Biomass Feasibility Project Final Report - Xcel Energy

pipelines, city water and sewer connections, electrical distribution and/or transmission
infrastructure. The cost of extending utility infrastructure to connect with a new facility can be
considerable. Minimizing these costs is a major consideration in developing a cost-effective
biopower project.
Access to Adequate Transportation Infrastructure
If a biopower project is to rely on biomass fuels generated offsite, it will have to find a location
with transportation infrastructure capable of supporting the additional use that will result. If a
facility is to utilize rail infrastructure, access to a rail siding will be necessary. If a facility is to rely
on road transport for delivery of fuels, developers must ensure that the road infrastructure
between the bio-power facility and its fuel supplies is rated for the additional heavy truck traffic
and that if seasonal weight restrictions apply they can be accommodated. Other related
considerations include facility design that will minimize the turnaround time for delivery trucks or
trains. This will help minimize delivered fuel costs by reducing the downtime of fuel suppliers’
equipment.
Sufficient Water Supplies
Nearly all biopower facilities require some amount of water for plant operations. Water can
come from deep or shallow aquifers, surface waters or municipal water supplies. The costs and
benefits for each of these sources can vary considerably. Municipal water supplies are likely to
be the most expensive and their quantity may be limited. Any facility that will withdraw 10,000 or
more gallons of water per day will require a water appropriations permit. To securing the permit
the project will have to show that the withdrawal will not have an adverse effect on neighbors or
the environment. Ground water supplies are quite limited in portions of the state, so steps should
be made to ensure access to adequate supplies early in the planning process. In recent years a
number of industrial facilities have been denied water permits due to limited availability.
Supportive Local Community
The support of the local community is a crucial element for any large biopower facility. Local
support can be achieved through public input during the planning stages and/or providing
local residents with a stake in a facility’s success.
FACILITY DESIGN
Project developers face a number of crucial design decisions early in the planning process.
Among the most important is the decision whether the facility will supply power to the grid or
merely offset power purchased from the grid. That choice, along with the project’s potential to
serve a thermal load as a CHP plant, will determine the fundamental economic parameters of
the project. Another design option is a conversion technology that allows the use of multiple
fuels.
FINANCING
Funding expensive projects like power plants usually involves more than one financing vehicle.
Some equity – what lenders call “feet-to-the-fire” money – almost always is the first requirement.
Some of that may come from the New Markets Tax Credits program (see Chapter VII, above) or
Identifying Effective Biomass Strategies: Page 165
Quantifying Minnesota’s Resources and Evaluating Future Opportunities