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US South Leads Growth in Biomass Electricity Generation; Costs Remain High

US South Leads Growth in Biomass Electricity Generation; Costs Remain High

Per two recent publications from the U.S. Energy Information Administration (EIA), electricity generation from biomass across all sectors grew from 56 terawatthours (TWh) in 2010 to 64 TWh in 2015, which represents a 14 percent increase. Much of this growth occurred in the US South due to the region’s dense concentration of forestland and availability of wood raw materials and wood waste. In 2015, electricity generation from biomass across all sectors accounted for 11.3 percent of renewable electricity generation, but just 1.6 percent of total electricity generation across the United States.

 

EIA1.pngSource: U.S. Energy Information Administration. Note: Regions reflect U.S. Census regions. Biomass includes wood and wood-derived fuels, wood waste liquids, black liquor, sludge waste, agricultural byproducts, and other biomass solids, liquids, and gases. Biomass does not include biogenic and nonbiogenic municipal solid waste, landfill gas, and tire-derived fuels.

 

Not surprisingly, nearly half of the electricity generated from biomass in 2015 was produced by industrial facilities outside of the electric power sector, such as pulp and paper mills. However, within the electric power sector, biomass accounted for 6.3 percent of renewable electricity generation and 0.8 percent of total US electricity generation.

 

The Regional Appeal of Biomass

The population of the US South continues to skyrocket. For example, North Carolina alone has experienced a 52 percent increase in its population since 1990 (6,600,000 to 10,400,000). As a result, several states across the US South have increased their electricity generation from biomass due to capacity needs. While these states have access to an abundance of forest resources, they generally have poor wind resources as well as seasonal and unpredictable solar resources (compared to areas such as the Southwest), making biomass the renewable energy resource of choice in the region.

The EIA publication details a few examples of how certain utility providers in southern states are incorporating biomass into their existing electricity generation portfolios.

  • Virginia has a statewide program to convert coal-fired plants to biomass, several of which converted in the last few years. Three of these plants—each rated at 51 megawatts (MW) and operated by Dominion Power—are located in Altavista, Hopewell, and Southampton. The conversions of these plants to burn biomass are part of Dominion's commitment to achieve Virginia's voluntary goal of generating 15 percent of its electricity from renewable sources by 2025. Other biomass projects of note include: the Northern Virginia Electric Cooperative (NOVEC) commissioned a 50 MW wood waste biomass plant in South Boston, Virginia; in 2012, Miller-Coors Brewing opened a biomass-based electricity plant in Elkton, Virginia, to dispose of brewing wastes; and an industrial plant in Altavista switched from natural gas to biomass as its primary fuel and upgraded capacity to add wood solids to its fuel mix.
  • In Georgia, the 55 MW Piedmont Green Power plant began operation in 2013, fueled by urban wood waste and mill and logging residues. Georgia Power built the plant to improve the diversity of its energy portfolio.

 

EIA2.png

Source: U.S. Energy Information Administration

 

As noted on the two charts above, portions of the western United States also experienced growth in biomass utilization between 2010 and 2015, increasing electricity generation by 15 percent over that timeframe. However, most of the growth in the West is the result of a few large plants in California that are helping the state meet its renewable electricity target.

 

Construction and Operating Costs

EIA also recently released a subsequent publication detailing construction cost information for electricity generators across a number of sectors. The information notes that, while many factors influence the economic competitiveness of electricity generation technologies, the two driving factors are construction costs and operating costs. The publication covers generators installed in 2013 and includes average costs by technology type.

This is the first time EIA has collected and reported actual construction costs for all new generators, which include capital and financing costs. It’s important to note that government grants, tax benefits or other incentives are excluded from these costs. Because the data are business-sensitive and protected, the analysis presents averaged costs for certain sectors and the reported costs reflect a snapshot of market prices for generation technologies at the time the projects were developed and built.

In the chart below, note the expense for constructing a biomass generator based on the 2013 data; it is the second most expensive technology to implement behind solar photovoltaic. This expense of constructing biomass generators accounts for the relatively low installation capacity during the timeframe. It also helps to explain why the growth is occurring primarily in the US South, where ample supplies of woody feedstocks are readily available.

 

EIA3.pngSource: U.S. Energy Information Administration Note: Average costs are weighted by nameplate capacity. Solar photovoltaic (PV) data are based on reported alternating current (AC) capacity and do not include distributed generation capacity.

 

Finally, the EIA publication notes that construction costs alone do not tell the entire story of the relative costs of each of these technologies. For fuel-consuming electricity generation technologies, fuel costs often make up a substantial portion of the plant's total costs. For nonfuel-consuming technologies such as wind and solar, the initial construction cost comprises a bulk of the plant's total costs. Additionally, federal, state, and local programs may provide incentives to buffer or lower the costs of certain technologies, which has been the case throughout much of Europe as government subsidies have made wood pellets a cost-effective feedstock.

As the Clean Power Plan (CPP) takes shape over the next few years, biomass will continue to be a valuable renewable resource for meeting individual state targets, especially throughout the US South where wood feedstocks are so plentiful. This newly-released EIA data confirms the trend, as well as the opportunities for the future.

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