Wood Chip Flap

Duke Energy’s request to use wood chips ruffles feathers.
By | November 23, 2010

The North Carolina Utilities Commission has ruled wood chips as an eligible feedstock under the state renewable energy standard (RES), and decided that wood in general is a renewable biomass resource under state law and therefore eligible for credit when utilized for renewable energy. The ruling was prompted by a request from power utility Duke Energy to gain renewable energy credits under the state RES for cofiring two of the company’s coal-fired power plants with wood chips derived from lower-value whole trees.

Although it’s been viewed as positive from groups such as the North Carolina Forestry Association, others are crying foul for sustainability reasons. Some environmental groups even filed legal challenges against Duke’s request, citing that only wood waste and scraps should be used and granted credit.

While wood chips derived from low-grade whole trees—not to be confused with whole tree wood chips as it often is—may go against the grain of what biomass power industry says is typically used at plants, it could give the struggling forest industry a healthy boost. 

Bob Cleaves, president and CEO of the Biomass Power Association, points out that fuel labels can be confusing. “Historically, what we’ve said as an industry is that we don’t use chips from whole trees,” he says. “That’s not actually accurate, because there are whole trees that are part of thinning operations that the industry uses, but these are consistent with a sustainable forestry plan.”

When loggers are harvesting for merchantable timber, Cleaves says, they may thin areas of non-merchantable trees that are spindly or diseased. “To the layman, that’s simply chopping down whole trees for electricity purposes,” he says.

Furthermore, some regions may be in dire need of forest management and thinning. Only 300,000 tons of waste wood was collected in North Carolina in 2009, and on average only 6 percent of available residuals are collected across the Southeast each year, points out Tracy Beer, renewable energy strategy manager at Duke Energy. “Residuals aren’t making it out of the woods because there isn’t adequate economic signal to do so,” she says. 

Aside from wood chips, Duke Energy will also be using wood waste, but in some cases there simply will not be enough waste wood materials available. “While it seems there are lots of impressions of an abundance of waste wood, those assumptions may not be completely accurate,” Beer says. “We would agree that more waste wood could be utilized, but there isn’t an unlimited supply. Also, it is unlikely that all of that material will ever make it out of the woods, due to terrain, landowner preferences and so on.”

Bob Slocum, executive vice president of the North Carolina Forestry Association, says North Carolina has a whopping 18 million acres of forestland. “About 58 percent of the state is forest,” he says. “Only three other states have more forestland than North Carolina, and the South as a region produces more wood than any other single nation in the world, yet our timber inventories have continued to increase.”

Notably, the vast majority of the forestland in North Carolina and the South is privately owned. “About 88 percent in North Carolina,” Slocum says. “History has proven that one of the main reasons we have as much forestland as we do is that forests have economic value to the people who own them, so having strong and varied markets for wood is essential to maintaining our forest land base. Biomass can provide an additional market for low-value wood and give landowners an economic incentive to improve forest management and to keep their land in forest.”  

North Carolina’s vast forestland base supports the state’s largest manufacturing industry—forest products. “However, the economic recession along with foreign competition, regulatory costs and other factors have severely impacted this industry,” Slocum says. “Mills have closed and those remaining are running at reduced production levels. Markets for wood are similarly depressed and landowners are not only harvesting less timber but, lacking an economic incentive, are also making lower investments in forest management.”

Biomass projects such as Duke Energy’s may help get the ball rolling again. The company’s intent is to use the lowest value biomass products available, Beer emphasizes, and none of the wood chips used will come from saw timber; only residual material or lower value whole trees, in accordance with sustainable practices.

The problem is that the word sustainability is frequently used but no one provides a definition of what it really means, Slocum says. “What is sustainability and what are the metrics by which you determine this?” he asks. “If you can define the term and how it’s measured, then answering questions about forest sustainability becomes easier.”

Realistically, can our forests provide unlimited amounts of wood forever?  “Probably not,” Slocum says. “There are limits to what an acre of land can produce, and we know that we will likely have fewer acres in the future. But we also know that our forests are probably growing only half or less than what they are capable of growing. What is lacking, among other things, is the economic signal to landowners to make these investments.”

In other news, Duke Energy and Duke University are teaming up to build a pilot anaerobic digestion plant at Loyd Ray Farms, a 9,000-head hog finishing facility in Boonville, N.C., 115 miles west of Raleigh.

“The project is about learning a lot together,” says Jason Walls, spokesman for Duke Energy. Besides the benefit of the pilot plant acting as a model and reference for other farms, Walls said the real value of the project comes in two key areas. First, it would help fulfill a portion of the state’s RES that requires a certain percentage of electricity to be generated from hog waste. “It also helps us better understand how this power plant interacts with our existing equipment,” he says.

 The project is expected to generate 512 to 639 megawatt hours of energy per year, all of which will be used at the hog farm. In exchange for hosting the experiment, hog farmer Loyd Bryant gets the system at no cost and will own it after 10 years, according to Walls.