Monday, January 25, 2010

Biomass Supply Challenges for the Renewable Industry

     I wanted to share a little of the information from a white paper we wrote last year which combined and analyzed information from a few of the government studies which have been published regarding biomass supply.  The paper identifies some of the biomass sources and talks about how as we develop commercial scale biomass based projects the sustainable production and logistics of providing biomass is going to be the major contributor to the success of the project outside the processing technology itself.  If you are interested in receiving the “Feedstock Supply Solutions for Biomass Based Renewable Energy Companies and Rural Economic Development”  white paper drop me a note and I will send a copy.
     In this white paper we discuss how the actual demand for biomass is may go well beyond the billion tons per year as mentioned in these studies as economic conversion technologies develop.  We contend that it will be 1.2 - 2.0 billion tons per year in the foreseeable future depending on our desire to reduce dependence on fossil fuels.  It also details existing biomass resources and opportunities.
     Let's take a quick look at the biomass sources.

Forest Biomass - The DOE/USDA Billion - Ton report shows 368 million tons of forest resources available annually in the US. This breaks down into 141 million tons in use already, 139 million tons available with better land management, and 88 million tons not currently utilized.   This leaves 227 million tons potential forest based biomass for use.

Municipal Solid Waste (MSW) - MSW Municipal solid waste is getting much attention as a potential feedstock for renewable applications.  MSW has some very attractive qualities.  It is a feedstock which is generated in center of population.  The use of MSW has tremendous greenhouse gas benefits with reductions in methane production and landfill storage requirements.  MSW has it's own challenges as a feedstock.  We have not studied MSW in detail as it is not currently a part of our operating plans. If future conversion methods for MSW can economically generate liquid fuels or syngas it will be very beneficial.

Agricultural ResourcesThe DOE and USDA joint report, “Biomass as a Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply,” lays out in great detail three possible scenarios for the availability of biomass feedstock from agricultural lands.  In the first scenario with moderate yield increase and no perennial energy crops indicates about 421 million tons annual capacity.  In the highest capacity scenario with high yield increases and perennial energy crops the annual capacity is 997 million tons per year.  This indicates that agricultural resources can be utilized to produce a significant and possibly the largest portion of our biomass energy feedstock.

The economical challenge with all biomass sources is the delivered price to the conversion facilities.  The aggregation and transportation can quickly drive the prices for biomass feedstock out of the economical price range for the conversion facility.   The existing market demand is also a concern in biomass sourcing.  If a facility will increase regional demand for biomass significantly there will likely be an increase biomass prices overall.  Knowing the other uses for biomass and their acceptable levels of feedstock cost is also very important.  The facility operator who requires the lowest cost feedstock in the region will surely experience economic troubles down the road.

In order for the biomass industry to grow and survive long term the biomass feedstock supply chain stakeholders need to focus on increasing the production per acre and reducing the total costs to the conversion facility.  Conversion facility owners and operators also need to participate in the feedstock supply chain by supporting the producers and developing technologies which will help them reduce the overall costs of biomass to the facilities.

The consistent economical feedstock supply for biomass based operations will continue to be the major challenge in scaling and industry growth.  Companies that do not understand the biomass capacity and sourcing very well will not survive.

Tuesday, January 5, 2010

Is 2010 going to be the year renewable energy goes main stream?

     The growth of renewable energy has been filled with stops and starts over the last decade.  The economic turmoil of 2008 and 2009 slowed the progression of renewable energy projects and especially projects requiring significant equity investment.
     Wind energy has taken a firm hold and is really beginning to make a difference.  There are more wind projects coming on line and when electricity demand increases wind power is ready for more expansion.
     The corn ethanol industry which was hammered in 2008 by high corn and energy prices seems to be coming back a bit with the purchase of distressed assets by Valero and others along with many plants running at full production and making some money.  If commodity prices remain somewhat stable in 2010 it should be a decent year for ethanol producers.
     Several cellulosic ethanol companies are saying they will have demonstration scale plants on line in 2010 and some are even going to commercial scale.  I wish them well but will not hold me breath.  I think there is a big shakeout coming in 2011 when some of these companies simply have not been able to prove their technologies commercially viable.  All the DOE money in the world won't make a company successful in the long term if the process is not competitive.  I hope there are at least a few of these companies who have something to sell at the end of the day.  That will be great news.
     Drop in replacement fuels may arguably be the most exciting renewable area for the foreseeable future.  Torrefaction and pyrolysis hold huge potential for replacing fossil fuels in power generation and crude oil applications.  The economics of these processes in main stream applications will hopefully be tested in 2010.
     If carbon cap and trade legislation passes these two technologies may move forward very quickly.
     I don't think about about solar power much living in the Pacific Northwest but solar power generation has really made some good progress in 2009.  I think we will see the expansion of rooftop arrays and larger generating sites simply because the conversion is getting more efficient and there are companies "managing" the solutions rather than having to figure it out yourself.
    Who knows what 2010 holds for renewable energy?  With a little nudge from the government and some advances in technology we may see some good results in 2010.