Biomass Feasibility Project Final Report - Xcel Energy

Potential Future Carbon Regulation. In addition to efforts to reduce the cost of biomass, it is
becoming more and more likely that there will be some sort of carbon regulation initiated within
the decade. Although this won’t impact the costs of biomass directly (since burning biomass
has a net zero carbon impact 3 ), it will increase the costs of fossil fuel resources. This would result
in more price competitiveness between traditional electric power resources and biomass
options.
Competition for Fuels
Many of the state’s biomass resources already are consumed by industry or agriculture, another
reason for the high cost of some biomass fuels. Biomass is a renewable resource, but not an
infinite one. Land is one constraint. Roughly half of Minnesota’s land is in fields and pasture, 19%
is in either developed land or protected wetland, and 29% is in commercial timberland not set
aside in wilderness or parks (Miles, Brand, and Mielke, 2006).
Half of that commercially available forest land is publicly owned and thus obliged to serve other
purposes besides production, like wildlife, hunting, hiking, and camping. The other half is mostly
owned by private parties for a variety of purposes that don’t include, and in fact may run
counter to, timber harvest – hunting, hiking, and sitting in the shade. Competing uses contribute
to perpetual complaints from the forest products industry that commercial harvest is too
restricted.
Like forests, agricultural lands are dedicated to many purposes that don’t include energy
production. The controversy over the use of corn crops in ethanol plants shows how inelastic
supply this supply is in the short term. Using food and feed crops for energy competes with their
traditional uses.
All of this suggests that there are not huge swaths of unutilized land in Minnesota that can be
dedicated to biomass energy feedstocks. Developers of biomass power plants either have to
compete with current biomass consumers, like paper mills or food processors, or seek out
biomass feedstocks that are underutilized or wasted.
Responses to Fuel Competition
Avoiding disposal costs. Since commodity crops are too expensive to use as fuel, the
alternative is to use waste biomass. The largest of these resources is corn stover. Others are
logging residues, agricultural wastes, manures, food processing wastes, and other byproducts
from agricultural processing. The cheapest are likely to be waste streams that, because of
avoided disposal costs, enter power plants at a zero, or even negative, cost. As seen earlier,
many pulp and paper mills; agricultural processing plants; and large dairy, hog, and poultry
facilities already are using waste in this way. But they aren’t exploiting as much of its potential
energy as they could using state-of-the-art technologies.
3 While the combustion of biomass does lead to the release of CO2 into the atmosphere, biomass fuels are not
considered to increase atmospheric CO2 concentrations. This is because the carbon molecules contained in biomass
fuels would have been returned to the atmosphere upon the plant’s death and decomposition. In this sense the
consumption of biomass fuels does not lead to the emission of greenhouse gases that would not have occurred
otherwise. This is contrasted with the combustion of fossil fuels, which returns carbon to the atmosphere that has been
sequestered from the atmosphere for tens to hundreds of millions of years. The carbon contained in these fuels would
not be emitted to the atmosphere without human activity.
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Identifying Effective Biomass Strategies:
Quantifying Minnesota’s Resources and Evaluating Future Opportunities