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BioPower: Two Steps Up and One Step Back

Competing regulatory pressures continue to affect progress in biopower in the US. Amid numerous announcements that wood-to-electricity projects were on track and that new projects were under consideration, there were two major announcements that plans were being abandoned or put on hold.

On track for 2011 or 2012 openings:

  • A legal settlement with opponents challenging its permits has kept American Renewables’ 100 MW Gainesville Renewable Energy Center on track to begin operations by the end of 2013, the date necessary for the facility to receive production tax credits. These tax credits are expected to total $200 million over the 30 years the plant will be in operations. The company now expects to complete its financing and begin construction by early summer. (American Renewables sold their first project, a 100 MW plant in Nacogdoches, Texas, to Southern Power when it couldn’t complete financing for that facility)
  • The 100 MW Nacogdoches Generating Plant, now owned by Southern Power, is 15 months into construction and is on schedule to be complete this fall and begin running tests on their boilers. Testing will last until mid-2012, the year the plant has been scheduled to go online.
  • Aspen Power, a 50 MW plant in Lufkin, Texas, will start test burns in May of this year.

Newly announced projects:

  • Dominion Virginia Power plans to convert three Virginia power stations from coal to waste wood from logging operations. Constructed in 1992, the plants are located in Altavista, Hopewell and Southhampton counties. If approved by local governments, the state Department of Environmental Quality and the State Corporation Commission, the plants will begin burning biomass in 2013. Once converted, the 50 MW plants will help Dominion meet the state’s voluntary renewable portfolio standard of 15 percent by 2025. About the plan, Virginia Gov. Bob McDonnell said, “The projects are reflective of the ‘all of the above’ approach we need to take when it comes to energy production in the Commonwealth.  They are essential to expanding our alternative energy portfolio and closing our import gap, not to mention creating good jobs here in the Commonwealth.”
  • Northwest Energy just announced that it will build two biopower plants in Oregon. One of the 40 MW plants will be located in Klamath Falls and the other will be in Warm Springs. The company has an arrangement with JWTR, the owner of 600,000 acres of forestland in southern Oregon and northern California, to supply the Klamath Falls facility; supply at the Warm Springs location is less certain, though the Confederated Tribes of Warm Springs will provide 40 percent of the needed biomass. Northwest Energy, an experienced player in the biomass energy business, is currently in off-take discussions with PacifiCorp and Portland General Electric.
  • Rentech will acquire the plans to the 55 MW biomass power plant in Port St. Joe, Florida from Biomass Energy Holdings. Because Rentech has a term sheet from the US Department of Energy, the company decided to proceed with the Port St. Joe facility because it would allow them to meet the loan guarantee requirement that construction begin before the end of the FY2011 (September 30). The facility has a power purchase agreement for most of its output with Progress Energy Florida. The plant is expected to be operational in 2013.

Abandoned or delayed projects:

  • Adage, the joint venture between Duke Energy and Areva, has canceled plans for a 55 MW facility in Shelton, Washington and has no plans to start construction on its 55 MW plant in Jasper, Florida. Spokesperson Tom DePonty says the permit in Florida will expire in June and that Adage will allow that to happen. The company cited low demand because of the recession, low natural gas prices and the lack of a federal renewable electricity standard as the reasons that it will suspend operations for now.
  • Oglethorpe Power announced that its plan to build three 100 MW biomass power plants in Georgia is on hold. The company’s most recent announcement delayed indefinitely a facility in Warren County; construction of that facility was slated to begin this year. Oglethorpe’s Greg Jones cited regulatory uncertainty as the cause: “We feel there is still considerable uncertainty over whether biomass generation will be treated as a renewable resource and will be considered carbon neutral. In light of that, our member systems have determined that we will defer construction of our Warren County, Ga., project as we continue to monitor regulatory and legislative developments related to biomass electricity generation.” Oglethorpe’s plans to build another plant in Appling County were put on hold earlier.