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The State of the Biomass in 2015 was “shaky” at best. The State of the Biomass is now in a state of emergency. While the biomass market had been in slow decline since 2000, when there were 38 plants producing 835 megawatts (MW) of operating capacity, utilizing nearly 7 million tons of wood chips from the urban, agricultural, and forest sectors. The decline in capacity has accelerated, with 9 plant closures in 2014-15. Currently, 20 plants are in operation, using 3.9 million tons of fuel, with two plants due to close early this year, and another five plants with expiring power purchase agreements by 3rd quarter 2016. Investor-owned utilities are now purchasing wind and solar power at less than half the 10-12 cents/kW, following years of tax subsidized development in those sectors.
Pricing that has recently averaged $30 per bone dry ton (bdt) is continuing to erode, with many suppliers put on notice of new price schedules being implemented immediately. Biomass industry sources have indicated that – barring any other financial assistance – they would need to charge $10/bdt. The slim profit center that once existed for woody material processing will become a cost burden, and worse, a shrinking option in the movement of materials for which alternative markets are not yet viable. With the available capacity continuing to shrink,
many composters and processors are left with limited market options. With agricultural waste being able to be plowed under or burned in the fields and with forest slash unrecovered
waiting for a miracle, urban wood waste has no where to go but to stay in the landfill or be used as ADC. A limited amount of wood chips may be co-composted with
biosolids or used for urban landscaping. Past efforts by the California Compost Coalition in 2007 with SB 1345 (Chesbro) promoted this CALTRANS market development bill that could have resulted in the use of over a million tons per year of mulch for erosion control and storm water pollution prevention.
The Governor’s Clean Energy Jobs Plan and the Bioenergy Action Plan of 2012 set out to increase renewable energy capacity by 20,000 MW by 2020, including 12,000 MW of distributed generation and 8,000 MW of new large-scale plants. Bioenergy has the potential to provide 2,000 MW to 5,000 MW of this power, utilizing between 16 million to 40 million tons per year of biomass, when approximately 36 million tons is technically available. After food waste, lumber represents the next largest disposal volume with 3.7 million tons per year still being buried in 2014 where bioenergy should seemingly be the answer. The Bioenergy Action Plan of 2012 needs a drastic update to address this disconnection and this latest emergency.
Large-scale biomass energy has been passed over by the $3.1 billion capand-trade budget and left behind in the California Energy Commission EPIC funding. AB 590 (Dahle), which will not likely return in 2016, had proposed to create the Biomass State Cost Share Account using capand-trade dollars to maintain the current level of biomass power and revitalize idle facilities in strategically located regions. The urban sector will be losing over one million tons of wood chips per year of biomass capacity while needing to ramp up to divert 1.7 million new tons per year to meet AB 1826, justifying large-scale biomass plants needing to be preserved to sustain a volume market. When the chips are down and out – do not ADC…think gasification.
Biomass conversion using gasification technologies is now defined in SB 498 to be 100% renewable and 100% diversion and could bring on over 100 MW of bioenergy from 1.5 million tons wood chips at a floor price of 12.77 cents per kilo-watt-hour. Using your wood chips for on-site for power and heat would provide a value market and save the uncertainty of the long haul and the upside down pricing during this state of emergency.
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