PPA Power

Will power purchase agreements make up for the lack of an RPS in SC?
By | November 23, 2010

South Carolina’s state-owned power utility Santee Cooper has approved two long-term power purchase agreements (PPA) with four biomass power plants operating or in development across the state, totaling 95 megawatts (MW).

The contracts specify that Domtar Paper Co. LLC at Bennetsville, S.C., will provide 50 MW for 15 years, and Southeast Renewable Energy will supply 45 MW for 30 years from three 15-MW plants to be constructed across the state. The first two are expected to be online in 2012 or 2013 in Dorchester and Kershaw counties.

While Santee has had a renewable energy program for nearly a decade, South Carolina does not currently have a renewable portfolio standard (RPS). Aside from fulfilling its voluntary program requirements, Santee, which already produces 22 MW of electricity from landfill gas, cited that the biomass power generation is the most cost-effective renewable resource in South Carolina. However, that may not be the perspective of other privately owned utilities in the state that have no renewable energy obligations.

According to the South Carolina Forestry Association, forests cover two-thirds of the total land area in the state, or 12.4 million acres, and each year the state grows 26 percent more timber than is removed by harvesting, land clearing, changes in land use and natural mortality.

Where does South Carolina stand in regard to current biopower production and its potential to host additional sustainable biomass projects? As of 2007, there was more than 500 MW of licensed industrial biopower capacity in the state, according to John Bonitz, farm outreach and policy advocate for the Southern Alliance for Clean Energy. “Many of those operations are probably defunct now though,” he said. “There are already a couple pellet mills in operation in S.C., plus a third in development. Combined, these pale in comparison to SACE’s 2009 estimate of South Carolina’s projected potential biopower capacity, which is more than 1,500 MW, 727 MW from forest resources alone.”

 Bonitz says SACE applauds Santee Cooper, which is the largest power utility in the state, for signing PPAs for appropriately scaled biopower projects. “It’s exactly the kind of leadership role that publicly owned utilities ought to be playing in biopower, emphasizing moderate scale and thermal efficiency,” he says.

Bonitz adds that SACE, which is a strong advocate for the adaptation a federal RPS, has determined the state has the resources or growth potential to multiply this five or 10-fold. “But without an RPS, it is unlikely the investor-owned utilities will do the right things to make this happen,” he says.