State seeks way to solve ‘a big biomass problem’


Issue Date: August 24, 2016
By Christine Souza

Across California, tens of millions of trees are dead, intense wildfires burn, and orchard and forest waste piles up, as more plants that convert wood waste into electricity close due to expiring contracts with utility companies.

"Nothing has been done to adjust the utility rates at the California Public Utilities Commission to account for the value that biomass has; they are not keeping track of all of the avoided pollution that it affords," said Allan Krauter, senior administrative analyst for Kern County. "Unless and until the state is willing to make up the difference between the market price and the break-even price, they are going to continue to have a big biomass problem."

The problem centers on 25- and 30-year contracts between biomass plants and utility companies, established in the 1980s, resulting in the construction of 66 power plants with an operating capacity of almost 1,000 megawatts. Now, only 22 biomass plants remain operating, with a total capacity of 532 MW—still enough to convert 7.3 million tons of wood waste into electricity.

The plants' power-purchase contracts with utility companies that expired in recent years were not renewed, because the utilities had cheaper renewable-energy alternatives—forcing plants to close. Natural gas costs 2.9 cents per kilowatt-hour; wind and solar cost 8 cents per kWh. By contrast, a price floor of 12 cents per kWh was established for biomass when the program began.

With the state legislative session due to end Aug. 31, lawmakers continue to negotiate if and how to spend $1.4 billion worth of "cap-and-trade" funds collected as part of the state's greenhouse gas emissions-reduction fund. Proponents of biomass, a renewable resource, say some money should be directed at keeping biomass power plants running, to convert forestry, agricultural and urban wood waste into electricity.

"There's a lot of competition for the money, because there are some equally good greenhouse gas-reducing programs out there, but we think policymakers need to look at what the short-term, immediate crisis need is first," said Julee Malinowski Ball, executive director of the California Biomass Energy Alliance. "But then, we need long-term contracts."

The state Assembly is expected to release its spending plan for the greenhouse-gas funds this week, Ball said, adding, "we are 100 percent focused on (Greenhouse Gas Reduction Funds), but other policy changes need to be made, including reform in the Renewable Portfolio Standard and contribution by other beneficiaries."

Some biomass facilities temporarily benefited from Gov. Brown's emergency proclamation, made last October, to protect the public from hazardous forest conditions. This directed the CPUC to extend contracts for existing biomass facilities receiving wood waste from certain high-hazard areas. The plan also authorized the commission to establish an auction where plant owners could bid to sell 50 MW of electricity from biomass.

Supporters of biomass say they have been informing lawmakers and others of the significant environmental benefits of burning wood waste in a boiler, instead of pile-burning or burning it in a landfill.

"We've known for years that if you take the material to a power plant which burns wood in a boiler instead of pile burning, you get a 98 percent reduction in emissions," California Forestry Association Vice President Steve Brink said.

Krauter said Kern County has seen the impact from the closure of a biomass power plant.

"When the Covanta contract at the facility in Delano expired in 2015, the Central Valley lost the last major source for co-gen for biomass," he said. "Not only did more than 50 people lose their jobs, but growers all over the southern San Joaquin Valley lost a really valuable resource. You don't have to drive very far to find windrows of chipped wood just sitting in the fields. They have no place to put it."

Disposal of wood waste remains a challenge for many counties. A 2011 mandate requires the amount of solid waste diverted from landfills to recycling and other uses to increase from 50 percent to 75 percent by 2020.

"If we started accepting wood waste, it would make it really hard for us to meet our legal mandates of diverting waste," Krauter said. "That's why cogeneration became an answer, not just for air quality, but for landfill capacity."

Assembly Member Jim Wood, D-Healdsburg, said the biomass industry is dying "because we haven't been willing to put our money where our mouth is." Wood, who introduced Assembly Bill 1923 to assist biomass and biogas facilities, said the governor and Legislature understand the importance of the issue, but the state "has not created a revenue source to help the biomass industry for the benefits it can provide."

As contracts with utilities expire, biomass plants continue to close—including last week's announcement that Burney Forest Power, a 30-MW power plant in Shasta County, will close next month.

Brink said the Burney plant "consumes 240,000 bone-dry tons of biomass per year that now won't have a home," and said the decision could also result in the closure of a nearby sawmill.

Just days after the announcement, the Shasta County Planning Commission approved construction of a new biomass power plant owned by Hat Creek Construction. The company said it plans to acquire a contract under a mandate established under a 2012 law that requires electric corporations to procure a certain amount of bioenergy.

Brink said the law allows plants under 3 MW to receive a 12.77 cent per kWh energy price floor if three plants bid in at the same time.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.