MICHIGAN BIOMASS NEWS

Keep cool Michigan: Biomass has your back

There going to be a lot of debate in Lansing this year on how to make up a projected shortfall in electrical generation capacity starting next year as new regulations force power companies to pull coal-fired power out of the mix because it doesn’t make economic sense to upgrade emission controls on those 50-year-old plants.

The big winner will likely be natural gas – a clean and abundant source of energy, some of which comes from right here in the Great Lakes state. But, there’s another affordable solution: biomass.

Ensuring there’s enough electricity to go around – especially during peak usage periods like the middle of summer – is a big part of the nation’s power infrastructure. “The Grid” can’t store energy in giant batteries to save for those times when people crank up their air conditioners and freezers work overtime to ensure there is ice for everyone’s tea – sweetened, if you happen to be from the South.

That means electric companies need the ability to turn up the power when people want it most, or to supply backup power when major storms cause disruptions in service. “Capacity” in power sector terms means the ability to generate as much power as is needed, precisely when it’s needed. That means having a little extra on the side for those “just in case” moments.

Starting next year Michigan will begin to fall short of the capacity that regulators say is necessary to ensure power stays on when temperatures soar and storms rake across the state. That’s because the state’s power producers will begin to shut down coal-fired plants that can’t economically meet new U.S. EPA air standards.

Biomass power provides “capacity” just like natural gas. Electricity produced from sources like, tree tops left from timber harvest, and crates and pallets diverted from landfills isn’t affected by these new environmental rules and will continue to bring cost effective reliability to Michigan’s electricity customers, just like they’ve been doing the past 30 years.

So, this summer you can sit back, relax and enjoy that second tall glass of tea, knowing that biomass power producers in Michigan will make sure there’s plenty of ice to keep you and your beverages cool as a cucumber.

Oil on biomass: It’s a good thing

Who’d have thought: the American Petroleum Institute “gets” biomass and believes that state and federal governments need to do more for it – get their act together in taking advantage of this renewable resource and its long-term positive impact on climate change, the environment and the economy.

That’s what API said in its 2015 State of American Energy report. Governments need to resolve policy uncertainties on regulating biogenic emissions from biomass in support of the overwhelming science that shows the carbon benefit of converting waste materials to energy.

“Yet, the industry faces challenges both to the continued success of current facilities and the ability to grow. State policies often do not value the baseload capacity provided by existing facilities. Also, state renewable policies are an uneven patchwork of incentives that have different rules and widely varying values from state to state,” the report says.

We agree on all accounts. The Union of Concerned Scientists in 2012 identified 680 million tons of biomass available for energy and fuel, equal to 54 billion gallons of nonfood ethanol and biofuels, and enough electricity to meet 20 percent of U.S. energy demand by 2030. Bioenergy can provide a more stable energy future, improve environmental quality, and increase economic opportunities.

We also agree that “biomass development is…significantly hampered by federal tax policy …resulting in an uneven playing field for biomass (and) does not offer predictable, long-term incentives necessary for capital intensive, baseload energy projects like biomass.”

Biomass is uniquely positioned amongst renewables to provide immediate economic, energy and resource benefit, and long-term climate change benefit. Getting resource and energy policy aligned to take advantage of this will help ensure the viability of this industry and should be paramount on Capitol Hill as well as state capitols around the country.

UP ‘unintended’ victim of perfect policy storm

I hate to use clichés but it’s so true in this case: The UP power dilemma is the product of the perfect storm. It’s a tale in which the last chapter as the good folk and businesses of Michigan’s Upper Peninsula getting saddled with cost they don’t deserve.

Chapter 1: Once upon a time, the Michigan legislature passed a law that limited how many electric customers could get their power from someone other than the incumbent utility – unless you were a UP mining company served by We Energy, which are exempt from the from the limitation because they composed more than 75% of We Energy’s Michigan retail sales. They argued successfully that the mines should have the choice option despite the limit. They took that option, which made it harder for We Energy to do business in Michigan.

Chapter II: Meanwhile, in a land far, far away, the US EPA drafted new rules on power plant emissions. We Energy first said it was selling its old 430-MW coal plant in Marquette because of these regulations, and the loss of the mines’ load, but the numbers didn’t add up so they said they would close the plant, putting a huge chunk of UP power supply in jeopardy.

Chapter III: But wait! That plant can’t close, says MISO, the agency that runs the grid. Without that old coal plant, reliability in the UP – the ability to keep the lights on – will suffer. MISO said that plant “must run.”

Chapter IV: There’s more. “OK,” said We Energy, “but it costs a lot to run that plant,” about $100 million a year, the feds said, including the cost of emission upgrades to meet new EPA air standards.

Chapter V: Meanwhile, back in that land far, far away the feds rolled out a new method for allocating “system costs” – determining how users divvy expenses for things like transmission and infrastructure. When the calculator smoke cleared, they said 99.5% of those We Energy costs must be paid by UP ratepayers, even those who weren’t We Energy customers.

The End: Not quite. This is a sticky wicket of unprecedented stickiness. Clearly these unintended consequences are neither “reasonable nor prudent” for UP electric customers.

Michigan needs a plan for the UP and it needs to capitalize on its local energy resources, like woody biomass, rather than forking over billions to power an old coal plant, or build transmission.

The state, the feds, utilities and industry in the UP need to fix this problem, and biomass should be a part of that solution.

Bioenergy Day a big hit

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What a fantastic day, celebrating the Second Annual National Bioenergy Day in McBain last week.

The event in McBain was one of 40 events in 24 states and Canada designed to raise awareness about bioenergy.

“Bioenergy contributes a great deal to our local economy and helps keep forests and the forest industry around here more resilient,” said Thomas Vine, plant manager, Viking Energy. “We employ local residents and generate clean energy from materials that would otherwise be discarded. We wanted to give people an opportunity to see what we do firsthand and learn more about bioenergy. We are so grateful for the turnout.”

In Michigan in 2012, approximately 68% of all renewable energy produced was from wood (EIA, 2012) – more than wind and solar combined and second only to hydroelectric energy.

“We are grateful to our sponsors and partners for their dedication to raising awareness about the role of bioenergy in communities across the nation,” said Gary Melow, Director of Michigan Biomass, a coalition of the state’s wood-fired power plants. “Today, all across the country, people are learning about bioenergy and how it helps local economies and forests.”

Michigan National Bioenergy Day event sponsors include Michigan Biomass, the Michigan Association of Timbermen, the Michigan Forest Products Council, the Wexford and Missaukee Conservation Districts, the Michigan Department of Natural Resources, the U.S. Forest Service, Biewer Lumber, Hydrolake, Viking Energy, AIS Equipment and Lutke Forest Products.

Learn more about bioenergy at www.bioenergyday.org.

Biomass open house Oct. 22 in McBain

SAVE THE DATE!

National Bioenergy Day open house, Wed., Oct. 22

Join Michigan Biomass and its partners in celebrating the Second Annual National Bioenergy Day with a public open house at Viking Energy in McBain, Wed., Oct. 22, from 11 a.m. to 4 p.m. It will include free hotdogs and chips, plant tours, a display of fire-fighting equipment, interpretive displays on wildlife and habitat, and information for forest owners.

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The event is one of dozens nationwide intended to showcase heat and electricity produced from biomass resources, and highlight its many benefits: forest health, reduced risk of catastrophic wildfire, habitat development, and local jobs and economies.

Event partners are the Michigan Association of Timbermen, Michigan Forest Products Council, the Wexford and Missaukee county Conservation Districts, AIS Equipment, Hydrolake, Inc., Biewer Lumber, Viking Energy of McBain, Michigan Department of Natural Resources and the U.S. Forest Service.

For more information, call Michigan Biomass at 989-763-0672, or e-mail at gary.melow@michiganbiomass.com.

Visit www.bioenergyday.com to learn more about the this nationwide event, and bioenergy.

Ice instead of power lines: A cool idea

There’s more than one way to skin a cat, and there’s more than one way to store energy.

Boothbay Harbor is a summer resort town on a peninsula in Maine, served by a single high-voltage line that, in peak season, struggles to keep up with tourist demand. Replacing that line would be costly, so Central Maine Power is thinking outside the box. Or, perhaps, thinking in a different box.

It’s ice, ice baby.

In a state-approved demonstration project, CMP is providing Boothbay customers with Ice Bears:  high-tech boxes that use blocks of ice to chill water and keep tourists cool. Thirty-two units have been installed.

The Ice Bear stores cooling energy in the form of 450-gallon blocks of ice. At night, when demand is low (and sometimes rates, too), the Ice Bear makes ice. As afternoon temperatures rise it switches to cooling mode. The ice melts, keeping travelers cucumber cool.

It’s exactly that kind of “new box” thinking that Michigan – and the U.S. for that matter – needs in order to develop a new energy paradigm that is cost effective, leans on efficiency, and provides diversity as a hedge against rising commodity costs and alternatives to transmission build-out.

Persistent ice flows on Lake Superior kept beachgoers comfy over Memorial Day weekend. Maybe those chilly waters could be put to good use this summer and reduced the load on the UP’s shaky power infrastructure.

Now that’s a cool idea.

Read more at the Portland Press Herald.

Biomass is baseload for the future

The house Energy & Technology Committee in March conducted two days of marathon hearings on HB 5542 that would allow Michigan ratepayers to shop for their power, but allow regulated utilities to maintain their monopoly on the distribution of that power. It made for great theater, with the television lights, the pointed questions from the committee and the barbed and sometimes defensive responses from those at the witness table.

The choice debate is about one thing, and one thing only – rates. Large commercial and industrial ratepayers say Michigan’s rates are too high and competition will lower them. Others say opening the marketplace will lead in the opposite direction – higher prices and less reliability. Both sides lean on the same data and information to support their position, and presented examples of successes and failures from other states.

No one, however, disagreed with one point made repeatedly during those hearings: new US EPA air standards are forcing the closure of aging coal plants, and with those closures comes the loss of baseload generating capacity critical to reliability.

Some think Michigan should put its energy eggs in the natural gas basket, but they also know it only takes one hiccup to drive up gas prices, leaving ratepayers holding the bag.

As qualified small power facilities, biomass plants don’t have those limitations and bring reliability and diversity to the state’s energy portfolio.

Biomass is part of the solution. Where ever energy policy discussions go, biomass power needs to be part of a diverse energy portfolio that will best serve Michigan consumers.

Biomass is Worth Public Investment

In January Michigan oil interests testified before the Michigan House Energy and Technology Committee on a trio of bills to promote enhanced oil recovery (EOR), which employs various extraction technologies to draw the last bit of oil from a reservoir. It’s the tough-to-get-at stuff conventional drilling leaves behind.

Additional oil extraction would contribute to energy independence, Michigan jobs and better economics.

Biomass does all these things, too.

According to the Dept. of Treasury, these so-called “stripper wells” in FY 2013 produced 2 million barrels (27% of total net production) and generated $10.5 million in severance tax revenues. Michigan could produce more oil from these marginal wells – up to 200 million barrels over their lifetime – if the extraction costs were lower, like lowering the severance tax on that oil. HB 4885 would cut it in half.

Biomass is Michigan-made domestic energy. It creates Michigan jobs and supports rural economies and the local tax base. It relies on “leftovers” like forest residuals and wood scraps from diverse and distributed sources, which can be tough-to-get-at stuff.

We’ve been doing it for 30 years, without subsidies or other specific public investment. And because wood is a renewable resource, we’ll never leave because the well ran dry.

That’s a pretty good deal for Michiganders and warrants support in state energy policy.

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