Report addresses bioenergy development in western U.S.

By Erin Voegele | May 08, 2013

The U.S. Endowment for Forestry & Communities Inc. has released a report that assesses how community-scale wood-fueled facilities could address forest health issue and losses from wildfires. The report, titled “Financing Woody Biomass Clusters: Barriers, Opportunities, and Potential Models for the Western U.S.,” is part of a series produced by the Endowment in collaboration with the U.S. Forestry Service.

“Biomass energy development has the potential to foster economic development, address wildfires and associated risks and costs, and reduce dependence on fossil fuels,” said Jeff Howe, president of Dovetail Partners and a report contributing author.  “There are critical strategic, organizational, and financial issues that need to be addressed in order to realize the considerable potential of biomass energy.  First and foremost, biomass energy needs to become an attractive and financially viable investment alternative.  This can be aided by strategically applying a wide array of market-based, as well as incentive- and grant-based financial tools.”

According to the report, the project focused on identifying factors that have contributed to the success or failure of biomass energy projects, with the goal of understanding how bioenergy can be more widely adapted in the U.S. This included the identification of opportunities and barriers for wood-to-energy plants, lessons learned from existing projects, the potential impacts of non-traditional revenue sources, and the models that could be economically viable for the development of woody biomass energy facilities. The analysis includes the collection of survey data from 73 bioenergy plans and eight producers and distributors of biomass fuel. Of the 73 bioenergy facilities, five were combined-heat-and-power (CHP) plants, 3 produced only electricity, and the rest produced only thermal energy.

As a result of the analysis, the authors of the report identified several barriers to the widespread adoption of bioenergy plants, including high upfront capital costs. Lack of profitability among fuel producers and the seasonality of heat demand were also identified as obstacles. Feedstock transportation costs, unreliable biomass fuel sources, insufficient policy incentives and risk aversion were also among the 11 identified barriers.

Regarding opportunities, the analysis showed that business models that combine bioenergy production with sawmills or similar production facilities can improve profitability. In addition, the report states that innovation in fuel production within traditional lumber facilities and the expansion of collaborative planning also present opportunities.

The report describes several specific recommendations for action, including more effective financing methods, and the use of project development best practices. The analysis also recommends the development of lower-cost, standardized biomass energy systems along with project investments in regions where there is a dependence on propane, electricity and heating oil. Additional recommendations relate to fuel supply, fuel delivery, creating non-traditional revenue sources, policy, and understanding the importance of regional differences.   

A full copy of the report can be downloaded here.