biomass magazine - december 2009

60
INSIDE: BIOMASS DEVELOPERS LINE UP FOR BCAP FUNDING December 2009 www.BiomassMagazine.com Woody Biomass Demand Intensifies Growing List of Biomass Projects Increases the Value of Wood Chips, Saw Dust and Shavings

Upload: bbi-international

Post on 04-Feb-2016

231 views

Category:

Documents


1 download

DESCRIPTION

December 2009 Biomass Magazine

TRANSCRIPT

Page 1: Biomass Magazine - December 2009

INSIDE: BIOMASS DEVELOPERS LINE UP FOR BCAP FUNDING

December 2009

www.BiomassMagazine.com

Woody Biomass Demand

Intensifi es Growing List of Biomass Projects

Increases the Value of Wood Chips, Saw Dust and Shavings

Page 2: Biomass Magazine - December 2009

U.S. Pat. 496,052

www.go4b.com/biomass

www.go4b.com/biomass

www.go4b.com/biomass

U.S. Pat. 6,731,219

www.go4b.com/biomass

TouchSwitchA Safer and More Efficient Belt Alignment Monitoring Device!

Roto-SafeFailsafe Rotation Detection of High and Low Levels of Bulk Granular Solids in Bins, Tanks or Silos!

M800 SpeedswitchSimple, Versatile and Reliable Underspeed Protection!

HotBus T500 EliteContinuous Bearing Temperature and Belt Misalignment Monitoring System!

www.go4b.com/biomass

Bolt ‘N’ GoThe Revolutionary New Assembly Method for Drop Forged Conveyor Chains!

U.S. Pat. 7,080,728

www.go4b.com/biomass

CC-S: Heavy-DutyElevator BucketsThick Front Lip and a Consistent Clean Discharge!

Page 3: Biomass Magazine - December 2009

WHEEL OF FORTUNE

Do you want to be

a frontrunner in the

cellulosic bioethanol

industry?Then it’s time

we start working

together.

Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries we create tomorrow’s industrial biosolutions, improving our customers’ business and the use of our planet’s resources.

Get the odds in your favorCellulosic bioethanol is key to optimizing the world’s future energy mix.

Novozymes is leading the way in marketing cellulosic ethanol a commercial

reality by 2010. And Novozymes’ Cellic® products are just what you need to

be a leader in the race to cellulosic bioethanol. So let’s start creating the future

today. Together we can make cellulosic bioethanol a winning solution.

Find out more at www.bioenergy.novozymes.com

© N

ovo

zymes A

/S · Cu

stom

er Co

mm

un

ication

s · No

. 2009-20937-01

Page 4: Biomass Magazine - December 2009

4 BIOMASS MAGAZINE 12|2009

Page 5: Biomass Magazine - December 2009

12 |2009 BIOMASS MAGAZINE 5

INSIDE DECEMBER 2009 VOLUME 3 ISSUE 12

FEATURES. . . . . . . . . . . . . . . . . . . . .

24 FINANCE State RPS, Incentives Spur Development State and federal support for bioenergy, in the form of renewable portfolio standards, tax incentives and grants, is allowing more biomass projects to move on to the preconstruction phase. By Lisa Gibson

30 INTERNATIONAL Bioenergy World Leaders All eyes are on the U.K. and China as the countries strive to meet aggressive goals to generate more power from renewable sources. By Lisa Gibson

36 MARKET Energizing the Woody Biomass Market The race to produce renewable energy has led to a growing list of projects— from 10-megawatt biomass-powered plants using locally produced biomass to 295-megawatt plants that will export wood chips—which is expected to have profound impact on the woody biomass market. By Rona Johnson

42 POLICY BCAP to Boost Biomass Harvest The Biomass Crop Assistance Program has undoubtedly caught the attention of biomass suppliers, producers and processors, and it will have a positive impact on some of those sectors. The jury is still out, however, on its long-term impact.By Anna Austin

CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . .

48 ANAEROBIC DIGESTION Who Gets the Upstream Methane Credits?Anaerobic digestion project developers need to clearly defi ne who gets the methane credits when negotiating power purchase agreements. By Joe R. Thompson and William H. Holmes

50 SUPPLY The Minneapolis Biomass Exchange: The Biomass MarketplaceNew trading platform facilitates biomass exchange and improves opportunities for biomass buyers and sellers. By Katie Hagen

FINANCE | PAGE 24

DEPARTMENTS. . . . . . . . . . . . . . . . . . . . .

06 Editor’s NoteLooking Forward to 2010By Rona Johnson

07 Advertiser Index

09 Legal Perspectives 11 Industry Events

12 Business Briefs

14 Industry News

53 BPA UpdatePitfalls of One-Size-Fits-All Approach to Biomass EmissionsBy Bob Cleaves

55 EERC UpdateBiomass Utilization, Rain Forests, and Their Effect on the U.S. Carbon FootprintBy Bruce Folkedahl

56 Marketplace

Page 6: Biomass Magazine - December 2009

6 BIOMASS MAGAZINE 12|2009

Looking Forward to 2010

t’s the end of the year and the list of proposed biomass pow-er facilities continues to grow, permits are being awarded and I expect construction to be buzzing along quite briskly by mid-2010.

Looking back, I think 2009 was a good year for bio-mass. In fact, it was quite good in terms of the government support for biomass production and project fi nance. Instead of using this issue to look back at 2009, however, the editors at Biomass Magazine were more interested in the current situation and in looking ahead. Thus, it was only fi tting for us to devote the last issue of the year on the woody biomass market, fi nanc-ing opportunities, the Biomass Crop Assistance Program and the world’s leading producers of bioenergy.

I see the fi rst part of 2010 as being much the same as 2009, mainly because there are still questions about what certain bio-mass resources are worth and the cost and logistics of harvesting, transporting and storing those feedstocks. Once these proposed plants start to come on line, those issues will be solved if only by necessity in order for the industry to move on. It would be nice if everything came together in a nicely wrapped package tied with a crisp bow, but at this point, I think it’s going to be more of a trial-and-error-type situation.

We know that industries aren’t built in a day, and that when things don’t turn out as we expected there is always plan B. For example, I’m not a big fan of the government-run health care option, but, I’m not going to freak out if it passes because I trust that the powers that be will tweak it if it doesn’t work as they had envisioned. Although that may sound easy, it is not. It’s hard to come up with what you consider a good idea and watch it fail. Sometimes people get so fi xated on their great idea that they don't see failure as an option. It takes a smart person to be able to accept failure and move on.

That’s actually going to be one of my New Year’s resolutions: to be smart enough to recog-nize when my ideas don’t work and to fi nd another solution.

I also have goals for 2010. One of them is to further develop our biopower and biogas maps and another is to develop monthly market reports for the different types of biomass. I envision a section in the magazine with a chart and some commentary about the woody biomass market. I would like to include municipal solid waste, crop residues and other biomass resources. If you have any information on how I can accomplish these goals, please shoot me an e-mail at [email protected] or call me at (701) 738-4940. And, let me know if you see something that should be changed as these goals develop. That’s when you’ll know if I’m keeping my New Year’s resolution of being smart enough to see the error of my ways in 2010.

In the meantime, I hope your holidays are joyous. See you next year.

I

Rona JohnsonEditor

[email protected]

editor’sNOTE

Page 7: Biomass Magazine - December 2009

12 |2009 BIOMASS MAGAZINE 7

advertiserINDEX

2010 International BIOMASS 60Conference & Expo

2010 International Fuel 54Ethanol Workshop & Expo

2010 Renewable Energy Technology 59 Conference & Exhibition

4B Components, Ltd. 2

Agra Industries 44

Biodiesel Magazine 57

BRUKS Rockwood 45

Buhler 41

Christianson & Associates PLLP 29

Continental Biomass Industries, Inc. 4

CW Mill Equipment Co., Inc. 34

Detroit Stoker Company 46

Ethanol Producer Magazine 52

Energy & Environmental Research Center 8

Envergent Technologies 10

Factory Sales and Engineering Inc. 33

Geomembrane Technologies Inc. 35

Indeck Power Equipment Co. 38

Jeffery Rader Corporation 39

Kroger Air 23

Laidig Systems Inc. 32

McHale & Associates, Inc. 27

Novozymes 3

Roskamp Champion 28

Sunbelt 58

The Teaford Co. Inc. 26

West Salem Machinery 40

Wolf Material Handling Systems 47

EDITORIAL

EDITOR Rona Johnson [email protected]

ASSOCIATE EDITORSAnna Austin [email protected] Gibson [email protected]

COPY EDITOR Jan Tellmann [email protected]

ART

ART DIRECTOR Jaci Satterlund [email protected]

GRAPHIC DESIGNERSElizabeth Slavens [email protected] Melquist [email protected]

PUBLISHING & SALES

CHAIRMANMike Bryan [email protected]

CEOJoe Bryan [email protected]

VICE PRESIDENT, CONTENTTom Bryan [email protected]

SALES DIRECTOR Matthew Spoor [email protected]

SALES MANAGER, MEDIA & EVENTSHoward Brockhouse [email protected]

SENIOR ACCOUNT MANAGER Jeremy Hanson [email protected]

ACCOUNT MANAGERSChip Shereck [email protected] Steen [email protected] Brown [email protected]

SUBSCRIPTION MANAGER Jessica Beaudry [email protected]

SUBSCRIBER ACQUISITION MANAGER Jason Smith [email protected]

Subscriptions Subscriptions to Bio-mass Magazine are $24.95 per year in the U.S; $39.95 in Canada and Mex-ico; and $49.95 outside North Amer-ica. Subscriptions can be completed online at www.BiomassMagazine.com or subscribe over the phone at (701) 746-8385.

Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more informa-tion, contact us at (701) 746-8385 or [email protected].

Advertising Biomass Magazine pro-vides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Biomass Magazine advertising opportunities, please con-tact us at (701) 746-8385 or [email protected].

Letters to the Editor We welcome let-ters to the editor. Send to Biomass Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected]. Please include your name, address and phone num-ber. Letters may be edited for clarity and/or space.

Cert no. SCS-COC-00648

Page 8: Biomass Magazine - December 2009
Page 9: Biomass Magazine - December 2009

12 |2009 BIOMASS MAGAZINE 9

LEGALperspectives

n the current economic climate, businesses in the environmental and renewable energy sectors must explore all options when it comes

to fi nancing their projects or operations. A potential source for those selling their products and services abroad is the Ex-port-Import Bank of the United States (Ex-Im Bank). Now 75 years old, Ex-Im Bank is the principal government agency responsible for aiding the export of U.S. goods and services through a variety of loan, guarantee and insurance programs. Further, in recent years, Ex-Im Bank has been on a mission to promote the export of goods and services related to renew-able energy or that are benefi cial to the environment. In furtherance of this mis-sion, Ex-Im Bank established an Offi ce of Renewable Energy and Environmen-tal Exports to expedite the lending pro-cess. Likewise, similar banks operated by a number of foreign countries (export credit agencies (ECAs)) serve a similar purpose and have designed special pro-grams to enhance their respective exports of renewable energy and environmental goods and services.

These fi nancial institutions, and par-ticularly Ex-Im Bank, offer fi nancial prod-ucts that occupy the following categories, all at rates competitive with ECAs: guar-antees and direct loans, working capital facility guarantees and export credit insur-ance. Ex-Im Bank does not compete with private-sector lenders but provides export fi nancing products that fi ll gaps in trade fi nancing. Ex-Im Bank assumes credit and country risks that the private sector

institutions are either unable or unwilling to accept. Ex-Im Bank levels the playing fi eld for U.S. exporters by matching the fi nancing that other governments provide to their exporters. In addition, essentially no transaction is too large or too small.

Ex-Im Bank and ECAs can facilitate trade and investment in this tight economic environment and have an important role in fi lling fi nancing gaps to promote clean energy investment and related trade activ-ity. As of Sept. 30, the amount of money that Ex-Im Bank approved for fi nancing to assist in the export of goods from the U.S. amounted to more than $21 billion. Furthermore, as of September, Ex-Im Bank announced that it will provide up to $250 million to help fi nance exports of U.S.-built-and-designed technology used in generating renewable energy. For those developing projects that may involve technologies from outside the U.S. or for companies looking to deploy their tech-nology internationally, these fi gures war-rant attention and the above-mentioned programs deserve further investigation. Familiarity with Ex-Im Bank programs could be benefi cial to manufacturers and service providers engaged in or contem-plating international green trade.

Considering the tight debt markets, Ex-Im Bank’s products can assist in de-risking certain business transactions. For example, credit-worthy U.S. companies that need to pay for raw materials, equip-ment, supplies, labor and overhead to produce goods and/or provide services for export and to purchase fi nished prod-ucts for export may fi nd Ex-Im Bank’s

working capital loan guarantee program to be of great benefi t.

The most practical starting point for a business interested in Ex-Im Bank fi nan-cial programs is its web site at www.exim.gov, where Ex-Im Bank has abundant in-formation about its products, underwrit-ing guidelines and application procedures. Copies of most applications, instructions and transaction documents can also be downloaded from the Web site. Further, Ex-Im Bank has set up a call-in consulta-tion service where product specialists are available to fi eld questions and provide direction by phone at (800) 565-3946. Finally, Ex-Im Bank maintains an Offi ce of Renewable Energy and Environmen-tal Exports tailored to support U.S. busi-nesses in these economic sectors.

In light of the movement toward green energy and environmentally sound products and services as evidenced by, among other things, the incentives and programs set forth in the stimulus pack-age, Ex-Im Bank’s working capital guar-antees, medium- and long-term direct loan programs to foreign buyers, and its Export Credit Insurance Program are fi -nancing alternatives that warrant serious consideration. Finally, the programs of-fered by the host country of any interna-tional transaction counterparty should be considered as well.

John Eustermann is a partner with Stoel Rives LLP. Reach him at jmeustermann@ stoel.com or (208) 387-4218.

Consider All Financing Options in the Global Green EconomyBy John Eustermann

John Eustermann partner, Stoel Rives LLP

I

Page 10: Biomass Magazine - December 2009

NOW YOU CAN CONVERT FORESTRY RESIDUALS INTO A LIQUID ASSET.

EnvergentTech.com

Finally, there’s a proven, practical technology that converts forestry residuals into pyrolysis oil for generating renewable power and process heat. It’s called Rapid Thermal Processing (RTP™), and it’s been used commercially in other industries since 1989. Today, it offers the forestry industry a more consistent, fl exible and environmentally friendly alternative to directly burning residuals. Visit our website for details. And stop sending valuable assets up in smoke.

Page 11: Biomass Magazine - December 2009

Canadian Renewable Fuels Summit

November 30-December 2, 2009 Westin Bayshore HotelVancouver British ColumbiaThis year’s summit will focus on how to grow beyond oil in a way that offers sustainable economic, environmental and social growth for Canada. Dis-cussions will include the new Canada-U.S. clean energy dialogue, moving toward second-generation biofuels, low-carbon fuel standards, and pros-pects to strengthen the bioenergy economic outlook.(613) 594-5528www.crfs2009.com

International Algae Congress 2009

December 1-2, 2009 Hotel HafenHamburg, GermanyThis event will focus on microcrops; similar pond productivity as microalgae and better separation; competition of agricultural land for biomass, food production and the focus on material balances and integrated systems, combining energy, nutrients, biomass, fi sh, food and plants. (0)30 698 1801www.algaecongress.com

Pacifi c West Biomass Conference & Expo

January 11-13, 2010 Hyatt Regency Sacramento, CaliforniaWith an exclusive focus on biomass utilization in California, Oregon, Wash-ington, Idaho and Nevada, this event will connect current and future produc-ers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with waste generators, aggregators, growers, municipal leaders, utilities, technology providers, equipment manufacturers, investors and policymakers. (701) 746-8385http://pacifi cwest.biomassconference.com

Energy From Biomass and Waste

January 26-27, 2010 Royal Horticultural Halls & Conference CentreLondonInvestment in bioenergy is set to rise in the U.K. and this conference and exhibition will provide a meeting place for vendors, buyers, investors, mu-nicipal representatives, legislators and scientists from around the world.+49-2802-9484840www.ebw-uk.com

Developing and CommercialisingNext Generation Biofuels

February 9-11, 2010Kingsway Hall Hotel LondonThis conference will provide the latest information on technological devel-opments and examine the prospects for bringing next-generation biofuels to market. The event will cover ground-breaking developments in cellulosic ethanol, synthetic biology, biomass to liquids, renewable diesel, algal biofu-els, waste to ethanol, biomass management and advanced biofuels, includ-ing biobutanol and biogasoline. +44 (0)207 017 7499www.agra-net.com/conferences

World Biofuels Markets

March 15-17, 2010The RAI Exhibition and Congress CentreAmsterdam, The NetherlandsThis event will provide leaders of the biofuel fi eld an opportunity to meet new customers, suppliers and partners, and help drive innovation and busi-ness. More than 4,500 executives from 78 countries have attended this conference to date.+44 20 7099 0600www.worldbiofuelsmarkets.com

2010 International Biomass Conference & Expo

May 4-6, 2010 Minneapolis Convention CenterMinneapolisThis conference will unite current and future producers of biomass-derived power, fuels and chemicals with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policymakers. Future and existing biofuels and biomass power producers will be able to network with waste generators and other industry suppliers and technology providers as well as utility executives, researchers, policymakers, investors, project developers and farmers.(701) 746-8385 www.biomassconference.com

2010 International Fuel Ethanol Workshop & Expo

June 14-17, 2010 America’s CenterSt. LouisThe FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-busi-ness environment. It is the largest, longest-running ethanol conference in the world. The event delivers timely presentations with a strong focus on commercial-scale ethanol production, new technology, and near-term re-search and development. (701) 746-8385 www.fuelethanolworkshop.com

industry events

11 BIOMASS MAGAZINE 12|2009

Page 12: Biomass Magazine - December 2009

12 BIOMASS MAGAZINE 12|2009

Thermochemical pioneer wins prestigious award

Tony Bridgwater, professor of chemical engineering at Aston University in Birming-ham, U.K., has been awarded the Don Klass Award for Excellence in Thermochemical Conversion Science. The award, presented in September at the international tcbiomass 2009 conference in Chicago, recognizes his

extensive contributions to the fi eld of bioenergy, and his past ef-forts as organizer of world biomass conferences. Globally recog-nized as a leading bioenergy researcher, Bridgwater has worked at Aston University for most of his professional career. His major research interests over the past 20 years have been in thermochem-ical processing of biomass and other solid fuels including waste and refuse to produce valuable fuels and chemicals. These prod-ucts include conventional and unconventional gaseous and liquid fuels; oxygenates as fuel additives and chemical intermediates; and commodity chemicals such as methanol and ammonia for fertilizer production. BIO

business BRIEFSMorbark launches Quick Switch conversion kit

Michigan-based Morbark Inc. announced the commercial release of the new Morbark Quick Switch grinder-to-chipper conversion kit. The Quick Switch, available for Morbark track and rubber-tire horizontal grinder models 3800, 4600, 4600XL and 6600, allows current grinder owners to produce a market-able chip by modifying the hammermill of their horizontal grinder. The conversion kit allows an average conversion of a grinder to a chipper in less than three hours. Morbark also an-nounced that it signed a dealer agreement with Warrior Tractor and Equipment in Northport, Ala., to represent the recycling and forestry product lines in Alabama, Arkansas and Wayne, Lawrence and Giles counties in Tennessee. The company also added Nortrax Equipment-Southeast Region to its family of recycling and forestry dealers, and signed Nortrax Equipment-Tennessee Region as an exclusive dealer of Morbark recycling and forestry equipment. BIO

AF&PA names government affairs director The American Forest & Paper Association announced that

Erik Heilman has been named a director of government affairs. Heilman will be responsible for promoting AF&PA’s policy po-sitions on Capitol Hill for climate change, tax and trade issues. Heilman has an extensive knowledge of international trade and the legislative process developed in both the legislative and exec-utive branches of the federal government. He previously served in the Offi ce of the U.S. Trade Representative, the Department of Commerce and both the U.S. House and Senate. He has also worked on transportation and appropriations issues. BIO

BioEnergy Solutions wins environmental leadership award

California Gov. Arnold Schwarzenegger announced that Bio-Energy Solutions of Bakersfi eld, Calif., has won the 2009 Gover-nor’s Environmental and Economic Leadership Award for its Dairy Biomethane Cluster Projects. GEELA is California’s highest envi-ronmental honor. The award recognizes individuals, organizations and businesses that have demonstrated exceptional leadership for voluntary achievements in conserving California’s resources, pro-tecting and enhancing the environment, and building public-private partnerships. BioEnergy Solutions’ fi rst digester project came on line in 2008 and is the fi rst in California to upgrade biogas from dairy digesters to pipeline quality and inject it into an existing natural gas line. BIO

Ze-gen named a Global Cleantech 100 companyZe-gen Inc., a clean energy company developing advanced

gasifi cation technology to convert waste streams into synthe-sis gas, has been named a Global Cleantech 100 company by Guardian News and Media and Cleantech Group LLC, provid-ers of leading research, events and advisory services for the cleantech ecosystem. The Global Cleantech 100 is the fi rst-ever list highlighting the most promising private clean technology companies around the world. Supported by the Carbon Trust, the Global Cleantech 100 recognizes companies at the fore-front of cleantech innovation offering solutions to some of the world’s most pressing environmental challenges. BIO

Bridgwater

Jorgensen joins DP CleanTech Group

Kenneth Jorgensen recently joined the DP CleanTech Group as chief tech-nical offi cer and senior vice president. Jorgensen will be based in Esbjerg, Den-mark, with global responsibility for the development of technology solutions and the management of global technology

resources. He has extensive experience working in the power industry, and is a recognized expert in combustion technology accredited with numerous technological advancements particu-larly in the area of biomass technology. Prior to joining DP CleanTech, Jorgensen was the sales director for Babcock & Wilcox Vølund A/S renewable energy plant business, and has global experience in technology and projects from sales through project execution to commissioning and operation. BIO

Jorgensen

Page 13: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 13

FCI offers initiative to meet GHG reporting mandate

Fluid Components International, a global supplier of thermal mass gas fl ow meters, is offering its Customer GHG Reporting Fast Track Initiative in response to the U.S. EPA’s new mandate per 40 CFR part 98 that requires greenhouse gas (GHG) emissions reporting effective Jan. 1. “To help our customers comply with the EPA’s new GHG reporting mandate, we have dedicated special gas fl ow meter application resources to assist them. We recognize that accurate measurement of greenhouse gas fl ow is important for compliance and the global environment, and are ready to do our part in helping our customers meet this challenge,” said FCI President Dan McQueen. FCI’s new Customer GHG Reporting Fast Track Initiative is a three-prong program. A special toll-free GHG hotline is available at (800) 863-8704, ext. 218. BIO

business BRIEFS

BPA launches Web video: Energy for AmericaThe Biomass Power Association launched a Web video

called Energy for America. This video provides an up-close look at the unique process of recycling millions of tons of organic waste, such as tree trimmings, rice hulls and almond shells into clean renewable electricity. It also details ways biomass power can reduce greenhouse gases, protect American forests and cre-ate new clean energy jobs. Energy for America was created to inform the public about the economic and environmental ben-efi ts of biomass power. The video will be distributed to BPA members and companies, as well as online outlets and renew-able energy blogs. Additional electronic copies will be sent to key Capitol Hill staff and Washington, D.C., infl uencers to inform them of the importance of clean, renewable biomass power in upcoming energy and climate legislation. The video will also be featured on the BPA Web site at www.biomasspowerassociation.com and uploaded to YouTube. BIO

Jansen supplies 50th biomass boiler upgrade in 10 years

This past spring, Jansen Combustion and Boiler Technologies Inc. supplied its 50th upgrade in 10 years in the combustion system of an existing biomass-fi red boiler. This unit, in a forest products plant in Tennessee, burns wood fuel and pulverized coal and has a maximum steaming capacity of 550,000 pounds per hour. The Jansen upgrade included a new overfi re air (OFA) delivery system and new fuel spouts. The rising cost of fossil fuels, stricter regulatory emissions performance requirements, and a general desire to increase power generation from green, renewable resources have been the driving forces behind these projects. Jansen has designed/supplied OFA sys-tem upgrades for units by a variety of original manufacturers, such as Babcock & Wilcox, Combustion Engineering, Foster Wheeler, Erie City, Riley Stoker, Zurn, Kipper and Union Iron Works, with original installation dates ranging from the mid-1950s to early-1990s. BIO

Bioenergy leaders honored at Bioenergy Engineering 2009

Four individuals and one corporation were honored at Bio-energy Engineering 2009, an international conference held in Bel-levue, Wash. John Ferrell was presented the Federal Agency Bio-energy Pioneer Award for his contributions toward development and administration in promoting bioenergy in the U.S. The Private Enterprise Bioenergy Pioneer Award was given to Phillip C. Badger of General*Bioenergy Inc., in recognition of his extraordinary con-tributions to the development of innovative technologies and com-mercialization efforts for bioenergy. The Public Service Bioenergy Pioneer Award was given to Ralph P. Cavalieri, associate dean for research and director of the Agricultural Research Center at Wash-ington State University, in recognition of his extraordinary contri-butions to administration and engineering education in promoting the development and use of bioenergy. Bryan M. Jenkins, professor of biological and agricultural engineering at the University of Cali-fornia-Davis, received the Academic Bioenergy Pioneer Award for his research and teaching in the area of biomass feedstock logistics and thermochemical conversion, including combustion, gasifi ca-tion, and pyrolysis for fuels and power, and high-temperature phe-nomena of associated inorganic constituents. The Bioenergy Com-pany of the Year Award was given to Abengoa Bioenergy Group in recognition of its commitment to produce biofuels in a manner that is energy and environmentally sustainable, technically effi cient and economically profi table. BIO

Duff joins GTE’s senior staff Gas Turbine Effi ciency plc, a leader in

energy services and aviation products, an-nounced the appointment of John Duff to the senior staff. Duff will be responsible for business development and strategic power generation initiatives. He has more than 32 years of experience in the power generation industry, including more than

two decades in management. Prior to joining GTE, Duff was senior vice president of Entegra Power Group LLC where he was responsible for the strategic leadership of the power plant operations, maintenance, engineering, capital project manage-ment, environmental and corporate insurance functions. BIO

BioEnergyTechnologies

Duff

Page 14: Biomass Magazine - December 2009

14 BIOMASS MAGAZINE 12|2009

industry NEWS

Coskata: Slow and steady wins the raceCoskata Inc., along with strategic investor General Motors

Corp. and plasma gasifi cation veteran Alter NRG Corp., offi cially unveiled its semi-commercial cellulosic ethanol facility near Madi-son, Pa., in mid-October. Though slightly behind the start-up date announced initially, CEO Bill Roe said that “slow and steady wins the race.” He attributed the company’s progress to a “hybrid ap-proach” to cellulosic ethanol—a combination of biochemical and thermochemical technologies—and the signifi cance of being truly feedstock fl exible.

“A number of other companies are moving down these path-ways (thermochemical and biochemical), and bringing these types of technologies to commercialization—it’s all based on good, sound science, but there are inherent strengths and weaknesses in both of those,” Roe said. “What we’ve done is take the best of both—a ther-mal front end that gives the feedstock fl exibility that we allude to, combined with a biological conversion step which gives us very high yields, and singular product as opposed to a range of products.”

Coskata’s process technology is capable of converting multiple feedstocks, including woody biomass, agricultural waste, energy crops and construction/industrial wastes, into synthesis gas. The syngas is cleaned, cooled and passed through a conversion process, where it undergoes bacterial fermentation using Coskata’s propri-etary microorganisms. “They have a singular purpose, and that is to ingest CO2 and hydrogen and exhale ethanol,” Roe said. “We’ve made them into super athletes in the course of our technology de-velopment. They perform not like they do in nature, but like we need them to in an industrial process; we’ve done lots of microbio-logical work and strain management development.”

The $25 million semi-commercial plant, 30 miles southeast of Pittsburgh, is co-located with a pilot-plant gasifi er owned and op-erated by a unit of Calgary, Alberta’s Alter NRG, which has been perfecting its technology for several decades.

Among many technology advancements made since the com-missioning of the company’s fi rst pilot plant in Warrenville, Ill., Roe said water consumption reduction is signifi cant. “It’s not something that gets a lot of play, but we’re very interested and concerned,” he said. “At our fi rst commercial plant, we will have reduced the total water consumption to 1.3 gallons per gallon of ethanol produced, far below anything right now, and we think that’s going to be a very important parameter in the future.”

Now that Project Lighthouse is complete, Roe said a site in the southeastern U.S. has been selected for the company’s fi rst commer-cial-scale facility, and that Coskata would likely be pulling in licensee companies over the next few months. “We’ve chosen to be a tech-nology provider, rather than an operating company,” he said.

The plant will consume 3,000 wet tons of biomass per day, Roe said, so it will need more than just wood residuals as feedstock. “You can’t sweep the fl oors and fi nd that—you have to harvest,” he added. “We’ve been working with feedstock suppliers.”

Engineering and design for the commercial plant began in

Coskata’s semi-commercial cellulosic ethanol facility is equipped with a wood chip feed-handling system.

PH

OTO

: CO

SK

ATA

INC

.

Page 15: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 15

November 2008, Roe said, and a feedstock study was completed in June. “Now, we’re revisiting the design work, and basing it on what we’re learning from the commissioning from this [Madison] facility,” he said. “We’ll put a fi nal polish on the design work at the end of this year so we’re ready to go to the EPC (engineering, procurement and construction) in 2010, with projected start-up in late 2012.”

Despite the wide array of companies striving to commercial-ly produce cellulosic ethanol, Roe and Wes Bolsen, Coskata chief marketing offi cer/vice president of governmental affairs, said they think the U.S. will likely miss the fi rst few renewable fuels standard (RFS) targets. “We can say the goals that were put out there needed to be aggressive goals, because they were meant to spawn action,” Roe told Biomass Magazine. “Also, it’s partially true that the credit crunch and drying up of the markets was a factor; you can’t get money for projects, particularly for fi rst-of-a-kind technologies. They’re not lending like they once did or will eventually, but you can’t hang everything on that. A lot of us in this space have been slower to bring our technologies forward than what was originally thought or promised.”

Roe added that companies such as Coskata and a few others that are coming fast, can fi ll the gap and eventually fall in line with the targets, provided they have some access to project fi nancing. “I’m optimistic,” he said. “I think the credit markets are starting to thaw and there will be fi nancing for projects with proven technology platforms. Yes, there are hurdles to jump—but they are jumpable now—and it looks a lot better to me now than it did a year ago.”

So what does Coskata’s progress mean for the industry? “We think right now there’s a defi nite need—particularly with the way that ethanol has been banged around in the recent past—to get some good news out there because there are some companies like Coskata and others that are coming, and coming rapidly,” Roe said. “Now that we have demonstrated this, and verifi ed our cost struc-tures at this scale, we can begin the build-out of full scale in the immediate future.”

—Anna Austin

industry NEWS

Employees stand by valves at Coskata’s semi-commercial feedstock-fl exible ethanol facility in Madison, Pa., where the company will combine biochemical and thermochemical technologies to produce cellulosic ethanol.

PH

OTO

: CO

SK

ATA

INC

.

Page 16: Biomass Magazine - December 2009

16 BIOMASS MAGAZINE 12|2009

industry NEWS

California fi rm commissions compact gasifi cation pilot plant

StormFisher inks deal with Canadian food distributor

A compact gasifi cation pilot plant in Des Plaines, Ill., was commissioned Nov. 5 by de-veloper Pratt & Whitney Rocketdyne, Canoga, Calif., and its team of organizations and part-ners.

The plant will be at the Gas Technology Institute and will have the capacity to con-sume 18 tons of blended feedstock per day, according to Jim Hartung, director of energy systems at PWR. The system will run on coal, petroleum coke—derived from oil refi nery coker units and other cracking processes—and biomass, according to Hartung. “We envision using a range of biomass from corn stover to wood chips,” he said. Typical gasifi cation plants run on about 3,000 tons per day, he said, adding that adequate feedstock can be hard to procure. “We want to be able to use what we can get,” he said.

The gasifi er is one-tenth the size of com-peting systems, which lowers the capital cost, increases effi ciency and makes maintenance easier, Hartung said. The system uses a pro-cess that rapidly mixes oxygen with the coal and biomass for fast gasifi cation in the small reactor, producing syngas consisting of car-

bon monoxide and hydrogen. The syngas can be converted to electricity or processed and

used to manufacture liquid fuels, fertilizers and chemicals. The gasifi er will produce only a small amount of syngas at the pilot scale and the plant will not be producing electricity.

To begin with, the pilot plant will run short duration tests, followed by longer ones and after about one year, PWR hopes to begin construction on a demonstration-scale plant. The site has not been determined, but the company is considering locations in China, Al-berta, Canada and the U.S., Hartung said. The goal is to prove the system and sell the gasifi er and associated hardware to large, industrial-scale facilities such as utilities, oil companies and chemical companies, he said.

PWR teamed up with ExxonMobil Re-search and Engineering, Zero Emissions Energy Plants Inc., Alberta Energy Research Institute and the Illinois Department of Con-servation and Economic Opportunity to de-velop and commercialize the technology, ac-cording to the company. The commissioning ceremony included a tour of the plant.

—Lisa Gibson

Ontario, Canada-based StormFisher Biogas has sealed a deal with grocery retailer Loblaw Companies Ltd. for the annual supply of 15,000 metric tons (16,500 tons) of organic waste to fuel its $15 million biogas plant in London, Ontario.

The agreement with Loblaw, a subsidiary of Canadian food distributor giant George Weston Ltd., is StormFisher’s biggest deal since last year’s announcement of plans to construct up to 30 anaerobic digestion plants across North America over the next fi ve years. The plants will be funded by $350 million from private equity company Denham Capital Management, and will each produce from 2.8 to 5 megawatts of electricity.

The London facility is the company’s fl ag-ship project, slated to commence operations in late 2010. The 210,000 MMBtu/2.8 megawatt plant will require approximately 140,000 metric tons of organic waste per year and be capable of powering about 2,800 homes; the amount of organic waste Loblaw will supply should be enough to power 225 homes.

The Ontario Power Authority will pur-chase the electricity from StormFisher through its Standard Offer Program, a feed-in tariff that was put in place in Ontario at the begin-ning of 2007. According to the program cri-teria, biogas projects under 10 megawatts are paid 11 cents per kilowatt hour.

Ryan Little, StormFisher vice president of business development, told Biomass Maga-zine that all 47 of Loblaw’s grocery stores, from Windsor to Waterloo, will be supplying the plant with organic wastes. Loblaw’s waste haulers will truck the materials to the facility, he said.

The company has development plans in Wisconsin, Alberta and another in London, which are making steady progress, Little said.

To learn more about StormFisher Biogas, read “Taking Anaerobic Digestion by Storm,” in the May issue of Biomass Magazine.

—Anna Austin

PWR’s compact gasifi er will have the capacity to consume 18 tons of blended feedstock per day.

PH

OTO

: PW

R

Page 17: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 17

Fibrowatt’s poultry litter-fi red power plant plans progress

industry NEWS

Fibrowatt LLC has contracted renewable energy project designer Fagen Inc. to engineer, procure and construct one of the company’s biomass power plants in North Carolina, and will possibly extend the contract to include two additional plants announced simultaneously in 2007.

Although plans for the trio of plants haven’t come together as quickly as desired, Terry Walmsley, Fibrowatt vice president of environmental and public affairs, said the company is trying to parallel progress of the projects—planned for Surry, Montgomery and Sampson counties—but added each has a life of its own and largely depends on obtain-ing suffi cient fuel under contract, and signing Power Purchase Agreements with area utili-ties.

“There’s also the permitting pathway,” he said, adding that none of the projects have “a leg up” on the others. “We believe we can re-tain quite a bit of value by maintaining a paral-lel path through engineering, design and con-struction,” he said. “It probably won’t always stay this way—many things could come into play that are outside of our control—but for now, this is how we’ll pursue them.”

In May, a spokesman for the North Carolina Division of Air Quality told Biomass Magazine that preliminary analyses of exist-ing facilities in Minnesota and North Carolina using wood waste indicated that arsenic emis-sions in the poultry-fi red plants may exceed permissible levels in the state. That would not mean they won’t get a permit, he said, but may require additional controls or other measures.

Walmsley said he didn’t know what a rea-sonable timeline for projects such as Fibro-watt’s should be, but that it hinges mostly on PPAs with power utilities. “It’s really the an-chor item that ensures the project has a life of its own and will go forward, in many respects,” he said. “So far though, we’ve done quite a bit of preliminary design and permit work.”

Fibrowatt brought its fi rst 55-megawatt poultry-fi red plant on line in Benson, Minn., in 2007, which is essentially the same size and scope as the South Carolina projects. In addi-tion to poultry litter, Walmsley said the plants will be designed to utilize woody and agricul-tural biomass. “We recognize, since we’re in a sense providing a service for poultry growers and we can’t dictate things such as date of de-livery, that we have to remain fl exible,” he said.

“We expect to use in excess of 600,000 tons per year, but the mix will depend on how well we do signing up litter under contracts.”

North Carolina’s poultry industry ac-counted for more than $3.3 billion in 2007, and is ranked third nationally with more than 10 percent of the nation’s poultry produc-tion, according to the North Carolina Poultry Foundation.

Walmsley added that it’s unfortunate the projects haven’t proceeded more quickly. “It would have been ideal to be at the point hav-ing utility PPAs in hand,” he said. “It’s very complex, but we’re working as quickly as pos-sible.”

North Carolina’s Renewable Energy and Energy Effi ciency Portfolio Standard, passed in 2007, requiring utilities to purchase 12.5 per-cent renewable electricity by 2021, with speci-fi ed portions being met from solar, swine and poultry waste—170,000 megawatt hours from poultry waste by 2012, and 900,000 by 2014.

—Anna Austin

US Army invests $1.5 million to develop mobile pyrolysis systemInternational defense and security tech-

nology company QinetiQ has been awarded a $1.5 million contract from the U.S. Army to develop a portable version of a trash-to-energy system that can turn food, medical and sani-tary waste, paper, plastic and any other waste that may be generated on an army base into electricity.

PyTEC is able to operate constantly as unsorted waste can be continually fed into the automated closed-loop system. The unit can process up to 100 kilograms (220 pounds) of municipal solid waste per hour, and also re-claims up to 500 kilowatts of the thermal en-ergy from the waste per hour, a proportion of which will be used to power the system.

The system is housed in two interconnect-ed intermodal containers fi tted with a hinged opening side, and requires minimal training or involvement to operate. About 25 liters (7 gallons) of char material is produced per 100 kilograms of raw waste processed, subject to the proportion of organic waste mix, accord-ing to QinetiQ.

The program is funded by the U.S. Of-fi ce of the Secretary of Defense through the Foreign Comparative Testing Program and could result in the Army acquiring more than 10 systems eventually. Completion is expected in mid-2010, followed by extensive testing and evaluation by the Army until early 2012. Doug-las Millard, QinetiQ communications manag-

er, said the Army, will be testing the PyTEC systems in the U.S.

Though the pyrolysis concept is not new, QinetiQ’s system is unique in that it’s scaled to be transportable, installed onboard ships or integrated into privately operated sites, Millard said. The technology has been under devel-opment by the Farnborough, England-based company for the past few years, he said.

The system was designed to reduce the need for outside contractors to have access to Army base camps to dispose of waste, while producing energy to reduce fuel needs.

—Anna Austin

Page 18: Biomass Magazine - December 2009

18 BIOMASS MAGAZINE 12|2009

industry NEWS

Agave might be ‘missing energy crop’Agave, a plant of a large botanical genus grown mainly in

Mexico, is the missing energy crop, according to researchers par-ticipating in the Agave Project, and could be revolutionary for the biofuels and bioproducts industries.

The plant is used to produce liquors such as tequila, mescal and sotol, along with cords and ropes mainly for handcrafts. But its potential has largely been untapped, according to researchers. One hectare (2.5 acres) of the plant annually produces more than 500 metric tons (551 tons) of biomass, yielding three times more sugars than sugarcane, four times more cellulose than the fastest-growing eucalyptus, and fi ve times more dry biomass than the genetically modifi ed poplar tree, according to project director Arturo Velez Jimenez. “It’s a reliable, abundant, cheap, easy-to-handle, high-qual-ity feedstock,” he said. “It’s the ideal feedstock for a biorefi nery where electricity, biofuels, biomaterial, chemicals and bioproducts are produced.” One hectare can produce 5,000 gallons of distilled ethanol and 5,000 gallons of cellulosic ethanol, he said.

Agave is not currently used to make biofuels, but is capable of producing any type, Jimenez said. It thrives on marginal lands, including in salty and acidic soils, on steep hills and in semiarid and temperate climates; needs neither watering nor agrochemicals; and can be easily cultivated at a low cost. In Mexico alone, there are more than 80 million hectares of marginal and semiarid land where agave plantations could be established, he said.

It does not compete with food crops either. “When I was a kid, men walked the streets selling toasted agave, a candy with a very soft taste of alcohol,” Jimenez said. “Nowadays, nobody makes this anymore. It’s not used to make food anymore.” Sometimes during drought the leaves are fed to cattle, he added, and the skin is used

to wrap and cook mixiote, a traditional popular dish with meat, herbs and sauce.

The Agave Project was started four years ago, when Jimenez was the administrative coordinator at the National Confederation of Forestry Producers, to explore and promote the potential of the plant, he said. Now, he’s developing the project separate from the agency. It uses the research of University of Chapingo Professor Remigio Madrigal Lugo, who developed enhanced varieties of Aga-ve tequilana weber, Agave angustifolia and Agave fourcroides, according to Jimenez. Those enhanced varieties have a higher sugar content and are several times bigger than common agave. The enhanced tequila variety, for example, produces six to 10 times more tequila than common agave, he said.

There is enough of the crop to sustainably supply a biofuels in-dustry, while continuing to produce tequila, Jimenez said. “There’s enough agave in Mexico for massive production of ethanol, biofu-els and bioproducts,” he said. “Right now, there’s an overpopula-tion of agave. More than 225 million mature agave plants won’t be commercialized because the tequila industry cannot buy them.”

Jimenez is developing the Agave Project in South Africa and seven adjacent countries, he said. He is striving to get several dif-ferent companies and technologies producing different biofuels to test the plant. Mascoma Corp., a New Hampshire-based biofuels company, is assessing Agave americana for its cellulosic ethanol con-version process, Jimenez said, and he’s in discussions with com-panies to convert the plant to biocoal and biochar, biojet fuel and biocrude.

—Lisa Gibson

Agave project director says that agave is the missing energy crop.

PH

OTO

: AG

AVE

PR

OJE

CT

Page 19: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 19

industry NEWS

GPI conference addresses options for reducing emissions

GPI conference: Biomass creates opportunities for wildlife, agriculture

The best way to reduce greenhouse gas (GHG) emissions from coal-fi red power plants in the U.S. is to replace plants that are more than 25 years old with facilities that coproduce electricity and synthetic fu-els from coal and biomass while employing carbon capture and storage systems, according to Robert Williams, senior research scientist at the Princeton Environmental Institute.

In order to meet the goal of reducing U.S. emissions by 80 percent of 2005 levels by 2050, the nation needs to look mostly at coal power and transportation, Williams told the crowd of about 115 people dur-ing the Great Plains Institute conference on Nov. 2 at North Dakota State University in Fargo. The conference, titled The Future of Coal and Biomass in a Carbon-Constrained World: Technology and Policy Op-portunities for the Midwest, featured several topics and hosted speakers from as far away as China. Tackling both coal power and transportation emissions simultaneously is the best option for meeting that 80 percent goal, Williams said. “That’s a very daunting task,” he said. “We need to make radical change and we need to get underway soon.”

Retrofi tting existing coal power plants with carbon capture and storage systems is one option, but Williams said it’s extremely expensive and energy- and water-intensive. Completely replacing the systems not only leads to decarbonized energy, he said, but also enables coal to play a major role in the realization of zero GHG emissions in the production of synthetic transportation fuels. The replacement would mean a switch from combustion to gasifi cation, which allows a relatively simple carbon dioxide removal, Williams said.

A coproduction system with carbon capture and storage, producing two-thirds synthetic fuels and one-third electricity, fi red by 11 percent biomass, reduces system-wide GHG emissions by 50 percent, whereas a system with 38 percent biomass reduces emissions by 90 percent, he said.

Obstacles to making the switch remain, however, and are mainly institutional, not economic, Williams said. They include managing three commodity products and two feedstocks simultaneously, along with forming new strategic alliances that can overcome obstacles in the pri-vate sector and federal government.

Williams said new policies are also needed, including a strong, broad carbon mitigation policy that would protect biomass synfuels investors against oil price collapse risk. Carbon capture and storage early-action policies are important, he said, along with incentives for commercial-scale demonstrations between 2010 and 2020 and policies for widespread im-plementation thereafter. In addition, more policies supporting research and development of thermochemical bioenergy are needed, along with policies regarding the logistics of biomass supply.

—Lisa Gibson

There could be a balance in managing land for energy and wildlife simultaneously, creating several opportunities for both sectors, according to Dave Nomsen, vice president of governmental affairs for Pheasants Forever.

Nomsen spoke at the Great Plains Institute’s Nov. 2 conference. “There are some intriguing possibilities,” he said of that balance. Pre-scribed burning, while limited in many parts of the country, can ensure plant residual is removed and recycled to keep the land productive. Har-vesting biomass removes vegetation and keeps it in an early plant suc-cessional stage rotation, he said. Removing exotic, invasive plant species such as reed canary creates a better habitat and those plant species might be benefi cial for biofuels production, he added.

Also speaking at the conference was Robert Bonnie, senior en-vironment and climate advisor to U.S. Agriculture Secretary Tom Vil-sack. Enormous opportunities exist for the agricultural sector in climate change legislation, Bonnie told attendees. “If we do it right; if we get the incentives right,” he said.

The two large climate change markets for agriculture are energy and carbon offsets, he said. Land stewardship activities can make carbon credits an attractive market, but Bonnie cautioned that if skepticism is not addressed responsibly, it will eliminate those markets.

“It’s also important to note that there are costs to inaction,” he said.

The U.S. EPA will move forward with some kind of legislation and the country is better off if it is comprehensive. It’s crucial that rural America is at the table for climate legislation in order to get the design right to provide benefi ts and opportunities, Bonnie emphasized. “The most im-portant thing is that rural America participates in this debate,” he said.

U.S. Sens. Kent Conrad, D-N.D., and Byron Dorgan, D-N.D., ad-dressed conference attendees via satellite, both focusing on current legis-lation. “It will take time to properly craft climate legislation,” Conrad said, adding that biomass should play a large role in the renewable energy and fuel portfolio. Climate change legislation will not be on the fl oor of the Senate this year, Dorgan said, as crafting healthcare legislation has taken longer than expected, but it will be on the fl oor next year. Coal, however, will continue to play a role in the country’s energy future, Conrad said, adding that 90 percent of North Dakota’s electricity comes from coal. Climate change efforts that don’t involve coal would drastically increase the price of electricity, he added.

According to Dorgan, one-fourth of oil pumped globally goes to the U.S. and 70 percent of that is from outside the country. While plenty of work is being done, there still is a long way to go, he said.

—Lisa Gibson

Great Plains InstituteWorking on tomorrow’s energy solutions with today’s leaders

Page 20: Biomass Magazine - December 2009

20 BIOMASS MAGAZINE 12|2009

industry NEWSPennsylvania project tests mine lands for biofuel crops

A project in Pennsylvania seeks to determine if abandoned and active mine lands can be reclaimed and used to grow biofuel crops such as switch-grass and other warm-season grass species.

Pennsylvania has about 180,000 acres of abandoned mine land, plus active mine land, that is not being used currently for food, feed or fiber, ac-cording to Rick Stehouwer, Penn State professor of environmental and soil science. That degraded land can be used for biomass production, but it needs to be reclaimed first, he said. The project will evaluate the effectiveness of soil amendments, determine whether the land can support biomass crops, and if the crops are cost effective.

Stehouwer and Marvin Hall, Penn State professor of forest management, have been tending to a privately owned plot planted with switchgrass and other grasses in Schuylkill County for the past four years. The project includes evalu-ating the use of excess manure from livestock operations and paper mill sludge as reclamation techniques and evaluating sustained production potential and management requirements, Stehouwer said. The projects also will evaluate the amount of nutrient leaching with the different soil amendments, as compared with traditional amendments such as lime and fertilizer.

Another 30-acre reclaimed plot in Clearfi eld County is in its fi rst year of the project and is being used to grow switchgrass, big bluestem grass and others. “We hope to keep these experiments going long term,” Ste-houwer said, adding that it depends on available funding.

The project got its start when a representative of the Pennsylvania Environmental Council approached Stehouwer, wondering if manure could be used to rehabilitate mine lands. “These are minimally produc-tive areas without signifi cant intervention,” Stehouwer said. Mined sites are usually not in highly fertile areas, the soil has a fairly low pH and extremely low organic matter content as the result of the mining, and the moving of the soil in the mining process causes compaction.

“The potential exists for someone to farm that land,” he said. Barriers to developing it exist, however, including the fact that most of the aban-doned and active mine lands are privately owned. It’s up to those landown-ers to determine how to handle their land after reclamation and not all of the 180,000 acres of abandoned mine land can be used for agricultural purposes because of layout and other issues.

—Lisa Gibson

The photo on the left is of abandoned mine land in Schuylkill County, Pa., and was taken in 2006. The photo on the right was taken in 2009, and proves that some of these areas may be prime ground for biofuel crops.

PH

OTO

S: P

EN

N S

TATE

Metabolix completes fi eld trial of genetically engineered tobaccoMassachusetts-based Metabolix Inc. completed a fi eld trial of a bio-

plastic-producing tobacco crop, helping lay the groundwork for planning and permitting of other biomass crop fi eld trials for bioplastics.

The tobacco in the 0.8-acre fi eld trial was genetically engineered to express polyhydroxyalkanoate (PHA) biobased polymers. The experiment is not a commercial opportunity for the company, but was used to validate and learn more about processes for future work in plant-based programs with nonfood crops such as switchgrass, oilseeds and sugarcane, according to the company. Metabolix is a bioscience company focused on providing sustainable solutions to manufacture plastics, chemicals and energy.

The trial provided valuable data relating to biopolymer production, with the best plants producing 3 percent to 5 percent PHA, according to Metabolix. In comparison, Metabolix has achieved a yield of 3.72 percent dry weight PHA in switchgrass leaves and 1.23 percent dry weight in the plant as a whole, according to Matt Lindberg, a communications represen-

tative for the company. Research aims to achieve 7.5 percent dry weight from the plant, a benchmark that would be economic for full-scale com-mercial production, he added. The bioplastic is grown directly within the crop and extracted later through a proprietary process, Lindberg said.

Metabolix obtained necessary permits from the USDA Animal and Plant Health Inspection Service in March and completed its tobacco fi eld trial in October. Information regarding the cost of the project is not avail-able, Lindberg said.

In a quest to develop crop technologies for the coproduction of biobased plastics, chemicals and energy from nonfood energy crops, Me-tabolix is taking a systems approach, from gene to end product. It is devel-oping and commercializing Mirel, a family of bioplastics and biodegrad-able alternatives to many petroleum-based plastics.

—Lisa Gibson

Page 21: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 21

A $100 million project set to break ground next year in Valdosta, Ga., will utilize wastewater, wastewater sludge and wood waste to op-erate a 40-megawatt biomass power plant.

The Wiregrass Electric Generating Facility will be constructed by Wiregrass Power LLC, a subsidiary of Atlanta-based Sterling Energy Assets, and will be built on 22 acres next to the Mud Creek Wastewater Treatment Plant.

About 750,000 gallons of reclaimed water from the Mud Creek plant, which has a daily capacity of 3.3 million gallons, will be used to cool the biomass plant boilers each day and will eliminate the need for an external water cooling source. Currently, after being treated the wa-ter is discharged into Mud Creek, a tributary of the Alapaha River.

Sludge that the city of Valdosta currently pays to be landfi lled will be used as a feedstock at the power plant, as will woody biomass from local sources.

Electricity produced at the plant, enough to power about 16,000 homes, will be sold to Georgia power utilities and sent through the grid via a transmission line adjacent to the project site.

Georgia is one of 16 states that does not have a renewable elec-tricity portfolio, but it does have some incentives to utilize biomass

resources. In 2006, the Georgia Legislature passed House Bill 1018 which provides a 100 percent sales and use tax exemption for the purchase of organic biomass materials utilized in the production of electricity, steam or both for resale.

Groundbreaking for Wiregrass Power is scheduled for 2010, and the project should be complete in 2012, according to Georgia Gov. Sonny Perdue’s offi ce.

Beyond the Valdosta project, Georgia currently has several pro-posed biomass power plants across the state, which include the con-version of Southern Co.’s largest utilities provider Georgia Power’s 164-megawatt coal-fi red power Plant Mitchell Unit 3, located near Albany, Ga., to a 96-megawatt, 100 percent wood-fi red biomass plant. For more information on that project, go to www.biomassmaga-zine.com/article.jsp?article_id=2466&q=Plant Mitchell. Oglethorpe Power Corp. has proposed the building of three 100-megawatt bio-mass power plants. To read more about those projects, go to www.biomassmagazine.com/article.jsp?article_id=2670.

—Anna Austin

industry NEWS

Wastewater sludge, wood waste to fuel Georgia power plant

Eight Montana sawmills to participate in biomass power programUpper Midwest/Northwest power utility NorthWestern Ener-

gy, the Montana Community Development Corp. and eight saw mills across Montana will play key roles in developing a community-based biomass power program.

The project is being funded with a $125,000 grant from the Montana Department of Commerce and a $50,000 grant from the U.S. Endowment for Forestry and Communities.

Many Montana saw mills have been working separately to pro-duce electricity to sell to the state power grid, however, cost and tech-nical issues involving plugging the power into the grid have stymied progress, according to Rosalie Cates, MCDC president. “We’ve been working with these individual saw mills in Montana for quite a while, to connect them with consultants who could do the feasibility studies for combined-heat-and-power generation at their sites,” Cates said. “They could size the plant, fi gure out the supply and the economics related to the saw mill, but all encountered the same set of problems trying to sell it to the utility.”

At the same time, NorthWestern Energy has been motivated to add renewable energy into its portfolio, as it’s required by law, Cates said. “We decided to bring all these concerns to the table at once and deal with them as a package, so the obstacles can be cleared for Mon-tana saw mills to provide them with that renewable power.”

Montana’s current renewable portfolio standard requires utilities to obtain 10 percent of their power from renewable resources from 2010 to 2014, and 15 percent by 2015 and thereafter.

Craig Rawlings, MCDC forest business consulting manager said the reason the mills were attractive renewable power generators is be-cause they all possess wood-fi red boilers, and produce no byproducts or other wood waste from their logging operations. “A lot of them are obsolete and need to be updated, so this is a good opportunity for them to do this—increase their effi ciency, install better pollution technology and produce some power and steam along the way.”

The partnership will include feasibility studies to analyze the biomass supplies available on private and public land, potential bio-mass generation facilities, operational requirements and preliminary impacts of the biomass production on local economies and the en-vironment. Each of the mill sites will be assessed, so that North-Western and the saw mill businesses can identify and address issues such as connectivity to power lines, cost effi ciencies and technical problems.

One or two of the mills are expected to break ground in 2010, as a lot of them are already in the engineering/fi nancing stages, Rawl-ings said. “The biomass power idea will be moving forward at eight Montana saw mills over this winter, and by March we expect to know what the possibilities are,” Cates added. “It could serve as a model nationally.”

—Anna Austin

Page 22: Biomass Magazine - December 2009

22 BIOMASS MAGAZINE 12|2009

industry NEWS

BioEnergy Technologies to build AD facilities A new Sumter, S.C.,-based bioenergy company will design, build

and possibly own and operate on-site anaerobic digestion systems at farms or food processing facilities that generate a large amount of bio-waste and high-energy density waste, such as fats, oil and grease.

Established this past summer, BioEnergy Technologies LLC will work with interested partners to convert agricultural and food waste into methane, for conversion into electricity and heat to be used at the facilities, according to the company. Excess electricity could be sold to the grid, as well, according to Rachel Barnett, marketing and public re-lations representative for the company. The fi rst location has not been established yet but the company said it hopes to announce it by the end of the year. BioEnergy is in discussions with a number of food proces-sors, farmers and utilities. Feasibility studies are being conducted and results should be ready in three to six months, Barnett said.

BioEnergy Technologies will focus mostly on South Carolina and North Carolina for customers, as the company has a location in Ra-leigh, N.C. Costs of the systems could vary, depending on size and desired end product. BioEnergy will design and build for its customers to operate, or design, build, own and operate at the company locations, depending on the customers’ needs. “We’re looking at different ways to do this,” Barnett said. “We’ll look at it on a case-by-case basis.”

The company is partnering with Austrian-based AAT, which has

used anaerobic digestion in Europe for 26 years at more than 120 facili-ties, and ECOregion, which pioneered the fi rst biogas facility in North America, according to BioEnergy. Once operational, a typical facility can produce 1 megawatt, enough to power 700 homes, according to Barnett. A 1.5-megwatt system would generate enough electricity to power 1,000 homes, she added. “We’ve had a tremendous amount of interest,” Barnett said.

Energy production through anaerobic digestion is the company’s priority now, she said, but services could expand in the future. “That’s what we’ll focus on at this point,” she said. “We’ll see what the future brings.”

—Lisa Gibson

Gaia gets permission to build UK biomass plant A 50-megawatt (MW) biomass power plant at Billingham Reach

Industrial Estates in the Tees Valley, Northeast England, will supply up to 80,000 homes with electricity annually, once fully operational in 2012. Other biomass projects are in development in the area, includ-ing a 295-MW plant operated by MGT Power, slated to go on line at Teesport in 2012.

Gaia Power Ltd., based in Yarm, Tees Valley, received planning permission for its 50-MW plant from the Stockton Borough Council Planning Committee and now will begin working to secure the fi nanc-ing package, according to Michael Fox, Gaia Power founder and chair-man. The facility will cost about 200 million pounds ($331.4 million), which will come entirely from the private sector and most likely will be a combination of limited recourse debt and independent equity, according to the company. “I don’t think we’re going to have any prob-lem at all with that,” said June Kelly, media representative for Gaia. Although this is Gaia’s fi rst project as a company, its founders have experience in large-scale, capital-intensive projects in both the renew-able power and renewable fuels sectors.

The plant will run on about 275,000 metric tons (303,100 tons) of recycled wood chippings per year from mostly local sources, according to Kelly, with about fi ve days worth of fuel kept on-site at all times. The fuel–including pallets, medium-density fi berboard and chipboard–

would otherwise go to landfi lls and contains less moisture than virgin wood, according to Gaia. Aker Solutions, a provider of engineering, technology and construction solutions, has been chosen to develop the facility on 16 acres of the Able UK Ltd. site at Billingham Reach. Able UK is based in Teesside and works to promote redevelopment on properties previously used for retail, leisure, commercial and residential purposes, among others.

The plant is expected to create about 400 jobs during construc-tion, 50 permanent jobs and 50 supply chain positions. Some of the power generated will be used within the plant and 45 MW will be sold to the local grid, according to the company.

Gaia hopes to continue developing biomass power plants in the U.K., subject to availability of fuel and necessary regulatory approvals, according to the company.

—Lisa Gibson

BioEnergyTechnologies

Page 23: Biomass Magazine - December 2009

Give us something. And we’ll convey it.

Products- Airlocks- Centrifugal Material Handling Fans- Cyclones- Blowpipe Component Parts: Same day

shipment of standards from stocked service center; custom components made to order

Services- Custom Metal and Plate Fabrication

per customer drawings and specs- Ductwork design and layout- Heavy gauge ductwork in carbon and

stainless steel to ¼" thick- Structural Steel Supports

®

Koger Air Corporation collaborated on design, and fabricated and installed this project which included dust control, fire protection, process metering, and pneumaticand material conveying of wood by-products for American Wood Fibers.

For 55 years, we’ve designed,

fabricated and installed pneumatic

and material conveying systems

nationwide. Contact us today

at (800) 368-2096 to learn how we

can help you with your next

project. Visit us at kogerair.com.

Page 24: Biomass Magazine - December 2009

24 BIOMASS MAGAZINE 12|2009

FINANCE

STATE RPS, INCENTIVES SPUR DEVELOPMENTBiomass project development could be expedited in 2010 and coming years, as developers contribute to state renewable portfolio standards and scramble to meet deadlines for funding opportunities.

By Lisa Gibson

Page 25: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 25

FINANCE

Page 26: Biomass Magazine - December 2009

26 BIOMASS MAGAZINE 12|2009

FINANCE

he most infl uential factors for U.S. biomass development in 2010 most likely will be state renewable portfolio stan-dards (RPS), along with fi nancial incentives, perhaps none as effective as the Grants for Specifi ed Energy Property

in Lieu of Tax Credits program.The incentive was established under Section 1603 of the Amer-

ican Recovery and Reinvestment Act and is designed to fi ll the gap where the Production Tax Credit isn’t useful. It requires the U.S. Department of the Treasury to make a one-time payment to eligible renewable electricity developers in the amount of 30 percent of a project’s qualifi ed capital cost, instead of the production tax credit, which is paid over a 10-year period. Statutory provisions specify that the property must be placed in service during 2009 or 2010. It can, however, be on line after 2010 by a statutory deadline, but only if construction began in 2009 or 2010. Thus, developers who want to reap its benefi ts are running out of time.

“We’re seeing a lot of biomass projects moving into the pre-construction phase because of the opportunity to get these grants,” says James Bertrand, a Leonard, Street and Deinard shareholder and head of the law fi rm’s energy group. “It signifi cantly improves the overall fi nancial picture.” The program is less complicated than the tax credits because there is no need for a tax credit investor, he adds.

Biomass projects can take advantage of both the grants and state RPS because they can be located where there is transmission capacity, Bertrand emphasizes. “Wind projects don’t have that same fl exibility,” he says. In addition, areas with no wind potential may be rich in biomass. Twenty-nine states and the District of Colum-bia have developed RPS and six have established portfolio goals. New York’s standard is 24 percent by 2013, the earliest, but fol-lowed closely by Montana, 15 percent by 2015, and Wisconsin, 10

percent by 2015, according to the Database of State Incentives for Renewables & Effi ciency, funded by the U.S. DOE. Standards ex-tend as far as 2025. National standards also could be on the horizon to accelerate biomass development, as a bill with a federal renewable electricity standard, American Clean Energy & Security Act, passed in the House of Representatives in June.

“We’re seeing a lot of attention in this area, very much more so than in the past 10 years,” Bertrand says of biomass projects. “Cli-ents who haven’t previously been in the biomass industry are look-ing at it now,” says Tammie Ptacek, also a shareholder at Leonard, Street and Deinard.

The Department of the Treasury has awarded one cash grant payment to a biomass project in the amount of $10.2 million, and had received 13 or 14 biomass project applications at the beginning of October, according to Ellen Neubauer, grants program manager at the Department of the Treasury’s Offi ce of the Fiscal Assistant Secretary. Cash grant recipients cannot claim tax credits under sec-tions 45 or 48 of the Internal Revenue Code for the same property, as it is an extension of the tax credit program. The program does not provide initial funding and applicants must be in the commercial production phase of their projects to qualify.

The online application can be found at www.treasury.gov\re-covery. The site also features program guidance and specifi c terms, conditions and requirements. The application deadline is Oct. 1, 2011.

Money Means TrendsIncentives cause trends in the biomass market, according to

Ptacek. Biomass power has the potential to grow exponentially in the U.S. as a result of the cash grants in a renewable market previ-ously dominated by ethanol, according to Peter Flynn, professor at

T

Page 27: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 27

FINANCE

the University of Alberta and a biomass industry expert. In terms of demonstrated technology, biomass power is more developed than other biomass endeavors, Flynn says, but is behind in the U.S. when it comes to implementation. It’s ahead of biofuel and ethanol devel-opment in other countries such as Finland, Flynn says. The George W. Bush administration focused mainly on reducing dependence on foreign oil, with a lukewarm approach to greenhouse gas (GHG) emissions, he adds. “I think under the current administration, the focus has shifted to broaden the mandate,” he says. “That, I think, will shift the focus to a mix of biomass power and fuels from bio-mass.”

Biomass electricity projects were eligible to receive Production Tax Credits under the Bush administration, as well, but the main factor in the change is that the cash grant opportunity makes renew-able electricity projects more appealing, Bertrand and Ptacek agree. “It’s clear that this administration has decided to emphasize biomass power,” Bertrand says.

More Federal FundingThe federal government has a plethora of funding opportunities

besides the cash grants. The U.S. DOE’s Loan Guarantee Program is well-known and heavily utilized. It’s designed to provide fourth-stage fi nancing in the form of loan guarantees to commercial-scale innovative renewable technologies that avoid, reduce or sequester GHGs and air pollutants. The loan cannot exceed 80 percent of total project costs.

The program includes two key elements: Section 1703, estab-lished as Title XVII under the Energy Policy Act of 2005, and Sec-tion 1705, an amendment included in the American Recovery and Reinvestment Act of 2009. The former supports eligible projects that are unable to obtain conventional private funding because of

high technology risks, while the latter supports renewable energy, transmission and leading-edge biofuels projects that will commence construction by Sept. 30, 2011, according to the DOE. The pro-gram periodically issues requests for proposals, or solicitations, for various categories, such as innovative technologies, encompassing new or signifi cantly improved technologies.

The DOE has several focus areas in biomass projects for the Loan Guarantee Program, including cellulosic ethanol, biomass to syngas, electricity or diesel, and bio-oil-derived fuel, says Dan Tobin, senior investment offi cer with the Loan Guarantee Program. “In addition, applicants should look at alternative feedstocks,” he says, adding that the DOE is not focused on providing funding for proj-ects that use corn as a feedstock. Projects that utilize 50 to 70 dry tons of biomass per day (considered demonstration scale) or more will be favored in the competitive program. In the biofuels area, the DOE is favoring innovative projects that have not been deployed commercially in the U.S., but have been piloted and demonstrated successfully. “It’s in the best interest of the applicant to submit ap-plications that show life-cycle GHG emissions,” Tobin adds.

In 2008, biomass projects made up 24 percent of all renew-able energy applications submitted to the program, second only to solar at 31 percent, according to the DOE. Applications also were submitted for hydrogen, wind and geothermal technologies, among others.

The application process includes an overview of the project, along with more detailed information later. DOE would also like to see a detailed plan by the project sponsor for mitigating market risk and to provide the agency with a reasonable assurance of loan repayment. For more information on the Loan Guarantee Program, visit www.lgprogram.energy.gov/. The Web site includes sugges-tions for strong applications.

Page 28: Biomass Magazine - December 2009

28 BIOMASS MAGAZINE 12|2009

The USDA also offers funding, including the Biomass Crop Assistance Program, which supports production of biomass crops by assisting with collection, harvest, storage and transportation of eligible material for use in biomass conversion facilities. Other USDA programs include the Biorefi nery Assistance Loan Guaran-tee Program, which provides grants for demonstration-scale biore-fi neries and loan guarantees for commercial-scale biorefi neries that produce advanced biofuels. The program includes a guaranteed loan limitation of $250 million, according to the USDA, and up to 50 percent of project costs at the pilot or demonstration scale. Manda-tory funding for 2009 is $75 million, and $245 million is available for 2010 until expended.

The USDA’s Repowering Assistance Program provides pay-ments to biorefi neries to replace fossil fuels with renewable biomass to produce heat or power. The program provides $35 million for 2009 that is available until exhausted, with $20 million still avail-able, according to the USDA, and provides additional funding of $15 million per year through 2012. The Notice of Solicitation of Applications was published in June. The Bioenergy Program for Advanced Biofuels provides payments to eligible producers to sup-port and ensure expanded production of advanced biofuels. Manda-tory funding for the program in both 2009 and 2010 is $55 million, increasing to $85 million in 2011 and $105 million in 2012. The Notice of Contract Proposals for the Bioenergy Program was also published in June.

The Biomass Research and Development program supports re-search, development and demonstration of biobased products, bio-fuels and biopower. Eligible recipients include institutions of higher learning, national laboratories, federal research agencies, state re-search agencies, private-sector entities and nonprofi t organizations.

Finally, the Rural Energy for America Program issues grants and loan guarantees to assist agricultural producers and rural small

businesses with energy effi ciency improvements. It also establishes a grant program for energy audits, technical assistance and feasibil-ity studies. The loan guarantee limit is $25 million or 75 percent of the project costs, according to the USDA. Mandatory funding for 2009 totaled $55 million and will increase to $60 million for 2010 and $70 million for 2011, with discretionary funding of up to $25 million each fi scal year through 2012. The Notice of Solicitation of Applications was published in May. Viability LLC, a fi rm that helps companies prepare and submit grant applications, recently se-cured $1.3 million in grants from the program for its clients and leveraged $31.5 million in overall project investment, the company reports. For more information on all USDA funding opportunities, visit www.usda.gov.

Other OptionsViability prepares grant applications for state and federal pro-

grams including tax credits and carbon credits. The fi rm has assisted with about 30 biomass projects, since its establishment six years ago, ranging from $3,500 to about $10 million in grants, loans and carbon credits for one project, according to Viability President Chris Byrnes. The company also writes grants for other renewable energy projects and has a 70 percent success rate with federal grants, compared with a success rate of 10 percent for most federal grant applications, he says.

Most of Viability’s clients come through word-of-mouth, Byrnes says, or are referred by their vendors. “A lot of our business is in ag-riculture and natural resources,” he says.

With grant applications, the fi rm charges 10 percent of the ask-ing amount, half when the grant application is submitted and the other half if and when it’s awarded. If the grant is not awarded, the other half of the fee is not collected, Byrnes says. Carbon credits have a slightly different fee structure and loan guarantee fees are much less.

FINANCE

Whether it's the standard features of the Champion Hammermill—the features that are options for them—or the exclusive gear drivetrain of the California Pellet Mill, the most efficient in the industry...

You get it all from CPM.

Durable. Energy efficient. Trouble free. Made in the USA with partswarehoused here to serve you faster. Call 800-366-2563 or visit uson the Web to get the right machine for your job.

FEATURES YOU NEED,RELIABILITY YOU DESERVE

Hammermill

Pellet mill

800-366-2563 | 319-232-8444 | WWW.CPMROSKAMP.COMWATERLOO, IOWA

Page 29: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 29

FINANCE

The fi rm does not guarantee awards will result from its work. The grant-writing process can take three to six months, he says,

as the company will need to provide a stockpile of information to Viability’s writers including a company history, information about its owners and fi nances and proof that the company complies with equal employment rules. Whether hiring a grant writer or doing it alone, applications need to include a lot of information, much of which can come from vendors and third parties who can verify technical information. “We try to make it as easy for the client as we can,” Byrnes says.

Among his clients, Byrnes says the number of projects has not increased, but the size has, a trend Flynn mentions, too. Companies developing those larger projects are applying for more programs, Byrnes adds.

Investment fi rms can also ease fi nancial pains during project development. Akeida Capital Management LLC is an environmen-tal asset fi rm focused on originating and investing in sustainable en-ergy projects, its latest investment being a 12.5-megawatt biomass power plant in Blue Lake, Calif. The plant is in the fi nal stages of a refurbishment process that began in September, 2008 and has a 10-year power purchase agreement with San Diego Gas and Electric for all of the electricity generated, enough to power 25,000 homes, according to Akeida. The fi rm provided a $10.5 million senior se-cured loan to complete construction.

The company has dealt mostly with electricity generation, es-pecially biomass power, according to Managing Director David Kandolha, but is beginning to dabble in waste to energy and meth-ane capture. “At this point, we’re not eliminating any specifi c types of projects, but we’re defi nitely building up comfort in specifi c ar-eas,” he says.

Developers looking for investment from such fi rms need to gather information such as progress to date, current needs and cur-

rent capital structure. “The best way [to attract attention] is to pro-vide concise information about their projects,” he says. Providing updates is benefi cial, as well. “We tend to be late-stage investors, so if a project doesn’t meet our criteria today, it’s also helpful for developers to periodically update us on their projects because they might meet our criteria later on,” he says. The capital structure is important so Akeida can take into account debts to other agencies and determine whether the developer is capable of paying back the amount.

The company provides loans, debt, equity and combinations of the three. The typical hold period on the fi nancing is two years, and the amount is determined on a project-by-project basis. Akeida has invested in three biomass power plants so far, all in the past year, and is open to biofuels, but has not found a promising project yet, Kandolha says. The main limitation, he says, is that Akeida invests in projects, not companies. “We’re not developmental investors, so we don’t take technology risk,” he says. “We limit our investments to projects using commercially proven technology.”

Akeida has seen an increase in biomass project funding re-quests, but Kandolha says the fi rm has gotten its name out in the industry so he hesitates to contribute it to an increase in develop-ment. “I would think there would be an increase because we think it’s an attractive area to invest in,” he says.

Bertrand says there are some measures developers can take to increase chances of gaining investors or getting grants, loans and other incentives. “We are seeing projects getting fi nanced, particu-larly those that have power purchase agreements for the off-take from the biomass-to-electricity projects,” he says. “Independent of the loan guarantee, as lenders are evaluating projects, the ones mov-ing to the top of the pile are those that have all the necessary com-ponents including transmission and power purchase agreements.” BIO

Page 30: Biomass Magazine - December 2009

30 BIOMASS MAGAZINE 12|2009

INTERNATIONAL

Bioenergy

World Leaders

As the world concentrates on producing renewable energy and reducing greenhouse gas emissions, the U.K. and China seem to be pulling ahead of the pack in efforts to meet their individually established goals.

By Lisa Gibson

Page 31: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 31

INTERNATIONAL

Page 32: Biomass Magazine - December 2009

32 BIOMASS MAGAZINE 12|2009

295-megawatt (MW) power plant at Teesport, Northeast England, will run on wood chips shipped to the port, generating enough elec-

tricity to power a grocery import warehouse, along with hundreds of thousands of homes, once it’s operational in 2012. In China’s Inner Mongolia province, a 50-MW biomass power plant will soon supply power to the grid fueled by nearby straw resources.

The world’s progress toward a healthy in-crease in renewable energy use is evident in the individual goals set by numerous countries and subsequent rapid growth and development. Both the U.K. and China set targets to gener-ate 15 percent of their energy from renewable sources by 2020 and seem to be hot spots for development. Announcements of new plants come out of the U.K. almost daily, and China has dominated headlines for its aggressive de-velopment plan.

Progress in the UKThe U.K. has 101 solid-fuel biomass

power plants that are accredited or prelimi-narily accredited under the government-run Renewables Obligation, including stations that cofi re with coal and biomass, according to the Offi ce of the Gas and Electricity Markets (Of-gem) register. The register also lists 399 power plants accredited or preliminarily accredited for landfi ll gas and 136 for sewage gas. Renew-able electricity plants need to be accredited by

Ofgem to be eligible for Renewable Obligation Certifi cates, tradable certifi cates that incentiv-ize renewable energy generation, according to Jonathan Farr, of the Department of Energy and Climate Change. The U.K. has a plethora of biomass projects on the verge of approval, as well, according to Leonie Greene, external affairs representative for the Renewable En-ergy Association.

An REA map that outlines U.K. renew-able energy plant locations (www.r-e-a.net/installations) shows about 15 biofuels plants, including bio-ethanol and biodiesel, six com-bined-heat-and-power facilities and 26 solid fuel plants, producing wood pellets, wood chips and other solid biomass fuel.

Still, the biomass market is in its infancy, according to Chris Moore, director of MGT

INTERNATIONAL

A

The 295-megawatt Tees Renewable Energy Plant shown in this rendering is expected to be in operation in 2012.

PH

OTO

: MG

T P

OW

ER

Page 33: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 33

Power, which is developing the 295-MW plant at Teesport, along with another 295-MW plant at the Port of Tyne, England. Both will con-sume 2.65 million tons of wood chips annually shipped from areas including the U.S., Brazil and the Baltics. Other plants approved but not yet constructed include a Prenergy Power Ltd. 350-MW power plant at Port Talbot, Wales, and Tilbury Green Power’s 60-MW waste-to-energy plant at Tilbury Docks, England. As these and other plants come on line, tariffs and government incentives pave the way for the next wave of biomass development.

The SwitchIn addition to the RO, the U.K. govern-

ment has incentives in place to spur renewable energy development, such as measures that support farmers who grow energy crops and a proposed Feed-In Tariff for smaller-scale biomass electricity generation that will support facilities under 5 MW. In addition, a proposed Renewable Heat Incentive has attracted inter-est in injecting biomethane into the gas grid and should be effective in April 2011, Greene says.

But the catalyst behind the unprecedent-ed growth in biomass power and biofuel is the recent banding of the Renewables Obligation, according to Moore and Greene. The new structure, effective since the spring of 2009, awards tariffs based on technology type. It previously awarded payments on a one-size-

fi ts-all basis. “For the past eight years, it’s been technology blind,” Moore says.

That new system is attracting interest in anaerobic digestion (AD), an area where Greene says the U.K. is lagging. Feed-In Tar-iffs also are sparking interest in AD, as they will allocate payments on the basis of total power generation, not just what is sold to the grid, she says. AD is a popular method of waste-to-energy conversion and has plenty of potential in the region. “The U.K. does have a waste dis-posal problem,” she says.

The RO banding, however, still favors the U.K.’s main interest in renewable energy: off-shore wind. The technology sits the high-est on the RO tariff scale. “If it’s committed to anything, it’s committed to wind,” Greene says, adding that the U.K. is very proud of its massive off-shore wind energy potential. But problems with installing wind turbines in deep water and issues surrounding transmission ac-cess make wide implementation diffi cult and extremely expensive.

Moore sees that issue as another trigger for rapid biomass-to-energy development, as the switch from fossil fuels progresses. About 30 percent of the U.K.’s power generating ca-pacity from nuclear power and coal will need to be shut down by 2015 because of old age and emissions, he explains. Companies seeking to build new coal-fi red stations have been denied by the governments, unless the facilities have scrubbers to clean emissions, Moore says.

“We have found that we can produce our green electricity at a substantial discount to off-shore wind price,” he says. “What should happen in a fair market is biomass will fl ip the market until it depresses the price of green en-ergy to a new break-even point for biomass.” The market system in the U.K. takes the cheap-est type of green electricity fi rst, Moore says, citing municipal solid waste-to-energy systems. Landfi ll gas is also used heavily, but the meth-od is tapped out, he adds, along with on-shore wind development sites in the mountains. “And so the Holy Grail, the future for the U.K. in terms of more electricity supply, is off-shore wind,” he says. “But it’s expensive, so it creates a gap in the market where large-scale biomass can operate with very attractive returns.”

Moore predicts that gap will last for the next 10 to 15 years, when off-shore wind and large-scale biomass will close in on each other in terms of economics and returns for devel-opers.

Biomass Energy TrendsAs in any market, trends emerge in bio-

mass energy that set the stage for further de-velopment. The industrial-scale plans of MGT Power and other companies have attracted interest in larger facilities, Moore says, adding that MGT executives think small plants are ineffi cient. “We don’t believe western civiliza-tions are ever going to tackle global warming if we try to pretend that renewable energy

INTERNATIONAL

Page 34: Biomass Magazine - December 2009

34 BIOMASS MAGAZINE 12|2009

should always be the preserve of small, cute, marginal technologies,’’ he emphasizes. “Now that we’ve pioneered the model, most of the European utilities are developing similar-scale projects.”

Some other companies are indeed begin-ning to develop larger facilities, but also are following MGT’s lead by establishing sites at ports for the shipment of feedstock, instead of relying on locally sourced biomass. There is a problem with a reliable supply of biomass fuel in the U.K., according to Greene. So if a plant obtains biomass solely from local sourc-es, it will have to be a small one. In addition, bringing in feedstock by ship has the same carbon footprint as transporting it 40 miles by road, Moore says. Poor forestry roads add to the problem.

The U.K. does, however, possess a stock of unrecyclable waste wood that goes into landfi lls, Greene says, to the tune of 4 million to 5 million tons each year. Grants available for energy crops are expected to increase, too, Farr says, from 40 percent to 50 percent of planting costs. The DECC is also researching ways to get higher yields of biomass from the crops, and grants under the Bioenergy Infrastructure Scheme will help develop robust biomass sup-ply chains, he adds.

Bioenergy in ChinaChina is one of the world’s largest energy

consumers, second only to the U.S. Between

2005 and 2030, China is expected to receive about 23 percent of total global investment in renewable energy, amounting to about $1.2 trillion, according to “China: Clean and Re-newable Energy Report to 2010” produced by Ireland-based Research and Markets. The country will focus on energy production from hydro, wind, solar and biomass.

The National Development and Reform Commission, the country’s primary macro-economic planner, has set a goal for biomass power capacity of 5.5 gigawatts (GW) by 2010 and 30 by 2020. But meeting that 30-GW goal is looking increasingly unlikely, according to Ryan Wiser, who is researching renewable energy in China for the Center for Resource Solutions, a U.S.-based nonprofi t working to mitigate climate change. Biomass projects aren’t being added to China’s renewable ener-gy arsenal rapidly enough, he says. “There are rumors that [China’s] 30-gigawatt goal will be reduced in the not-so-distant future to refl ect a more realistic deployment path,” he says.

A Feed-In Tariff established under the national Renewable Energy Law was intended to help meet that 2020 goal, Wiser says. The tariff provides biomass power generators with an additional incentive of 25 fen (4 cents) per kilowatt hour on top of the local coal price. The Renewable Energy Law, established in 2006, is the most important driver for biomass development in China, according to “Back-ground Paper: Chinese Renewables Status Re-

port October 2009,” by the Renewable Policy Network for the 21st Century (Ren21).

A system of subsequent supporting poli-cies has continued to support biomass power development in China including “Guidelines for Renewable Energy Sectors,” which laid a foundation for further implementing and formulating policies and fi nancial incentives. “Management Measures for Power Genera-tion from Renewable Energy Sources” is an elaboration of regulatory regime, project man-agement and grid connections for renewable power; and the “Interim Management Mea-sures for Renewable Power Tariff and Cost Allocation” outlines specifi c provisions of le-gal tariff and cost sharing, the report states.

China’s Bioenergy HistoryAvailable feedstocks in China include

bagasse, agricultural straw and stalks, agro-product processing residues, forest residues, wood mill residues, municipal wastes, and in-dustrial organic wastes including solid wastes and sewage. Technologies used include direct and mixed combustion, gasifi cation and waste incineration. In 2008, a biomass power gener-ating capacity of 3,136 MW was installed na-tionwide, according to the report. That was a large increase from 2,709 MW the year before, and 2,219 in 2006.

Bagasse has been used heavily since the beginning of Chinese biomass power devel-opment in the 1960s. In 1985, 600 MW from

INTERNATIONAL

Page 35: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 35

bagasse were installed, according to the Ren21 report. In 1990, waste incineration began at-tracting attention and added 18 MW to the biomass power capacity, according to the re-port. In 2000, 1,100 MW were installed and 1,120 in 2001. The use of rice husks began in 2002, when a total of 1,652 MW were added, and landfi ll gas and biogas began rapid de-velopment in 2005, contributing toward that year’s capacity installation of 2,071 MW, the report states.

Liquid biofuels have had a less impres-sive past in China and have remained relatively undeveloped, the paper states. A 3,000-tons-per-annum (tpa) cellulosic ethanol project was founded by Henan Tianguan Group and is the fi rst 1,000-ton cellulosic ethanol project in the country, the report says. Biogasoline projects also are underway, along with biodiesel.

The capacity for biodiesel production in China is more than 3 million metric tons, about 900 million gallons. Twenty-six biodie-sel businesses with the capacity of 10,000 tpa currently operate, and a number of large-scale biodiesel projects are under construction with a total capacity of 3 million metric tons, ac-cording to the report. Production in 2007 was only 10 percent of capacity because of high prices and a shortage of raw material. Barriers to biodiesel development include feedstock constraints and the lack of a marketing chan-nel and incentive policy, the report says.

Looking AheadDirect combustion is the dominant bio-

mass power generation technology in China because of technical or regulatory obstacles that hinder the development of other tech-nologies, according to the report. Researchers do expect, however, that biomass power gen-eration technologies will be diversifi ed, with co-combustion becoming dominant. They also expect that an appropriate size of 5 to 10 MW per single gasifi cation technology will be widely deployed.

The National Development and Reform Commission’s “Medium- and Long-Term De-velopment Plan for Renewable Energy in Chi-na” says that priority sectors up to 2010 and 2020 will be biomass power, biogas, biomass pellets and liquid biofuels. Agro and forestry biomass power generation will be established

INTERNATIONAL

in China’s main grain production areas, it adds, and the installed capacity of agro, forestry and energy crops by 2010 will be 4 GW. By 2020, it will reach 24 GW. Also by 2010, 4,700 large-scale biomass projects will be built on livestock farms, along with 1,600 biogas projects using industrial organic effl uent, for a total installed capacity of 1 GW. By 2020, 10,000 large-scale, livestock-farm biogas projects will be built and 6,000 using industrial organic effl uent, equal-ling 3 GW, it says.

China’s aggressive biomass power plans

have positioned the country at center stage as the world looks ahead to a fossil fuel-free ener-gy market, while the U.K.’s recent rapid devel-opment has done the same. The two countries seem to be leading the globe toward a reliable renewable energy cache. BIO

Lisa Gibson is a Biomass Magazine as-sociate editor. Reach her at [email protected] or (701) 738-4952.

Page 36: Biomass Magazine - December 2009

36 BIOMASS MAGAZINE 12|2009

MARKET

Energizing The race to meet renewable energy targets has increased the demand for saw dust, shavings and wood chips.

By Rona Johnson

the Woody Biomass Market

Page 37: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 37

MARKET

Page 38: Biomass Magazine - December 2009

oody biomass could be one of the fastest growing markets in the U.S. as competition for the resource heats up between pulp and paper mills and renewable energy plants.

About three years ago, William Perritt, who was reporting on wood fi ber and lumber markets for RISI’s International Woodfi ber Report and Crow’s Weekly Market Report, started making a case for tracking the wood biomass market. In October 2008, RISI’s Wood Biomass Market Report was started with Perritt as its executive edi-tor.

“I kept saying ‘You know something, this is going to be the next big thing,’” Perritt says. “But I had no idea how big it would be, and I don’t think anybody did.”

Press releases announcing biomass power projects have been fl ooding reporters’ inboxes. These announcements range from the building of 25 to 100 megawatt plants in the U.S., to coal-fi red power plants switching part or all of their facilities to burn biomass, to the construction of mega plants in the U.K. that will import wood chips from North America and other countries and produce in excess of 250 megawatts of electricity power.

“They just keep coming,” says Perritt, who has a section in his monthly newsletter that details new projects. “I fi gured in the fi rst couple of moths that [section] would start to dwindle and I would have to fi gure out something else to fi ll that copy hole. But I think we had only one month where there was just one new project and updates on some others.”

This trend has led to greater competition for woody biomass and has caused a stir in the wood products industry with the consensus being that there are positive and negative impacts to the increased de-mand.

“With the so-called traditional industry players, there are reactions that could be described as both positive and negative,” Perritt said. “With a new energy plant or a new pellet mill in the neighborhood, it’s going to cause competitive factors for similar products.” They include wood products such as pulp wood delivered to pulp mills because bio-mass can compete on a level with that, as well as the lower-grade items such as particle board and medium density fi berboard.

On the other hand, the new demand creates a market for some wood waste that was not there before such as saw dust. “Who would have thought saw dust would turn into gold,” Perritt said. “The pulp mills were picking that stuff up just for the cost of delivery. The saw mill would call up and say ‘Hey guys come get it.’ It’s not that way anymore.”

For some lumber mills decimated by the collapsed housing market and the sheer drop off in construction, getting paid for materials such as wood chips, shavings and saw dust that weren’t valued in the past might be the key to survival.

The one sector of the wood products industry that could benefi t the most from the nascent woody biomass market is the logging indus-try, which has been in the dumps, Perritt said.

The retraction in logging capacity is one of the main concerns for anyone who is buying wood on the open market, Perritt said.

MARKET

W

continued on page 40

Page 39: Biomass Magazine - December 2009

CFB Boiler Feed SystemsBiomass Handling EquipmentComplete Engineered SystemsPulverized Coal Boiler Conversions

USA: CORPORATE HEADQUARTERSJeffrey Rader Corporation398 Willis RoadWoodruff, SC, USA 29388Phone: 864.476.7523

CANADA: Montreal, QuebecJeffrey Rader Canada2350 Place Trans-CanadienneDorval, Quebec H9P 2X5 CanadaPhone: 514.822.2660

CANADA: Vancouver, BCJeffrey Rader CanadaUnit 2, 62 Fawcett RoadCoquitlam, BC V3K 6V5 CanadaPhone: 604.299.0241

SWEDEN: StockholmJeffrey Rader ABDomnarvsgatan 11, 163 53 SPÅNGAStockholm, SwedenPhone: +46 8 56 47 57 47

To learn how how Jeffrey Rader Corporation can solve your Biomass Handling needs, visit us at www.jeffreyrader.com/bio1

Silos

Wood Hogs

Disc Screens

Open Storage

Closed Storage

Truck Dumpers

Chain Conveyors

Bucket Elevators

Screw Conveyors

Screw Reclaimers

Pneumatic Conveying

Material Handling for Woody BiomassUNITED STATES CANADA SWEDENUNITED STATES CANADA SWEDEN

See our Biomass video at www.jeffreyrader.com/videoB

MARKET

MGH ERP System

Page 40: Biomass Magazine - December 2009

40 BIOMASS MAGAZINE 12|2009

“Loggers are just disappearing but it’s very hard to quantify.” That’s because there are a lot of mom and pop operations, and some logging operations may still be operating but they’ve dropped crews.

“These biomass markets have given the loggers something to do, and the ones that have been able to invest in some equipment or who got ahead of this thing early on and bought chippers and grinders are doing a little bit better. If it can keep some of these loggers in business then that is a good thing for the whole industry.”

Preparing for the DemandThe U.S. biomass market is small com-

pared with some European countries where bioenergy development is further along.

In the 27 European Union member states, bioenergy contributes only 3.7 per-cent of the total primary energy supply; however, in several European countries such as Finland and Sweden it contributes 20 per-cent and 16 percent respectively of the gross inland consumption, according to the Euro-pean Biomass Industry Association.

That market is being closely moni-tored by Finland-based MHG Systems Ltd., which develops enterprise resource planning (ERP) systems to connect the bioenergy and forestry industries in Europe (see graphic on page 39). The ERP system uses Internet, real-time maps and satellite-based infor-mation to map out biomass and other re-sources, including information about where the biomass can be found, moisture content and if it was produced and harvested sus-tainably. The system is designed to improve a company’s biomass procurement and lo-gistics operations and fi nancial effi ciency by tracking the biomass from the fi eld to the bioenergy production facility.

The company currently does business in several countries, targeting companies in the energy, biofuels, electricity and heating, harvesting, saw milling, pellets, forest ser-vices and the forest industries, and is in the process of establishing a North American presence.

Although Finland and Sweden already consume large amounts of woody biomass, MGH believes there’s room for growth

MARKET

An employee of Finland-based MGH is trainingone of its German customers to use its ERP system.

continued from page 38

PH

OTO

: MG

H

Page 41: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 41

there, and in other parts of the world. In Finland for example, the market for small-scale utilization of forest biomass in single-family homes is not developed at all and there is a huge potential to develop that market particularly for pellets, according to Dominik Röser, a researcher at the Inter-national Forest Technology Finnish Forest Research Institute and Seppo Huurinainen, managing director of MGH.

Röser and Huurinainen see the poten-tial for woody biomass markets in rural ar-eas of Germany, especially for wood chips, and France where the market is not very de-veloped. In Eastern Europe district heating systems that are mainly based on coal, oil and gas, could be easily retrofi tted for bio-mass, they say. Large forest fi res are caus-ing problems in Spain and Portugal, which would provide excellent possibilities for woody biomass utilization in the future. “In particular, China has huge potential to in-crease both forest biomass and agrowastes for heating and power,” Huurinainen says. “Big investments are just about to start.”

Röser believes the U.S. and Canada hold the biggest potential for the development of biomass markets. “They have a need for heat and also the necessary resources,” he says. “Furthermore, pulping is increasingly moving to South America and Asia, which will create the need for a new market both in North America and Europe.”

Although the potential is there, Röser has some advice for the budding biomass industry. “The latest developments in the U.S. are very encouraging,” he says. “The potential is huge. But the industry has to market biomass properly since there are still so many misconceptions about burning wood—air pollution, sustainability, etc. Also an active dialog with environmental groups and researchers will be essential to move biomass forward.”

MHG offers its bioenergy ERP service in 13 languages and says new languages can be easily added. “MHG is in readiness to start doing business in North America right now,” Huurinainen says. “For easy start we have launched a risk-free Starter Package in-

MARKET

The solution behind the solution.

Quality pellets, guaranteed. For perfect pellets the entire production system must work together flawlessly. Buhler enables total process control by providing a complete process design package and key equipment for drying, grinding, pelleting, cooling, bagging and loading. This, combined with Buhler’s integrated automation system, unrivaled after sales support and training provides a seamless solution, guaranteed.

Buhler Inc., 13105 12th Ave N., Plymouth, MN 55441, T 763-847-9900 [email protected], www.buhlergroup.com

cluding business model development consul-tancy, training, software and hardware.”

For more information about MHG’s ERP systems check out its Web site at www.mhgsystems.com.

In order for the U.S. biomass market to fully develop, the proposed bioenergy plants have to be built and in operation. Until that happens, those who will be impacted, or could benefi t, are watching and preparing.

“I went from being one of the people at RISI who quietly worked away at the pulp

wood report and every now and then would start to squeak and whine about biomass, and now we’re very much in the spotlight,” Per-ritt says. “It’s just amazing what’s happening in the industry. It’s a big buzz right now and it’s going to fade back, but what the heck, it’s kind of nice to be part of something like this.“ BIO

Rona Johnson is the editor of Biomass Magazine. Reach her at [email protected] or (701) 738-4940.

Page 42: Biomass Magazine - December 2009

BCAP to Boost Biomass Harvest

42 BIOMASS MAGAZINE 12|2009

POLICY

It will take time to determine if the Biomass Crop Assistance Program is a success. In the meantime, despite questions and concerns, the list of eligible biomass projects is growing by leaps and bounds.

By Anna Austin

BCAP to Boost Biomass Harvest

Page 43: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 43

POLICY

Page 44: Biomass Magazine - December 2009

44 BIOMASS MAGAZINE 12|2009

crucial question for farmers when weighing the benefi ts of growing biocrops or collect-ing ag residue is “What’s in it

for me?” Not knowing if there will be a market for these crops has been the big-gest deterrent for farmers when deciding to grow and harvest switchgrass, wheat straw, corn stover or other biomass crops. Farmers also have to consider the cost of harvesting, transportation and storage.

On the fl ip side, there’s also been un-certainty on the part of end users of the biomass materials, regarding whether the materials will be too costly or consistently available.

To alleviate those concerns, the Bio-mass Crop Assistance Program was cre-ated in the 2008 Farm Bill to provide fi nancial assistance to eligible material owners providing biomass to facilities that convert or propose to convert bio-mass to heat, power, biobased products or advanced biofuels. The Congressional Budget Offi ce estimates the cost of the program will top out at $70 million, in-cluding $14 million in 2009 and 2010, and $21 million during each of the remaining two years of the program.

Since its inception, to say the program is popular would be an understatement. As of the end of November, the qualifi ed biomass conversion facility list was at 250, ranging from pellet producers to biomass power plants to pulp and paper mills.

Although the program has been re-ceived positively for the most part, it hasn’t escaped criticism. In August, the USDA Farm Service Agency began ac-cepting comments on the draft program-matic environmental impact statement (EIS) on BCAP to collect suggestions on the program and any ideas for rulemaking, and plans to release more program rules later this year.

Meanwhile, the program continues to gain momentum. Jonathan Groveman, USDA FSA public affairs specialist, says the overwhelming interest in the new pro-gram has been the greatest surprise with inquiries coming from all levels and sec-tors of the biomass industry.

Taking Off“The best part [of BCAP] has been

hearing from all the innovative start-up facilities trying to fi gure out how they fi t into the program and to get the indirect benefi ts, such as a small tree farm that is installing a hydronic unit to power its op-erations,” Groveman says. He adds that it’s been a surprise to learn that many facili-ties already in operation, during pressing economic times, see their indirect benefi ts as a way for them to move toward more effi cient bioenergy production. “Eligible material owners (EMOs), too, appear to see their direct benefi t as an opportunity to make their operations more effi cient, such as using mobile briquetting which cuts the bulk and cost of transporting biomass,” he says.

One of the aspects of the program that might have led to its popularity was the easy application process. Applying to the program wasn’t diffi cult, says Gerry DeNotto, president of Indeck Energy Services. Indeck Energy has two biomass conversion facilities in BCAP—a 16 mega-watt wood-to-energy plant in Alexandria, N.H., and a 90,000 ton per year wood pel-let plant in Wisconsin. “The [initial] rules came out piecemeal, although, I must give the FSA credit for getting them out quick-ly,” he adds.

So far, the list doesn’t include many facilities in the Midwest, which is touted as the country’s agriculture belt. Grove-man points out that it’s important to re-member that while a biomass conversion facility may be located in one state, the eligible material may come from several

APOLICY

‘We’re receiving applications from schools and universities, smaller entrepreneurial start-ups, various biobased product and advanced biofuel producers and cooperatives.’

Jonathan Groveman, USDA FSA public affairs specialist

Page 45: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 45

POLICY

states. “The initial trend of sign ups for qualifi cation of the biomass conversion facilities came from the forestry and pa-per industry and now a variety of sectors are beginning to submit applications,” he says. “We’re receiving applications from schools and universities, smaller entrepre-neurial start-ups, various biobased prod-uct and advanced biofuel producers and cooperatives.”

Most bioconversion facilities that have applied to the program have quali-fi ed, only a few facilities have been turned away because the facilities convert only ineligible materials or there were no con-version processes, according to Grove-man. “Several facilities have been un-able to qualify based on their inability to provide environmental compliance with federal, state or local laws,” Groveman says. “Many applications have had to be returned for defi ciencies, meaning they were incomplete.”

If an application is returned, howev-er, the applicant may reapply. “And most have reapplied, or intend to apply when li-censes and permits are in place,” he adds.

Questions and ConcernsAs with any new program, kinks in

the BCAP program still need to be worked out. Charlie Niebling, general manager for BCAP qualifi er New England Wood Pellet and chairman of the board of directors for the Biomass Thermal Energy Coun-cil, believes BCAP will benefi t the pellet industry in the Northeast, as it is a critical revenue enhancement for wood suppli-ers, many of whom are struggling in the down economy. However, Niebling says he has a healthy skepticism about subsidy programs such as BCAP because markets often adjust quickly to the presence of subsidies, and the benefi ts of the program diminish as a result. “I’m also concerned about what happens in two years when

Bulk Materials Handling Solutions

FromReception to Delivery

For Additional InformationPlease Contact:Kara Hertzler

770 849 0100 x100Or www.BRUKS.com

Air Supported Conveyor

Truck Receiving

Stacker Reclaimer

Eligible Material RequirementsEligible materials generally include:

Materials, pre-commercial thinnings, or invasive species from National Forest System land and Bureau of Land Management land that: are by-products of preventive treatments that are removed to reduce hazardous fuels, to reduce or contain disease or insect infestation, or to restore eco-system health; would not otherwise be used for higher-value products; and are harvested in accordance with applicable law and land manage-ment plans and the requirements for old-growth maintenance, restoration, and management direction of section 102 (e)(2), (3), and (4) of the Healthy Forests Restoration Act of 2003 (16U.S.C. 6512) and large-tree retention of subsection (f).

Any organic matter that is available on a renewable or recurring ba-sis from non-Federal land or land belonging to an Indian or Indian tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including: renewable plant mate-rial including crop residues from commodities eligible to receive payments under Title 1 of the 2008 Farm Bill, other agricultural commodities, other plants and trees; and waste material including crop residue, other vegeta-tive waste material (including wood waste and wood residues).

Page 46: Biomass Magazine - December 2009

46 BIOMASS MAGAZINE 12|2009

POLICY

most current EMO’s no longer qualify to participate,” he says. “Will they be in a po-sition to adjust their businesses to the ab-sence of the subsidy at that time? I think all companies participating in the program have to keep expectations realistic and not view BCAP as a panacea.”

Across the biomass industry, ques-tions have been raised, such as whether using wood waste or residue should count

as eligible material, as most established conventional facilities most likely already have established suppliers of woody bio-mass. The Institute for Agriculture and Trade Policy says funding is being used to pay for existing biomass supplies used for renewable energy, rather than focus-ing on the BCAP program goal of helping to jump-start the growth of new biomass energy crops. IATP recommends that pe-

Farmers have not been eager to produce biomass crops or harvest crop residue because they wonder if there will be a market for it.

Page 47: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 47

POLICY

rennial and multiple-species biomass feed-stocks be a focus and, if funds allow, then annual crops in a resource-conserving crop rotation.

A commodities manager for a quali-fi ed ethanol facility employing a biomass gasifi cation system told Biomass Magazine that though the goal of the program has been made clear, he’s not sure if they’re “doing a great job in meeting that goal.” He says he’s also had questions about the 0 percent moisture rule in the BCAP.

“No other crop assistance program that I’m aware of has had that require-ment,” he says. Under BCAP, payments for the sale and delivery of eligible mate-rial to a qualifi ed facility rate $1 for each $1 per dry ton, limited to a maximum of $45 per dry ton. For example, 45.3 actual tons of biomass with 11.6 percent total mois-ture content has a dry ton equivalent of 40 tons, and so the EMO would get paid only for those 40 tons.

Seth Voyles, manager of government affairs for the Pellet Fuels Institute, says there are also concerns with the popularity of the program, which could be a problem because the money allocated might not be enough—and the dollar for dollar won’t be achieved because of the high amount of people applying for the money.

As the debate over the effectiveness of the program continues, most view the biomass-focused program as signaling a change in the energy focus of the federal government.

Future of BCAP BCAP’s incentives are likely to give

farmers contemplating growing biomass crops the fi nal push needed to do so, and established woody biomass suppliers strug-gling with the downturn in housing mar-kets may be able to regain their footing. Additionally, the program’s many indirect benefi ts are being realized.

“The pellet industry is looking at it optimistically and supportively because one thing we’re worrying about is feedstock, es-pecially with suppliers,” Voyles says. “Feed-stocks have been hard to come by. Realisti-cally, for the pellet industry, prices will be the same or just a little lower, but on the positive side, with pellet mills signing up people will want to sell to them because they have the potential to get that dollar for dollar.”

A proposed rule for full BCAP imple-mentation is expected after the EIS is com-plete sometime in November, and full im-plementation of the program is expected in 2010. Until then, those working toward commercialization of innovative renewable fuel and energy technologies utilizing bio-mass can rest a little easier knowing that realizing a secure, steady feedstock supply in the future is a near certainty, and those planning to provide the materials are poised for steady demand.

More information about BCAP can be found at www.fsa.usda.gov. BIO

Anna Austin is a Biomass Magazine as-sociate editor. Reach her at [email protected] or (701) 738-4968.

BCAP’s incentives are likely to give farmers contemplating growing biomass crops the fi nal push needed to do so, and established woody biomass suppliers struggling with the downturn in housing markets may be able to regain their footing.

Page 48: Biomass Magazine - December 2009

48 BIOMASS MAGAZINE 12|2009

CONTRIBUTION

ANAEROBIC DIGESTION By Joe R. Thompson and William H. Holmes

Who Gets the Upstream Methane Credits?When negotiating power purchase agreements, it should be crystal clear who owns the greenhouse gas credits and renewable energy certifi cates.

or the developer of an anaerobic digestion project that gener-ates electricity, the sale

of upstream greenhouse gas (GHG) credits and renewable energy certifi cates (RECs) can make the difference between projects that pencil and those that don’t.

To ensure smooth trans-actions in both the REC and GHG markets, a power pur-chase agreement (PPA) for a di-gester should clearly state who owns the RECs and who owns the GHG credits.

Methane, Manure and Landfi lls

Animal husbandry is re-sponsible for more than 30 per-cent of methane emissions in the U.S.1 Methane digester projects prevent methane, a potent GHG, from entering the atmosphere. For example, to the extent that the technology used involves de-positing waste into a covered la-goon, the cover creates a seal and an oxygen-free environment for anaerobic digestion. As anaerobic microorganisms digest the waste, they produce methane, carbon dioxide and a digestate. This

“capture” stage of an anaerobic digester project carries a potential GHG benefi t, which is called an “upstream credit” or a “methane destruction” credit.

The trapped gases are often combusted by fl aring, but the gases can also be cleaned up and sold to a pipeline or, for present purposes, used in a generator to produce electricity.

REC Trading MarketsWhen utilities enter into

PPAs with renewable energy projects, they are usually trying to comply with an applicable re-newable portfolio standard (RPS), which can vary from state to state. To help utilities meet the appli-cable standards, many states have

authorized the use of a system of trading RECs.

Several regional renewable energy tracking systems have been developed in the U.S. An admin-istrator will issue a certifi cate for each megawatt hour produced from a qualifying generation unit. A sophisticated software system records that certifi cate’s particu-lar attributes. That information is then used to identify certifi cate eligibility for state renewable en-ergy requirements. The owner of the certifi cate can either retire the certifi cate to meet its own re-quirements or sell the certifi cate to another utility seeking additional certifi cates.

To avoid double counting, the tracking systems require that

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

F

Page 49: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 49

the certifi cate be a “whole certifi -cate,” meaning that none of the renewable or environmental ben-efi ts of the electricity generated have been carved off for sale or use elsewhere. Midwest Renew-able Energy Tracking System Op-erating Procedures (July 2, 2007), for example, defi nes a whole cer-tifi cate as “one where none of the renewable attributes have been separately sold, given, or otherwise transferred to another party by a deliberate act of the Certifi cate owner. Renewable attributes shall include the environmental attri-butes that are defi ned as any and all credits, benefi ts, emissions re-ductions, offsets, and allowances, howsoever entitled, directly attrib-utable to the generation from the generation unit(s).”

GHG MarketsThe Regional Greenhouse

Gas Initiative was the fi rst manda-tory regional cap and trade system for GHGs, and the Chicago Cli-mate Exchange (CCX) was devel-oped as an international voluntary GHG commodity exchange. The California Climate Action Reserve was also developed as a voluntary GHG registry, but it has a more limited geographical scope than CCX.

Each of the three GHG mar-kets recognizes a distinct methane destruction credit. All three seem to recognize that trapping and avoiding the release of methane into the atmosphere is a distinct emissions reduction, and is sepa-rate from any indirect emissions offsets attributable to the displace-ment of fossil fuel generation by renewable energy.

CCX: CCX recognizes methane emissions offset projects that were placed into service after Jan. 1, 1999 in various countries. Projects that include electricity generation may also earn indirect

offsets for any displaced grid emis-sions. Digesters receive credit for destroying the methane either through combustion or in an en-ergy recovery facility.

Project owners need to dem-onstrate to an approved verifi er that they own the credits from the destruction of the methane. CCX aggregators or verifi ers will look at PPAs to ensure the power pur-chaser has not already bought the upstream credits.

CCAR: CCAR eligible proj-ects must meet performance stan-dards, be on U.S. farms and have a project start date no earlier than Jan. 1, 2001. The methane can qualify for GHG credits if it is de-stroyed through fl aring; used in a generator, engine or boiler; or up-graded and sold into a natural gas pipeline system. CCAR does not recognize any indirect offsets for displacement of traditional fossil-powered electricity with renewable electricity. Projects that sell associ-ated electricity are required to dis-close the name of the utility pur-chasing the power and the type of contract governing the sale (e.g., a PPA). There are no requirements, however, to further disclose terms of the contract.

CCAR voids emissions re-ductions benefi ts that have been sold more than once.

RGGI: Offset projects that capture and destroy methane using anaerobic digesters may qualify for the award of CO2 emissions offset allowances, provided they meet a particular participating state’s re-quirements. The fi rst round of projects was due June 30, and in-dividual determinations are being made by the states.

Although the RGGI system seems to recognize that the up-stream methane destruction cred-its are distinct from RECs pro-duced by electricity generation, a clause in the General Additionality

Requirements section of the mod-el rule provides that “CO2 offset allowances shall not be awarded to an offset project that includes an electric generation component, unless the project sponsor trans-fers legal rights to any and all at-tribute credits generated from the operation of the offset project that may be used for compliance with a renewable portfolio stan-dard or other regulatory require-ment, to the regulatory agency or its agent.”

Potential ProblemsMany PPAs include broad

REC acquisition clauses. Although most such clauses start by transfer-ring the RECs and benefi ts arising from the generation of the renew-able electricity, some go on to con-vey nearly all of the environmen-tal attributes associated with the generating facility. Sweeping PPA language creates an ambiguity as to whether upstream credits have been transferred to the utility that buys the power. Some utilities un-derstand that broad REC clauses in PPAs preclude the sale of up-stream methane credits, thus de-stroying the economics of the di-gester project, so they have agreed to REC clauses that clearly reserve the upstream methane credits to the project developer. Other utili-ties rely on broad language, either in PPAs or in other documents such as grant agreements. Unfortu-nately, developers sometimes enter into PPAs without understanding the effect of a broad REC clause, thus inadvertently transferring the upstream GHG credit twice, once to the utility as a REC and once to an upstream off-taker of the credit.

RecommendationsMethane digesters that wish

to generate electricity should con-sider several points. First, PPA

clauses conveying RECs should transfer to the utility only the ben-efi ts directly attributable to renew-able electricity generation.

Second, the PPA should in-clude language clearly explaining the distinction between RECs and upstream credits.

Third, the PPA should de-tail which credits are conveyed to the utility and which are reserved to the developer under the PPA. The PPA should expressly exclude upstream credits from the REC transfer, reserving them to the project developer.

Fourth, the parties may want to consider whether to include a clause giving the developer the right to terminate the PPA if the REC clause is construed to inter-fere with the owner’s retention and sale of upstream credits. As a practical matter, utilities likely will resist granting such a termination right to a developer.

Last, parties should consider all agreements entered into in con-nection with the digester project, such as grant agreements that might transfer ownership of the upstream credits to the entity pro-viding the grant. Parties negotiat-ing PPAs and upstream methane destruction credit off-take agree-ments for digester projects should ensure there are no agreements under which the GHGs or RECs have already been conveyed to an-other party. BIO

Joe R.Thompson is a mem-ber of Stoel Rives LLP in the firm’s Energy and Telecom-munications practice group.William H. Holmes is a mem-ber of Stoel Rives LLP and is the chair of the firm’s Renew-able Energy Initiative.

1w w w. e p a . g o v / m e t h a n e /sources.html.

ANAEROBIC DIGESTION By Joe R. Thompson and William H. Holmes

Page 50: Biomass Magazine - December 2009

50 BIOMASS MAGAZINE 12|2009

CONTRIBUTION

SUPPLY By Katie Hagen

The Minneapolis Biomass Exchange: The Biomass Marketplace New exchange offers a platform for biomass buyers and sellers in the U.S. and Canada to connect.

new player has en-tered the biomass marketplace. The Minneapolis Bio-mass Exchange

(MBioEx), which launched its online portal in July, has cre-ated an innovative and user-friendly technology solution to bring together buyers and sell-ers of underutilized biomass feedstock.

Users can list any biomass on the exchange, but typical feedstocks include forest resi-dues, wood chips, corncobs,

corn stover, hay, wheat straw and dedicated energy crops, such as switchgrass. Users can fi nd a full sample list on the ex-change at www.mbioex.com.

In addition to the listing platform, MBioEx offers a messaging service to contact users, map tools and commit-ment templates. A monthly e-newsletter is also available to keep users updated on feature upgrades and research reports.

The service is available to users anywhere in the United States and Canada. Support for

the metric system will be added by the end of 2009.

Hatching the ExchangeThe company’s founder

and president, Kevin Triemstra, spent fi ve years in Web technol-ogy before entering the biomass industry. While getting his mas-ter’s in business degree at the University of Minnesota, he no-ticed that many in the biomass marketplace were struggling with supply chain issues that had no easy solution.

At about the same time, he discovered the Minnesota Biomass Exchange, a project developed by the Agricultural Utilization Research Institute,

Minnesota Clean Energy Re-source Teams, and state natural resource and commerce depart-ments.

Triemstra knew his most valuable contribution to the bio-mass industry would be to use his experience to apply newer Web technology to advance the previ-ous exchange. After consulting with AURI and developing an alpha version with the BioBusi-ness Alliance of Minnesota and Swedish fi rm Ecoera AB, Triem-stra had Midwest Web experts develop the beta site which was released in July. The beta period ended Nov. 1, and users can now freely use the site.

Triemstra said that many in

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

A

Page 51: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 51

the industry talk about the clas-sic chicken and egg dilemma—in this case, which comes fi rst in biomass—the market or the supply? “We’re saying that you have to work both sides at the same time, which is what a listing platform can do,” he said.

Supply-Side: Producer Advantages

A biomass exchange does not come without its challenges. Besides overall challenges with the biomass supply chain, Triem-stra learned from several farmers that they would not want to har-vest their agricultural residues unless a market already existed. He knew that his technology could provide a solution.

On MBioEx, users can al-ways list harvested farm-gate biomass such as hay bales, which have a more established market. But to alleviate farmer concerns, they can also list in-fi eld unhar-vested new market biomass such as corn stover. By doing it this way farmers would not harvest biomass that has nutrient value to the fi eld, unless a buyer makes a reasonable bid.

“We’re just providing an outlet to additional markets,” Triemstra said.

Market-Side: Cultivating End-Users

In addition to opening up market options to biomass pro-ducers, MBioEx also hopes to add end-user value.

“We’re identifying supply to reduce discovery and pro-curement costs for end-users today,” Triemstra said. “Some investors are looking for regions with good local knowledge and advertised interest. Regions with a larger number of listings will be advantageous to these inves-tors.”

There are other diffi culties attracting new investments. Be-fore investing, some investors require a project to have some of its feedstock wrapped up in long-term contracts to reduce their risk. That means it can be diffi cult to gain these invest-ments. MBioEx can reduce in-vestor risk by providing access to a more fl uid and consistent biomass marketplace.

“If we can work together with suppliers to show a more consistent supply is available, more end-users will accept bio-mass as an alternative feedstock,” Triemstra said. “Hopefully, this will reduce investor risk and al-low more organizations to get their projects off the ground.”

Available FeaturesThe features available now

on the Web site include:Listings: Listings are free.

“We want to encourage interac-tion,” Triemstra explained. Users can list their biomass by feed-stock type, quantity and avail-ability date (if not recurring). In the future, users will have the option to receive e-mail or text alerts when new supply becomes available.

Messaging: It is similar to sites such as craigslist and eBay, where users can contact each other to inquire about a listing. Messages are sent via the site to the user’s e-mail address. That way, users don’t have to log in every day to check for messages. At any time, users can log in to view a full conversation.

Mapping: Mapping tools are available so users can see where the ready supply is lo-cated. This will help a buyer un-derstand the distance between a supplier and the end facility. However, supply is mapped by city, not by street address, so

suppliers can remain as anony-mous as possible until a serious inquiry is made.

Agreements: Online com-mitment templates are available for buyers and sellers. Today, fi nal agreement terms and pay-ment are up to the buyer and seller, but an upcoming upgrade will allow digital signatures.

E-Newsletter: Users can stay informed about new ex-change features by subscribing to the MBioEx monthly e-news-letter directly from the home-page.

Coming Soon: Triemstra said that the feedback MBioEx receives from users will help shape the new and upgraded features that the portal offers. To submit feature requests, use the contact us form on the Web site. A few enhancements are already in the works.

Biomass Crop Assistance Program

MBioEx has already been assisting qualifi ed biomass facil-ity signup to the Biomass Crop Assistance Program. BCAP of-fers support of up to $45 a ton for biomass sent to qualifi ed bio-mass conversion facilities. These facilities will include those that convert or propose to convert eligible material into heat, power, biobased products and advanced biofuels.

“We are considering setting up a user interface to automati-cally create the BCAP application PDFs,” Triemstra said. “There are several different forms, and we thought why not just simplify the process. All the user would do is fi ll out company informa-tion into a Web form and then download the completed PDFs. BCAP trades are already occur-ring so the time to act is now.”

If implemented, BCAP au-

tomatic sign-up support would be available on the Web site in December.

LogisticsMBioEx plans to integrate

contract harvesters and freight services in the fi rst quarter of 2010.

“Our role is simply to facili-tate exchange and improve op-portunities for our users. But if we can reduce discovery time by connecting users to important logistics services, we’ll do that,” Triemstra said.

Once a buyer and seller agree on a feedstock exchange, they could then choose from these optional services. This may be important in the upper Mid-west, especially when farmers have a lot of work to complete before winter arrives. If a farmer still needs to harvest corn and soybeans, he may want to hire a contractor to handle the biomass residues to save time.

Market QuotesEventually the Web site will

list average monthly biomass trade prices. For now, since the market has not fully materialized for many biomass feedstocks, the site can only provide some pric-ing guides based on university research for what a seller can ex-pect to charge. These guides will adjust daily for some feedstocks based on changing feed and en-ergy costs. Ultimately, sellers can sell at any price. BIO

Katie Hagen is a freelance writer in Minneapolis. To learn more about the Minneapolis Biomass Exchange, contact Kevin Triem-stra at [email protected] or through the corporate Web site at www.mbioex.com.

SUPPLY By Katie Hagen

Page 52: Biomass Magazine - December 2009

52 BIOMASS MAGAZINE 12|2009

Page 53: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 53

B P AUPDATE

A recent article from Science Magazine that chal-lenges the carbon benefi ts of biomass to energy is making the rounds on Capitol Hill. After reviewing the article, it’s clear that the disparity in carbon di-oxide output stems from the assumption of major land-use changes that are theoretically possible if new feedstock comes from the growing of energy crops. In our view, this is a solution in search of a problem.

Let’s leave aside the fact that since Congress established the closed-loop production tax credit in 1992, not a single facility has been constructed. That’s because the economics of growing energy crops for the production of power has never been economically feasible. Of course, that may change in a carbon constrained world. For now, it’s diffi cult to overcome the economics and conclude that large-scale land conversion will actually occur.

Regardless, the article presents a one-size-fi ts-all approach to biomass emissions and fails to explain the differences between open- and closed-loop bio-mass power.

America’s electricity from biomass is gener-ated predominately from open-loop biomass power. Open-loop biomass power uses only waste material that would otherwise decompose on the forest fl oor. In addition, open-loop biomass power eliminates methane gas and reduces the carbon dioxide that would otherwise be emitted during the decomposi-tion process. This method actually reduces overall greenhouse gases and offsets the burning of fossil fuels with clean, renewable electricity. Even the au-thors of the Science Magazine article say that utiliz-ing wastes and residues for bioenergy production, including forest wastes, offsets emissions and is not the subject of their analysis about altered land use and biofuels.

Now to address closed-loop biomass power: closed-loop biomass power uses material grown specifi cally to produce electricity. This method re-lies on vegetation and plant life to eat up the ad-ditional carbon dioxide that is released during the electricity generation process. Naturally, this method of carbon offsets is more diffi cult to measure and

ultimately creates a lag in the over-all environmental benefi t of closed-loop biomass power.

The failure to differentiate be-tween open- and closed-loop bio-mass undermines the relevance of the emissions numbers. America predominately produces electricity from open-loop biomass power, and therefore, it wouldn’t make sense to assume that legislative in-centives would result in a ground-swell of closed-loop production.

To lump all biomass into one large pool rather than clearly identifying the individual niches of each technology and fuel source is the wrong approach. It also blurs the fact that all legislation on Capitol Hill accounts for the differences between open- and closed-loop biomass in legislative defi nitions. There-fore, concerns about a massive shift in land use to grow tons of closed-loop biomass facilities are un-founded.

The bottom line is that it is greatly misleading to discourage the expansion of biomass power by citing theoretical land-use changes and concluding that all biomass power increases carbon emissions. Open-loop biomass power not only reduces carbon emissions, but it also eliminates harmful methane gas that would be released during decomposition and displaces fossil fuels that would be burned oth-erwise.

Both open- and closed-loop biomass offer enormous climate benefi ts and the Biomass Power Association will continue to educate policymakers and key legislative staff on these issues. For now, this is what we know—open-loop biomass power is irrefutably carbon neutral, and at times carbon negative. In order to meet the aggressive goals of a green economy, America must expand its use of open-loop biomass power. BIO

Bob Cleaves is president and CEO of the Biomass Pow-er Association. To learn more about biomass power, please visit www.USABiomass.org.

Pitfalls of One-Size-Fits-All Approach to Biomass Emissions

Bob Cleavespresident and CEO, Biomass Power Association

Page 54: Biomass Magazine - December 2009
Page 55: Biomass Magazine - December 2009

12|2009 BIOMASS MAGAZINE 55

EERCUPDATE

Biomass for heat, power and fuels is certainly not without its challenges. Recent editorials by Bruce Dale1 have illustrated the hypocrisy through which biofuels are being held to much higher standards than traditional fuels when it comes to greenhouse gas emissions.

The issue that carries the most damaging effect on the carbon footprint of the production of biofuels is indirect land-use change. This is essentially a meth-od of accounting for increased greenhouse gas emis-sions from the supposed increase in agricultural lands to offset the amount of agricultural lands utilized in biomass for biofuels production. The theory goes that if 1,000 acres of corn previously used for food is now going to biofuels production, then 1,000 acres of new agricultural lands, such as clearing rain forests for ag-riculture, will be brought into production.

In the U.S., utilizing nonfood-producing lands such as underutilized agricultural land or commercial forest is a way to increase and sustain biofuel produc-tion without sacrifi cing fertile food producing crop-lands or destroying rain forests. Agricultural residues that are not necessary for nutrient replenishment in the soil become sensible nonfood feedstocks for bio-fuels and products.

In the forested areas of the U.S., much of the mar-ket for wood has been for pulp and paper which, like many U.S. industries, is being diminished due to prod-ucts from overseas. This leaves behind a huge infra-structure devoted to sustaining the planting, growth, harvesting, transport and processing of wood in these areas. The utilization of this biomass infrastructure in the near future to produce biobased fuels and prod-ucts can save the jobs that are currently disappearing with the pulp and paper industry. In areas that retain a healthy forest industry, the residues associated with the various wood-processing industries are a valuable source of biomass resources that can add revenue to ever-decreasing profi t margins in mature industries.

Studies have shown that, cur-rently, the U.S. harvests less wood than the annual growth rate of the forested lands, leaving room for managed removal for production of biofuels without negatively af-fecting the overall resource. Parts of the eastern U.S. are already taking advantage of this forest in-dustry infrastructure and are pro-viding wood chips for domestic cofi ring facilities and wood pellets for the international markets.

The Energy & Environmen-tal Research Center is working with several organi-zations that are currently exploring the opportunity of converting wood or nonfood agricultural grasses and residues to biofuels. There are multiple avenues to biofuels production such as gasifi cation of woody biomass and catalytic conversion of the resultant syn-gas to alcohols, green diesel, or biocrude liquids that can be further refi ned.

The technology that makes the most sense for a given location will depend on particular market condi-tions, and the EERC has been helping clients to un-derstand these nuances and further develop the tech-nology that is the most economically viable for a given situation. At this time, however, technology is not the primary challenge—the source of the feedstock is the challenge. Let’s hope that common sense will rule the day, and we can continue to harvest sustainable non-food biomass feedstocks to enable the U.S. to reduce its overall carbon footprint. BIO

Bruce Folkedahl is a senior research manager at the EERC. Reach him at [email protected] or (701) 777-5243.

1. Dale, B. Biofuels, Bioprod. Bioref. 2009, 3, 1–2.

Biomass Utilization, Rain Forests and Their Effect on the U.S. Carbon Footprint

Bruce Folkedahlsenior researchmanager, EERC

Page 56: Biomass Magazine - December 2009

56 BIOMASS MAGAZINE 12|2009

Select Environmental Services:Permitting & ComplianceAir Quality SpecialistsFeasibility AssessmentsSite AssessmentSite EvaluationsDue DiligenceCarbon Lifecycle Health & Safety

THE PERMITTING SPECIALISTSBiomass Energy and Waste-to-Energy

For more information, contact our Practice Leader:David Minott, CCM, [email protected]

ERM consulting services worldwide www.erm.com

Decades of experience in your industry. ERM offers service

consulting services. ERM is committed to delivering sustainable solutions in a more competitive world.

MARKETPLACEBIOMASS MAGAZINE

Page 57: Biomass Magazine - December 2009
Page 58: Biomass Magazine - December 2009
Page 59: Biomass Magazine - December 2009

Wind. Solar. Hydro. Ocean. Geothermal. Biomass. Biofuels. Smart Grid. Effi ciency. Whatever your interest, RETECH covers it plus…

PRESENT your company’s capabilities to government offi cials including DOE, DOD, DOC, DOI, USDA and EPA.

DEMONSTRATE your company’s skills in renewable energy technologies such as wind, solar, geothermal, hydro,

ocean, and biomass, and in key areas like transmission, smart grid and storage.

MEET potential joint venture and joint bid partners in the exhibition hall.

SHOW your company to government buyers and discuss the features and benefi ts of your products and services

RECRUIT the best employees who will see you and talk with your representatives.

RAISE capital from investors and lenders who will be speaking to the conference and then walking

though the exhibition.

SELL your renewable energy products and systems at the show and on the exhibit fl oor.

Why Attend RETECH 2010?

Save $$$ - Register by December 18th for the BEST RATES at www.retech2010.com for the #1 All-Renewable Energy Event

February 3–5, 2010Washington Convention Center | Washington D.C.

Plan Now to Join 3,500 Government,

Business and Technology Professionals

at the World’s Premier Event for the

Renewable Energy Technology Industry

Page 60: Biomass Magazine - December 2009

60 BIOMASS MAGAZINE 12|2009