Rallying for a Rebound Year

Low oil, dipping power prices and a warm winter have presented the biomass industry with a challenging year.
By Anna Simet, photos by Lenn Long Photography | May 23, 2016

The ninth annual International Biomass Conference & Expo brought nearly 1,000 attendees to Charlotte, North Carolina, for a frank discussion of the current state of the biomass energy industry and the outlook for the next year, as well as three days of information and technology sharing, collaboration and networking.

Association leaders participating in the April 12 general session discussion didn’t skirt the issue that record-low fossil fuel and energy prices have caused turmoil for most industry sectors, but they also shined some light on promising solutions to some problems faced and highlighted each sector’s bright spots.

The Clean Power Plan—the ultimate fate of which will be decided with the fall election—and a push for renewed tax credits were emphasized during the panel, fronts that the usually fragmented industry have united on. Bob Cleaves, president of the Biomass Power Association, said the U.S. EPA’s recent workshop focused on biomass in the CPP—which was held despite the CPP’s current legal limbo—was encouraging, and conveyed a strong message that biomass can play an important role in state implantation plans (SIP). The looming question is how states will define biomass, and for those that     choose not to craft their own SIPs, that job will—disadvantageous  to the industry—be left up to the U.S. EPA, which recently put out a rulemaking to determine which types of biomass should be included. “That is a really bad approach…the idea the EPA could be the arbiter of what are acceptable types of biomass,” Cleaves said.

All panelists urged industry stakeholders to call their senators to request an extension of the Section 45 production tax credits, as they are set to expire at the end of the year. It was agreed that there was good opportunity to get the extension included in the Federal Aviation Administration Reauthorization Act, which was passed by the Senate April 19, and is now in the hands of the House, which must act before the FAARA expires in July. Also having potential for inclusion in the FAARA is the BTU Act, said Dan Wilson, board chair of the Biomass Thermal Energy Council. He reminded attendees that biomass thermal has faced an unlevel playing field with other renewables for many years, and pointed to the BTU Act as a means of rectifying the discrepancy. “This is the time to make the push, and I can’t state enough what a big deal this is for the industry.”

Patrick Serfass, executive director of the American Biogas Council, said there have been and are some sector challenges, “but also some high highs.” The biogas industry has been challenged by the low price paid for power produced by biogas-based electricity projects, and regulatory issues surrounding getting upgraded biogas into the pipeline and electricity to the grid, but there has been a push toward more organics recycling and other favorable policies that are providing growth opportunities.

Stephen Faehrner, chairman of the Pellet Fuels Institute, said besides the major dip in demand due to the warm winter, the domestic pellet industry faces some regulatory challenges, including the New Source Performance Standards, which PFI worked on with the EPA for many years but still resulted in some confusing and challenging language. On positives, he said that many states in this country that have done a lot to try to help biomass thermal, specifically pellets or stoves. “More states are beginning to recognize biomass…Maryland has a biomass directory and a program manager….23 states have some form of program to help folks get a wood or pellet stove. It’s something that’s really encouraging.”

Seth Ginther, executive director of the U.S. Industrial Pellet Association, discussed the Sustainable Biomass Partnership, saying it’s off to a great start and seeing some success, as well as an initiative to secure government funding to allow the conversion of Drax’s final unit to biomass, which he said would provide some great opportunity for the industry. He also touched on USIPA’s strategy to start thinking long-term, and how the industry will navigate a subsidy-free future.

Author: Anna Simet
Managing Editor, Biomass Magazine