California’s Biomass Debacle, Part 3

California’s biomass industry is experiencing tough times, and we’ve been following it for quite some time.
By Anna Simet | January 08, 2016

California’s biomass industry is experiencing tough times, and we’ve been following it for quite some time. Senior Editor Ron Kotrba wrote about the challenges it faces here (expiring contracts and difficulties renewing them, the resulting fuel glut, etc.) and I followed up with a blog on California Gov. Jerry Brown’s state of emergency declaration on the number of dead and dying trees in the state, due to the drought and pine beetle epidemic, and its strong emphasis on getting that material to bioenergy facilities.

Today, I was made aware of another article on the topic, a good one, written by a newspaper in-state. While it included a fair share of information we already knew, one statistic jumped out, one that I hadn’t seen before:

Despite the supply, 22 of California’s 50 biomass power plants are either idle or not-operating. Another nine could shut down between now and the end of next year—including Buena Vista.

I circled back to the California Bioenergy Alliance site, which confirmed that information to be pretty accurate—25 biomass electric generating plants in operation, which combined produce more than 565 MW of power, enough for 420,000 homes, nearly all of Sacramento County’s residences. These plants use 8 million tons of wood waste as fuel annually that would otherwise be landfilled, left to rot and serve as a fire hazard in the forest, or open burned.  If those additional plants closed, that means a whole lot less (renewable) power—300 MW offline—and millions of tons of wood waste will have to find another home (likely landfills or open burning) and 1,000 jobs lost.

 Keep in mind that in the 1980s, there were 63 biomass power plants. In the past two years, upward of ten have closed. And now, within the next two years, the number of plants left could be cut nearly in half. Industry organizations and stakeholders have been hoping for passage of Assembly 590, which would provide temporary relief to the situation, but that has to happen.

If you’re not familiar with AB 590, it passed the Assembly and awaits action in the Senate. It is a standalone bill proposing a biomass cost-share account using GHG reduction funds from AB 32 cap-and-trade auction revenue. Summarizing the bill, California Bioenergy Alliance Executive Director told Kotrba late last year:

 “Electric ratepayers currently pay for their share, but no one is paying for these other societal benefits generated…No one is paying landfill diversion and burn bans, so there needs to be a beneficiaries-paid process, and the GHG reduction fund is the seed money for that. In the short term, this fund is designed to be accessed for biomass power plants falling off fixed energy prices or fixed contracts to make sure they don’t go off line. If they do shut down, we can count on GHG emissions increasing from open burning or landfilling. In the long-term, we can do other things with these funds, but in the short-term they’re needed to stabilize the industry while the state puts together a post-2020 climate plan.”

So the burning questions here are: will Brown’s State of Emergency initiative to get material to bioenergy facilities and keep them running help with this situation in any way? What kind of an impact will it have? Are these plants in danger of shutting down regardless? Is the only hope passage of Assembly Bill 590?

I’m working to answer these questions, so stay tuned.