Biomass Power Plant Development in North America,Overview and Lessons Learned

Renewable Energy

Adrian Wilson nternational Associates

Pioneering E!!orts " Biomass #tili$ation !or the Prod%ction o! Energy Prod%cts

What is Biomass&
Biomass any solid, nonhazardous, cellulosic material derived from: forest-related resources, solid wood wastes, agricultural wastes, and plants grown exclusively as a fuel.*
*based on the definition of biomass in the 2 ! "nergy #ct

Woody Biomass #tili$ation

# variety of value-added end uses have evolved over time $ome are commercially proven and some are still in the %& ' & (hases
* * * * * *

)umber products, composite panels, pulp $oil amendments )andscape*landfill cover +io-based products ,plastics, solvents, etc.+iofuels ,ethanol, renewable diesel+iomass power

Biomass Power 'echnology

.wo main components:

*

#n energy conversion system that converts biomass to useful steam, heat, or combustible gases # prime mover that uses the steam, heat, or combustible gas to produce power

(omb%stion 'echnology

)asi!ication " 'he *%t%re&

"lectricity*/eat

+iofuels (otential

Advantages o! Biomass When (ompared to Wind and +olar Energy

(rovides base-load renewable energy ,20*1on a cost effective basis. /as numerous societal benefits:
$upports hazardous fuels reduction and healthy forests 2et improvement in air 3uality (rovides employment ,0.4 5obs*67 %educes waste material destined for landfills

* *

Economic Bene!its o! Biomass #tili$ation

*

%ural economic development and stability.

- .he 8$ spends 9! billion each year in oil importation. +iomass could replace half of the said energy source and direct a minimum 92! billion to local economy and not to foreign oil mar:ets

;ncrease of <ob &emand.

- .he 8$ &epartment of #griculture estimates that =1, for every million gallons of ethanol 5obs are generated

;ncrease on #gricultural ;ncome.

- .he "lectric (ower %esearch ;nstitute estimates that producing ! 3uads from ! million acres of land will increase annual farm income by 9=2 billion in +ritain. .he 8nited $tates consumes 4 3uads annually.

Environmental Bene!its
* (reservation of agricultural land. * $ustainable agricultural techni3ues.
- .he crops can restore and ensure soil stability and health along with minimizing chemical residues and habitat destruction.

* %eduction of >reenhouse gas.

- ?apturing methane from producers such as cows or rice fields and applying it for fuel will significantly reduce methane which is 2 times more potent than ?@2 .

*;ncreased carbon se3uestering from the crops grown for

biomass. *#n estimated A! million tons of waste that goes to landfills could be used for energy production. *2o net increase in atmospheric carbon dioxide.

mproving Air ,%ality

New n!l%encing *actors E!!ecting Biomass Plants -old and new.

* * * * * *

>rowing waste disposal issues*opportunities %enewable energy government mandates*incentives 2ew Binancial and @wner >roups loo:ing for renewable energy business deals Bossil fuel pricing abrupt current and future price increases #cceleration in the development of new biomass to energy conversion technologies >reenhouse gas reduction opportunities

*based on data DSIRE: www.dsireusa.org

January 2008

ncentives / Renewable Port!olio +tandards

7N1 534 by 5653
-8cel1 964 by 5656.

0WA1 234 by 5656

2&: = C by 2 =!

D.: %" meets load growth by 2 =2

7E1 964 by 5666

264 by 562: / new RE

W 1 re>%irement varies by
OR1 534 by 5653
-large %tilities. 34 / 264 by 5653 -smaller %tilities.

E N;1 59<=4 in 5653 7A1 @4 by 566A B

24 ann%al increase

7'1 234 by 5623

%tility? 264 by 5623 goal

R 1 2C4 by 5656 A1 263 7W L1 534 by 5653

6@: ==C by 2 2

E 0ND1 564 by 5623

('1 594 by 5656 E NE1 5@4 by 5629 E NG1 55<34 by 5652 E PA1 2=4H by 5656 E 7D1 A<34 in 5655 E 0DE1 564 by 562A E D(1 224 by 5655
0D#: =2C by 2 22

(A1 564 by 5626

E (O1 564 by 5656 - O#s. 0264 by 5656 -co/ops F large m%nis.

E AI1 234 by 5653 E N71 564 by 5656 - O#s.

264 by 5656 -co/ops.

E N(1 25<34 by 5652 - O#s.

264 by 562= -co/ops F m%nis.

'81 3,==6 7W by 5623 ; 1 564 by 5656

Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE PA: 8% Tier I / 1 % Tier II !includes non-rene"a#les$
State RPS State Goal Solar water heating eligible

+iomass "xperience "arly &ays

* * *

;nitial biomass plants developed in response to air 3uality*waste management issues. #ll biomass plants were co-located and generally operated as ?/(. 6ost biomass waste was deposited in landfills and burned in the open.

#long ?omes (8%(#

*

(ublic 8tilities %egulatory (olicy #ct of =41F:

%e3uires that investor owned utilities must purchase privately produced power at Gavoided costH rates. ?reated the mar:et context that stimulated the development of the independent power industry in the 8$.

@ther ;ncentives
*

%enewable energy incentives of =41 Is and =4F Is caused renewed interest and development:

;nvestment tax credits "nergy tax credits .ax incentives

(rivate $ector %esponse

* 7ithin =! years approximately =, 67 of biomass power was developed and brought into service in ?alifornia alone. "nough renewable energy for about 1! , homes. * ;n =442 +iomass generated 9=.Fbillion in personal and corporate income and employed JJ, wor:ers. * ?onsumed biomass fuel at the rate of around =!, , >.*year:
* * * *

Borest products manufacturing residuals Borest sourced biomass #gricultural waste 8rban wood

(8%(# ?ontracts $tandard @ffer 0 and the +oom Kears

* * *

A year contracts. Birst = years at fixed rates ,9. 1 -.=A*:7h-. Kear =- = rates based on energy forecasts with prices escalating well into future.

Kear == A , rates are based on wholesale energy rates ,most floated based on natural gas rates-. (ower producers need to meet certain firm delivery standards to be considered a 3ualifying facility ,LB-.

.hen ?ame the +ust

* * * *

7ith the =4FJ world oil mar:et crash of =4FJ, $%#? prices fell to half their previous levels. $tandard @ffer 0 contract rates fell. Bew $@ 0 contracts let after =4F!. &eregulation of electric power mar:ets loomed large.

#fter the +ust

*

8tilities provide cash incentives to buy bac: $@ 0 contracts. $ome plants went down, some curtailed operations (lants that were smaller, less efficient or had poor access to fuel were closed.

(lants that transitioned into year == sought out cheaper fuel sources. #ttempt at electrical utility deregulation implemented

2orth #merica "xperience ?urrent $ituation

* * *

.here are approximately F operational biomass plants in the 8nited $tates. (roduce almost =,J1J 67 of generating capacity. ,"nough to power around =.A million homes?onsume around = , , >.*year:
* * *

forest biomass agricultural biomass urban biomass

>enerate revenue based upon a variety of power purchase agreements non-(8%(# rates most on a fixed rate of around 9. J0!*:7h. ?urrent pricing schedule terms out in <une, 2 ==.

#bout A!C of the sales generation biomass plants are located in ?alifornia. .hree states, ?alifornia, 6aine, and 6ichigan, provide !JC of the biomass sales generation capacity. #pproximately FFC of the biomass sales capacity is located in ten states:

* .he average size of the salesgeneration biomass plants is 2=67.

?# .imber /arvest
77B* 3666 @366 @666 9366 9666 5366 5666 2366 2666 366 6 2A=6 2A=9 2A=C 2A=A 2AA5 2AA3 2AA= P%blic Priva te 'ota l

2umber of sawmills in ?#
966 536 566 236 266 36 6 2AC= 2A:5 2A:C 2A=5 2A=3 2A== 2AA5 2AA@ 5666

?alifornia +iomass #vailability

=44= M J N million +&.*Kear 2 0 M 12N million +&.*Kear 2 0 #nalysis %esults: O!=C 8rban O24C #gricultural O 4C ?haparral O 1C Borest O AC Borest products residuals

Source: California Biomass Collaborative

Cone Fire Unthinned Thinned

Biomass Power in (ali!ornia (%rrent nd%strial 'echnology

* * * * * *

2early = , 8.$. megawatts #lmost all systems are combustion * steam turbine 6ost are grate sto:ers. !-== 67 ,avg. 2 67-. /eat rate ==, -2 , +.8*:7h. ;nstalled cost 9=1 -9A! per :7.

Biomass *acility EJample

2 67 plant produces enough power for about 2 , homes 2ew plant construction cost M 90 to 0! million N ?onsumes about =J , +&.*yr ,=+&.*67*hour burn rate+iomass transported up to ! miles ,maybe farther&elivered +iomass valued at 9=! - ! per +&. #verage electrical energy production cost P 9 . J - 9 . 4*:7h

* * * * * *

+itingK n!rastr%ct%re/ Part

*

?o-locate with existing commercial or industrial pro5ect

Borest products manufacturing facility that has on site demand for heat and power

* *

#d5acent to power transmission*distribution system .ypical pro5ect re3uires at least F acre site

+itingK n!rastr%ct%re / Part

* * *

7ater readily available ,= N gpm minimum)ocation incentives "nterprise zones .ransportation system

/ighway %ail

* *

#sh*7aste water disposal (ublic concerns

Bugitive emissions 2oise @dor

Biomass ProLect Development " *atal *law ss%es to (onsider

* * * * *

Buel $upply ?ommunity $upport (ro5ect "conomics #ppropriate .echnology $iting*;nfrastructure

Woody Biomass +%pply +o%rces

* * * * *

.imber harvest residuals Borest fuels treatment residuals 8rban wood waste Borest products manufacturing residuals #gricultural byproducts

*%el +%pply

* * * * *

$ustainable long term supply located within close proximity ,2! to ! mile radius"conomically available "nvironmentally available 6eets 3uality specifications #vailable in 3uantities and from diverse sources that support pro5ect financing:

6inimum = year supply, 1 C under contract #t least 2.! A times facility usage ,fuel supply coverage ratio-

(omm%nity +%pport
* *

+est to have grass roots support (oll :ey sta:eholders:

?ounty ?ommissioners .ribal ?ouncils ?hamber of ?ommerce ?onservation ?ommunity )ocal, $tate and Bederal agency representatives (rivate sector resource managers, landowners

ProLect Economics
*

$ustainable and economical fuel supply

Buel supply typically represents the highest variable cost for a biomass facility (roduction .ax ?redits +usiness "nergy .ax ?redits )ocal incentives enterprise zone 6ar:et support 5ustifies capital investment 6inimum %@; of 2 CN

"xisting incentives

* *

6ar:ets for heat and power

%eturn on investment

Potential PowerK;eat P%rchasers

%egulated utility companies 6unicipal 8tility &istricts Borest products manufacturing facility #gricultural processing facility ?ommunity buildings @thers

* * * * * *

Electricity Prices
Paci!ic )as F Electric +hort R%n Avoided (ost Gan%ary 2AA: / November 566:
4. F. 1. J. (entsKMWh !. 0. A. 2. =. . =441 =44F =444 2 2 = 2 2 2 A 2 0 2 ! 2 J 2 1 Date

Appropriate 'echnology
*

$earch for most appropriate technology considering pro5ect location and fuel supply

#bility to convert local fuel supply into heat*power 6ust meet local permitting specifications ?ommercially available @perates efficiently on available fuel supply @perates cleanly on available fuel supply #ppropriate for site and local resources

.echnology must be proven:

ProLect Development +teps Part

z

z z z

z z

= - ?onduct preliminary feasibility study ,Batal Blaw #nalysis2 - ?onfirm community support A - #ssess fuel resource availability 0 - ?onsider siting and infrastructure issues, including environmental permit review ! - ?omplete due diligence Beasibility $tudy J - $ecure developer and*or investment ban:er

ProLect Development +teps Part

1 - ?omplete power purchase*thermal delivery agreement F - "nlist e3uity partners 4 - $ecure financing = - $elect "(? firm == - "ngineer*construct pro5ect =2 - >enerate renewable energy

z z z z z

,%estions& (omments&

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