Iberdrola halts Oregon biomass project

By Anna Austin | October 13, 2011

Iberdrola Renewables has announced that its 26.8-megawatt (MW) biomass power project at Collins Pine Co.’s Fremont sawmill in Lakeview, Ore., will be put on hold indefinitely, due to lack of a power purchase agreement (PPA).

Located in southern Oregon’s Lake County, Lakeview Cogeneration LLC has been in development for the past several years. It was owned by two other companies before being acquired by Iberdrola.

The 55-acre plant site is about 20 miles from the California border next to Collins’ sawmill. Much of the power plant’s fuel would have been logging and mill residuals from the sawmill’s operations, and in turn the plant would have provide the sawmill with the equivalent of 2 megawatts of steam to power its operations.

While Collins was an ideal partner for the project, without a PPA, the project isn’t viable, said Jan Johnson, spokeswoman for Iberdrola Renewables. “Since [we] announced the Lakeview biomass project, the market for power purchase agreements nationwide has become unattainable due to the economy and lower energy prices generally,” she said.

As a result, the company has decided not to build without a long-term agreement to sell the output, according to Johnson. “We have decided to cease construction efforts until we are able to obtain a long-term power agreement sufficient to support the restart of construction at the Lakeview biomass site,” she said.

Johnson said Iberdrola had about 5 percent of the construction done, had received various permits, and were able to negotiate with its partners a long-term fuel agreement, steam sale agreement, transmission rights and other various elements, but wasn’t able to attain the centrally important PPA.

There is a possibility work on the project will resume in the future, however. “Iberdrola Renewables will do what it needs to do to keep the project viable and economic,” Johnson said. “We still believe in the technology and view Lakeview as the right project in the right place.”