Contracts as Industry Marching Orders

By Tim Portz | July 03, 2012

I am continually struck by the number of professionals, and the variety of their responsibilities, that are involved in the development of any biomass-to-energy project. From the first spark of an idea for a project’s development through the commissioning phase, the assembled body of professional expertise is staggering. Furthermore, every project that succeeds and begins delivering renewable power, heat or fuels is testimony to the expertise and commitment of every professional involved.

This month in Biomass Magazine, we examine the professionals who pursue, shape and fulfill the off take agreements, contracts and power purchase agreements (PPAs) that ultimately are the driving force behind this industry. Any sales professional will remind you that “nothing happens until somebody sells something,” and the energy sector  is no exception. Featured this month is a close look at the role contracts play in not only  any specific project’s development, but also how contracts and PPAs collectively form a foundation of a steady and reliable energy product supply.

Luke Geiver’s article “Contract Concepts” outlines the role of pellet supply contracts in providing surety to waiting utility customers who cannot tolerate any supply interruption or quality inconsistency.  He features insights from contract experts including Henry Pease, a senior biofuel portfolio manager for RWE, who sources nearly 3 million tons of wood pellets annually from all over the globe.

In Anna Simet’s story  “Power Purchase Plays,” she establishes the relationship between a PPA and a project’s ability to attract and convince a conservative lending community. The professionals she spoke with remind us that biomass energy competes with other renewables but, as evidenced by her conversations with South Carolina utility Santee Cooper, biomass can and does win its fair share of the market because of its reliable and consistent base-load qualities.

Finally, I’d like to draw your attention to the expanded biomass coverage you can expect in Biomass Magazine. This month’s issue focuses on the conversion of biomass into not only renewable kilowatts and Btu, but also liquid fuels and next- generation renewable chemicals. In covering the industry, we’ve often found that stories about inputs, conversion technologies and projects couldn’t be confined to heat or power but had applicability in fuels and chemicals as well. To tell the whole story, the fuel and chemical components had to be discussed. And so it is with the biomass industry as a whole. To tell the entire biomass story, we have to talk about all of its energy product possibilities. In fact, perhaps the strongest argument for the continued advancement of the biomass-to-energy industry is biomass’s ability to be converted into every energy product the U.S. and world consume. No other renewable energy input can boast that, and Biomass Magazine’s new editorial scope should be construed as a celebration of biomass’s unrivaled output flexibility.