A new biomass plant under construction in Georgia highlights
the challenging economics of the technology, even in a state so rich in
forestry waste it exports it to other countries.
The 50-MW Albany Green plant — the largest renewable energy
project in the state so far — is a unique collaboration among Georgia Power,
private companies (including Procter & Gamble) and a nearby Marine base.
While the cost for biomass generated
electricity is too high to compete with wind and solar, the project also
produces steam for industrial use, which improves its economics.
Because Albany Green is situated in the midst of rich timber
tracts, biomass harvesting will be restricted to a 100-mile radius, and will
include forestry residues locally sourced that would otherwise have been left
to decay, burn or dispose of in a landfill. This includes trees not suitable
for saw or pulp mills, discarded tree tops, limbs or branches, sawdust, mill
waste, demolition debris and the seasonally available shells of pecans and
peanuts.
“This plant represents years of planning and deadline
extensions in an effort to utilize pine trees and forest debris in generating
electricity,” explains Tim Echols, vice-chair of the Georgia Public Service
Commission. “It was no easy thing to bring about this biomass power plant.”
Emissions Questions
Other pending biomass projects may have even more trouble
securing financing. Echols notes that Georgia Power’s 2016 Integrated Resource
Plan does not include a carve-out for biomass. “Instead, biomass will compete
head to head with imported wind from Oklahoma and utility-scale solar, which is
obviously bad news for biomass.”
Two thirds of Georgia is forested—25 million acres—and the
state is ranked first in the nation for commercial timberland. More than a
dozen plants in the state export wood pellets to supply renewable fuel to power
plants in Europe — where electricity prices are high and the fuel is classified
as “carbon neutral” by the European Union (even though many scientists reject
biomass as a climate solution).
As with other biomass operations, Georgia biomass plants
transform wood products into pellets that offset or replace coal and oil in a
power plant. The source material is renewable, but whether it is carbon neutral
has been hotly debated. In the case of Albany Green, the sources are
predominantly forest residues (logging residues and residues from sustainable
forest management) as well as sawmill residues and urban wood residues that
would have otherwise been landfilled.
Mary Booth, director of the Partnership for Policy
Integrity, is a skeptic. “This plant has a 1,037 million BTU boiler that is
capable of burning 100-110 tons of wood an hour,” she explains. She believes much
of that wood will be harvested when green, and “a boiler that size burning
green wood chips can end up being as dirty as coal.”
Green wood is about half water by weight, so more of it has
to be burned to generate the same amount of power as coal. Says Booth: “Fuel
efficiency takes a hit—it can be as low as 24 percent, whereas traditional coal
plants are 33 percent, and new coal plants are much higher. More carbon dioxide
can come out of the stack per megawatt hour than coal.
That’s not acceptable.”
Yet for Georgia, biomass is a lucrative industry—at least
for exports. Georgia’s residues from timber harvesting (tops and branches)
exceed five million dry tons annually, according to a 2008 report by the Georgia Forestry Commission. Georgia Biomass in Waycross is
the world’s largest biomass pellet facility, and exports 750,000 tons of
processed wood pellets a year. The Port of Brunswick has expanded in order to
ship a million tons of pellets a year. But biomass generation for in-state use
is an upward battle, largely because of the availability of cheaper locally
available power from gas and solar.
The 2007 capacity price for biomass—$0.13/kW—was held over
by the PSC to encourage biomass-based energy, says Echols.
“Obviously, that was when natural gas was very expensive,” he
says, “and those prices are long gone.” Biomass generation works best at
co-generation facilities, says Echols, because there is a use for the steam.
“But clearly the 2007 capacity prices, approved by the Public Service
Commission, that have been carried over is what has made most of it possible.”
Competition from Renewables
Even at $0.13/kW, says Echols, the project had trouble
securing financing. Now, with 1,600 MW of new renewables approved by the PSC
last summer, much of it likely to be solar, Echols expects the solar price to
be “in the $0.06/kW ballpark, and obviously you can’t build a biomass plant for
that.”
In addition, federal tax incentives for biomass are about
one-third of solar and wind, according to Ron Melchior, executive director of
distributed energy at Constellation, which had the winning bid to develop the
plant from Georgia Power. “Biomass is an established technology, and incentives
tend to be reduced as a technology ages,” Melchior said.
Albany Green succeeded in part because of a timely
coalescence of need and availability. For Procter & Gamble, it is an
important step forward in the company’s mandate to get 30 percent of its energy
from renewable sources by 2020—up from 10 percent. Ultimately, the company
plans to be 100 percent renewable.
“We’ve had a formal sustainability division since 1999,”
explains Jack McAneny, director of global sustainability at Constellation. The
company is a member of the Renewable Energy Buyers Alliance, which works with
60 multinational companies, with a goal of helping them purchase 60 GW of
additional renewable energy in the U.S. by 2025. P&G also worked with the
World Wildlife Fund to be sure the plant meets sustainability standards.
In addition, P&G already had a smaller cogeneration
plant in Albany, which provided 30 percent of their energy needs. The new plant
will provide 100 percent of P&G’s steam requirements, according to
Melchior, and 70 percent in renewable electricity energy credits—with a 20-year
power purchase agreement.
The nearby military base sealed the deal, with an 8.5-MW
steam turbine that will run on steam purchased from the plant, and will launch
in 2018.
Looking to the future, Echols notes that the PSC granted
“yet another extension to the remaining biomass megawatts to be developed in
Madison County, Georgia. This 109-MW facility will be one of the largest in the
state if it comes to completion —and I am hoping they can work out their
financing.”
Echols points out that keeping a balanced energy portfolio
protects Georgia ratepayers against natural gas volatility. The state currently
has 330 MW of power purchase agreements with various Biomass Proxy Qualified
Facilities. Additionally, there are six pending biomass projects (including
Albany Green) with a total capacity of approximately 178 MW, according to John
Kraft, a spokesman for Georgia Power.
Yet it’s uncertain whether Georgia Power has built a premium
into the power they are buying from the plant, which might be passed on to
ratepayers. Some of the company’s costs are available in public dockets, and others are, says Kraft, “trade secrets.
As in every ‘marketplace,’ the value (and cost) of capacity and energy is
constantly changing. Amounts we are paying for this biomass project are tied to
the capacity value we identified in the RFP for 2015 capacity.”
Booth thinks it’s likely that a premium has been built into
the cost of power from the plant.
“Other biomass plants in the southeast—such as Piedmont
Green Power in Barnesville, Georgia, or plants in Virginia owned by Dominion,
which converted three coal plants to biomass—found a way to get Tier 1
renewable energy credits out of the state and pass fuel escalation costs on to
ratepayers at the same time,” Booth said.
Even though Georgia is growing its solar power very quickly,
notes Echols, “the PSC’s goal is building a robust renewable energy industry
that will bring long-term economic health to the rural forests and farmland.
Because semi-trucks loaded with chips and pellets arrive around the clock,
biomass provides a steady supply of electricity whether the sun is shining or
the wind is blowing.”
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