Xcel halts Bay Front biomass power conversion

By | December 02, 2010

After months of research, Xcel Energy has notified the Public Service Commission of Wisconsin that it will not convert the third boiler at its Bay Front Power Plant to biomass as previously planned.

The 76-megawatt plant, located in the northern-most portion of the state in the community of Ashland, has used 100 percent waste wood in two of its three boilers since 1979. In 2009, they consumed more than 250,000 tons of wood, according to Brian Elwood, communications representative for Xcel. “The third one’s just a different kind of boiler,” he said.

The cancellation of the conversion of boiler No. 3 resulted from a culmination of three limiting factors: a significant increase in the cost estimate of the project; considerable regulatory uncertainty at the state and federal levels; and declining costs of other generation options. “Those three factors led us to the conclusion that we weren’t going to move forward with the project,” Elwood said.

Xcel looked first at a biomass gasification technology to replace the coal-fired boiler, but alternatives such as natural gas represent a cheaper option. The project was originally estimated to cost between $55 million and $70 million, but that projection skyrocketed to about $80 million. “We looked at other options as well, but they all were more expensive than we expected,” he said. “So we’ll keep operating as is.”

“Although we are disappointed with the outcome, we have gained considerable value from the evaluation that we have completed,” said Mike Swenson, president and CEO of Northern States Power Co. in Wisconsin, a subsidiary of Xcel. “The engineering studies will advance gasifier technologies for utility applications and our efforts to procure sustainable biomass supplies have resulted in a model that can be adopted in future projects. In addition, as part of this project we helped fund the development of two biomass energy plantations in northern Wisconsin, which will provide valuable research and study opportunities for decades to come.” Those plantations are testing the development of hybrid poplar and black willow trees for harvesting and burning to generate power.