By Nicole Strong, Oregon State University Extension
Steve Forrester from the City of Prineville started us off with an overview of Prineville’s growth and energy needs. Prineville is situated in a place and time that offers an opportunity to make biomass utilization a feasible enterprise. In light of the recent growth of data centers, power consumption has grown from 10 megawatts to 100 megawatts. At this rate of growth, Prineville stands to surpass the current load capacities of current suppliers. This creates an opportunity and incentive for Prineville to begin to create its own power. Prineville has a proven track record with innovative problem-solving, including the
Marcus Kauffman is a statewide biomass resources specialist for the Oregon Department of Forestry. He acknowledged that enthusiasm about biomass has ebbed and flowed over the last several decades. This latest shift
Kauffman also highlighted two global markets with
- Exporting Pellets to European countries. There are currently 32 export wood pellets in the Southeastern United States, with a 9.4-million-ton capacity. There could be an opportunity for the Pacific Northwest to enter this market.
- Asian Carbon Policy. Japan and South Korea both require renewable energy that
surpasstheir production ability, which requires them to import renewable energy products. Canada is currently the largest supplier of pellets for Japan, and Vietnam is the largest supplier to South Korea, but there could be an opportunity for the United States to enter this market. Marcus did note that there is a new competitor in the form of palm kernel shells.
Oregon is currently engaged in a carbon cap and invest conversation, which includes biomass. Marcus stated that at this point in the conversation it is too soon to see how forests will be treated, but there is an opportunity for stakeholders to get engaged in the process if they want to see biomass utilization included in any policies that are developed. Several resources for those interested in further pursuing biomass initiatives include:
- USFS national Bio-Energy Technical Team: https://www.fs.fed.us/science-technology/energy-forest-products/wood-innovation
- Oregon Statewide Wood Energy Team: https://www.oregon.gov/ODF/Board/Pages/SWET.aspx
- USFS Wood Innovations Fund: https://www.fs.fed.us/science-technology/energy-forest-products/wood-innovations-grants
- Also, free technical assistance is always available from Marcus himself.
Energy Trust of Oregon is an independent nonprofit organization dedicated to helping Oregon’s 1.6 million residential, business and nonprofit utility ratepayers use less energy, save on energy costs and move to renewable resources.
Dave Moldal from Energy Trust of Oregon helped us better understand how current efforts by the Energy Trust could dovetail with local interests to utilize biomass materials. Energy Trust provides support for municipal project development assistance including, but not limited
David Smith, Oregon State University Professor Emeritus, has been working in the forest products industry for 45 years. Over the course of this
So what does Dr. Smith think we need for a successful biomass business?
- Adequate wood supply. Somewhere around 2000 truckloads a year, every year.
- Manufacturing Facility and High-Quality Products. An investment ($10 million) in a mill that can make a high-quality product, made to meet the specifications and expectations of markets made up of professional customers who will keep paying at least $5 million dollars for those products annually. This mill would employ at least 12 skilled full-time employees.
- Business Climate. Sensible regulation and trust between the public and private entities involved. Assured log supply.
- A Project Champion and a Well-Articulated Business Plan. The enterprise must be led by a team that is committed to success and knows what they’re doing. Forest treatments that generate biomass are often seasonal. They need to understand their products and the dynamics of the markets. If you’re going to attract investors, or get corporate support, all of these questions and more must be addressed in a solid business plan.
Dr Smith recommended two resources for anyone interested in planning a potential project:
- Biomass Enterprise Economic Model. Tool for estimating CapEx and OpEx for various biomass plant sizes and configurations http://owic.oregonstate.edu/biomass-enterprise-economic-model
- CBH- 4, Community Biomass Handbook, Vol.4. Enterprise Development for Integrated Wood Manufacturing, Eini Lowell, PNW Research
Station ,2017 https://www.fs.usda.gov/treesearch/pubs/53956
And finally, to quote Dr. Smith:
tu’ biomass? I believe the promise is true, and biomass utilization will grow, because it is in all of our best interest, for the sake of the forest, for the sake of rural economies, for the sake of the climate, and for the good of society, I call on industry and entrepreneurs to make it so.”
Key Takeaways and Application to Crook County
- Given current industrial growth and population increases in Prineville, biomass could provide important supplemental power and heat in the near future.
- Quantifying current annual supply of woody biomass can incentivize investors in the needed facilities and work force.
- We are really lucky in Oregon to have many technical and financial assistance opportunities.
- There are also potential growing international markets that can be considered in a business plan.
- There needs to an identified Project Champion. This Project Champion could tap into all the available resources identified in this panel to develop a feasibility study and business plan.
Possible Next Steps
- Crook County could self-identify as a Project Champion, and apply for an Energy Trust of Oregon feasibility analysis, including estimating county-level annual supply and potential markets.
Steve, you [the City of Prineville] has demand from these new data centers, but do they understand the connection between their energy and landscape restoration?
Steve: Yes and no. The data center community originally wanted nothing to do with anything related to the forest. Talking to them more, they are starting to understand the needs and they even gave us money to conduct a study. What they don’t want to do is get involved with the regulatory process.
So, should we log it or burn it?
Marcus: We should log it first, and then burn the slash. My job here was to talk about policy. Something that is not well understood is that 40% of the material from the trees is biomass. The other 60% is lumber, so we are letting 40% of this material decompose. This is what needs to be actively managed.
If you could change one policy to help incentivize biomass, what would it be and why?
David: The first thing I would change is related to the short term limitation on being able to offer biomass to respective investors. I think the Forest Service in particular needs to find a way in which they can work in collaboration with private entities to stimulate investments to guarantee they will meet a volume expectation. Back in the 20th century, they used the stumpage approach. The price would float based on market conditions to ensure industry had affordable logs.
Marcus: I would say we need to move away from these policies that only look at a single evaluation for biomass. We like biomass for its co-benefits. We need to move to a policy that recognizes the range of benefits biomass energy can provide. There is a whole suite of things biomass can do but none are recognized in any policy.
Steve: First I would change legal prospects and the process of being able to tie up timber sales and programs on the forest by NGOs. Then I would have a policy that changes where the money comes from for fighting forest fires.
Dave: It would be very beneficial if biomass energy projects (thermal and CHP) are able to monetize the energy and non-energy benefits directly. In addition, stable and predictable incentives are critical for this nascent energy technology, especially in the midst of low natural gas prices that do not account for the true cost of this fossil fuel energy resource.
How is manure used for energy?
Dave: Any biomass, bio-solids, or treated wastewater are put into an anaerobic tank, and then bacteria decompose that biomass producing biogas. Biogas by energy content is 60% methane. This biogas has enough energy to be run through a turbine, cleaned and then turned into renewable fuel.
Steve, what is going on with the solar panel project in town? There is infrastructure in Prineville that could use biomass, so what would it take to get this going again?
Steve: There are 5 permitted solar facilities in Prineville, but we all know that the sun doesn’t shine all of the time. One of the things that biomass could provide is base load power when the sun goes down. Solar power is very cheap. How much more would somebody pay to get that power firmed up 24 hours a day? We still have an old boiler in Prineville that could be used, and we had several people take a look at it who suggested it would take 6,000 kilowatts to power.
What does Japan pay for electricity to make it worth shipping pellets?
Marcus: I do not know the exact amount, but the way the tariff works is they have set rates. These rates are prescribed by the government and are the same for everyone. They are currently not interested in [new] markets, but a new pellet facility is on the cusp. We should be looking at the quantity they have and where the materials come from.