Biomass Feasibility Project Final Report - Xcel Energy

central Minnesota to burn biomass in the form of DDGs or crop wastes. But Central Minnesota
Ethanol Cooperative in Little Falls fuels a gasifier with waste wood from nearby millwork plants
and sawmills. The choice of fuel for any specific opportunity will ultimately be decided by its
availability and price, not by a priori notions of its appropriateness.
Having said that, we suspect that in most cases biomass fuel selection still will depend on the
predominant biomass types in the immediate area. The relationships among those biomass
resources and all the types of infrastructure necessary to a biomass power plant are
complicated but critical. The suite of maps in gopher will help the user gain an understanding of
resource availability alongside existing infrastructure.
BIOMASS POWER’S CHALLENGES AND RESPONSES
Given the complexity of developing effective bio-power projects, we try to make it easier by
answering the challenges of biomass power development in Minnesota with some solutions to
them. Some challenges arise from the properties of biomass itself, while others arise from
limitations in technologies, markets, and institutions. Some challenges will be overcome with
advances in technology or changes in policy. Other challenges may have to await changes in
biomass’s cost relative to fossil fuels – not just lower biomass generation costs through the use of
more efficient handling and conversion technologies, but also the higher fossil fuel prices that
seem inevitable in the current world situation. Biomass applications are businesses that face
typical business challenges. But they also have so many contact points with the ecology and
with society at large that also present challenges to public policy makers.
BUSINESS DEVELOPMENT CHALLENGES
There is nothing unique about most challenges facing biomass power developers. They are
familiar to entrepreneurs in any emerging technologies:
• High input costs
• Competition for supplies
• Securing supplies
• Information gaps
• High capital costs
• Increased risk in financing new
technologies
• Permitting and regulation
• High transaction costs
• Monetizing non-financial benefits
• Marketing byproducts
High Cost of Biomass Fuels
When comparing current market prices, most biomass fuels cost more than coal, the
predominant fuel used in electric power generation. One may wonder how that can be when
so many biomass fuels are wastes. The answer is the high cost of energy and effort expended in
collecting, transporting, and processing biomass into usable fuel delivered to the power plant.
Compared to coal, biomass is a dispersed resource that doesn’t lend itself to efficient
transportation and handling within our current system. Additionally, the infrastructure for
delivering coal quickly and efficiently is the product of various local, state, and federal
incentives to support its development over many decades.
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Identifying Effective Biomass Strategies:
Quantifying Minnesota’s Resources and Evaluating Future Opportunities