Nasty fight in New Hampshire cracks open truths about biomass industry

Things are getting ugly in New Hampshire, where four existing biomass power plants have filed to intervene in the power purchase agreement for the massive 75 MW Laidlaw biomass plant proposed for Berlin. The companies claim that the power purchase agreement that Public Service Corporation of New Hampshire has provided to the Berlin plant will drive the smaller biomass plants out of business. Meanwhile, members of the construction unions have picketed the smaller plants, claiming that interference in the Berlin plant’s process will prevent it from being built.
 
Biomass proponents often claim that biomass is cheap, clean, abundant and local. So what do those four biomass companies know that you should know?
 
What they know, and what their statements demonstrate, is that biomass fuel is getting scarce and costly, the biomass industry is heavily dependent on subsidies, and that pollution controls can be prohibitively expensive. Recent news quotes and background information tell the story:
 
Fuel is more scarce than the industry admits:
 
An early story from the industry journal Biomass Power and Thermal, back when the intervener group was larger, tells us that fuel is getting scarce:
 
“A petition from the latter six alleges fierce competition for the biomass fuel, saying their own plants have a substantial interest in its availability and pricing, and Laidlaw’s PPA, for which negotiations began in 2007, would directly affect them. It says that the wood price adjustment clause in the PPA affects fuel cost and economic viability of the other plants because it would allow Laidlaw to pay more for biomass.”
 
Meanwhile, the existing biomass industry uses a considerable amount of wood:
 
“Each of the state’s six independent biomass power plants use around 200,000 tons of wood annually, which is a large portion of the wood supply, he says, adding the two plants still under long-term power agreements are teetering on contract expiration, as well. The delivered price of that wood is about $25 per ton.”
 
The biomass industry often claims they can harvest fuel “sustainably”, meaning, at a minimum, that forest harvesting rates won’t exceed the forest growth rate. Yet a new report from the Cary Institute of Ecosystem Studies assesses the biomass supply in ME, NH, VT, MA, CT, NY, PA, RI at only about 12.6 million green tons. Compare this to wood use at the Berlin plant alone, which will burn close to a million tons of trees a year (940,000 tons, assuming typical plant efficiency and wood moisture content).  The Berlin plant is only the beginning – multiple wood-burning plants and pellet manufacturing facilities are proposed across the Northeast, with a combined demand far greater than "available" wood.
 
Here are a few more calculations we find interesting:
 
·         It will require 38,000 tractor-trailer truck-trips a year to deliver wood fuel to the Berlin plant. Assuming a one-way delivery distance of 75 miles, that’s about 5.64 million miles driven per year. Assuming a fuel efficiency for these trucks of 6 mpg, that’s 940,000 gallons of diesel fuel, each and every year.
 
·         The existing biomass power plants in NH burned about 1.7 million tons of wood in 2009. Their fuel delivery “bill”, assuming a 50-mile delivery radius, was thus about 6.6 million miles driven and 1.11 million gallons of diesel, just in that one year alone.
 
·         The power generation sector in NH emitted about 6 million tons of CO2 in 2009. Carbon dioxide emissions from the existing biomass plants were about 1.7 million tons, but these are counted as zero because of the persistent myth of carbon neutrality of biomass.
 
·         No one is pretending anymore that the Laidlaw Berlin plant will be fueled with “forest residues” – as the air permit states, “Equipment will be installed within a new building to produce wood chips from whole logs.”
 
·         U.S. Forest Service statistics indicate that New Hampshire’s commercial roundwood harvest was about 957,501 tons in 2006. So the Berlin plant alone will burn about the same amount of trees as are harvested for high-value timber, per year.
 
The biomass industry in NH is heavily dependent on subsidies
 
The four plants protesting the PSNH power purchase agreement with Laidlaw want PSNH to give them a shorter energy purchase contract, to tide them over until the economy turns. But PSNH isn’t playing, and the statements are pithy:
 
But Marin Murray, spokesman for PSNH said "what they are asking for is a subsidy."   He said they were required to do that for 20 years to get these renewable power plants up and running and now it is time for them to sink or swim on their own.   Murray said, "We have a long history of paying those plants an enormous amount of money and that is the key reason why rates are higher here.   We just got out from under that and now they have to compete at market with everybody," Murray said.  He noted there are other utilities with which they could enter a contract, but apparently none have bitten.
 
The interveners particularly resent a provision in the Laidlaw power purchase agreement that “passes through” fuel costs to the consumer. They’re right to oppose that because they understand the real economics of fuel acquisition, which requires ongoing financial support. For instance, the biomass industry in New Hampshire received about $11 million in 2009/2010 from the federal taxpayer-funded Biomass Crop Assistance Program (total bill $243 million, nationally). This program pays biomass suppliers about $25 per green ton to deliver fuel, matching payments from the biomass energy facilities. Considering that this is fuel that would have been delivered anyway, New Hampshire voters may be interested to learn of this use of their tax dollars (and perhaps relieved to learn that the BCAP program is likely to be defunded).
 
The Berlin plant is also lined up to receive massive federal subsidies, including Stimulus funds. The November 2010 report of the NH Site Evaluation Committee states:
 
Although the Applicant did not consider federal “stimulus funds” in its Application, the opportunity exists to receive an investment tax credit or grant through the American Recovery and Reinvestment Act (ARRA). Through such programs, the Applicant might receive as much as 30 percent of the construction cost of the Facility in grants if it commences construction by the end of the year or, alternatively, the Applicant may benefit from an investment tax credit under ARRA. Tr. 08/25/2010, Afternoon Session, at 11-13. The Applicant stated that the investment tax credit “is an important part of financing the Project.”
 
With development costs estimated at $228 million to $274 million, the Berlin project would thus receive between $70 and $80 million as a taxpayer-funded grant.
 
 
The biomass industry in NH is so dirty, some plants don’t even qualify as renewable energy providers
 
While PSNH is promoting building the massive Berlin plant, the smaller biomass plants in NH are struggling in part because they are so dirty, they are not eligible to receive “Class I” renewable energy credits (RECs), the additional fee that electricity ratepayers pay to help the power sector transition to “clean”, carbon-free and renewable energy. Some are so dirty, they’re not even eligible for Class III RECS:  
 
 “Working around policy changes, it’s possible for the power plants to qualify for Class I RECs, but the process involves substantial upgrades that would expand capacity and in some cases add emission controls. Bridgewater currently sells energy to power distributor ISO-New England and RECs to the Class I market in Connecticut. The plant isn’t even certified for Class III in New Hampshire because of its particulate emissions, so the investment to qualify for Class I in New Hampshire would be outrageous. “We’ve made an offer to the utility to put in particulate emissions removal and qualify for Class III if we could get a contract for a certain period of time,” O’Leary says.”
 
The Berlin plant will be eligible for Class I RECs, and will help meet PSNH’s purchase obligations. However, by standards for real renewable energy sources like wind and solar, the Berlin plant will be a huge source of pollution, too, as demonstrated by emission limits in the air permit:
 
Pollutant                                 tons per year
Particulate matter (PM2.5)      42.3
Sulfur dioxide                           48.7
Nitrogen oxides                        245
Carbon monoxide                    308
Volatile organic compounds    41.1
Sulfuric acid                             8.1
 
·         For the major pollutants, the emissions profile of this “modern” Laidlaw facility plant looks a lot like a coal plant. The plant will also also be a major source for hazardous air pollutants, emitting a combined total of at least 25 tons per year of carcinogens and respiratory irritants like benzene, styrene, formaldehyde, and acetaldehyde, as well as heavy metals like arsenic and chromium. The total includes a permitted 24 lb of mercury and 400 lb of lead per year (that all assumes, of course, that emissions controls on the plant are working perfectly all the time).
 
Even the notorious skepticism of New Hampshire-ites should be getting a workout, considering the full picture of the “green” biomass energy they’re being forced to subsidize. Biomass plants emit about as much conventional pollution as a coal plant, and even more CO2. Unlike real renewable power sources like wind and solar, where the “fuel” is free, biomass burners rely on an endless stream of subsidies for fuel harvest and delivery, yet still can’t produce power cost-effectively. The Laidlaw plant developers, well-adapted to exploit the many incentives that exist for biomass power, have crafted a pass-through agreement that transfers fuel costs to ratepayers, and are making a run for the $70 – $80 million in taxpayer-funded Stimulus dollars. Meanwhile they’ve ginned up union support with promises of construction jobs, a familiar tactic that has also been used by biomass power developers in Massachusetts, where union members in matching green shirts carrying glossy signs suddenly showed up at an air permit hearing for the biomass plant proposed in Springfield (the green shirts for biomass supporters is emerging as a bit of a theme – developers provided green shirts for unions in a biomass fight in Hawaii, too).
 
The New Hampshire fight is revealing the deep and fundamental flaws and misrepresentations that underlie the myth of biomass power as “clean, green, and renewable” – and it’s just a preview of what’s starting to play out all around the country.
 
(picture credit Chris Matera. Mass Forest Watch; photo taken at White Mountain National Forest, New Hampshire)
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