Developing Sustainable Integrated Biomass Systems

Jane Hughes Turnbull, Electric Power Research Institute, 3412 Hillview Avenue, Palo Alto, California 94304

INTRODUCTION

More than a year ago the Electric Power Research Institute (EPRI) published a white paper, "Strategies for Achieving a Sustainable, Clean and Cost-Effective Biomass Resource," which stated that it is realistic to consider that at least 20 million ha of cropland in the United States will be available for the production of biomass feedstocks between now and the year 2010. If those croplands were planted in energy crops that yielded better than 12.5 dry tons per ha annually, that would result in potentially 5 exajoules of heat energy, which could fuel approximately 50,000 megawatts of electric capacity. Inasmuch as the current electric capacity in the U.S. is nearly 700,000 MW, we are making the projection that this new renewable energy resource would be providing 8 percent of the U.S. power requirement.

The economics of competing feedstocks

For biomass to become a major energy feedstock, energy crops will need to compete economically with coal and natural gas, both presently priced at nearly record low prices. Coal costs presently are between $1.00 and $1.75 (U.S.) per kilojoule, and natural gas spot market prices are in the range of $2.00 to $2.35 per kilojoule. Based on productivity of 12.5 tons per ha and using the best currently available harvesting equipment, biomass energy crops are estimated to cost at least $2.50 per kilojoule. However, included in the federal Energy Policy Act of 1992 is a production incentive of 1.5 cents per kilowatt hour for feedstock produced in a "closed loop" manner. For power produced by a facility with a heat rate of 10,000 kilojoules per kilowatt hour, that incentive could mean $1.50 per kilojoule. With improvements in harvesting equipment and yields of 25 tons per ha, staff at Oak Ridge National Lab estimate feedstock costs of $1.60 per kilojoule within the next ten to fifteen years.

Environmental and economic drivers

The United States presently has nearly 7,000 MW of biomass-fueled electric capacity on line; however, less than 300 MW is owned by electric utilities. The major portion of this power is being generated by the paper and pulp and other forest products industries, using residual harvesting and processing wastes as feedstocks. Only within the past 12 months, with the increasing recognition of a series of environmental and economic drivers, have U.S. utilities begun to take the biomass power option seriously.

The environmental drivers are: 1) the need for increased controls on emissions of sulfur and nitrogen oxides as a result of the Clean Air Act Amendment of 1990, and 2) mitigation of greenhouse gas emissions on the part of electric utilities. Furthermore, there is growing recognition of the potential for using woody and perennial herbaceous energy crops to improve soils, to protect surface and groundwaters from the intrusion of chemicals moving through the soil, and to benefit wildlife habitats.

The major economic driver for the utilities is that by using biomass feedstocks, the utilities put their fuel purchase dollars directly into their own service territories, creating jobs and improving economic well-being. With continued improvements in agricultural crop productivities resulting from the use of biotechnology, and a decrease in export markets for conventional agricultural crops, rural communities (and farmers) are seeking new crops, with new markets. Because these energy crops are deeply rooted species, agronomists suggest that they would better withstand the impacts of flooding, and in fact, U.S. Soil Conservation Service staff are assessing the opportunities to reduce federal subsidy payments by permitting these crops to be planted on lands currently in government set-aside programs.

While we at EPRI are enthusiastic about the benefits which may be achieved with energy crop production, we also are urging utilities to look first at the availability of other lower cost biomass resources within a defined area around the conversion facility that will use the feedstock. Historically, pulpmill and sawmill wastes have been tepee-burned or simply piled up on a "back 40." Air and water regulations now preclude this type of disposal in many parts of the country. Forest thinning and agricultural wastes also have been disposed of by slash or open-field burning - practices which are more and more limited.

Figure 1, Hypothetical Biomass Cost/Supply Curve, illustrates a generic cost-supply curve which would provide a project developer with a sense of the size and cost of the sustainable resource for one specific project. Cost-supply curves should be developed using some sort of geographic-information system to tie supplies to a specific land base. Projections regarding the costs and supplies of energy crops will depend on the availability and quality of croplands; thus they should also be tied directly to the area land base.

Developing sustainable systems

A shift of millions of ha of cropland into a new crop with notably different crop regimens would have significant environmental and economic implications, either positive or negative. Recognizing this, in the summer of 1992 EPRI and the National Audubon Society formed the National Biofuels Roundtable. The U.S. Department of Energy and the Tennessee Valley Authority also offered direct support by helping to cover the costs of a conflict resolution facilitator, travel expenses when travel budget cuts curtailed a member's participation, and publication of a consensus, or synthesis, document.

The Roundtable has 30 members, and they reflect the views of 24 different groups - state and federal government agencies, academia, both the paper and pulp and the electric utility industries, and environmental organizations. The Roundtable has met as a whole six times over the past 18 months and has reached consensus on all but three issues. These three concerns, which will be discussed in an agenda for future resolution, are:

• harvesting of forests for energy;
• using exotic plant species for energy production; and
• changing the requirements of eligibility for the biomass production tax credit.

The emphasis of the Roundtable has been to develop criteria or guidance for sustainable production of biomass resources - balancing environmentally preferred practices with their economic and social acceptability. Environmental principles on which there is agreement include:

• emphasize environmental opportunities, such as habitat protection, surface and groundwater protection, and soils protection;
• monitor and control wastes and emissions at conversion facilities;
• match crops to native vegetation when appropriate;
• value both species and genetic diversity;
• use spatial and temporal considerations in landscape planning;
• ensure protection of highly vulnerable areas.

Socioeconomic factors to be considered include:

• siting and sizing facilities appropriately;
• identifying niche opportunities, such as cofiring, repowering, and coproduction systems;
• optimizing the use of local resources;
• fostering ways of decreasing rural sector dependence on federal subsidies.

While the "Synthesis Document" of the Roundtable will present initial guidance for feedstock production, it will also identify ten barriers to the large-scale development of biomass energy systems, with options to be considered as strategies for addressing these barriers. The document is expected to be available by the first of May. from EPRI, Oak Ridge National Laboratory or the National Renewable Energy Laboratory.

Steps toward large-scale energy crop production

As noted earlier, large-scale deployment of integrated biomass production systems will depend on the extent to which dedicated crops can compete with coal and natural gas.

Figure 2, Allocation of Costs for Production of Energy Crops, is a somewhat simplified breakdown of the costs associated with the different aspects of crop production. While it is clear that land and taxes are a significant part of the total costs, it is also evident that harvesting and handling costs are the dominant ones. Thus, improvements in harvesting and handling technologies are likely to be as important to the future competitiveness of these systems as the relative productivities of the crops themselves.

While many utilities are expressing increased interest in the possibility of using biomass as a renewable energy resource, their fuels management staffs have very legitimate questions about the reliability of the feedstock. The link between production of the resource and its delivery to the utility gate is generally thought of as the "infrastructure" - those functions and people who will provide the planning, management, funding, service, education, public relations, harvesting, handling, and transportation operations. While the ability to carry out such functions has been demonstrated for other agricultural products, there is not yet the assurance of the reliability of these operations in the case of energy crops. For this reason, EPRI is interested in supporting a number of regional pilot demonstrations.

Rather than 4 to 20 ha trials which are the typical size of existing research plots, we would like to see 6 to 8 pilot projects, each started with an initial 400 ha planted and scaling up to around 10,000 ha. These would be planted in 5 to 8 year rotations and intended to provide a sustainable 25 to 30 MW of power. We are working with Oak Ridge National Laboratory, the U.S. Forest Service, the Minnesota Department of Natural Resources, and Northern States Power Company, planning for the first pilot project using poplar cuttings on nearly 400 ha on 25 individual farms in and around Alexandria, Minnesota this spring. Hopefully, another two or three pilots will be under way before the end of this year.

Determining the feasibility of integrated systems

Along with pilot planting systems, EPRI is working with the U.S. Department of Energy's National Renewable Energy Laboratory, cost-sharing seven (out of a total of twelve selected for funding support) case studies of the economic and environmental feasibility of integrated biomass systems in individual utility service territories. These seven cover a broad spectrum of systems and approaches. Yet because more than six other utilities have told EPRI that they had not been aware of the first round of case studies or the range of benefits which might be realized through development of integrated systems, EPRI has issued a request for a second round of proposals. The next group will be evaluated during the summer of 1994, with decisions expected in the fall. One condition for selection will be the committed involvement of a broad-based team representing farmers, regional political interests, natural resource specialists, equipment vendors, power plant engineers, etc.

Conscious of the more than 14 million ha of highly erodible cropland in the federal Conservation Reserve Program, staff within the U.S. Department of Agriculture asked EPRI staff to carry out a limited- scale survey to learn if utilities with coal-fired power plants in rural areas might consider cofiring with biomass in their plants. Our survey was certainly not exhaustive; yet in the space of just a couple days we had a list of 94 plants in 20 different states. USDA staff evaluated the amount of set-aside land in the counties in which those 94 plants are located and concluded that for 16 of them, more than 10 percent (by heat content) of the fuel needed to power them could be grown on the set-aside lands in those counties. These particular lands currently cost the federal government more than $16 million in annual subsidies. This was a small sample of a large set of potentially suitable coal plants. EPRI staff estimate that at least ten times the number of plants could fit this scenario. At this time no policy changes are actually under consideration; however, researchers at Iowa State University are evaluating the changes in soils which are the result of planting both woody and herbaceous energy crops on erodible soils.

It's time for commercialization

During 1994, the EPRI biomass program staff expect that several of the case studies of the economic feasibility of integrated systems will be completed and be ready for implementation. Efforts are under way to develop formal memoranda of understanding between EPRI and the U.S. Department of Energy and the U.S. Department of Agriculture to promote collaboration in both research and development and commercialization of biomass energy systems.

Continuing research and development is needed in terms of improved breeding stock, in matching plantings to specific soils, in improving the handling and harvesting technologies, and in understanding better the ecosystem impacts of energy crop plantings. But it is also time to move beyond research trials toward commercialization. It is time that those parties in both the private and public sectors come to the same table to explore opportunities to share the remaining risks and to make a reality of the promise of biomass energy.

File posted on March 5, 1996; Date Modified: February 21, 1999