Pellets Still the Affordable, Available, Renewable One

Upcoming U.S. Industrial Pellet Association 5th Annual Exporting Conference occurring during an exciting time for the industry. Seth Ginther says it's critical the industry remain flexible as it heads into a period of expansion and diversification.
By Seth Ginther | September 18, 2015

As we at the United States Industrial Pellet Association get ready for our 5th Annual Exporting Pellets Conference in Miami, it continues to be an exciting time in the industrial wood pellet industry. European policymakers are poised to come back from recess with one thing on their minds when it comes to energy policy and decarbonization—how do they accomplish their goals in an affordable way without creating additional economic burdens on taxpayers?

As affordability moves to the forefront of European policymakers’ minds when confronting the energy “trilemma” of affordability, security and decarbonization, biomass remains the only affordable, commercially available renewable technology that can provide dispatchable baseload power to balance the energy grid at a moment’s notice. Baseload. Renewable power. All the time. Other renewable technologies are intermittent, meaning they only work when their fuel source is available, i.e., when the sun is shining or when the wind is blowing.

Accordingly, it is important to look beyond basic per megawatt-hour cost comparisons of all renewable technologies in order to truly understand how much each technology costs the average consumer on the road to decarbonization. A deeper analytical cost comparison will show that intermittent technologies also carry hidden costs associated with “demand capacity”—power plants that must be activated to balance the grid when the sun is not shining and the wind is not blowing. These power plants are often fossil fuel-based power stations that are kept on standby at excruciatingly high costs to the consumer.

Affordability will also translate here in the U.S. as federal and state lawmakers begin to implement President Obama’s Clean Power Plan. The plan emphasizes the importance of renewable energy and recognizes that sustainable biomass can be an important player in the fight against climate change. As we work with EPA on the specifics of biomass carbon accounting, there are a multitude of states ready to use sustainable biomass as an important component of their plans to mitigate climate change and increase their use of renewables. There are a few hurdles to address in this area, such as workforce and infrastructure, but we anticipate this domestic market will open up in the next few years, especially as the coal industry and domestic power generators look to cofiring as the most cost-effective way to continue the life of current coal plants. Because U.S. coal-fired power plants could use biomass for cofiring to meet the objectives of the Clean Power Plan—and do so while preserving jobs, infrastructure and capital investment—biomass can provide an affordable way for the U.S. to decarbonize as well.

There are additional nonsubsidized markets, such as the chemical production market, that could also open up for industrial pellet producers. In the U.S., we have spent the past decade developing the infrastructure and building a sophisticated supply chain to turn sustainable, low-grade woody fiber into sustainable wood pellets and deliver them to the world. With this development now behind us, the industry is able to participate in new markets without the costly start-up expenses.

It is critical that the industry remain flexible as we head into this period of expansion and diversification. There are plenty of opportunities in both traditional and emerging markets for industrial wood pellets and the entire bioenergy industry, we just need to be prepared to grab them as they come along.

For a more in-depth discussion on these issues and how the wood pellet industry can participate in new markets, I hope you will join us in Miami, Sept. 20-22 for our 5th Annual Exporting Pellets Conference. Visit www.theusipa.org/conference for more information.

Author: Seth Ginther
Executive Director
U.S. Industrial Pellet Association
804-771-9540
sginther@hf-law.com