 15% of its generation to stem from renewable resources by 2025. The company said it successfully met the 2010 milestone of 4%.

56 Billion Kilowatt-hours of Biomass Generation 

But despite Dominion´s enthusiasm for biomass, some experts say other electricity suppliers may not be so keen to grow their biomass supply chain until the EPA clarifies how exactly it plans to regulate the sector. "We don´t see a sudden rush from utilities to expand their biomass generation sources,” says Chris Namovicz, a biomass consultant at the U.S. Energy Information Administration.

"Rather, I think the move will be gradual as it takes time to bring biomass plants online and utilities will have to establish a reliable biomass supply system.”  So far, biomass accounts for a tiny fraction of electricity generation in the US. According to Namovicz, biomass generation from all operating sources reached 56 billion kWh last year compared to 4,120 billion kWh from all electricity power sources including electric utilities, independent producers, and industrial facilities that co-generate electricity. 

How fast biomass power plants will actually grow is anyone´s guess, at least until the EPA finishes reviewing the sector´s emission levels (and can issue an appropriate cap framework) which will not happen for another three years, he said. "It´s premature for companies to make investments as it´s hard to know to what degree biomass will really be exempt from emission limits until the EPA does enough research to understand the technology," Namovicz says.

"Companies are not going to want to make big capital investments until there is more regulatory certainty," Namovicz adds.  

Controversy over Carbon Neutrality 

It´s not just the EPA that is having a hard time calculating the market´s potential as a clean power-producing technology.  Several U.S. states are also up in arms about how much they want to support the technology. Biomass plants are already in operation in California, Michigan and Maine, thanks to tax credits issued by states that are keen to diversify their power portfolios and build their green credentials.

But in Massachusetts, a major debate is brewing over the exact environmental benefits of biomass. The controversy is so bitter that the state has launched new rules to limit the type of projects that quality for renewable energy incentives. It has also made the emission allowances for biomass installations more stringent, according to Mike Camera, chairman of the Coalition for Biomass Energy for MASS, which is lobbying the state to change the legislation.

The controversy stems from a recent study claiming biomass is not carbon neutral. 

Since then, anti-biomass group, the Biomass Accountability Project, has been pressing the Massachusetts to introduce a moratorium on state air permits for new biomass projects, threatening the viability of three new facilities currently under construction in in Springfield, Russell and Greenfield. 

But Camera said biomass is carbon neutral and that the state is undermining its renewable goals and hindering the creation of thousands of new jobs.

"It's totally unfair," Camera says. "Biomass is a clean technology and we have 2.5 million tons of it available in the state that could be used as a clean fuel. Instead, the state exporting this amount, creating a bigger carbon footprint in the process."

Under the current rules, the Springfield, Russell and Greenfield facilities will be much more expensive to build with their completion facing delays, Camera adds.

He hopes Massachusetts Environment Secretary will heed the coalition’s pleas and enact new regulations to allow biomass installations to flourish in the northeast state. 

But the Biomass Accountability Project will likely continue its fight to see the technology scrapped. 

In a statement, the organization claimed wood-burning plants create air pollution and are harmful to health.

“At a time when our governments are in financial meltdown and health costs are skyrocketing, taxpayer money (is) in these dirty incinerators that will poison communities for decades,” said Meg Sheehan, the attorney behind the group. “The federal government is giving billions of our money to corporations that wrongly call biomass ‘green energy.’”

If other states follow Massachusetts, the biomass sector´s domestic growth could be seriously jeopardized. 

But for now, it´s a wait-and-see game for the technology´s advocates, including Camera, who says the state is currently reviewing both parties´ claims before enacting any new legislation.

"We have no idea what the government will do but we are going to continue fighting to see biomass receives the credit it deserves," Camera said.

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