Biomass Feasibility Project Final Report - Xcel Energy

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1994 Legislature – As part of the Prairie Island Agreement, NSP is mandated to generate 125 MW of biomass power from farm grown closed loop biomass. 1995 Legislature – 1996 Legislature – Farm grown closed-loop biomass is defined. Interim fuel exemptions are provided for. Nonbiomass fuel use is capped at 25%. Projects mandated to demonstrate financial viability. Single project MW limitation of 75 MW established, and waste wood is allowed as a fuel source for 25 MW power from St. Paul district heating system. 1998 Legislature – Ratepayer recovery of utility expenses incurred in meeting the mandate is permitted. Act of God exemption form requirement to use biomass fuels is included. 2000 Legislature – Agricultural cropwaste is permitted to fulfill 25% of project fuel requirements. Use of turkey litter is permitted by Fibrominn plant. The Fibrominn plant is limited to 50 MW, and the PPA price is capped. Co-firing with nonbiomass fuels is permitted. New projects restricted if they will adversely impact existing projects. 75 MWs mandated to come from “Agricultural Biomass”. 2001 Special Legislative Session – NSP ordered to “consider on an equal basis” the Northome Biomass Project. The project is required to be operational by December 31, 2002. Facilities datisfying the biomass mandate are exempted from property taxes. 2003 Legislature – Operational date for the Northome Biomass Project changed to construction start date of December 31, 2005. 2003 Legislature – NSP ordered to sign PPA for Northome Biomass project under Reneweable Energy Objective. 2003 Special Session – Legislature Reduces mandate to 110 MW, requires approval of EPS/Beck transfer to NGPP if the project size is reduced. 2005 Legislature– The use of “sustainably managed woody biomass” by mandated projects is permitted. State agencies and project developers are mandated to define best practices for “sustainably managed woody biomass”. December 1998 - NSP and EPS Beck execute a PPA for 25 MW to be powered by a Whole Tree Burner January 2000 – EPS/Beck project increased to 50 MW February 2003 - EPS/Beck PPA transferred to NGPP. The project will now use chipped wood, at least 50% from closed loop biomass. March 2005 – NGPP Purchased by Laurentian Energy Authority. June 2006 – Construction underway at LEA November 1997 - NSP and MNVAP execute a PPA for 75 MW to be fueled by Alfalfa Stems December 1998 - NSP and St. Paul Cogeneration execute a PPA for 25 MW to be fueled by waste wood December 1999 – MNVAP contract terminated for noncompliance. August 2000 –+ Fibrominn PPA Signed Summer 2001 – Construction begins on St. Paul District Energy plant. Spring 2003 – Construction completed on St. Paul District Energy plant. November 2004 – Fibrominn Construction begins Early Fibro proje comp expe 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Figure VII-1: A Timeline of Minnesota's Biomass Mandate Identifying Effective Biomass Strategies: Page 97 Quantifying Minnesota’s Resources and Evaluating Future Opportunities
GOVERNMENT ECONOMIC DEVELOPMENT INCENTIVES FOR BIOMASS POWER PROJECTS Government incentives for renewable power generation are a moving target. The Minnesota State Legislature and the United States Congress currently are deliberating a flurry of bills encouraging all varieties of renewable energy. So any account of incentives must be updated frequently as some of those bills pass into law. Rather than provide only a snapshot of today’s programs, which will be superseded by tomorrow’s, we supply addresses of websites that will supply current information. Another reason to check with the agencies before planning a project around government programs is that some of those programs which look good on paper have no funding. That seems to be true especially of federal programs. They survive on the page in the hope that some day the Congress will see fit to replenish them. Most existing government incentives promote energy efficiency and conservation on the demand side, not renewable capacity on the supply side. Even when incentives are designed to encourage the production of renewable energy, they tend to focus on efforts by small communities, farms, private businesses and family households to generate power for internal consumption using small technologies like wind generators, photovoltaic and solar thermal panels, and anaerobic digesters. Few programs target biomass plants large enough to export power to the grid. In the aggregate, local initiatives and small technologies can make valuable contributions to our overall renewable energy portfolio. But since boilers, turbines and gasifiers are expensive, biomass plants generally operate at utility scale or else co-generate power as adjuncts of substantial manufacturing or processing enterprises. Aside from programs targeting renewable energy projects, however, there are many larger economic development programs that can help any kind of project, including biomass energy. Minnesota through the years has been in the forefront nationally in establishing agencies and programs to help businesses grow. Those programs can work well for co-generation, which probably will continue to be the dominant form of biomass project, because they tend to favor expansions by existing businesses rather than start-ups. Therefore we begin with a survey of generic economic development programs and follow that with a look at programs specifically aimed at renewable energy development. General-Purpose Economic Development Programs Though incentives designed specifically for large scale biomass power generation are few, developers of biomass plants can take advantage of many generic economic development programs. Fortunately for Minnesota biomass energy developers, one of the nations most powerful is available through the Minnesota Department of Trade and Economic Development (DEED). It’s commonly know as JOBZ Page 98 Identifying Effective Biomass Strategies: Quantifying Minnesota’s Resources and Evaluating Future Opportunities
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FINAL REPORT Identifying Effective
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OVERVIEW The profile of bio-power (
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This net-net amount usable for fuel
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Chapter VII: Government Policies, I
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Chapter XI: Project Development Han
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Fuel Selection Considerations......
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Carbon Emissions Policy ...........
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APPENDIX D : DATA SOURCES .........
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Figure VII-1: A Timeline of Minneso
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CHAPTER I : INTRODUCTION Bio-power
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into renewable technologies that su
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BioPET Figure I-2: BioPET Main Scre
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CHAPTER II : BIOMASS FUELS BIOMASS
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when evaluating individual projects
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450,000 Corn Grain Corn Grain 51% 4
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For purposes of this analysis, all
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Billion Btu 70,000 60,000 50,000 40
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Billion Btu 300,000 250,000 200,000
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30,000 Dairy Manure Hog Manure 19%
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Identifying Effective Biomass Strat
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Dedicated Energy Crops Crops raised
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primary purpose, like food, animal
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Manures Variability. Depending on t
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equipment, logistics, soil health,
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Even a limited contribution to Minn
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Since NASS doesn’t provide a simi
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Billion Btu 160,000 140,000 120,000
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Capacity Factor = The amount of tim
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$9.00 $0.06 $8.00 $7.00 $3.16 $ per
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PHYSICAL FACTORS AFFECTING BIOMASS
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Thermal treatment of SSO also invol
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Wood Chipping Trees and logging res
Page 68 and 69: Baled Agricultural Biomass Preparin
Page 70 and 71: fuels exceeding the moisture conten
Page 72 and 73: • Rail. For most biomass plants,
Page 74 and 75: CHAPTER V : BIO-POWER CONVERSION TE
Page 76 and 77: Pile Burners Pile burners are a ver
Page 78 and 79: suspends them as they burn. Spreade
Page 80 and 81: Technology Type Table V-1: Emission
Page 82 and 83: Fuel (Gas) COMBUSTOR COMPRESSOR TUR
Page 84 and 85: • increased thermal to electrical
Page 86 and 87: Biodiesel has somewhat different ma
Page 88 and 89: Table V-4: Bio-Power Generation Res
Page 90 and 91: fuel plant to co-fire biomass than
Page 92 and 93: Co-Firing Gasified or Liquefied Bio
Page 94 and 95: esidues leave energy on the table b
Page 96 and 97: The industry’s most strenuous cha
Page 98 and 99: pulp from logs. Minnesota’s two c
Page 100 and 101: The result has been satisfactory, i
Page 102 and 103: City (plant name) Table VI-6: Ethan
Page 104 and 105: cut energy consumption 10%. But his
Page 106 and 107: Laurentian Energy in Hibbing and Vi
Page 108 and 109: achieve a 50 reduction in overall e
Page 110 and 111: (Nelson and Lamb, 2002) Figure VI-4
Page 112 and 113: e a 75 MW plant using alfalfa stems
Page 114 and 115: District Energy’s intervention re
Page 116 and 117: Fibrominn Concerns about the enviro
Page 120 and 121: Minnesota Jobs Opportunities Buildi
Page 122 and 123: Real Estate Tax Exemptions Since re
Page 124 and 125: For more information, contact Paul
Page 126 and 127: Fort Snelling, MN 55111-4007 612-71
Page 128 and 129: USDA Rural Development Because biom
Page 130 and 131: egion encompassing approximately 13
Page 132 and 133: the boundaries of the Taconite Assi
Page 134 and 135: certain communities located in inel
Page 136 and 137: Suitable borrowers. For-profit SBCs
Page 138 and 139: http://www.state.mn.us/portal/mn/js
Page 140 and 141: NEW POLICY INITIATIVES Community-Ba
Page 142 and 143: The Energy Act also established the
Page 144 and 145: Overall Structure Fuel Delivery Pat
Page 146 and 147: expenses, rate of return, inflation
Page 148 and 149: $0.350 295 kW CHP $0.300 $0.250 $0.
Page 150 and 151: plant characteristics and plant exp
Page 152 and 153: Table VIII-4: Power Plant Financial
Page 154 and 155: Table VIII-7: Scenario Definitions
Page 156 and 157: Disregarding the manure digester, t
Page 158 and 159: CHAPTER IX : OVERCOMING BARRIERS Mi
Page 160 and 161: Biomass also tends to have a low en
Page 162 and 163: Learning more about the energy pote
Page 164 and 165: Recent projects in Minnesota and ne
Page 166 and 167: e calculated. Plants above 10 MW do
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To realize its goal, a mandate must
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alone. A decade or two from now, ev
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project in South Dakota because it
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surrounding air permits for biomass
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CHAPTER X : SEEKING OPPORTUNITIES W
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OPPORTUNITY 4: RETROFITTING EXISTIN
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for a full-time permit is more comp
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While this study did not focus spec
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Waste Landfill: a contract with a l
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pipelines, city water and sewer con
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ENVIRONMENTAL PERMITS A bio-power p
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AIR PERMITS The Minnesota Pollution
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Rate Agreements Facilities of 10 M
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BIBLIOGRAPHY AND RESOURCES The foll
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Cinergy Business Solutions - Combin
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Energy Efficiency and Renewable Ene
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Gordon, G. (2005, December 26). Wat
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McNeil Technologies, Inc. (2003). B
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Pollution Control Agency, ed. [PCA]
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Stephens, W.R. (2006, March). A Bio
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Xenergy and Energetic Management As
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OVERALL STRUCTURE The evaluation to
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Field Characteristics Energy Conten
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Feedstock Site Processing Yard (opt
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Storage Facility Figure A-6: Feedst
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“Logs” in the Navigation Menu.
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2001 legislation ordered Minnesota
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Figure A-10: Financial Assumption S
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Navigation Menu. Note that every ti
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Project Comparisons $0.140 $0.135 $
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APPENDIX B : INDUSTRY CONTACT LIST
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Clean Energy Resource Teams (CERTs)
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Home Farms Technologies Brandon, Ma
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RCM Digesters Berkeley, CA 94704 (5
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Table B-2: Categorized List CATEGOR
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CONSULTING RW Beck St. Paul, MN 551
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NON- PROFIT/ADVOCACY The Minnesota
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TECHNOLOGY VENDOR Recovered Energy
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INTRODUCTION APPENDIX D : DATA SOUR
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Sweet Corn Stalks • Inventory/Ava
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Sugar Beets • Material Characteri
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Aspen 8 • Material Characteristic
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FOSSIL FUELS Minnesota Average Coal
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