Baseload, Bioenergy

US Utilities Look to Biomass

Issue 3 and Volume 15.

Dominion Virginia has announced that it is fully converting three coal-fired power plants to biomass, using waste wood as fuel, signalling a warming towards biomass among US utilities.

‘It made better economic sense for us to do a full conversion rather than going with a co-firing solution,’ said Dan Genest, a Dominion spokesperson. ‘The low cost of this renewable energy source played a role in our decision, as did the minor changes necessary to convert the coal stations to using biomass (primarily fuel-handling equipment).’ In addition, waste wood is ‘readily and plentifully available near all three power stations that we are converting from coal to biomass’.

The conversions will ‘provide strong customer value at a cost that is significantly lower than building an equivalent capacity of new greenfield biomass facilities’, according to a statement from Dominion. The three conversions in Virgina, costing about US$55 million each, will be in Altavista, Hopewell and near Franklin, are due to be completed by the end of 2013. Biomass is part of Dominion’s plan to generate 15% of its power with renewables by 2025, it says.

The company also owns and operates the 83 MW Pittsylvania biomass power plant in Hurt, one of the largest in the country. The biomass source is wood chips and mill residues such as sawdust. More than 90% of this fuel is waste wood that would otherwise be left in forests as ‘slash’, dumped into landfills, or inefficiently burned, according to the company.

Waste Woods on Tap

Electricity generated from biomass costs $0.12/kWh – compared with $0.09-$0.10/kWh for coal and $0.06/kWh for natural gas – in 2009 dollars, according to April 2011 data from the Energy Information Administration. Biomass is often readily available and geographically near the plant. Utilities can partner with a lumber/timber facility to purchase its waste wood – as in the case of Dominion Virginia’s projects – or access waste wood from surrounding forests. Southern Power’s Nacogdoches plant is doing both.

The up-and-coming Nacogdoches Generating Facility in Sacul will be the country’s largest biomass plant when it goes into operation in mid-2012. Southern purchased the plant from American Renewables in 2009 and construction began late that same year. The plant will generate 100 MW of electricity. ‘The location is practical in that the supply of wood waste within a 100 mile [160 km] radius of the plant is capable of meeting the demand of 1 million tonnes of wood waste per year for the plant,’ said Stephanie Kirijan, a Southern Company spokesperson.

The Nacogdoches plant is the utility’s only full-scale biomass facility, but the company sees prospects for more: ‘We are excited about the possibilities that biomass has to offer. It’s exciting because it’s a baseload form of renewable generation,’ said Kirijan.

Southern subsidiary Georgia Power also plans to convert a unit at coal-based Plant Mitchell, near Albany, to biomass, pending the resolution of regulatory uncertainties, according to the company’s website. At the moment, renewables represent less than 1% of Southern’s total generation.

While some utilities build new plants or convert existing ones to biomass, others enter into power purchase agreements (PPA) with plants built, owned and operated by independent power producers. An example of the second option is the 30-year PPA agreement between Gainesville Regional Utilities (GRU) in Florida and the Gainesville Renewable Energy Center (GREC), a 100 MW biomass facility under construction by American Renewables. GRU will purchase all the plant’s output.

A Baseload Solution

GRU was pursuing coal to expand its baseload generation, but the Gainesville City Commission decided in favour of renewable energy. In addition, the governor ‘took coal off the table’, said Kathy E. Viehe, GRU’s assistant general manager of customer support services. The project began construction in March 2011 and is scheduled to open in late 2013. Once operational, it will raise renewables’ share in the utility’s power to 18%.

The GREC plant’s fuel source will be wood waste, including tops and limbs from harvested trees, residue from lumber mill operations, and urban wood waste from landscaping contractors and power line/roadway clearance contractors. Once the project is operational it will spend about $30 million per year on wood from the surrounding region, supporting the forestry industry, said GREC president Jim Gordon.

‘In general, having a local fuel source helps our community and the local economy since fuel will be purchased locally,’ said Viehe. ‘Biomass still costs more than traditional fossil fuels, at least in the short term. Over the long term we believe it will be less expensive and less volatile than fossil fuels.’

For the short term, the natural gas boom makes it a first choice for most large utilities. As coal falls out of favour, renewables like biomass appear to be playing pinch-hitter – as in Dominion Virginia’s case. While Dominion has no plans for more biomass plants in the next 15 years, Genest said the firm is ‘always interested in maintaining a diverse fuel mix.’ In the long term, biomass’s baseload capacity, competitive pricing and abundant and readily available fuel supply, should continue to draw the attention of large utilities in the US.