The California Solid-Fuel Biomass Power Industry

How California is Helping,…..Or Not

January 2007

What Are the California Biomass Plants?

They all……

Burn wood wastes…To boil water…And make steam…To turn the steam turbine…That turns the generator…That makes electricity…That is sold wholesale…To the utilities.

Wheelabrator’s Shasta Energy Co., Anderson, CA 53 MW

Delano Energy, Kern County. 50 MW

Delano Plant Boilers

Colmac Energy 47 MW Riverside Co. CA

Current Biomass Power Industry

• 28 Operating Plants

• In 17 Counties

• 555 MW net generation capacity

• About 1.75% of California’s Power

• 14 Idle Plants, 117 MW capacity

California Biomass Power plants 2004

MW net

0-1515-3030-60

operating idle dismantled

Today,

the California biomass power industryis using

about 7 MILLION tons per year

of wood wastes

to generate electricity.

The Biomass Power Industry Fuels:

All are wastes with no higher-value market.

Three categories of waste wood fuel source:

1. Forest-derived2. Agricultural residues3. Urban wood wastes

1. Forest-derived Fuels

Over Dense Forestland

Shears cut all trees to be removed…

Skidders move the cut trees from forest to roadside landing…

Chippers process whole trees directly into chip vans…

Cull Logs

What We Have ByThe Millions Of Acres

Dead Trees in San Bernardino National Forest

Thinning Helps Prevent This

2. Agricultural-residue Fuels

Orchard Prunings

Whole Tree Orchard Removals

Rice Hull

Walnut Shell

Almond shell

Pistachio shell

OpenBurningOfAgWastes

3. Urban Wood Waste Fuels

Urban/Industrial Wood

Pallets

Raw lumber from drop boxes

Urban Wood Waste

URBAN WOOD WASTES

Eucalyptus

Railroad Ties

Urban Wood;Energy Instead of This

Brush

Today we are reaching out for more diverse fuel sources …

Wax Coated Corrugated Cardboard

Marijuana

Over 40% Smaller than the Peak in the Mid-90s.

Our State has lost 2 plants per yearfor the last 5 years.

117 MW of generating capacity closed.

California’s Biomass Power IndustryIs in Decline.

Why is This Happening?

• It’s the Fuel, Stupid!

Change in the Fuel Mix 1992 – 2006 (% of BDT)

1992 2006Forest-derived 62% 43%Urban 18% 35%Ag 20% 22%

Biomass Generation is Expensive

• Collection• Chipping• Trucking• On-site Handling

• Contrast to the cost of the fuel for a wind generator, or a hydro or geothermal plant.

Value of the Non-Electric Benefits??

Calculate the costs of the alternate fates of the materials

NREL says > 10 cents/kWh

Plants are paid:5.37 – 6.45 cents for the electricity, orShort-Run Avoided Cost (SRAC)

California has tried to help…

1. What has not worked.

2. What has worked, sort of.

3. What is now in play.

1. What has Not Worked

1a. Ag Fuel Grants

$10/ton of ag fuels used;Effective while it lasted

2000-2001;

Legislature pulled the plugafter a year.

The Biomass Power IndustryA huge waste-management industry…

That makes a little electricity on the side.

BUT….

Is not paid for the non-electric benefits.

1b. Trash Bill Surcharge

75 cents a monthon everybody's trash bill;

Distribute as a usage-basedfuel subsidy.

No Traction.

1c. California has passed a Renewable Portfolio Standard.

It has not worked.20% Renewable kWh by 2010;Fulfilled by kilowatt hours alone;Not differentiated by technology;Effectively, Low Price Wins.

Utilities have resisted.

Wind is winning most of the bids.No new biomass plants.

2. What has worked..sort of.

Subsidizes biomass generation a bit during Off-Peak hours;

Funding from Ratepayers “Public Good Charge”

Keeps most plants running and consuming waste. (This is good.)

BUT…The subsidy is very limited.

2a.The California Energy Commission

California's Biomass Power Decline - 1993 to Present

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MW

2b. “Fixed” Prices

Most renewables negotiatedfixed energy prices w/IOUs

(Escalate at 1%/yr.);

5-year term;

After 5 years???

3. What’s now in play.

3a. New State Policy, April 2006(After 10 years of trying.)

Biomass-to-Electricity is to constitute 20% of RPS;

(Includes LFG)

20% of 20% = 4%Double the existing industry?

The California PUC

Is deciding the gas-based price that renewable generators should be paid by the utilities.

A decision may be released this spring.

How this interacts with State Policy and the RPSIs up in the air.

The CPUC, CARB, CEC,CIWMB, CalEPA, CDF&FP,

Resources Agency, Food & Ag, Dept. of Gen’l Svcs, SWRCB

are trying to figure out how to implement the 20% Policy.

The CECis now deciding on

continuation of the ‘off-peak’ subsidy.

Will it continue?If so, at what level?

Conclusions

The California biomass industry future depends on:

1. Implementation of the 20% Policy;2. The future determination of SRAC;3. Fuel availability from Federal lands;4. Continuation of the “Off-Peak” subsidy

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