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The Shift from Coal to Biomass Is on in Europe

The Shift from Coal to Biomass Is on in Europe | Timberland Investment | Scoop.it

The European Union (EU) is preparing to fully generate 20% of its electricity by 2020 using only renewable sources. As such, fuel switching from coal to biomass or natural gas is enabling some power plants in the EU to stay open and profitably generate power despite ever-tightening emissions limits. One of the other major pressures driving fuel switching is Europe’s $38 billion-a-year carbon market. Now a decade after the policy was enacted, it’s finally having an effect on regional generation as more plants turn to biomass. Under EU rules, biomass is considered carbon neutral—and a growing number of large coal burners are finding it a viable option.

Coupled with rapidly falling installation costs for renewables, industry is aggressively finding ways to phase out the worst pollution sources—although unevenly across the continent. While to the east, coal is still the biggest fuel source, western Europe is moving quickly away from it—with Germany, not surprisingly, straddling the fence, essentially building a second renewable system on top of a carbon-intensive one.

Taking it further, several western European nations have formally announced a deadline to end all coal burning. The UK was the first large user to set a drawdown, scheduling the last fires to go out by 2025, propelled even faster by an increased carbon tax. France, a small coal burner, will phase it out altogether by 2022. The Netherlands and Italy have also proposed plans to close their coal-fired power plants by 2030 and 2025, respectively.

Germany, the EU’s largest economy and a perceived champion of clean energy through its Energiewende program, remains Europe’s largest coal burner. The question of a “coal exit” is being hotly debated by the country’s new coalition government, and most experts don’t expect a phase-out to fully take place until 2030 at the earliest. Just the same, recent figures show that hard coal-fired generation in Germany fell by 53.2% in the year ending in January, while lignite coal generation dropped by 6.6%.

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Wood-Based Biofuels: A drop in the bucket

Wood-Based Biofuels: A drop in the bucket | Timberland Investment | Scoop.it

In May of 2011, Forisk published a study that evaluated the viability of the wood-based transportation fuel sector in the U.S. The study detailed 12 technologies and 36 projects that convert wood to fuels including ethanol, butanol, diesel, gasoline, and jet fuel. Forisk’s conclusion of the 2011 study:

“…wood-based biofuels will fail to contribute substantively to EPA’s Renewable Fuel Standard targets in 2011 or 2022.”

Revisiting the study in 2018 confirmed that wood-based biofuels have failed to develop commercially, despite conventional ethanol and biodiesel being produced at record levels—the U.S. produced 15,845 million gallons of ethanol and 1,592 million gallons of biodiesel in 2017. Of the original 36 projects, 19 were canceled, 9 were shut down, and 8 remain operational. Of these operational facilities, all are pilot or demonstration plants.
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Despite scientific progress, there were only 24 operating and advancing projects at the end of 2017, and at least 13 of these were pilot projects or demonstration facilities. Of the 4 projects with stated capacities of 10 million gallons per year or higher, none operate at a commercial level. The entire sector has a maximum potential capacity of 75 million gallons per year. This is less than the 392 million gallons of gasoline that drivers in the U.S. use in one day. Analysis of potential wood use highlights the change within the sector and the minimal relevance these projects currently have on the forest industry (Figure).

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UW studies say petite poplars are the future of biofuels

UW studies say petite poplars are the future of biofuels | Timberland Investment | Scoop.it
In the quest to produce affordable biofuels, poplar trees are one of the Pacific Northwest’s best bets—the trees are abundant, fast-growing, adaptable to many terrains and their wood can be transformed into substances used in biofuel and high-value chemicals that we rely on in our daily lives.

But even as researchers test poplars’ potential to morph into everything from ethanol to chemicals in cosmetics and detergents, a commercial-scale processing plant for poplars has yet to be achieved. This is mainly because production costs still are not competitive with the current price of oil.

A University of Washington team is trying to make poplar a viable competitor by testing the production of younger poplar trees that could be harvested more frequently—after only two or three years—instead of the usual 10- to 20-year cycle. These trees, essentially juveniles compared with fully grown adults, are planted closer together and cut in such a way that more branches sprout up from the stump after each harvest, using the same root systems for up to 20 years. This method is called “coppicing,” and the trees are known as poplar coppice.

The team is the first to try converting the entire young tree—including leaves, bark and stems—into bio oil, a biologically derived oil product, and ethanol using two separate processes. Their results, published this summer in two papers—one in ACS Sustainable Chemistry & Engineering and the other in Biotechnology for Biofuels—point to a promising future for using poplar coppice for biofuel.

“Our research proved that poplar coppice can be a good option to meet the cheap, high-volume criteria of biofuel feedstock,” said lead author Chang Dou on both papers, a doctoral student in the UW’s Bioresource Science and Engineering program. “Our findings are significant for the future biofuel industry, and the ultimate goal is to make poplar coppice biofuel a step closer to the pump.”
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Biomass Plants in the Northeast Scramble to Change Business Model

Biomass Plants in the Northeast Scramble to Change Business Model | Timberland Investment | Scoop.it

In the Northeast, biomass electricity plants are staring at some tough economics. For many standalone wood-fired electricity plants, the cost of fuel (wood chips) and operations exceed what they get paid for the electricity they generate. With natural gas (and thus wholesale electricity) prices expected to remain low—and state-level support for biomass fading—biomass plants are working hard to figure out how to continue operating.

New Hampshire and Maine have provided some short-term support to biomass electricity facilities in recent years with the expectation that the funding was a bridge to allow time for new economic models to be developed. We’re now starting to see some real efforts to find ways to improve the economic sustainability of these facilities, often in ways that add to the rural economy.

Biomass plants have a lot to offer as a co-location or re-use site. They have existing forest industry infrastructure (wood yards, scales, a procurement staff, etc.), permits, interconnection to the grid, as well as access to “behind the fence” electricity, steam and hot water. Companies are now seeking ways to utilize these assets to support continued (or expanded) markets for biomass fuel.
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In New York, ReEnergy has announced “adaptive reuse” plans for their facility in Lyonsdale, with wood-based liquid fuel company Ensyn building a biorefining at the site that will re-purpose some of the existing infrastructure and use roughly the same volume of biomass chips. In order to maintain the wood supply infrastructure while the conversion occurs (and wood supply is critical for any wood-using facility), ReEnergy has a request for continued support through the Renewable Energy Standard now pending before the NY Public Service Commission.

In Maine, Stored Solar has been seeking co-location partners through their Born Global Challenge, which seeks to “addresses the global shift to a Bio-Economy and invites worldwide innovation into real projects and real revenues within The State of Maine.” In presentations made by Stored Solar, the company indicates that more than 50 partner companies have applied to work with them, and 14 companies have been pre-qualified through a technology and economic vetting process as appropriate matches for the facilities.
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ReEnergy, with four facilities in Maine, has issued a Request for Proposals (RFP). Administered by the group Biobased Maine, this RFP seeks co-location partners, noting that “ReEnergy’s biomass power plants are capable of delivering cost-effective thermal energy (steam, hot water), electricity and CO2 to an industry or industries located on adjacent property.”

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UGA study says biomass energy not feasible in U.S.

UGA study says biomass energy not feasible in U.S. | Timberland Investment | Scoop.it
Wood pellets used for biomass energy, an alternative to fossil fuels, are produced right outside of Athens, but do not expect to see biomass energy adopted here. Those pellets are shipped straight to Europe, and new University of Georgia research shows why.

“With global warming, we really want to reduce carbon emissions,” said Dr. Richard Bin Mei, co-author of a study on biomass-produced electricity. “In the United States, unfortunately, we do not have the mandate or government subsidies, so our study looked at whether it is economically feasible to co-fire wood pellets with coal to produce power, and the answer is no, unless the government does the same thing as the EU.”

Bin Mei , a professor in the UGA Warnell School of Forestry and Natural Resources, and researchers from Purdue University, examined the economics of transitioning to biomass use in a recent study published in the journal Energy Economics.

They determined that it is economically prohibitive to convert coal firing plants to biomass in the United States without government subsidies.

According to Bin Mei, Europe has widely adopted biomass energy as a replacement for coal in energy plants in order to cut harmful fossil fuel emissions. European nations receive nearly five million tons of wood pellets each year from the U.S. for their energy plants, but the U.S. itself has not adopted the cleaner method because of the cost. Under the U.S.’s Clean Power Plan, in the next 25 years, power plants are expected to lower their carbon emissions by 32 percent from 2005 levels.

While burning wood for energy can have negative consequences for deforestation and air pollution, biomass is generally considered to be less harmful than burning coal or other fossil fuels. Growing trees for the pellets offsets emissions from burning wood, and if fast growing tree species are selected, deforestation can be avoided.

According to Bin Mei, it would be unrealistic for U.S. companies to totally abandon their coal firing plants, so the study examined the cost for coal firing plants to switch to a co-firing setup where biomass is burned alongside the coal.

 However, according to Bin Mei, the costs to convert plants to a co-firing method would either require the government to subsidize the conversion or customers would have to pay a cost.

Effectively, plants will remain only coal burning due to no incentive to convert. Bin Mei said the required subsidies would cost the government roughly the same amount as it currently spends on subsidies for other alternative forms of energy like solar and wind.

“All else equal, the government could consider wooden biomass as an alternative fuel to feed traditional coal based power plants,” Bin Mei said. “By design, a coal power plant is designed for 30 to 50 years. It is not economically feasible just to abandon the coal plant, but if you convert it to co-firing, you just add a small percentage of pellets to the furnace. It is not that hard, you just pay a conversion cost and achieve a certain reduction in carbon emission production.”
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Senators propose 100 percent renewable energy in US by 2050

Senators propose 100 percent renewable energy in US by 2050 | Timberland Investment | Scoop.it
Oregon Sen. Jeff Merkley and Sen. Bernie Sanders, I-Vermont, along with Sens. Edward J. Markey, D-Massachusetts and Cory Booker, D-New Jersey, introduced landmark climate legislation that would transition the U.S. to 100 percent clean and renewable energy by 2050.

 The “100 by ’50 Act” lays out a roadmap for a transition to 100 percent clean and renewable energy by 2050. It is the first bill introduced in Congress that will fully envision a transition off of fossil fuels for the United States.

:America is home to innovative entrepreneurs and scientists who have tackled many challenges in our nation’s history—from harnessing electricity, to putting a man on the moon, to curing disease,” said Merkley. “The power to end the use of fossil fuels and completely transition to clean and renewable energy is within our hands, but just as with the moon landing, we need a roadmap, a goal, and a passionate, shared national commitment to get us there. If an asteroid were hurtling its way through space towards our planet, we would do everything in our power to stop that asteroid. Our commitment to fighting climate change should be no less. Starting at a local, grassroots level and working toward the bold and comprehensive national vision laid out in this legislation, now is the time to commit to 100 percent by 2050.”
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Nippon Paper Eyes 'Roasted' Wood Pellets as Earnings Source

Nippon Paper Eyes 'Roasted' Wood Pellets as Earnings Source | Timberland Investment | Scoop.it
Nippon Paper Industries will begin tests next spring on a process it plans to use to mass-produce efficient-burning wood pellets as a biomass fuel for electricity generation starting in fiscal 2018.
     The so-called torrefied wood gets its name from torrefaction, a process similar to coffee roasting. Wood is heated at relatively low temperatures for less than an hour to yield a substance that burns with double the heat volume of wood chips, effectively doubling the power generation efficiency.
     Despite global research on torrefied wood as a biomass fuel, few companies have taken the next step to develop a means of mass production. Nippon Paper intends to leverage its papermaking experience to quickly establish this as a source of earnings for its energy business.
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Wood Bioenergy Update

Wood Bioenergy Update | Timberland Investment | Scoop.it

Wood bioenergy projects have slowed in the U.S.; meaningful potential growth, if realized, will occur in the next five years.
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Regionally, the U.S. North still has the largest share (47%) of viable wood bioenergy projects while the South accounts for 53% of the potential wood use for bioenergy

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The single largest source of growth in U.S. wood bioenergy markets remain pellet projects planned and under construction in the South built to serve export markets to the U.K. and EU.

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New federal analysis favors Maine biomass plants

New federal analysis favors Maine biomass plants | Timberland Investment | Scoop.it

A new analysis by the federal Environmental Protection Agency may be good news for Maine firms that make electricity by burning wood, but some environmental groups are crying foul.

The new EPA analysis, issued last week, suggests how the federal government will count greenhouse gas emissions from wood-fired biomass facilities, and an accompanying memo from a top-ranking EPA official suggests biomass producers will likely get a pass when it comes to strict, new carbon dioxide regulations.

Carbon dioxide is a gas byproduct that comes from burning any carbon-based fuel, including coal, petroleum and wood, and it is largely blamed for the effects of global climate change.

But the new analysis suggests that because wood-fired biomass facilities are fueled with forest byproducts, namely leftover branches, limbs, chips and sawdust, the net impact on the environment is neutral over time. The analysis involves some complex science that models the amount of CO2 live trees absorb compared to the amount that's released when they either decompose naturally or are burned for energy.

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Environmental group asks province for probe of NSP biomass supply

Environmental group asks province for probe of NSP biomass supply | Timberland Investment | Scoop.it

A Cape Breton environmental group is calling for an emergency review of harvesting practices at Nova Scotia Power’s biomass plant in Point Tupper.


On Friday, the Margaree Environmental Association issued a letter to Premier Stephen McNeil requesting a delay in harvesting to allow the province to examine the plant’s wood supply.


Association co-chair Neal Livingston said the plant has shown itself to be a “voracious” consumer of wood fibre. Not only is quality material being directed to the plant, there is also too much forest resource being cut, he added.

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NSP has said up to 650,000 tonnes of wood waste will be needed to run the plant per year. The 60-megawatt power generating station, located in Richmond County, is part of Nova Scotia’s plan to source 25 per cent of the province’s electricity from renewable sources by 2020.


But in recent months, business owners who rely on the forest for a living have told The Chronicle Herald that high-quality hardwoods are making their way into the biomass plant.

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On Friday, NSP spokeswoman Neera Ritcey denied that quality hardwoods are winding up that the plant.


“We require our suppliers to follow strict conditions on the biomass they supply for use at the plant,” Ritcey said in an email. “We have checks and balances in place to ensure rules are followed.”

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Wood Fuel Prices in US South - 1Q2014

Wood Fuel Prices in US South - 1Q2014 | Timberland Investment | Scoop.it

Wood fuel delivered prices in the first quarter of 2014 increased $1.04 per ton, or 5.2 percent, from the first quarter 2013 average price of $20.05 per ton. Since fourth quarter 2013, prices increased $0.88 per ton to an average price of $21.09 per ton.
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Breaking out individual price components from the total delivered price into wood raw material and freight costs makes it clear that wood raw material costs are the main cause of the upturn. In 1Q2014, freights costs increased an average of $0.03 per ton, but wood raw material costs increased $1.01 per ton.


The reason for the increase in wood raw material costs is two-fold:


  • Demand for wood fuel increased, as total purchases by volume were 9 percent higher in the first quarter of 2014. The increase in demand has been driven primarily by dedicated biomass power facilities opening and pulp and paper mills converting from coal-fired to biomass boilers in response to electricity and natural gas prices increases of 6.1 percent and 31.1 percent, respectively.
  • A total of 571 inches of rain fell in 2013, which was the second largest amount of rainfall across the South over the last decade. Southwide rainfall amounts increased 22.2 percent from 2012 to 2013, and this caused delayed effects of constrained supply due to a shortage of available inventory during the first quarter of 2014. Our data supports a correlation between increases in rainfall and increases in wood raw material costs.


The combination of increased demand and heavy rainfall influenced the escalation in wood fuel delivered price.

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Cate Street changes ‘whole nature’ of Millinocket pellet plant proposal

Cate Street changes ‘whole nature’ of Millinocket pellet plant proposal | Timberland Investment | Scoop.it

A New Hampshire investment company has changed the “whole nature” of its proposal to build New England’s first torrefied wood facility at the former Great Northern Paper Co. mill, leaving unclear the status of the $25 million state bond backing the project, officials said Thursday.


Cate Street Capital’s plans now call for replacing the $70 million microwave torrefaction plant with a $140 million steam-thermal plant like those built in Crockett, Texas, and Selma, Ala. The new plant would employ 50 people instead of 35 and more than triple the amount of pellets created and tree wastes used annually, Cate Street spokesman Scott Tranchemontagne said. Torrefied wood pellets are described as a renewable substitute for coal.

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Wood Pellet Developments and the Relevance to U.S. Timberland Investments

Wood Pellet Developments and the Relevance to U.S. Timberland Investments | Timberland Investment | Scoop.it

Wood bioenergy markets interest forestland owners and timberland investors for a simple reason: potential returns on capital. Higher demand for pulpwood and other lower-valued forest residues can strengthen prices and increase returns to landowners for any investments made in their forests. However, the reality is that new wood bioenergy markets are small relative to traditional forest industry demand, and they are incredibly localized based on specific and primarily pellet-producing facilities.

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Pellet plants in the U.S. today have two primary markets: domestic U.S. home heating and European industrial markets for electricity and cogeneration. While a surge of proposed domestic projects occurred in 2009 and 2010 to take advantage of pellet use from increased petroleum prices, most recent investments have supported pellet plants intent on exporting to the EU, especially the U.K. These projects are larger than their domestic counterparts, consuming hundreds of thousands to over one million tons of wood per year, versus the typical fifty to two hundred thousand tons per year for domestic plants.

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Wood pellet projects represent one sub-sector within the overall wood bioenergy market. There are 122 pellet plants operating in the United States, 10 plants under construction, and 47 in the planning stages. Regionally, the North leads the U.S. with the most pellet plants operating, while the South leads in growth with 11.6 million tons of pellet production capacity in development.

 

While more than 800,000 U.S. homes use wood pellets for heat, global wood pellet markets are growing largely in response to EU renewable energy mandates. Pellet production globally increased from 8 million metric tons per year in 2007 to more than 15 million metric tons in 2010. Currently, Europe consumes most of this production. In 2012, European consumption of wood pellets was 14 million metric tons alone. The European Union estimates that the EU will consume 17 million metric tons in 2014 (EU Biofuels Annual 2013).

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The data specific to pellet plant announcements and development in the U.S. tell a story of two market strategies. The U.S. domestic market for pellets relies primarily on smaller producers who rely on low cost manufacturing residuals.This strategy complements the U.S. forest products sector, and has an immaterial influence on timberland investments. The pellet export market from the U.S. has encouraged investment in larger scale facilities that, by necessity, focus on procuring traditional pulpwood roundwood. This strategy competes with traditional pulpwood users while providing a growth market in key local markets in the U.S. Southeast for timberland owners. Overall, however, large-scale pellet sector success remains hinged to EU policies and, in the near term, realized demand from U.K. power plants. Within the overall forest products industry, wood pellets represent a niche opportunity reliant on specific, critical factors associated with logistics and the economics of pulpwood and residuals.


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$300 million biofuel plant planned in Michigan UP

$300 million biofuel plant planned in Michigan UP | Timberland Investment | Scoop.it
ONTONAGON — After months of waiting, Synsel Energy announced this week that financing terms for construction of a biofuel plant at the site of the former Smurfit-Stone paper mill have been finalized.

The $300 million refinery will create second-generation biofuels from pulp and waste wood abundant in the area, Synsel said in a release.

“Everything’s been worked out, the i’s are dotted and the t’s are crossed,” said Pat Tucker of Lost Bowl Development LLC, which owns the site. He was unable to comment on the identity of the investors due to a non-disclosure agreement.

Securing the funds was a long and slow process but now it is on to the next stage, he said.

“The next step of actually putting the plant up is another long, involved process, but it’s done with one challenge and on to the next one,” Tucker said.

Lost Bowl Development is contracted to act as co-developer on the property and will continue to be part of the process.

Snysel will be involving as many local resources and companies as possible on the project, Tucker said, although some work will be done off-site and require specialized workers.

“We don’t have many locals that have built bio-refineries,” he added.

Synsel estimates the work will bring hundreds of workers to the area during construction, stimulating the local economy. In the long term, 100 to 150 permanent jobs will be created.
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Low energy prices force New England wood heat pioneers to pivot

Low energy prices force New England wood heat pioneers to pivot | Timberland Investment | Scoop.it

It was May of 2014 and Charlie Niebling was feeling pretty good. As the wood buyer for New England Wood Pellets and a modern wood heat pioneer, he had reason to be optimistic. New England’s automated wood heat industry was finally beginning to hum.

 

For years, high energy prices were the driving force behind adoption of residential pellets stoves, spurring investment in wood pellet manufacturing and, concurrently, leading to the installation of hundreds of commercial wood-fired heating systems across Vermont, New Hampshire and Maine.
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But by June of 2014, a dramatic slide in the price of fossil fuels would ultimately force Niebling and the region’s wood heat pioneers to rethink their strategy.

 

Energy savings — the longtime rationale of the wood heating industry — had begun to disappear. By 2017, the Energy Information Administration would declare that natural gas prices were the lowest in 20 years.
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“How are we going to sell these ideas and sustain this industry when we can’t make an economic argument that says you’re going to save 50 percent on your heating bill by switching to wood heat?” Adams wondered. “That was the crisis point. What exactly are we promoting and what’s the promise we are making to consumers?”

 

To get to the bottom of these questions, Adams and other leaders began pulling people together. They wanted to understand how advocates talked about wood energy and what would resonate with new customers.

 

They quickly came to three realizations. First, the market was very weak and they needed to work together. Second, everyone used different words to describe the same thing. Third and most importantly, whether they were talking about biomass boilers, bio-energy, biomass thermal, modern wood heat or automated wood heat, most consumers had no idea what they meant.
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As a result of these candid dialogues, advocates began to get on the same page and use the same words. Energy savings is still part of the conversation, but it has moved from a marquee role to a supporting cast member who might make a cameo.

 

Their messaging shifted the one-trick pony named Lower My Energy Bill to the back of the pack and picked up a stable that included Creating Local Jobs, Getting Off Oil, Keeping Energy Dollars Local and Supporting Working Forests.
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It’s too soon to tell if this new strategy will bear fruit. The Northern Forest Center hopes to launch a new cohesive messaging campaign later this winter that will include shared resources to tell the story of modern wood-fired heat.
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The value proposition for wood heat is not where Charlie Niebling would like it to be. But he is undeterred. His optimism rests on the importance of homegrown renewable energy to forests, sustainability and communities.

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Loggers and truckers sue Xcel Energy over proposed shutdowns of plants

Loggers and truckers sue Xcel Energy over proposed shutdowns of plants | Timberland Investment | Scoop.it

A group of loggers in Minnesota is using an environmental law to sue Xcel Energy about three biomass plants in the state that burn wood waste or turkey manure to produce electricity.

 

The Associated Contract Loggers & Truckers of Minnesota filed the lawsuit last week in state court to stop Xcel from buying and shutting down one plant and ending contracts with two others. The move, the group said, would eliminate 100 direct jobs and hundreds of indirect jobs.

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Xcel said electricity from the plants is far too expensive, and contracts should be ended to save ratepayers money.

But Clean Energy Economy Minnesota, a nonprofit group that works with clean-energy companies across the state and is not part of the lawsuit, said that the three plants are critically important markets for biomass and represent millions of dollars in capital investments.

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The turkey manure incinerator is located in Benson in western Minnesota, and the two wood-burning plants are in Virginia and Hibbing, owned by the Laurentian Energy Authority.

Xcel signed long-term contracts to purchase electricity from Laurentian and Benson until 2026 and 2028, respectively.

 

The biomass commitments were spawned by a multipronged 1994 agreement that Xcel's predecessor Northern States Power Co. made with the state. In exchange for permission to expand nuclear waste storage at the utility's Prairie Island nuclear plant in Red Wing, NSP promised to generate or purchase a certain amount of its future power from wind and biomass plants.

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Xcel made the case to the 2017 Legislature that the biomass plants are the most expensive energy on the utility's system, and cost 10 times more than wind-generated power. It has also claimed that removing biomass energy could save its customers nearly $700 million over the next 11 years.

 

Lawmakers responded by passing a law that allows Xcel to buy out the contracts if the plant owners, cities and the Public Utilities Commission (PUC) agree to the details. Under those provisions, Xcel may purchase and shut down the Benson plant and get out early from its power purchase agreements with the plants in Hibbing and Virginia.

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The loggers' lawsuit contends that shutting down the power plants will damage the health of Minnesota's forests. Harvesting the fuel utilizes thousands of acres of blown down, damaged and low-grade wood that is otherwise useless and would be left uncollected in the forests, the lawsuit said.

 

The result would be increased forest-fire hazards, negative effects on private and public timber management, and interference with projects to halt invasive species.

 

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DuPont to sell cellulosic ethanol plant in blow to biofuel

DuPont to sell cellulosic ethanol plant in blow to biofuel | Timberland Investment | Scoop.it

DuPont Industrial Biosciences, a unit of DowDuPont Inc, on Thursday said it halted operations at a two-year-old ethanol plant and will sell it, dealing another blow to efforts to create biofuels without using food crops.

The decision to shut the Iowa plant comes as political winds are undercutting efforts to produce ethanol from plant waste and wood shavings. The U.S. Environmental Protection Agency (EPA) this year has pushed to lower the amount of cellulosic biofuels that need to be blended into the nation's fuels under a 2007 mandate, arguing the industry has not produced enough.

The EPA predicted in 2007 that U.S. cellulosic ethanol production could hit 1 billion gallons by 2020, but output this year is expected to reach only 7 million gallons, according to Renewable Fuels Association (RFA), a trade group.

High production costs and still-maturing technology have undercut the rationale for cellulosic biofuel, part of the original goal to use biofuels to help reduce the nation's dependence on foreign oil.

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Why biomass remains a challenge, even in timber-rich Georgia

Why biomass remains a challenge, even in timber-rich Georgia | Timberland Investment | Scoop.it

A new biomass plant under construction in Georgia highlights the challenging economics of the technology, even in a state so rich in forestry waste it exports it to other countries.

The 50 MW Albany Green plant – the largest renewable energy project in the state so far – is a unique collaboration among Georgia Power, private companies (including Procter & Gamble) and a nearby Marine base. While the cost for biomass generated electricity is too high to compete with wind and solar, the project also produces steam for industrial use, which improves its economics.
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Two thirds of Georgia is forested—25 million acres—and the state is ranked first in the nation for commercial timberland. More than a dozen plants in the state export wood pellets to supply renewable fuel to power plants in Europe – where electricity prices are high and the fuel is classified as “carbon neutral” by the European Union (even though many scientists reject biomass as a climate solution).
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Mary Booth, director of the Partnership for Policy Integrity, is a skeptic. “This plant has a 1,037 million BTU boiler that is capable of burning 100-110 tons of wood an hour,” she explains. She believes much of that wood will be harvested when green, and “a boiler that size burning green wood chips can end up being as dirty as coal.”
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Yet for Georgia, biomass is a lucrative industry—at least for exports. Georgia’s residues from timber harvesting (tops and branches) exceed five million dry tons annually, according to a 2008 report by the Georgia Forestry Commission. Georgia Biomass in Waycross is the world’s largest biomass pellet facility, and exports 750,000 tons of processed wood pellets a year. The Port of Brunswick has expanded in order to ship a million tons of pellets a year. But biomass generation for in-state use is an upward battle, largely because of the availability of cheaper locally available power from gas and solar.
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Even at 13 cents a kilowatt, says Echols, the project had trouble securing financing. Now, with 1,600 megawatts of new renewables approved by the PSC last summer, much of it likely to be solar, Echols expects the solar price to be “in the 6 cent per kilowatt ballpark, and obviously you can’t build a biomass plant for that.”

In addition, federal tax incentives for biomass are about 1/3 of solar and wind, according to Ron Melchior, Executive Director of Distributed Energy at Constellation, which had the winning bid to develop the plant from Georgia Power. “Biomass is an established technology, and incentives tend to be reduced as a technology ages.”

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Britain Flexed It with EU Exit; Forisk Checks Its Implications for Forest Markets and Bioenergy

Britain Flexed It with EU Exit; Forisk Checks Its Implications for Forest Markets and Bioenergy | Timberland Investment | Scoop.it

What does Brexit imply for U.S. timberland investors and forest industry firms? Probably not much. Brexit implications concentrate on markets with strong exposure to wood pellets. Since U.S. wood pellet producers represent a small portion of the U.S. forest products industry, any impacts would be felt locally in key pulpwood markets, if at all. Even here, the risks reside within the context of increased uncertainty in three key areas: EU/UK energy policy, trade, and currency valuation (FX).

 

The main policy driving wood pellet demand is the EU’s implementation of its 2020 climate and energy package. It remains unclear if further policy changes will ensue with the exit or new political leadership following the resignation of PM David Cameron. The 2009 EU Renewable Energy Directive (RED), which is part of the energy and climate package, sets binding renewable energy targets for each EU member state. The RED set a target of 15% energy consumption from renewables by 2020 for the United Kingdom. Efforts to meet this target pushed biomass-based electricity generation from 3.8% of the national total in 2010 to 8.6% in 2015, with forecasts of 11% by 2020.
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A UK departure from the EU would release the UK from the RED obligations, unless the UK maintains economic trade ties with the EU as part of the European Economic Area (EEA). An exit from the EU also releases the UK from compliance with EU State aid rules, which could simplify subsidy programs in the UK. The UK has developed its own climate change goals in the Climate Change Act of 2008 and has established programs to meet carbon reduction requirements, including the Contracts for Difference (CFD) program that provides subsidies for renewable energy technologies. Recent CFD budgets favor “less established technologies” such as offshore wind and biomass combined heat and power rather than biomass conversions, which have been driving the U.S. pellet export sector.
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Finally, Brexit could tighten financing for unfinished projects if capital markets step back. Projects that plan to source wood pellets, such as Lynemouth and MGT, may face increased delays. Technically, nothing will formally change until the UK invokes Article 50 of Lisbon Treaty and begins the withdrawal process (a process that could take two years). In sum, the future of subsidy programs and funding efforts for renewable energy rest with Britain’s government and commitment as a country to continue supporting renewable energy and low carbon technologies, regardless the recent vote.

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Legislators approve $13.4 million bailout of Maine biomass industry

Legislators approve $13.4 million bailout of Maine biomass industry | Timberland Investment | Scoop.it
The Legislature voted Friday to back a $13.4 million taxpayer bailout of at least two of the state’s six ailing biomass energy plants that support hundreds of logging jobs.

The 25-9 vote in the Senate and the 104-40 vote in the House followed lengthy debate and closed-door negotiations. Legislative leaders sought to balance the goal of saving the jobs of loggers with the less attractive job of finding public money to prop up ailing power generators owned by multinational private-equity firms.

At the end of the private talks, lawmakers agreed to avoid tapping the state’s rainy day fund for the bailout by diverting the money before it gets into the fund.

The amended proposal generated lengthy debate. Opponents argued that the bill contained no guarantees that it would save the remaining biomass energy plants and will likely only benefit three of them. Supporters countered that lawmakers had no choice but to try to save a group of workers who stand alongside fishermen and lobstermen as cogs in the state’s blue-collar economy and its cultural identity.
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Drax publishes biomass supply data in bid to address sustainability concerns

Drax publishes biomass supply data in bid to address sustainability concerns | Timberland Investment | Scoop.it
Energy giant Drax has sought to alleviate concerns about the environmental impact of its ambitious plans to shift from coal to biomass power, publishing comprehensive new sustainability data alongside its annual report last week.
The company last week confirmed that pre-tax profits rose last year to £166m, as the company continued work on “Europe’s largest decarbonisation project whilst producing eight per cent of the UK’s electricity”.
The report revealed that a third of the power plant’s generating capacity is now the result of biomass generation, adding that its third converted biomass unit is due to come online in the third quarter of this year.
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Can bioenergy replace coal?

Can bioenergy replace coal? | Timberland Investment | Scoop.it

Like all renewable energy in the European Union, bioenergy has struggled against low-priced coal imports, low carbon dioxide prices in the emissions-trading system, and an economic and regulatory backlash against renewable-energy policies, including substantial cuts in government support. But don’t count out biomass-based energy just yet. Although today it fails to compete on cost with other renewables such as wind and solar, we believe bioenergy not only has the potential to significantly improve but could even become cost competitive with coal.

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How can that happen? We believe the levelized cost of bioenergy—its cost per kilowatt-hour—has the potential to be reduced by almost half by 2025, making bio-based electricity close to competitive with coal depending on the type of plant. While there’s no denying this would require significant effort, it doesn’t require technological breakthroughs but rather simply making better use of the opportunities already at hand.

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Supply of woody biomass for energy from privately owned forests in Europe overestimated

Supply of woody biomass for energy from privately owned forests in Europe overestimated | Timberland Investment | Scoop.it

The European Commission expects the use of biomass for energy in the EU to increase significantly to meet a legally binding target of at least 20% of the EU’s total energy use from renewable sources in 2020. In response to the increased demand, the EU member states have estimated the direct supply of biomass from their forests to increase by 45% on a volume basis between 2006 and 2020. A new study, led by Kristina Blennow from the Swedish University of Agricultural Sciences (SLU), shows for the first time that European private forest owners are not as ready to increase the supply of woody biomass for energy as assumed.


Fifty percent of the forest area in Europe is privately owned. The private forest owners’ attitudes towards supplying biomass for energy so that the targets can be met and the related economic policy instruments are extremely important. Considering the beliefs and desires of the land owners in designing land-use policies is crucial for their effectiveness. This study shows that the future supply of woody biomass for energy from privately owned forests in Europe and the effectiveness of economic policy instruments to mobilise woody biomass from them have been overestimated.

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A Giant Step for Pellet Capacity

A Giant Step for Pellet Capacity | Timberland Investment | Scoop.it

More than 4 million metric tons of new wood pellet production capacity are currently under construction throughout North America, over 3 million tons of which are scheduled to come on line this year, and 600,000 tons by spring. Such capacity growth is unprecedented in the North American pellet industry, which is comprised of some 160 facilities, with a total installed capacity of around 13 million metric tons. Not only will the capacity added this year grow the industry’s output  by nearly 25 percent in just one year, but facilities scheduled to come on line in 2015 will bring the two-year expansion closer to 33 percent.

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The vast majority of under-construction capacity is represented by producers already engaged in pellet production. ––Fram Renewable Fuel LLC, Enviva LP, German Pellets GmbH, Drax Biomass, and Zilkha Biomass Energy––developers who are engaging in follow-up efforts to add to their existing capacities. Still, there are plants under construction that represent a company’s first production effort. Vulcan Renewables, with an initial planned capacity of nearly 150,000 metric tons, is Vulcan’s first facility. 

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The funnel of pellet production projects under development but not yet under active construction numbered as high as 27 facilities with more than 7 million tons early last year. As the industry continues to grow, however, questions about the resiliency of this marketplace momentum are beginning to surface. The required volume from U.K.-based power producers is significant, but the risk of having demand tied up in one or two planned facilities is already apparent. In December, the conversion of the massive Eggborough Power Station, which would have created another infusion of Drax-like demand, was omitted from a list of projects deemed provisionally affordable. Stakeholders are already working to get the Eggborough conversion back on track, but demand volatility of this sort is certain to impact the development of projects not yet underway. Eggborough’s fate will have little bearing on the production class of 2014, however, and regardless of demand trajectory at the year’s conclusion, it will go down as a year of unprecedented expansion in the biomass industry’s hottest sector.

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Rothschild biomass plant only getting 10 percent of fuel from forest waste as proposed

Rothschild biomass plant only getting 10 percent of fuel from forest waste as proposed | Timberland Investment | Scoop.it

The recently built power plant at Domtar paper mill in central Wisconsin is getting only 10 percent of its fuel from logging waste, which originally was supposed to supply nearly all of the plant's energy needs.

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We Energies told the Wisconsin Public Service Commission in its permit applications which were required to build the facility, that logging waste would supply the vast majority of the plant’s fuel. The PSC approved the plant’s construction over the objection of neighbors and critics in the wood industry who said forest waste would not provide enough fuel for the operation and that the plant inevitably would drive up wood prices.

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Domtar initially targeted tree tops and other logging waste as its anchor fuel for the power plant, said Jeff Plunkett, the company’s procurement manager. Instead, wood from land cleared of trees for expanding farms and housing developments and residue from saw mills and paper mills has been a “huge source for us,” he said.

Sam Radcliffe's insight:

"...expanding farms and housing developments..." Are we really talking about northern Wisconsin? 

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