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BIOMASS POWER GENERATION
Tad Mason, CEO TSS Consultants
Biomass Market Fundamentals
Workshop
April 15, 2016
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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 per the Federal Energy Act of
2005.
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COMBUSTION TECHNOLOGY
Burney Forest Power 31 MW CHP at Burney, CA
Phoenix Energy 500 kWh Gasification Unit at Merced, CA
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SHORT HISTORY OF THE BIOMASS POWER SECTOR IN THE WEST
¡ Forest products sector was an
early adopter. ¡ Public Utilities Regulatory Policy
Act of 1978 (Federal). § Market response – 80+ new
biopower plants (1,000+ MW of generation capacity in the West).
¡ Power contract buyouts following de-regulation of natural gas.
¡ Latest OR policy – SB 1547 (March 2016). No coal power by 2030. OR Renewable Portfolio Standard – 50% renewable by 2040.
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OREGON FACILITIES
¡ 8 biomass plants in commercial service – about 140 MW capacity.
¡ Utilize a blend of urban, ag and forest feedstocks. Urban feedstock is the low price leader, then ag, with forest biomass as the highest priced.
¡ Preferred feedstock characteristics: § < 50% moisture content § > 8,000 Btu/dry pound § < 5% ash content
¡ 6 idle plants with about 80 MW capacity.
¡ Most recent biomass plant curtailment is SP Newsprint 40 MW at Newburg.
CURRENT WEST-WIDE AND FEDERAL TRENDS – PART I
¡ Conversion of existing coal fired power generation facilities to biomass or co-fire with biomass.
¡ State legislative push towards small-scale distributed generation facilities. Example – move to technology specific feed in tariff rates (California Senate Bill 1122).
¡ Diversion of forest biomass away from BAU practice of pile and burn and towards alternative uses – including bioenergy.
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CURRENT WEST-WIDE AND FEDERAL TRENDS – PART II
¡ Much interest in replacing aging fossil fuel fired thermal energy systems with biomass fired systems.
¡ Capital costs for small-scale biomass gasification systems are trending downward (<$5M/MW).
¡ Downward pressure on wholesale energy prices. Several states have SRAC and MPR pricing tied directly to current natural gas prices.
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CHALLENGES FOR THE BIOMASS POWER SECTOR
¡ Overall energy prices have dropped significantly. § Natural gas, oil, and coal commodity values down significantly in
recent years.
¡ Renewable energy technologies have improved capital costs and efficiency. Solar and wind are very competitive renewable power generators now with cost of generation as low as $.05 - $.06/kWh.
¡ Unlike solar and wind, biomass plants must procure fuel – at a price point equivalent around $.03-$.04/kWh.
¡ Federal renewable energy Production Tax Credits are priced about ½ of PTC for wind and solar.
¡ Oregon Biomass Producers Tax Credit sunsets 2017.
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THE FUTURE OF COMMERCIAL SCALE BIOMASS POWER PLANTS IN THE WEST DEPENDS ON …
¡ Market of energy (especially natural gas). ¡ Collective response to environmental issues:
§ Air emissions – particulate, black carbon, etc. § Carbon accounting
¡ KEY - Monetization of societal and ratepayer benefits.
¡ KEY – Level playing field for all renewable energy technologies. (PTC that is equal for all renewables)
NOT ALL BIOMASS USERS AGREE
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