Green Light Requisites for Biopower
I hail from Wisconsin, so whenever I hear of a biomass power project being developed there, my interest is piqued. On a recent family trip back to my old stomping grounds of central Wisconsin, I heard coffee shop talk of a new biopower plant being built near the city of Rothschild. So I did a little investigating, because I’m always amazed at the circumstances that allow or deny the development of a successful biomass power project. Through the years, I have devised some simple requisite conditions for success.
In the current U.S. power environment, here are my proposed requisites: 1) competitive biomass feedstock cost, 2) brokerable biomass feedstock supply, 3) financial incentives, 4) reliable conversion technology, and 5) a committed utility and supportive community. The Wisconsin biopower plant is a model example of a project that I consider to have all the correct pieces of the biopower success puzzle in place.
First of all, the cost and supply of biomass feedstocks (requisites 1 and 2) that can be brokered and guaranteed go hand in hand. For many business scenarios involving biomass, the resource is discovered at seemingly the right cost and the nearby community gets excited about consuming a few megawatts of green power. But then the reality of harvesting, transporting and processing that biomass from field or forest to fuel silo at the power plant kills the entire venture. Sometimes, even though the feedstock reliability and cost look good, once the utility announces a higher electricity cost relative to established fossil-based electricity, the customer cries foul and the project never starts.
In the case of the Wisconsin power plant, the biomass will consist of residues from sawmills and pulp mills, which usually implies lower cost. It will be facilitated by a paper mill’s infrastructure that has decades of operation and experience in this region, which usually implies sustainability. This power plant is connected to an industry that has been buying and selling forest wood for over a century, which usually implies a greater ability for this biomass resource to be brokered. I remember the smell of paper mills as a kid, and my father once owned a tract of northern Wisconsin forest that he had “pulped out,” one summer, as he would say. That was slang for having the timber harvested as pulpwood for paper production. This infrastructure goes back decades and provides assurances to banks, communities and power providers so they are more apt to get behind a biopower project. This type of infrastructure, or the ability to create it at a reasonable cost, is essential for success. I think some of these principles can apply to other feedstocks.
That covers requisites 1 to 3 and part of 5. For requisite 4 (reliable conversion technology), the $268 million 50-MW plant is being spearheaded by Domtar Corp. This company already operates 15 pulp and paper mills in North America, with the majority of the process steam and heat requirements fueled by renewable fuels such as biomass and black liquor, a product of papermaking. The power plant will use conventional small stream boiler combustion and emission-control technologies that have been around for decades.
Finally, I need to delve into incentives, since they are almost always necessary to make biopower projects work (requisite 5). Since 2005, Wisconsin has required investor-owned electric utilities, municipal electric utilities and rural electric cooperatives (electric providers) to meet a gradually increasing percentage of their retail sales with qualified renewable resources. The current state renewable portfolio standard (RPS) establishes the goal that by the end of 2015, 10 percent of all electric energy consumed in the state will be renewable energy. We Energies and Domtar announced this project more than five years ago as a step toward this RPS goal. Another incentive that is aiding this project and others like it is the U.S. federal 1.1 cent-per-kilowatt-hour production tax credit, which has been around in some shape or form since the Energy Policy Act of 1992. The recent fiscal cliff deal of early 2013 has essentially extended this credit through 2014.
In my opinion, this project should end as a renewable power success story since it has all of my prescribed requisite conditions. It might seem nerdy to my family, but on my next visit back to the homeland, I just might stop by to get a tour.
Author: Chris J. Zygarlicke
Deputy Associate Director for Research