Cap-and-Trade Bill Boosts California's Struggling Biomass Facilities

California's new rigorous renewable portfolio standard of 50 percent by 2030 will support a renewable energy source that serves the dual purpose of reducing forest fire hazards.

4 minute read

September 5, 2016, 9:00 AM PDT

By Irvin Dawid

The biomass power industry in the U.S., which largely burns wood to create steam power to generate electricity, is in 'financial tumult,' reports John Upton, senior science writer at Climate Central.

California's biomass plants are no different.

"A little more than a dozen of the [state's] 35 biomass power plants are currently idle, unable to compete against cheaper fossil fuels or cleaner alternatives," adds Upton.

However, a critical deal on allocating cap-and-trade proceeds reached on the last day of the 2016 legislative session between legislative leaders and Gov. Jerry Brown should keep them operating for at least the next five years, providing they utilize wood from "high fire hazard zones."

According to the legislative analysis of SB 859, "Public resources: greenhouse emissions and biomass", 

This bill is the cap-and-trade trailer bill for 2016-17. This bill contains necessary statutory changes to implement the cap-and-trade expenditures in the 2016-17 Budget. [See prior post on the $900 million expenditure plan.].

Requires retail sellers of electricity to purchase a total of 125 megawatts of power from biomass facilities that generate electricity from forest materials removed from specific high fire hazard zones, as designated by CAL FIRE in the Governor's Proclamation of a State of Emergency issued October 30, 2015 [PDF].

Furthermore, it stipulates that the use of "Greenhouse Gas Reduction Fund grant funding for forest projects shall reduce greenhouse gas emissions and improve forest health, with priority given to projects that promote long-term forest management goals."

The biomass industry in California was pleased with the legislation that "support(s) biomass plants within the state," reports Erin Voegele for Biomass Magazine on Sep. 1. "The bill calls on electricity retailers to enter into five-year contracts for 125 MW [megawatts] of biomass power from facilities that generate energy from wood harvested from high fire hazard zones."

Biomass facilities serve as vital tools in meeting the state’s renewable energy portfolio standard and the eradication of dead and dying trees from high hazard fire zones,” said Julee Malinowski-Ball, executive director of the California Biomass Energy Alliance.

“Today’s passage of Senate Bill 859 ensures that the biomass industry will continue to meet both of these important objectives."

The California Biomass Energy Alliance was also a backer of the landmark climate bill, SB 32, that requires the California Air Resources Board to oversee emissions cuts that amount to 40 percent below 1990 levels by 2030, reported Voegele earlier.

A boon to rural, Northern California economy

The inclusion of the biomass power purchase requirement is expected to breathe new life into ailing biomass facilities like Burney Forest Power in Burney, Shasta County, "a 31 MW biomass-fueled power plant selling electricity to Pacific Gas & Electric Co," according to the Energy Justice Network. Due to an expiring contract with Pacific Gas & Electric (PG&E), the plant gave notice on Aug. 12 that it would shut down at the end of September, reported David Benda of the Redding Record Searchlight. 

PG&E is the largest purchaser of biomass in California. Of all the biomass contracted in 2015, PG&E purchased 92 percent of that, said PG&E spokesman Paul Moreno,.

Still, the biomass industry is struggling in California because it doesn't get the subsidies that renewable sources like solar and wind receive, said North State Assemblyman Brian Dahle (R-Redding).

According to Pit River Country, PG&E supports the biomass provisions in SB 859 and urged Gov. Brown to sign SB 859, unlike other utilities (see below). All indications are he will sign it as his office announced the historic agreement on Aug. 31 on which it is based.

While Burney Power employs about 25 workers, its closure would have a far greater economic effect in Shasta County. Shasta Green, also in Burney, which employs over 100 workers, sells wood products to Burney Power and buys steam power from their plant.

Opposition to biomass provisions in bill

"While many stakeholders who have been working on the tree mortality and biomass front supported the provisions in [SB 859], utilities and environmental groups were not so quick to praise the amended bill," reports Rural County Representatives of California (RCRC) for the Sierra Sun Times in Mariposa, California on Sep. 2.  

Utilities expressed displeasure at having to pass costs onto ratepayers for energy that wouldn’t be used statewide, while environmental groups feared that not only would older, less clean biomass facilities benefit from the bill, but that healthy trees would be sacrificed in order to provide feedstock for the facilities to continue operating.

Biomass: Green or Brown?

Climate Center's John Upton doesn't present a clean image for the green fuel.

"Compared with fossil fuels, wood contains little energy and lots of carbon," he writes. "Producing a megawatt hour of electricity by burning wood releases more heat-trapping carbon dioxide into the atmosphere than burning coal."

According to a February 2016 Congressional Research Service report, "Is Biopower Carbon Neutral?" [PDF], "[a]n energy production activity typically is classified as carbon neutral if it produces no net increase in greenhouse gas (GHG) emissions on a life-cycle basis."

Whether biopower is considered carbon neutral depends on many factors, including the definition of carbon neutrality, feedstock type, technology used, and time frame examined. 

The California Energy Commission describes the various types of feedstock used in the state's biomass plants, the history, and current status of the industry.

From about 1990 to 1993, California's biomass power generation was at its highest (more than 800 MW of installed capacity)...Currently, there are about 30 direct-combustion biomass facility in operation with a capacity of 640 MW. 

With Gov. Brown's signature on SB 859, the plants should have a brighter future.

Hat tip to Al Sattler.

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