As Congress spars over renewable energy incentives, a bright spot has emerged in an unlikely place: biomass to power in the Southeastern US.
Local actors have demonstrated an increasing demand for renewable energy, and, in a region lacking the solar resources of Arizona or wind of West Texas, biomass provides a cost-effective, base-load solution. Both the local and state governments, utilities, and even the US military, have taken steps towards utilizing an abundant local resource to not only generate power, but also fuel economic growth.
Over the next 20 years, the Southeastern US will undergo significant changes to its electricity fleet. Two factors will drive this change: First, the electricity needs of the region are expected to grow by approximately 50% by 2030. Second, approximately 50 GW of coal-fired power plants will be retired – approximately the entire generation capacity of Mississippi and Alabama combined. With minimal wind and solar resources, the opportunities for renewable energy in the Southeast are limited, with one exception: biomass to power.
The Southeastern US has an abundance of forestry resources. Mississippi alone currently produces 3.6 million tons of logging wastes (i.e., wood too small to market), as well as 16 million tons of pulpwood annually. This abundance surmounts the primary hurdles of biomass-to-power projects: 1) the cost of transporting fuel, and 2) the low energy density of biomass relative to coal. Due to its low energy density (a ton of chipped, untreated biomass produces roughly 61% the energy of a ton of coal), a power plant needs a significant amount of fuel. In order to make economic sense, biomass power plants also typically need to source their fuel from within 50-75 miles; both of these criteria are relatively easy to satisfy in the Southeastern US.
Second, in contrast to other renewables in the area, biomass is close to competing on cost: a dedicated biomass to power facility can produce economically at roughly 3 cents per kilowatt hour (KWh) greater than the average electricity price,while a co-firing plant can produce at roughly 0.2-2.2 cents more. Wind and solar, at this point, have difficulty matching that price (when transportation costs are included in the case of wind) and are hindered by their intermittent generation.
Skeptics also overlook the long-term economic impact of biomass on the regional economy. The forestry industry, one of the largest contributors to GDP in the region, has contracted significantlyover the past 10 years, with the secular decline of the pulp and paper industry, as well the more recent slowdown in construction. 116 mills have closed in Mississippi alone over the past 15 years, and the logging industry has shed 1500 jobs over the past decade in the state. Biomass provides a way to help preserve a laggingindustry, while creating long-term, sustainable jobs – approximately 925 per 150 MW plant, according to multiple studies. A biomass power plant creates roughly 4 jobs per megawatt of capacity over the life of the plant , in contrast to less than 1 for both wind and solar – and these jobs are for the life of the plant, not just the construction phase.
Despite its promise, biomass still has significant hurdles until its potential can be realized. The EPA has delayed a ruling on biomass emissions, while critics also voice concerns over the sustainability of burning wood for power. Moreover, federal incentives to this point have focused on the promotion of wind and solar, not biomass.
However, an increasing wave of investment and regulatory support has grown the industry. The EU treats biomass fuel as a renewable, zero-emission fuel, and many European companies, such as Enviva and RWE, have invested significantly in US production facilities. Virginia’s Dominion Power, in a joint-venture with Enviva, has received approval for the conversion of three 50 MW coal facilities to biomass. We at Meridian Power, with the support of the local and state government, are pushing forward with the development of two large scale (>100 MW) facilities in Mississippi. As policymakers realize the potential economic dynamism of the biomass industry, momentum has built behind increased incentives. As Congress, and the country writ large, decide how best to balance economic growth with new spending and energy priorities, the potential for biomass as a relatively cheap and effective engine of growth should not be overlooked.
Mac Broderick is an Associate at Meridian Power, a Jackson, MS-based biomass power plant developer; however, the views expressed are his own. He is also a candidate for an M.A. in International Relations and Economics at Johns Hopkins University’s School of Advanced International Studies and an M.B.A. at The Wharton School, University of Pennsylvania.
