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Biomass woes
What’s behind the struggling N.H. biomass industry

04/27/17
By Ryan Lessard news@hippopress.com



 Earlier this month, the Indeck Energy biomass plant in Alexandria announced it was shutting down. And if market prices or regulations meant to help renewable energy providers don’t change, the state’s remaining plants could soon follow.

“There will be hundreds of jobs lost, literally,” said Hunter Carbee, a procurement forester with North Country Procurement.
 
Economics
Carbee procures and sells the wood that’s burned in biomass plants, which turns heat energy from burning wood into electrical energy. His whole business is with biomass energy, and right now he sells his wood predominantly to the Pinetree Power plant in Tamworth.
He said the problem with the biomass industry is not like anything seen before as the plants are operating at a loss right now, and the reason is twofold.
The larger force at work is the very low price of biomass energy sold in the wholesale market. 
“The price in the past year or two years has been significantly low. There’s less demand, we’ve had warmer winters and natural gas has come in to replace what was coal and oil, and natural gas was much cheaper as a fossil fuel,” Carbee said.
As a result, the economic forces are pushing everything toward more cheap natural gas. 
Secondly, the reimbursement rates under the state’s Renewable Portfolio Standard law are too low to make a difference. Carbee said the renewable energy certificates are meant to be incentives to strengthen renewable energy generators by filling the gaps in the prices. The goal is to ensure the state has 25 percent renewable energy sources by the year 2025. 
There is a bill that passed the Senate that aims to raise the reimbursement rates in an effort to save the ailing biomass industry. It’s currently being taken up by the House Science, Technology and Energy Committee.
 
Worst case
If the state loses its biomass plants, it will result in the loss of jobs and have a number of other negative ripple effects as well, Carbee said.
One effect is the impact on New Hampshire forests. 
With the closing of several New England paper mills, biomass plants are now the last remaining buyers of low-grade wood, essentially the scrap that foresters can’t sell to anyone else. 
If there isn’t a market for low-grade wood in the region, a lot of scrap will be left in the forest.
That could result in an increased risk of forest fires and invasive insect infestations. There may also be a negative aesthetic effect when it isn’t fully cleared of unusable wood.
The loss of biomass will also make the energy market more volatile, according to Jason Stock at the New Hampshire Timberland Owners Association.
“Although it’s not a huge chunk of power, they do provide a nice hedge to the fluctuating natural gas market,” Stock said.
Unlike most other renewable energy sources like wind or solar, biomass is constantly running 24/7 and the plants are strategically located throughout the state so they don’t have to transmit the power very far.
There are plants affiliated with or owned by Eversource in Portsmouth and Berlin and independent plants in Bethlehem, Whitefield, Tamworth, Bridgewater and Springfield, according to Stock.
Take those away, and you could exacerbate the energy prices in the state. 
Stock said the state already gets most of its energy from natural gas, about 50 to 60 percent. That makes the state vulnerable to the kinds of price spikes like those seen in the 2013 to 2014 winter. In periods of high demand like that, supply can’t keep up. 
If the state is even more reliant on natural gas, Carbee said, a bad winter could cause prices to skyrocket further. 
There are smaller biomass generators that supply heat and hot water to places like Winnisquam Regional High School in Tilton and the state health department building in Concord. Stock said that while they aren’t affected directly by the economic forces of the energy market, they could find it harder to find wood chips to fuel the generators if all the biomass plants go belly up. That’s because the power generators use a lot of wood, Stock said, about 1.2 million tons a year.
“The volume that [smaller heat generators] consume … it’s very difficult to justify owning and operating a chipping crew,” Stock said. 





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