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Biomass Plant Closures Affect Farmers

April 22,2015

 
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Chris Lange, standing by a toppled citrus tree at his farm in Woodlake, says he needs a chipper company to come to remove downed trees. The chippers take the wood waste to a biomass energy plant, but plants have been closing due to changes in the energy market, leaving Lange and other farmers with fewer options for disposing of orchard waste.
Photo/Cecilia Parsons

With utilities choosing not to renew contracts with biomass power plants and plants closing as a result, fewer facilities remain to process orchard waste and other biomass—leaving growers looking for solutions.
Tulare County farmer Chris Lange has about 80 acres of uprooted citrus and olive trees that he needs to have cleared and chipped. Lange said he is waiting on a chipping company, which has not yet received approval from biomass plants to bring the orchard waste in to be processed into electricity.
“We have been waiting for the chipper to come and it is just not happening,” Lange said. “I understand that the contracts for the chippers by the cogeneration plants are not being renewed. We (in the San Joaquin Valley) have more permanent crops being pushed out than ever, and this leaves everybody hanging.”
The root of the problem, according to Executive Director Julee Malinowski Ball of the California Biomass Energy Alliance, is 25- and 30-year contracts between biomass plants and utility companies that were established in the 1980s. Those contracts are now expiring and not being renewed, forcing biomass plants to close.
“The contracts were set for the first 10 years at a very high, fixed price to get the facilities built, and then the price would fall off into a market price. No one ever anticipated that the market price would be as low as it is because of the price of natural gas,” Malinowski Ball said. “Utilities will continue in some instances—but not all—to recontract, but they can’t recontract at a price that is so above market right now.”
Karen Norene Mills, California Farm Bureau Federation associate counsel and Public Utilities Department director, said there is “widespread acknowledgement and support for the extensive benefits attributable to biomass generation facilities,” but that the ongoing challenge is how to monetize the benefits.
The development of biomass energy in California was stimulated by the Biomass Development Program, which provided long-term support, funding or seed money, according to the California Energy Commission. The commission cited expiration of government price support to the biomass sector as the main reason for a reduction in biomass power generation in California, which peaked at 800 megawatts in the early 1990s.
About two-dozen direct-combustion biomass facilities currently operate in the state, with many of those subject to closure as contracts with utility companies expire.
Consultant Matt Barnes of Grid Subject Matter Experts said a number of plants “have shut down or will be shut down in the next few years when contracts expire, because they just can’t get a high enough rate from the market to justify continuing to operate.”
The California Biomass Energy Alliance points to environmental benefits of biomass such as reducing carbon emissions, diverting waste from landfills and reducing the demand for fossil fuels as reasons for maintaining the plants’ viability. According to the alliance, California biomass plants dispose of an estimated 8 million tons of waste per year and cut carbon dioxide emissions by 1.5 million to 3.5 million tons annually. Together, the plants produce 565 MW of electricity, enough to power more than 420,000 homes.
“We have lower energy prices, we have expiring contracts and we have an industry that is not only a renewable generating facility providing benefits to avoid fossil power generation, it is providing a whole host of other environmental and economic benefits,” Malinowski Ball said. “There needs to be a cost-share mechanism developed to help the plants survive.”
Steve Brink, California Forestry Association vice president of public resources, said electricity produced from natural gas costs 2-6 cents per kilowatt, whereas biomass power costs about 10 cents per kilowatt.
“With no direction from state government to pay the known environmental benefit, what would you expect the utility to do?” Brink said. “The state has not provided any direction of where this (biomass) needs to go. There’s 1 million, bone-dry tons just in the Northern California forests on both public and private lands that is piled up and burned, now that there’s no place to take it.”
With orchard growers pulling out and replacing older trees with young trees in an effort to conserve water during the drought, and with fewer biomass plants operating, “the problem is now amplified,” Brink said.
“As the contracts or power purchase agreements expire on plants on the valley floor—which almost 100 percent get their feedstock from crop agriculture—crop agriculture is not going to have anywhere to take it (orchard waste),” he said. “This is going to become a major problem for crop agricultural waste in the San Joaquin Valley particularly.”
Because there are specific restrictions on agricultural burning, farmers have fewer options for managing waste in many of the state’s air districts.
Timber operators, who are not located in the Central Valley and are not under the strict state air quality requirements related to agricultural burning, are allowed to pile and burn forest waste. However, Brink said, “The research is well established on the benefits of controlling combustion of wood in a boiler vs. out in the open and piled and burned.”
Kern County farmer Greg Wegis said if this issue is not resolved, San Joaquin Valley farmers would likely be spending several hundred dollars more per acre to have orchards cleared.
“We have our orchards removed for $100 to $200 an acre now, and if the cogeneration plants close it could cost us $900 per acre plus removal, which could cost another $900 an acre if we have to go to landfills,” Wegis said, “or we may have to figure out how to incorporate wood chips into our soils onsite if plants close. This is all an extra expense to growers.”
Tulare County citrus farmer Lange said removing his old trees is the first step needed before he can plant new trees.
“We’ve got young trees in a nursery that we anticipated planting this spring and we’re just sitting around waiting,” he said, adding that the tree removal is only one step in the replanting process. “When you have the trees chipped and then the chips hauled off, then we still have to rip the soil, do leveling, put in new irrigation, add berms and then plant.”

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