Biomass Plants in the Northeast Scramble to Change Business Model

In the Northeast, biomass electricity plants are staring at some tough economics. For many standalone wood-fired electricity plants, the cost of fuel (wood chips) and operations exceed what they get paid for the electricity they generate. With natural gas (and thus wholesale electricity) prices expected to remain low—and state-level support for biomass fading—biomass plants are working hard to figure out how to continue operating.

New Hampshire and Maine have provided some short-term support to biomass electricity facilities in recent years with the expectation that the funding was a bridge to allow time for new economic models to be developed. We’re now starting to see some real efforts to find ways to improve the economic sustainability of these facilities, often in ways that add to the rural economy. 

Biomass plants have a lot to offer as a co-location or re-use site. They have existing forest industry infrastructure (wood yards, scales, a procurement staff, etc.), permits, interconnection to the grid, as well as access to “behind the fence” electricity, steam and hot water. Companies are now seeking ways to utilize these assets to support continued (or expanded) markets for biomass fuel. The success of these efforts won’t be known for months or perhaps years, but clearly companies are thinking and trying.

In New York, ReEnergy has announced “adaptive reuse” plans for their facility in Lyonsdale, with wood-based liquid fuel company Ensyn building a biorefining at the site that will re-purpose some of the existing infrastructure and use roughly the same volume of biomass chips. In order to maintain the wood supply infrastructure while the conversion occurs (and wood supply is critical for any wood-using facility), ReEnergy has a request for continued support through the Renewable Energy Standard now pending before the NY Public Service Commission. 

In Maine, Stored Solar has been seeking co-location partners through their Born Global Challenge, which seeks to “addresses the global shift to a Bio-Economy and invites worldwide innovation into real projects and real revenues within The State of Maine.” In presentations made by Stored Solar, the company indicates that more than 50 partner companies have applied to work with them, and 14 companies have been pre-qualified through a technology and economic vetting process as appropriate matches for the facilities. How many—if any—of these companies will build in Maine remains to be seen, but it’s a start. 

For one of Stored Solar’s 25 MW facilities, the firm has plans for greenhouses, aquaculture and a bio-refinery producing biofuels, biochemicals and biochar. Through related company Katahdin Shrimp Farm LLC, a $500,000 dollar loan for the development of the aquaculture piece has been secured.

ReEnergy, with four facilities in Maine, has issued a Request for Proposals (RFP). Administered by the group Biobased Maine, this RFP seeks co-location partners, noting that “ReEnergy’s biomass power plants are capable of delivering cost-effective thermal energy (steam, hot water), electricity and CO2 to an industry or industries located on adjacent property.” Casting a wide net, the RFP suggests appropriate partners may include manufacturers of “biofuels, biobased chemicals, advanced biobased materials, as well as industries such as agriculture, aquaculture, algae, or other technologies that use biomass energy co-products (heat, steam, emissions).” 

For years, if not decades, biomass electric plants have suggested that they were good sites for co-location. Until very recently, it seems the economics weren’t compelling enough to make this a priority.  With economic conditions eroding—both energy sales and state-level support for biomass—it is great to see real efforts underway to find opportunities that would support, and perhaps increase, markets for biomass and low-grade wood. It is far too early to know if these efforts will succeed, but the fact that they are underway is itself a great sign.