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Development of Development of BioenergyBioenergy

Facilities Using Facilities Using Woody BiomassWoody Biomass

July 15, 2009July 15, 2009

Ed Gee, Team Leader, Woody Biomass Utilization Team,Ed Gee, Team Leader, Woody Biomass Utilization Team,USDA Forest Service, Washington, DCUSDA Forest Service, Washington, DC

Development of a Federal Bioenergy Development of a Federal Bioenergy Facility in Using Woody BiomassFacility in Using Woody Biomass

OverviewOverview

BackgroundBackground

Barriers & ChallengesBarriers & Challenges

Criteria for successCriteria for success

The next steps involved in successfully The next steps involved in successfully implementing a federal bioenergy facility.implementing a federal bioenergy facility.

... to sustain the health, diversity, and productivity of the nation’s forests and grasslands to meet the needs

of present and future generations ...

Shift from commodity production to Shift from commodity production to restoration of ecosystem function and restoration of ecosystem function and

resiliency while at the same timeresiliency while at the same time

A decade long drought in the WestA decade long drought in the West

A multiA multi--decade increase in the forest density decade increase in the forest density and increased incidents of fire, insects and and increased incidents of fire, insects and diseasedisease

An expansion of residential developments into An expansion of residential developments into forestsforests

Growing concern over the effects of climate Growing concern over the effects of climate change on forests change on forests

The Size and Intensity of Wildfire Has Increased In Recent Years

0

1

23

4

5

67

8

9

2005200019951990198519801975197019651960

Fire Year

Acr

es b

urne

d in

mill

ions

National Fire Plan

Putting towns at risk and damaging watersheds

Buffalo Creek Fire - 1996

In 1996, the Buffalo In 1996, the Buffalo Creek Fire in Creek Fire in Colorado did major Colorado did major damage to damage to DenverDenver’’s water s water supply, with one supply, with one storm dumping storm dumping more than 300,000 more than 300,000 cubic yards of soil cubic yards of soil into the Strontia into the Strontia Springs Reservoir, Springs Reservoir, causing millions of causing millions of dollars of damage.dollars of damage.(And killing two (And killing two people)people)

Forest Growth and Removals National Forests of the Interior West - 1920-1997

Source: Forest Resources of the United States, 1997; GTR-NC-219. USDA-Forest Service, 2001.

1952 1962 1977 1987 1997 20010

200

400

600

800

1000

1200

1400

1600Millions of Cubic Feet

Net Growth Removals

Forest growth greatly exceeds removalson NFS lands in the Interior West

When net forest growth exceeds removals, live biomass is increasing

Western Pine Bark Beetle Damage Western Pine Bark Beetle Damage ---- Prescott National Forest, ArizonaPrescott National Forest, Arizona

When dense forests combine with extended When dense forests combine with extended drought, the ecological stress sets the stage for drought, the ecological stress sets the stage for

increased insect epidemics and wildfireincreased insect epidemics and wildfire

•• Strategically placing Strategically placing these bioenergy these bioenergy facilities in areas close facilities in areas close to the raw material to the raw material

•• Decrease the many Decrease the many large fires that are in large fires that are in diseased and droughtdiseased and drought-- stressed forests.stressed forests.

We can decrease the effect of drought, pests, and wildfires

For most of human history, For most of human history, renewablesrenewables were predominant energy sources.were predominant energy sources.

Biomass, Water, Wind, Solar, GeothermalBiomass, Water, Wind, Solar, Geothermal

U.S. Energy Consumption, By Energy Source 1850-2007

020406080

100120

1850

1861

1872

1883

1894

1905

1916

1927

1938

1949

1960

1971

1982

1993

2004

Qua

drill

ions

of B

TUs

Wood/Biomass Coal OilNatural Gas Hydropower Nuclear

The Role of Renewable Energy Consumption in The Role of Renewable Energy Consumption in the Nationthe Nation’’s Energy Supply, 2008s Energy Supply, 2008

Key Recent DevelopmentKey Recent Development

Growing concern about unintended Growing concern about unintended consequences of using food crops to consequences of using food crops to produce biofuels. produce biofuels.

Focus of US biomass energy policy has Focus of US biomass energy policy has started to shift away from cornstarted to shift away from corn--ethanol ethanol toward toward ““lignoligno--cellulosiccellulosic”” feedstocks.feedstocks.

National Renewable Energy Goals National Renewable Energy Goals Goal AreasGoal Areas ApproachApproach OutcomesOutcomes

National National Biomass Biomass InitiativeInitiative

Biofuels Biofuels ––

68 billion 68 billion gallons by 2030gallons by 2030Biopower Biopower ––

10 quads by10 quads by

20302030Bioproducts Bioproducts ––

55 billion 55 billion pounds by 2030pounds by 2030

Vision workshop to update Vision workshop to update goals; followed by peer goals; followed by peer review. (final: Sept. review. (final: Sept. ’’06)06)Three RegionThree Region--specific specific Roadmap workshopsRoadmap workshops

Roadmap of R&D and policy strategies Roadmap of R&D and policy strategies and timelines (regional and national and timelines (regional and national perspective)perspective)Guidance to R&D BoardGuidance to R&D BoardGuidance for annual joint USDA/DOE Guidance for annual joint USDA/DOE solicitationsolicitationUsed to monitor progress by agenciesUsed to monitor progress by agencies

PresidentPresident’’s s Biofuels Biofuels InitiativeInitiative30 x 30 x ‘‘3030

Cellulosic ethanol Cellulosic ethanol ––

30% 30% gasoline displaced by gasoline displaced by 2030 2030 ––

60 billion gallons60 billion gallons

Convened 30xConvened 30x’’30 industrial 30 industrial workshopworkshopConvened government Convened government biofuels implementation biofuels implementation planning workshopplanning workshop

R&D & policy strategies to provide basis R&D & policy strategies to provide basis for DOE R&D planningfor DOE R&D planningFederal Implementation Plan to map Federal Implementation Plan to map agency rolesagency roles

20 in 20 in ‘‘1010 Reduce U.S. gas use by Reduce U.S. gas use by 20% in 10 years (2017)20% in 10 years (2017)

RFS for 35 billion gallons of RFS for 35 billion gallons of renewable and alternative renewable and alternative fuelsfuels

Facilitated growth in short time frame Facilitated growth in short time frame with expanded scope of fuel sourceswith expanded scope of fuel sources

Energy Act Energy Act 20072007

Advanced Biofuels Advanced Biofuels ––

36 36 billion gallons per year billion gallons per year by 2022by 2022

RFS RFS ––

Renewable Fuel Renewable Fuel StandardStandard

21 billion by 2022 from non21 billion by 2022 from non--starchstarchMust have 50% GHG reductionMust have 50% GHG reduction

25 x 25 x ‘‘2525 Wind, Solar, Biofuels Wind, Solar, Biofuels ––

25% energy displaced by 25% energy displaced by 2025 2025 ––

32 quads32 quads

Holding planning meetings Holding planning meetings and established and established workgroups**workgroups**

Roadmap of R&D and policy Roadmap of R&D and policy recommendations, (draft: Oct. recommendations, (draft: Oct. ‘‘06)06)

Adapted from BR&Di – Biomass Research & Development Initiative

Today, there is a resurgence of Today, there is a resurgence of interest in renewables.interest in renewables.

Oil PricesOil PricesNational SecurityNational SecurityClimate ChangeClimate ChangeAgriculture Policy Agriculture Policy

Wood is an obvious feedstock choice for Wood is an obvious feedstock choice for biomass energy in some regions.biomass energy in some regions.

Federal agencies purchase the green energy

RTOs manage dedicated green energy markets for federal agencies

Private sector firms 16 Energy Savings Contractors- design, construct, and operate power plants

Federal, State, Tribal and private- owned forests provide wood residues

ConceptConcept

Government Private Sector Government

BeforeBefore

AfterAfter

Thinned to Improve Thinned to Improve Aspen for WildlifeAspen for Wildlife

BeforeBefore

AfterAfter

Thinned to Reduce Hazardous Thinned to Reduce Hazardous Fuels & Forest Health Fuels & Forest Health

RestorationRestoration

BeforeBefore

AfterAfter

Thinned to Protect Thinned to Protect California Spotted OwlCalifornia Spotted Owl

Enhancing Future RCW HabitatEnhancing Future RCW Habitat

Harvey SaleHarvey Sale

Lassen NFLassen NF

USFSUSFS

Goshawk Management Area: Goshawk Management Area: biomass harvested four weeks prior biomass harvested four weeks prior

to phototo photoEagle Lake Ranger District, Lassen Eagle Lake Ranger District, Lassen

National ForestNational Forest

Red-Cockaded Woodpecker and Nest Tree

Piedmont National Wildlife RefugePiedmont National Wildlife Refuge

Design

Development Stage Financing

Feasibility S

tudy PPA

Site

Staffing

Fuel

O&

M

Close

Negotiations

2 -3 Years

1 Year

•Establish agreement with RTO

•RTO to create dedicated wholesale green energy market for the government

•Engineering review of developer’s plans

•Negotiate PPAs with federal agencies

Government

Private Sector

Developer

Construction Phase Commercial Operations

Shakedown

SiteWork

Fabrication, erection,etc

Start-up, testing

Provisional A

cceptance

Punch List

Final Acceptance

2 – 3 Years 10 – 30 Years

< 1 Year

Government

•Continued development of PPAs with federal agencies

Private Sector

Developer

Strategic PlanningStrategic Planning

Establish MOUs with federal agencies as neededEstablish MOUs with federal agencies as needed

Identify new projectsIdentify new projects

Project Management and FacilitationProject Management and Facilitation

Identify biomass resources and broker their acquisitionIdentify biomass resources and broker their acquisition

Provide list of potential federal green energy buyersProvide list of potential federal green energy buyers

Conduct independent Power Plant design engineering Conduct independent Power Plant design engineering reviewreview

Conduct System analysis and modeling, i.e. SupplyConduct System analysis and modeling, i.e. Supply-- GenerationGeneration--TransmissionTransmission--SaleSale

Government Sector FunctionsGovernment Sector Functions

Design/Construction FirmDesign/Construction Firm

Overall Project OwnerOverall Project Owner

Feasibility StudyFeasibility Study

Legal ReviewLegal Review

Project Risk ManagementProject Risk Management

PermittingPermitting

Land acquisition Land acquisition

Site analysis/planning/developmentSite analysis/planning/development

Plant designPlant design

ConstructionConstruction

OperationOperation

Private Sector FunctionsPrivate Sector Functions

BarriersBarriers

Supply Chain Supply Chain –– Feedstock Feedstock

Fear of overFear of over--scale and nonscale and non--sustainabilitysustainability

Transportation costsTransportation costs

Economic resources for startEconomic resources for start--upup

Lifecycle analysis vs capitalization costsLifecycle analysis vs capitalization costs

Mixed support from legislative branchMixed support from legislative branch

ChallengesChallenges

Competing priorities of appropriated fundsCompeting priorities of appropriated funds

Climate changeClimate change

Wildfire suppressionWildfire suppression

Forest health restorationForest health restoration

Providing green jobsProviding green jobs

Economic resourcesEconomic resources

SocioSocio--political supportpolitical support

Criteria for SuccessCriteria for Success

Social licensingSocial licensing

Reliable and predictable supply of woody biomassReliable and predictable supply of woody biomass

Efficiency & ScaleEfficiency & Scale

Transportation networkTransportation network

Close proximity to transmission lines/substationsClose proximity to transmission lines/substations

Financial supportFinancial support

Power purchase agreementPower purchase agreement

Climate ChangeClimate Change

The Next Steps Involved in Successfully The Next Steps Involved in Successfully Implementing a Federal Bioenergy FacilityImplementing a Federal Bioenergy Facility

Developing a strong federal partnership with DOEDeveloping a strong federal partnership with DOE-- Federal Energy Mgmt Program Federal Energy Mgmt Program –– 16 ESCO16 ESCO’’ss

Secure the geographical location Secure the geographical location –– vertical alignmentvertical alignment

Use ESCO/traditional financial ventureUse ESCO/traditional financial venture

PrePre--feasibility studyfeasibility study

Assurance of feedstock supply Assurance of feedstock supply –– stewardship contractingstewardship contracting

Construction of bioenergy facilityConstruction of bioenergy facility--thermal and CHPthermal and CHP

Power Purchase AgreementPower Purchase Agreement

Monitor pilot bioenergy projectsMonitor pilot bioenergy projects

Cost efficiency and potential savings of various sources to Cost efficiency and potential savings of various sources to generate thermal energy.generate thermal energy.

Source Price Unit MMBtu/unit Source Price Unit MMBtu/unit $/MMBtu $/MMBtu Commerical Residential Commerical Residential

Wood Chips Wood Chips $ 40 $ 40 grn ton grn ton 10.1 10.1 $6.09 $27,525 n/a $6.09 $27,525 n/a

Wood Pellets$ 160 Wood Pellets$ 160 ton ton 16.4 16.4 $12.20 $67,805 $12.20 $67,805 $1,153$1,153

Cordwood Cordwood $ 175 $ 175 cord cord 19.5 19.5 $12.82 $62,372 $12.82 $62,372 $1,060 $1,060

Natural Gas Natural Gas $ 1.05 $ 1.05 therm therm 0.1 0.1 $13.13 $72,975 $13.13 $72,975 $1,241 $1,241

Heating Oil Heating Oil $ 2.95 $ 2.95 gallon gallon 0.139 0.139 $28.30 $147,500 $28.30 $147,500 $2,508$2,508

Propane Propane $ 2.10 $ 2.10 gallon gallon 0.0905 $29.01 $161,271 0.0905 $29.01 $161,271 $2,742$2,742

Critical Issues for Effective Critical Issues for Effective Development of Biomass EnergyDevelopment of Biomass Energy

EfficiencyEfficiency

ScaleScale

Wood Biomass SupplyWood Biomass Supply

Sustainable HarvestSustainable Harvest

EmissionsEmissions

Climate ChangeClimate Change

Key Concepts to Advocate:Key Concepts to Advocate:

The government doesn't just dictate to the public but The government doesn't just dictate to the public but leads by example.leads by example.

The 'example' includes demonstrating how to advance 2 The 'example' includes demonstrating how to advance 2 important sustainability principals, i.e.residual/waste important sustainability principals, i.e.residual/waste minimization and generation of green energy.minimization and generation of green energy.

It also includes use of the latest and cleanest resourceIt also includes use of the latest and cleanest resource-- toto--energy technologies energy technologies -- many of which were developed many of which were developed with government funds.with government funds.

AccomplishmentAccomplishment’’s with s with Bioenergy FacilitiesBioenergy Facilities

Meeting Executive Order 13423Meeting Executive Order 13423

Decreasing fossil fuel dependencyDecreasing fossil fuel dependency

Decreasing wildfires through hazardous fuel Decreasing wildfires through hazardous fuel reductionreduction

Decreasing thermal and CHP costsDecreasing thermal and CHP costs

Decreasing GHG through wood substitutionDecreasing GHG through wood substitution

Decreasing our CO2 emissions Decreasing our CO2 emissions -- climate changeclimate change

Increasing Forest Health RestorationIncreasing Forest Health Restoration

Increasing National SecurityIncreasing National Security

Thank YouThank You

Q&AQ&A’’ss