Can the California bioMAT program spur demand for woody biomass

In recent years California has had an abundance of wood supply as a result of forest fire waste, could the California BioMAT program spur demand for woody biomass projects?

Can the California BioMAT Program Spur Woody Biomass Projects?

California needs to do something about the massive woody biomass feedstock as a result of agriculture waste, forestry and urban woodwaste. Can woody biomass projects really be the answer? Woody biomass projects have had a history of high build costs, difficult operating conditions and complexities with fulfilling feedstock supply.

Will wood-based biomass help reduce fire hazardous wood?

What is woody biomass?

Woody biomass is a form of biomass energy projects that relies solely on a targeted feedstock of urban woodwaste, agriculture woodwaste/residuals, forestry and fire hazard wood. The forestry or wood is usually broken down through a gasification process or traditional biomass combustion technology.

After processing through gasification or combustion, the power is usually sold to a utility counterpart. The excess charred wood is usually called biochar.

Biochar can be sold on the open market for various prices at grade levels. Commercial applications for biochar include activated carbon, filtration media, binder additives and more.

The global biochar market is anticipated to reach $5.9 billion by 2025. This is from current levels of $300 million today. In addition,

Biomass projects are considered renewable energy since they use an organic feedstock (input) to produce power as an output.

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What is the California BioMAT program?

The California BioMAT program is led from the S.B. 1122 legislative action that calls for three California investor-owned utilities to procure 250 MWs of biomass projects from developers or independent power producers.

The legislation calls for the three largest California investor-owned utilities to take action in buying energy from wood-based biomass project. The California Public Utilities Commission (CPUC) approves of this initiative.

The three investor-owned utilities involved in the California BioMAT program includes:

  • Pacific Gas and Electric Company: PG&E provides natural gas and electricity to most of the northern two-thirds of California, from Bakersfield almost to the Oregon border which represents 5.2 million households.
    • Required to procure 111 MWs of woody biomass projects
  • Southern California Edison: Southern California Edison, the largest subsidiary of Edison International, is the primary electricity supply company for much of Southern California, USA.
    • Required to procure 115 MWs of woody biomass projects
  • San Diego Gas & Electric: SDG&E provides natural gas and electricity to San Diego County and southern Orange County in southwestern California, United States. It is owned by Sempra Energy, a Fortune 500 energy services holding company based in San Diego.
    • Require to procure 25 Mws of woody biomass projects

Of the above investor-owned utilities, the California BioMAT program is slated to procure projects that fulfill the following feedstock requirements:

  • Urban Woodwaste: Required to procure 79 MWs of urban wood waste biomass projects
  • Agriculture Waste: Required to procure 91 MWs of agriculture waste biomass projects
  • Forestry Wood: Required to procure 51 MWs of forestry wood biomass projects

The California BioMAT program has a long ways to go to procure 250MWs of biomass. Several parties need to step up to help hit this goal.

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California BioMAT Timeline

The BioMAT program started as a result of industry themes. It’s been a long time coming for forestry in California. Here is the following timeline of how the procurement process has taken shape for woody biomass as a result of California BioMAT:

  • Senate Bill 705 forces curtailment of pile/burn due to air quality concerns.
  • Assembly Bill 32 requires CA to reduce greenhouse gas emissions to 1990 levels, favoring biomass gasification over traditional combustion technology.
  • Assembly Bill 1826 prohibits ‘dumping’ organic waste in landfill and recognizes biomass power generation as a suitable alternative.
  • Senate Bill1122 has led to the California BioMAT program, administered by the California Public Utilities Commission.
  • Governor has declared a state of emergency due to massive tree mortalities from the beetle kill and drought creating fire hazard threat.

See Related: Overview of Wood Pellets

What are the economic considerations for woody biomass?

Woody biomass has several economic tailwinds in the state of California that could drive further development. There are several economic conditions to evaluate whether or not woody biomass is a proper solution for forestry issues in California:

  • Approximately 40% of California’s existing biomass power plants are idled or scheduled to close due to the expiration of PPAs and end-of-life generating assets.
  • California agriculture generates millions of tons of orchard wood, nut shells, seed pits, rice hulls, and other non-food by-product every year.
  • Population increase in California is contributing to increasing levels of construction & demolition wood waste as well as increasing load demand.
  • CA Department of Transportation has awarded $100MM for fuel reduction work to reduce to fire impacts.

There a number of other tailwinds to consider in the economic drivers for biomass projects in California. For instance, California has a goal of reaching 100% renewables by 2045. This is big news for the state.

We know that the state can’t solely rely on solar and wind energy for their renewables targets, so there must be some other form of procurement.

This could lead to a further tailwind for wood waste biomass development.

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Is Woody Biomass the Right Solution?

Biomass development and construction is difficult. Far more difficult than wind or solar development. There are a lot more moving parts to the solution and investors realize that. Oftentimes, lenders are unwilling to lend against woody biomass projects.

In addition, woody biomass can be complicated to rely on trucks showing up with loads and loads of wood. In order to make woody biomass viable, it’s most optimal for the biomass project to have the feedstock supply on-site.

On the flip side, woody biomass has made some recent advancements in technology that can make it more stable of construction. In addition, biochar is in high demand as a result of oil drilling. Biochar can be used to soak up water and clean oil wells among other uses. Biochar is anticipated to see tremendous growth over the next five years.

Woodwaste biomass is a great solution to get rid of hazardous wood. However, these biomass projects might not be economically viable for investors to consider. I admire California’s forward-thinking approach to power, energy efficiency and electric vehicles.

What do you think about wood-based biomass projects? Let us know in the comment below we’d love to hear from you.

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