From its very inception, California has fostered the entrepreneurial spirit&mdash;from the 1849 Gold Rush right through to present-day Silicon Valley.&nbsp; The Golden State has traditionally been a hotbed of innovation, and that remains true today, particularly when it comes to renewable energy generation. But three decades after California led the country in creating one of the world&rsquo;s most viable biomass industries, the state&rsquo;s sector is literally fighting for its long-term survival.&nbsp; A confluence of low natural gas prices, expiring power purchase agreements (PPAs), expiration of price guarantees on continuing PPAs, and cheap and plentiful solar alternatives have deeply cut into the state&rsquo;s biomass-to-energy production.&nbsp; In many ways, during his second term ending in 1983, current California Gov. Jerry Brown was the architect and inspiration behind the state&rsquo;s once-burgeoning biomass industry. At one time, the state saw more than 60 plants incorporating a mix of ag waste, forest product waste and residues, as well as urban construction and demolition (C&amp;D) waste.&nbsp; Today, Brown is under pressure from both biomass plant operators and fuel suppliers who are increasingly looking to leadership from Sacramento for a way out of what may shape up to be biomass&rsquo;s worst year ever in California.&nbsp; Past Biomass Glory At its peak in the early 1990s, the California biomass energy industry produced almost 4.5 billion kilowatt-hours (KWh) per year of electricity, according to the national renewable energy laboratory.&nbsp; &ldquo;There are currently 23 California biomass plants operating with a collective capacity of 550 MW,&rdquo; says Gregg Morris, a Berkeley-based bioenergy consultant. &ldquo;Seven or eight plants are idle but refurbishable.&rdquo; Thus, he says, there is probably 150 MW of capacity that could come back online if the facilities were to secure PPAs.&nbsp; Six biomass plants have shut down in the past two years. Covanta&rsquo;s Mendota biomass plant is just the latest casualty, closing in December. Morris says two or three are facing closure if they don&rsquo;t get a new contract this year. He expects another half dozen to close next year.&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; Long-term PPAs are expiring at the same time that we are seeing historically low natural gas prices, says Carrie Annand, vice president of external affairs at the Biomass Power Association in Washington, D.C.&nbsp; She says that is causing uncertainty for all California biomass producers. Biomass currently only provides California with less than six percent of its renewable energy; compared to an all-time high of more than 15 percent.&nbsp; The industry uses some five to six million tons total per year of biomass total.&nbsp; &ldquo;In a normal year, we would have 100 percent of our fuel supply already contracted,&rdquo; says Rick Spurlock, plant manager of Rio Bravo Fresno, a 25-MW plant owned by IHI Power Services Corp. &ldquo;But we don&rsquo;t have an energy price agreement past July 31.&rdquo;&nbsp; Thus, Spurlock says they are not going to contract fuel without an energy price agreement in place, a decision that boils down to economics. &ldquo;If the biomass plants go off the fixed rate, that means the price per KWh will drop by five to six cents,&rdquo; says Lynch.&nbsp; &ldquo;They can buy wind and solar for five to six cents.&rdquo;&nbsp; Thus, it&rsquo;s no surprise that Covanta&rsquo;s five California biomass plants have all been shut down. Current power purchase prices are not sufficient to cover operations and fuel and the company has been unable to secure PPAs to continue operations, says James Regan, spokesman for Covanta in Morristown, New Jersey. &ldquo;We will continue to evaluate their future, but [only] getting a PPA at the right price will enable us to operate,&rdquo; Regan says.&nbsp; Clock is Ticking The California legislature can appropriate greenhouse gas (GHG) reduction funds, says Kelly Covello, president of the Almond Hullers &amp; Processors Association in Ripon. But the utilities still need to sign contracts, the California Public Utility Commission needs to approve them and a mechanism to get the funds passed through to the utility needs to be created, she says.&nbsp; Finally, to benefit ag and almond growers, the contracts and funds need to flow to the plants that are located in or near the valley to take ag biomass material, Covello says. The AHPA has developed a coalition of biomass producers, forestry professionals, urban waste collectors, agricultural entities and city sanitation district advocates to develop a strategy to address the immediate crisis and build a model for a sustainable biomass industry, according to Covello, but chipping rates have already increased from $350 per acre to over $1200 per acre. &ldquo;Ultimately, we will not know until the governor signs the state budget in June if PPAs will be signed and what the details will be,&rdquo; she says. Unfortunately, that may be too late for many operators. &ldquo;If we are unable to reach agreement on an extension to our fixed energy price, the plant would most likely shutdown this summer,&rdquo; says Spurlock.&nbsp; &ldquo;Current SRAC (short-run avoided cost) pricing would not even cover the cost of the plant&rsquo;s fuel.&rdquo; That means this summer, prices Spurlock would be offered for the plant&rsquo;s power could drop to as low as 3 cents per KWh. &ldquo;If that happens, we would no longer be able to supply wood to the Rio Bravo plant at the equivalent of 3 cents per KWh,&rdquo; says Harley Phillips, tipping manager with Wilson Ag in California&rsquo;s Central Valley. Phillips says the only alternative would be to raise the price for taking out orchard residues to the point where it would not be economically feasible for the growers. &ldquo;If all of this happens, we&rsquo;re going to have to develop something else to do with this wood,&rdquo; he says. &ldquo;We&rsquo;re trying to see how much can be incorporated back into the ground in the orchard where it came from.&rdquo;&nbsp; Disposal of Mounting Biomass Further north in Chico, Tim Lynch of Agra Marketing Group, an ag waste fuel supplier, also says if nothing changes soon, his company will be in dire straits this summer. If these biomass plants can&rsquo;t get fair, 5- to 10-year terms on price per KWh, Lynch says, it could result in an environmental disaster. &ldquo;There&rsquo;s so many millions of tons of this material, it&rsquo;s got no place to go,&rdquo; says Lynch.&nbsp; Does this mean that the growers will go back to open burning? South of Sacramento, in the San Joaquin Valley, one of the worst air districts in the U.S., burning permits are again being issued.&nbsp; &ldquo;When they start this open burning again, the farmers are going to get blamed,&rdquo; says Lynch. The effects of California&rsquo;s four-year drought and subsequent bark beetle infestation on much of the state&rsquo;s forests, could provide a helpful reprieve from such low rates. The U.S. Forest Service estimates that more than 22 million trees have already died. And as Gov. Jerry Brown has noted, state and federal agencies are actively surveying the most hazardous forest zones in California as a target of removing such dead wood. Biomass fuel suppliers and biomass plant operators are pinning their hopes on passage of draft resolution E-4770 put forth by the California Public Utility Commission. The PUC failed to initially pass a resolution that would require three of these utilities to get some 80 percent of their biomass fuel from forest residues under threat from drought and bark beetle infestation. These new, short-term emergency PPAs would only be contracted for five years.&nbsp; Although there may be some changes in its final wording, at press time, Morris felt confident that the PUC would pass some version of its existing resolution on March 17. In part, the PUC resolution orders the utilities to hold a solicitation to contract 50 MW worth of biomass power. He says San Diego Gas and Electric will get 5 to 10 MW, and Pacific Gas and Electric and Southern California Edison will split the rest of that that allotment. Morris says the overarching goal is to keep the biomass industry operating. That means taking as much material out of those dead trees as the forest service, Cal Fire and any private landowners can produce. As Kim Carr, an assistant deputy director of the California department of forestry and fire protection (Cal Fire) explains, Cal Fire and the state&rsquo;s office of emergency services have been designated by the governor to create a task force of stakeholders to coordinate emergency protective actions and monitor ongoing conditions on this epidemic. As part of the CPUC resolution, Carr says, the utilities are to offer auctions that allow for higher power prices for existing and new facilities that use biomass from areas designated for purposes of the emergency proclamation, as high hazard zones. Rio Bravo Fresno in Fresno County is ideally located to receive fuel from three of the six county areas affected by southern Sierra tree mortality, Spurlock says. He notes that major highways run east from the city of Fresno into the mountainous areas of Madera, Fresno and Tulare County, adding that Rio Bravo Fresno is also negotiating a short-term contract with a southern Sierra biomass fuel supplier. Biomass&rsquo;s Future in California The endgame for the current crisis remains murky, but Annand hopes to eventually see federal support in the form of tax credits for at least some of these biomass facilities. But, she says it&rsquo;s unlikely to come until well after this fall&rsquo;s presidential elections. Congress and state lawmakers will need to be reminded that biomass provides much in the way of waste disposal, she adds, and that&rsquo;s not something that wind and solar can offer.&nbsp; Unfortunately, biomass is not the cheapest renewable out there, Morris points out. So the question remains:&nbsp; How can the biomass industry best be compensated for these extra services?&nbsp; In the end, if California&rsquo;s biomass industry is to continue, it will need the hallmarks of the state&rsquo;s well-earned reputation for innovation to make it so. Exactly what form such innovation will ultimately take is anyone&rsquo;s guess. But, in the long-term, it may take new more efficient technology to lower plant operating costs.&nbsp; In the short-term, survival will likely come in the form of state and federal tax credits and incentives. If California can weather the current storm, what it learns would likely have follow-on benefits that will ripple across the U.S. biomass industry as a whole. Author: Bruce Dorminey Science journalist/author brucedorminey@gmail.com Twitter:@bdorminey

STAYING ALIVE: Rio Bravo Fresno is one of only a couple dozen biomass power plants that are still operating in California, which at its peak hosted more than 60 facilities.

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FOGGY FUTURE: Rio Bravo Fresno, a 25-MW plant operating in central California, normally has all of its annual  fuel supply contracted at this time of year, but thatâ€™s not the case right now, as the near-term fate of the facility is unclear.

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TRAGEDY TO TRIUMPH: The effects of Californiaâ€™s four-year drought and subsequent bark beetle infestation on much of the stateâ€™s forests, coupled with the governmentâ€™s focus on removing the material and getting it to bioenergy facilities could p

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While California's biomass power industry continues its struggle for survival, fuel suppliers are left without a home for mounting materials. 

Staving Off a Sunset

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