EPA Considers GHG Rules as Economic Forces Mount Against Biomass

Date: December 6, 2010

Source: News Room

Industry is turning up the pressure on EPA to declare greenhouse gas (GHG) emissions from biomass carbon neutral especially as low energy prices and rising feedstock costs undermine the economic viability of energy from biomass which has led developers to cancel several proposed projects. On Nov. 30 Xcel Energy announced that it is canceling plans to install biomass gasification technology at its Ashland, WI, plant "due to the significant increase in the estimated costs, declining costs of other generation options and considerable regulatory uncertainty at the state and federal level." On Nov. 17 FirstEnergy Corp. said it would shut down two of its coal-fired units in Ohio rather than convert them to 80 percent biomass by 2013, as previously planned, due to economic concerns. In a statement announcing the cancellation, FirstEnergy said, "Despite our best efforts, we were unable to overcome the challenges of the difficult economy to cost-effectively repower the Burger plant to burn biomass." Last July, a Portuguese company - Martifer Renewables, withdrew a license application for a 106.8 megawatt hybrid biomass-solar plant in California noting in a June letter to the California Energy Commission, "We were not able at this time to resolve some of our issues regarding project economics and biomass supply, among other things."

The cancellations of these biomass projects come as EPA weighs whether to exempt biomass facilities from new GHG permitting rules and, separately, whether to consider biomass as best available control technology (BACT) under those same permitting rules.

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