Biomass Feasibility Project Final Report - Xcel Energy

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programs, which will be superseded by tomorrow’s, we supply addresses of websites that will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