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Reliability of Renewable Energy: Biomass

Reliability of Renewable Energy: Biomass

RELIABILITY OF RENEWABLE :

Jordan Lofthouse, BS, Strata Policy

Randy T Simmons, PhD, Utah State University

Ryan M. Yonk, PhD, Utah State University

The Institute of Political Economy (IPE) at Utah State University seeks to promote a better understanding of the foundations of a free society by conducting research and disseminating findings through publications, classes, seminars, conferences, and lectures. By mentoring students and engaging them in research and writing projects, IPE creates diverse opportunities for students in graduate programs, internships, policy groups, and business.

come to depend on incentives, making biomass RELIABILITY OF RENEWABLE economically unreliable. ENERGY: BIOMASS RELATIVE COST OF BIOMASS

Although biomass are more expensive than INTRODUCTION on average, the two fuels can be cost-competitive, making them more economically reliable than many As Americans have grown more concerned with fossil renewable sources. Researchers use what is fuels, policymakers have responded to their called the “levelized cost of electricity” (LCOE) to constituencies by mandating and subsidizing estimate the lifetime costs associated with generating sources like biomass. Biomass is electricity. In 2015, the Energy Information organic material that can be used for energy Administration estimated that the LCOE from a production. Environmentally-focused policies have conventional coal plant was $95.10 per megawatt- helped the biomass market grow as an electricity hour, and the LCOE from a biomass plant was $100.50 source in the United States and internationally. In per megawatt-hour. 2 Because biomass electricity is 2014, 1.7 percent of the the United States’ electricity generally not a viable alternative to fossil powered was generated from biomass, and as state electricity, lawmakers in the United States have governments mandate higher amounts of renewable established mandates and subsidies to ensure that energy, more electricity will be generated using states explore options beyond fossil fuels. biomass fuels. 1 The Institute of Political Economy evaluated the environmental, economic, and physical MANDATES reliability of biomass-generated electricity. To be considered reliable, biomass-generated electricity Biomass is currently only mandated by state must be: governments, not the federal government. Renewable Portfolio Standards (RPS), the most common type of • Economically viable and profitable without renewable energy mandate, outline what portion of a government mandates, subsidies, or incentives. state’s energy must come from renewable resources. • Less harmful to the environment than traditional Some states’ RPS have mandates for specific amounts forms of energy. of its energy come from a particular energy source. • Able to consistently meet energy demands These mandates are called carve-outs. without disruption. Most carve-outs are for wind or , but some states have carve-outs for biomass. While biomass has ECONOMIC RELIABILITY fewer carve-outs than wind or solar power, it is still eligible to satisfy the general renewable requirements Biomass-generated electricity is, on average, slightly for all twenty-nine states that have adopted RPS. 3 more expensive than coal power, so it is used less as Because biomass is one of the most reliable ways to an electricity source. Governments attempt to meet RPS, these mandates drive the growth of the circumvent high costs of biomass by subsidizing and biomass . mandating biomass electricity production. Biomass incentives are effective, but the biomass industry has

1 U.S. Energy Information Administration. (2015, March 31). What Resources in the Annual Energy Outlook 2015. Retrieved from is U.S. by Energy Source? Retrieved from http://www.eia.gov/forecasts/aeo/electricity_generation.cfm http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3. 3 Department of Energy. (2014). Renewable Portfolio Standards. 2 U.S. Energy Information Administration. (2015, April 14). DSIRE. Retrieved from Levelized Cost and Levelized Avoided Cost of New Generation http://www.dsireusa.org/resources/detailed-summary-maps/

Read the full report at usu.edu/ipe SUBSIDIES industry. To incentivize farmers to harvest more agriculture and residues, the U.S. Department of In addition to mandates, governments use subsidies to Agriculture matches payments made to farmers by impact the biomass industry. Biomass subsidies biomass energy companies through the BCAP. The increase the cost of electricity for taxpayers and BCAP provides matching payments up to $12.5 million redistribute wealth to biomass producers. Taxpayers per year.9 Many biomass energy plants have come to for Common Sense, a 501(c)(3) non-profit organization rely on the BCAP to stay in operation.10 Proposed BCAP that acts as a budget watchdog, estimates that tax cuts discourage farmers from entering the industry, credits for biomass will cost taxpayers more than $2.2 showing that biomass suppliers are unconfident that billion over the next ten years.4 the biomass industry could sustain itself if the industry were to lose government support.11 The Production Tax Credit (PTC) is a key government subsidy for most types of biomass. 5 Electricity Biomass is economically reliable when it exists producers that use energy crops, called closed-loop independently of government support, but when biomass, receive a tax credit of 2.3 cents per kilowatt- biomass is grown and used solely because of hour. Electricity producers that use farm and forest government intervention, as is often the case with waste, , and other forms of waste biomass animal waste and closed-loop biomass energy sources, receive a smaller tax credit of 1.1 cents per kilowatt- biomass is not an economically reliable electricity hour.6 This is known as open-loop biomass. source.

Although closed-loop systems receive a greater tax ENVIRONMENTAL RELIABILITY credit than open-loop systems, they are not as widely used because energy crops are expensive to produce.7 is the principal fuel used in biomass electricity Open-loop biomass material, however, is less generation.12 Biomass power plants can be reliably expensive and easier for electricity companies to supplied from forest operations and wood procure. Even without the PTC in effect, electricity waste from construction and municipalities, but wood companies use waste biomass to generate electricity. is often supplied by full scale operations. Incentivizing open-loop biomass provides additional According to a 2011 article by the Partnership For profits to companies that are already generating a Policy Integrity (PFPI), 55 million tons of wood (roughly profit by using waste biomass to generate electricity.8 650,000 clear-cut acres of forest) are needed each year to provide enough fuel for predicted biomass facilities The Biomass Crop Assistance Program (BCAP) is coming online over the next three years. That volume another federal subsidy used to help the biomass cannot be met by existing wood scrap and waste,

4 Taxpayers for Common Sense. (2013, August). Taxpayer power-of-association Subsidies for Biomass in the Federal Farm Bill. Retrieved from 9 Farm Service Agency. (2014, July). Conservation Fact Sheet. http://www.taxpayer.net/images/uploads/downloads/Taxpayer_ Retrieved from Supports_for_Biomass_in_Farm_Bill_Fact_Sheet_FINAL.pdf https://www.fsa.usda.gov/Internet/FSA_File/bcap_fact_sht_201 5 U.S. Department of Energy. (n.d.). Renewable Electricity 4.pdf Production Tax Credit (PTC). Retrieved from 10 The Washington Post. (2010, January 10). The Unintended http://energy.gov/savings/renewable-electricity-production-tax- Ripples from the Biomass Subsidy Program. Retrieved from credit-ptc www.washingto npost.com/wp- 6 Union of Concerned Scientists. (2015). Production Tax Credit for dyn/content/article/2010/01/09/AR2010010902023.html Renewable Energy. Retrieved from 11 Farm Industry News. (2012, February 7). Growth of Biomass http://www.ucsusa.org/clean_energy/smart-energy- Industry Dependent on Government Policy. Retrieved from solutions/increase-renewables/production-tax-credit- http://farmindustrynews.com/bioenergy/growth-biomass- for.html#.VSTPmxPF-Xx industry-dependent-government-policy 7 Kotrba, R. (n.d.) The power of association. Biomass Magazine. 12 Energy Systems Research Unit - University of Strathclyde. (n.d.) Retrieved from http://biomassmagazine.com/articles/1675/the- Biomass types. Retrieved from power-of-association http://www.esru.strath.ac.uk/EandE/Web_sites/03- 8 Kotrba, R. (n.d.) The power of association. Biomass Magazine. 04/biomass/background%20info4.html Retrieved from http://biomassmagazine.com/articles/1675/the-

Read the full report at usu.edu/ipe meaning will need to be harvested to meet Environmental Protection Agency to obtain Prevention demand.13 of Significant Deterioration permits, which regulate emissions from energy generation. 19 Most biomass Logging and burning releases sequestered facilities do not face any restrictions regarding carbon into the atmosphere while diminishing forests’ hazardous air pollutants like hydrochloric acid, future ability to sequester carbon.14 Carbon lost from carcinogens, and heavy metals.20 Biomass plants are burning trees will not be recaptured until trees have incentivized by both mandates and subsidies, yet they reached maturity, even if the trees are replanted after are often dirtier than fossil fuels. being harvested. Because is an immediate concern, it is illogical for government to Unlike trees, grasses do not have a significant time lag incentivize burning as a way to reduce carbon between releasing and sequestering carbon. Burning emissions. Net carbon emissions are positive in the grass that will be regrown the next year has little short term because large numbers of trees that would impact on net carbon emissions.37 Compared to fossil absorb carbon dioxide in the future have been fuels and wood harvesting, grasses have a minimal net harvested and burned.15 By burning whole trees cut carbon impact on the environment. Grasses do, specifically for energy production, atmospheric carbon however, require large amounts of land to produce dioxide builds while carbon sequestering rates enough grass to provide reliable power. The Union of decrease.16 Concerned Scientists suggest that if grasses are planted on a scale sufficient to meet increasing In addition to its immediate effects on carbon demands, forestland would have to be sequestration, burning woody biomass increases cleared to make room for displaced food crops or harmful emissions from energy production. A study energy grasses themselves.21 done by the PFPI found that biomass combustion produces more carbon dioxide and nitrogen oxides than Clearing forests would release massive stores of coal per megawatt-hour. 17 The Massachusetts carbon dioxide into the atmosphere, and the grasses Environmental Energy Alliance states that biomass that would replace forests would never be able to store combustion emits 1.5 times more of both carbon the same amount of carbon that the removed trees did. monoxide and carbon dioxide than burning coal.18 Grasses’ ability to thrive in infertile areas indicates that unless market conditions change dramatically, Although biomass is dirtier than coal in terms of grasses will fill marginal farmland before farmers immediate emissions, biomass electricity plants are clear-cut forests to make room for energy grass. Given not held to the same emission standards as their fossil current market conditions, grasses are unlikely to fuel counterparts. Biomass companies can emit two displace food crops and forestland enough to have and a half times more of the same pollutants than significant negative impacts. fossil fuels before they are required by the

13 Partnership for Policy Integrity. (2011, March 17). Biomass 18 Massachusetts Environmental Energy Alliance. (n.d.). The energy overview. Retrieved from http://www.pfpi.net/biomass- harmful impacts of biomass energy generation: Undermining the basics-2 fight against global warming. Retrieved from 14 Partnership for Policy Integrity. (2011, March 17). Carbon http://massenvironmentalenergy.org/docs/biomass%20factsheet emissions from burning biomass for energy. Retrieved from %20from%20MEEA.pdf http://www.pfpi.net/?page_id=155 19 Booth, M. S. (2014, April 2). Trees, trash, toxics: How biomass 15 Partnership for Policy Integrity. (2011, March 17). Carbon energy has become the new coal. p. 5. Retrieved from emissions from burning biomass for energy. Retrieved from http://www.pfpi.net/wp-content/uploads/2014/04/PFPI-Biomass- http://www.pfpi.net/?page_id=155 is-the-New-Coal-April-2-2014.pdf 16 Ibid. 20 Ibid. 17 Sheehan, M., Chirillo, S., Schlossberg, J., Sammons, W., 21 Union of Concerned Scientists. (n.d.) Environmental impacts of Leonard, M., Energy Justice Network. (2011, June). Biomass biomass for electricity. Retrieved from electricity: Clean energy subsidies for a dirty industry. p. 4. http://www.ucsusa.org/clean_energy/our-energy- Retrieved from http://www.pfpi.net/wp- choices/renewable-energy/environmental-impacts-biomass-for- content/uploads/2011/06/BAP-Biomass-Projects-Report.pdf electricity.html#.VddWjFNVhHw

Read the full report at usu.edu/ipe A study conducted by the Vermont Grass Energy often more harmful to the environment than fossil Partnership found that burning dried grass pellets fuels, so it cannot be considered an environmentally releases more nitrogen, sulfur, and chlorine than reliable electricity source overall. burning wood. 22 Salts within plant material are difficult to combust and aid in the creation of toxic PHYSICAL RELIABILITY emissions. 23 To minimize toxic emissions from biomass, biomass materials can be co-fired with coal. Biomass, unlike wind and solar power, is predictable Burning biomass materials with coal can reduce and can be used for baseload power. Power plants that greenhouse gas emissions, particularly carbon dioxide supply baseload power operate constantly to meet the and sulfur compounds.24 majority of electricity demand, thus supplying a "base" of power that can be supplemented by other electricity Methane, a greenhouse gas, is naturally emitted from sources when electricity demand fluctuates.29 landfills and livestock waste and can be collected and burned to generate electricity. 25 Burning methane Although biomass can provide baseload power, most positively affects the environment by converting solid biomass materials have a low , methane into carbon dioxide, which is less damaging meaning biomass has little energy potential per unit of to the atmosphere.26 Collecting methane for electricity material compared to other fuels, such as coal. is reliable in multiple ways. Waste is readily and Biomass’ low energy density is due largely to the high predictably available, and methane operations help water content of biological materials. The water within lengthen the existence of landfills, delay additional biological materials cannot be burned for energy, so it landfill needs, and lower waste disposal effects and does little more than weigh the material down. costs.27 from microbial organisms Biomass materials also have very low bulk density, naturally produces methane that can be burned like meaning they have less weight per unit of volume that and the remaining waste can still be used they take up.30 The combined effect of low bulk density as fertilizer for crops.28 and low energy density means that biomass materials take up more space and have more weight per unit of Although biomass is renewable, it is not less harmful energy produced than other sources of energy. These to the environment than traditional forms of energy. factors make biomass material inefficient to transport Biomass plants emit more emissions per unit of and store because it takes up more space, weighs electricity produced than plants and are far more, and generates less electricity than other fuels.31 less efficient. Because of mandates and subsidies, Unless biomass materials are first processed to reduce farmers may replace food crops with energy crops, their water content, it is generally inefficient to causing an increase in the price of food. Although transport them more than 50-100 miles by truck.32 biomass power is a renewable electricity source, it is

22 Vermont Grass Energy Partnership. (2011, January). Technical of biomass: Clean power and fuel - If handled right. Retrieved assessment of grass pellets as boiler fuel in Vermont. Retrieved from from http://www.ucsusa.org/sites/default/files/legacy/assets/docume http://www.vsjf.org/assets/files/RFPs/VT%20Grass%20Pellet%2 nts/clean_vehicles/Biomass-Resource-Assessment.pdf 0Feasibility%20Study%202010.pdf 28 Oregon Department of Energy. (n.d.). Biomass Energy and the 23 Ibid. Environment. Retrieved from 24 National Renewable Energy Laboratory. (2000, June). Biomass http://www.oregon.gov/energy/renew/biomass/pages/environme : A renewable alternative for utilities. Retrieved from nt.aspx http://www.nrel.gov/docs/fy00osti/28009.pdf 29 Idaho Governor’s Office of Energy Resources. (n.d.) Baseload 25 United States Environment Protection Agency. (2015, May 7). power. Retrieved from Overview of greenhouse gases. Retrieved from http://www.energy.idaho.gov/baseload.htm http://epa.gov/climatechange/ghgemissions/gases/ch4.html 30 Clarke, S., Preto, F. (2001, June). Biomass densification for 26 Westerman, P., Veal M., Cheng J., & Zering K. (n.d.) Carbon energy production factsheet. Ontario Ministry of Agriculture, Food credits for methane collection and combustion. Retrieved from and Rural Affairs. Retrieved from http://www.bae.ncsu.edu/extension/ext- http://www.omafra.gov.on.ca/english/engineer/facts/11-035.htm publications/waste/animal/ag-708-methane-westerman.pdf 31 Ibid. 27 Union of Concerned Scientists. (September, 2012). The promise 32 Union of Concerned Scientists. (n.d.) How biomass energy

Read the full report at usu.edu/ipe Biomass producers can make biomass material more option when used close to their sources. Biomass energy dense, making it more efficient to transport. energy initiatives can help maintain forest health and Methods of increasing energy density include convert methane to less harmful carbon dioxide. densifying the material by applying extreme pressure, Government mandates and subsidies, however, can or drying the material and turning it into .33,34 incentivize unsustainable and environmentally harmful Treating biomass material, however, is often a very biomass practices. While biomass may have a place in expensive process, and for smaller-scale operations, it the United States as a means of is usually more economical to generate electricity with using waste products, it is an unreliable source of the biomass material close to the source it was electricity at the grid-scale. harvested from.35

Biomass can provide renewable baseload power. Because supply is predictable, unlike wind or solar, biomass can meet energy demands without disruption. Therefore, biomass is physically reliable.

CONCLUSION

The popularity of biomass-generated electricity is growing because of government policies. In some cases, biomass facilities have become dependent on government support, such as the Drax in the United Kingdom. Governments mandate and incentivize biomass because of its supposed environmental benefits, but many forms of biomass energy production have negative environmental impacts. Woody biomass is dirtier than coal in terms of emissions, and harvesting it often damages forests. Producing electricity using methane, however, benefits the environment and is an efficient use of a resource that would have otherwise gone to waste.

Solid biomass fuels are an inefficient source of power due to their low energy and bulk densities. Although biomass materials can be densified, the costs are prohibitive for small-scale operations and obtaining sufficient amounts of biomass is difficult for large- scale operations.

Biomass can be a reliable source of energy when properly utilized. Animal and woody wastes are readily available and can provide an economically viable works. Retrieved from http://www.ucsusa.org/clean_energy/our- 34 Vencor International Inc. (n.d.) Torrefied Wood Pellets. energy-choices/renewable-energy/how-biomass-energy- Retrieved from http://www.vencorintl.com/?page_id=12146 works.html#.VPjRiPldUWI 35 Mani, S., Sokhansanj, S., Bi, X., Turhollow, A. (2006). Economics 33 Clarke, S., Preto, F. (2001, June). Biomass densification for of producing fuel pellets from biomass. Retrieved from energy production factsheet. Ontario Ministry of Agriculture, Food http://www.researchgate.net/profile/Sudhagar_Mani/publication and Rural Affairs. Retrieved from /236999846_Economics_of_producing_fuel_pellets_from_bioma http://www.omafra.gov.on.ca/english/engineer/facts/11-035.htm ss/links/00b7d528a396e3edf1000000.pdf

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