Russell Biomass terminates project
Russell Biomass, a biomass power project under development in Russell, Mass., has been cancelled.
The 50 MW plant had been in the works since 2005. Its partners had successfully worked their way through a string of obstacles over the years, but were permanently halted by the Massachusetts Department of Energy Resources’ new renewable portfolio standard (RPS) regulations. In particular, a requirement calling for an increase in the minimum efficiency mandate of biomass power plants from 40 to 50 percent. Biomass plants now receive half a renewable energy credit upon reaching 50 percent efficiency, and one full credit beginning at 60 percent, feats which many argue is impossible for biomass plants.
“Under the final DOER regulations, the project is not technically and economically viable because of the required 50-percent efficiency, coupled with the new forest biomass fuel supply limitations,” said Russell Biomass partner John Bos. “We are unable to modify the plant design as permitted.”
In a letter that Russell Biomass sent to the city selectman chairman, it pointed out several reasons why the project could no longer go forward, which includes the need to obtain new permits; difficulties in finding year-round thermal energy requirements for long-term contracts; inability to be price competitive with on-shore wind energy due to lack of local and state support; increases in the cost of fuel delivery due to new forest waste wood physical and administrative limitations; and potential lenders and equity investors becoming risk-averse to financing almost any renewable energy project in Massachusetts because of the regulatory uncertainty.
The letter concludes that perhaps the most important consideration for the town of Russell going forward is, “how the site, now of little value, can be utilized to produce any meaningful tax value. A power project is inherently the type of project with the greatest taxable value.”