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Biomass power plants locked out of Massachusetts

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Biomass power plants locked out of Massachusetts

May 16, 2011 - 04:19
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NEW YORK, May 16, 2011 (RISI) -Proposed regulations by the administration of Massachusetts Governor Deval Patrick will dramatically alter whether biomass power plants qualify for renewable energy credits. The new rules nearly double the requirements for a biomass energy facility's overall efficiency, effectively eliminating all five of the biomass plants that currently provide electricity to the state from receiving state support. Without the credits, which makes biomass competitive against traditional fuel sources and helps secure financing for new plants, prospects for new wood-burning electricity facilities serving the state appear severely limited.

The proposed biomass energy regulations, filed for review with the Massachusetts legislature in early May 2010, are virtually unchanged from the initial proposal submitted for a public hearing in October 2010. Under the proposal, biomass plants must demonstrate greenhouse gas emission reductions of at least 50% over 20 years. Biomass electricity facilities also must operate at a minimum overall efficiency rate of 40% to receive a partial renewable energy credit. Existing biomass facilities currently operate in the range of 20 - 25% overall efficiency.

"The regulations make it less likely that large stand-alone, electricity-only plants will qualify going forward," said Bob Keough, a spokesman for the state's Executive Office of Energy and Environmental Affairs, before the public hearing last year.

While environmental groups applaud the proposal, the renewable energy industry says the rules will cripple biomass power production in the New England region. "I worry that the industry is now effectively locked out of the state and possibly the region," says Josh Levine, director of project development with American Renewables.

Policy change

Massachusetts prides itself on being at the forefront of renewable energy development. However, the new proposal appear to be a direct reversal of the state's previous position. Gov. Patrick's administration has already invested $1 million in four proposed biomass plants in the state, in an effort to achieve a mandated goal of 80% reduction of greenhouse gas emissions by 2050. Under the proposed regulations though, it is unclear whether any of the four plants will be completed.

"The regulations were established to incentivize developers to build projects that, in the long run, contribute significant renewable generation to load," says Louis T. Bravakis, executive vice president of the Laidlaw Energy Group. "In 2008, Massachusetts-qualified biomass generation provided over 39% of the required renewable generation to the Commonwealth. The regulations should be structured to reduce risk and provide financial incentives for more renewable energy development, but these changes do the exact opposite and are very disappointing."

Proposed regulations will most likely direct biomass investment to other regions of the country, such as the 100-MW wood-fired power plant developed by American Renewables near Sacul, Texas.

The change in policy appears to stem from a state-sponsored study in 2010 that emphasized extremely high levels of carbon emissions from biomass power plants. The study, conducted by the Manomet Center for Conservation Sciences, reported that large-scale biomass-fired electricity facilities would result in a 3% increase in carbon emissions by 2050, when compared with coal-fired electric plants. The study concluded that plants release more carbon dioxide emissions per unit of energy than oil, coal, or natural gas, and that greenhouse gas emissions are absorbed slower than previously believed. Currently, coal is considered the leading source of greenhouse gas emissions.

Administration officials point out that the new rules are directly aimed at discouraging large biomass plants that produce only power. Smaller facilities that produce combined heat and power, displacing fossil fuels used for hearing, cooling and industrial processes, are encouraged under the regulations. Waste biomass would be almost entirely excluded, leaving only regulated limits of forest residues and salvage to quality for the credits. The administration says the regulations will curtail the harvesting of whole trees.

Politized debate

Environmental advocacy groups have seized on the campaign slogan of "Forests are not fuel" to resist biomass energy development under the existing regulations. The call for the six-month study by the Manomet Center was an attempt by the Patrick administration to head off further political action by these groups. "The science is now clear and recognizes the tremendous negative impacts of burning forests and trees to generate electricity," said James McCaffrey, Massachusetts Sierra Club Director.

The Conversation Law Foundation (CLF), instrumentally involved in the debate over biomass in Massachusetts, says the new regulations are a step forward for science-based rulemaking. "Propelled by truly robust citizen advocacy, emerging science and bold leadership, Massachusetts again is leading the nation on climate policy and closing the biomass carbon accounting loophole," says Sue Reid, senior attorney at CLF.

Renewable energy developers respond that the current debate in Massachusetts misses the mark. "The Manomet study is based on a specific set of limited assumptions that do not tell the whole story and the conclusions that have been drawn by opponents to biomass as well as by politicians and regulators are overreaching and inaccurate," says Levine.

The Manomet study, say industry analysts, failed to take into account the well-known environmental damage from using fossil fuels for energy production, focusing almost solely on the levels of carbon dioxide emissions from biomass energy production. The increase in overall carbon emissions reported by the Manomet study was in part due to the assumption of a decline in forested areas that could absorb released carbon dioxide. In addition, comparisons show that the Monomet study stands alone with respect to the impact on greenhouse gas emissions when using forest-based biomass as an energy source.

Under the Global Warming Solutions Act, Massachusetts has set a greenhouse gas emissions target of 25% below 1990 levels by 2020, and is mandated to reduce greenhouse gas emissions across the economy 80% by 2050. In place of biomass, Gov. Patrick's administration says it will focus more on wind and solar projects to achieve the reduction targets.

Kenneth Norris is a US based contributing editor to PPI magazine and the RISI community website and can be contacted at:knorris@quintstrategies.com