Current Status and Policies

Current Status

In 2008, a total of 55.9 kilowatt-hour of biomass electricity was produced in the United States. Out of this total, 70 percent of it used residuals of wood and the remaining 30 percent was from biogenic municipal solid waste, agricultural (and other) byproducts, landfill gas.

In the near future, the co-firing process of biomass is expected to continue to be the most cost-effective selection for expanding bio-power for electricity production. However, in the medium and long run, there are other bio-power generating technologies that seem to have greater potential to successfully meet energy demands and climate goals. These technologies (of which gasification is an example) are still only in the early commercialization stages of development.

Currently, CHP or the Co-generation technology is the most widely used in the U.S. pulp and paper industries. It accounts for 85 percent of all woody biomass utilization. This technology holds a lot of potential for residential, as well as district, heating.

Policies

Along with government spending on R&D, these are some policies that the government can undertake in order to increase available bio-power across the nation:

1. Price on carbon emissions:

At the moment, there are no financial consequences for fossil fuel power plants for greenhouse gas emissions. However, if there were financial costs that were to be borne by firms associated with GHG emissions, biopower would certainly become more cost competitive with these traditional fossil fuel technologies because of its net zero Carbon Dioxide emissions.

If carbon emissions were to be priced, similar to a system of a GHG cap-and-trade program, it would help discourage the use of traditional fossil fuel. Instead, it would encourage investments in a variety of clean energy technology, of which biopower would play an eminent role.        

2. Tax Incentives:

The Production Tax Credits (PTCs) for biomass power are half of those provided for other renewable forms of energy such as wind and geothermal. This leaves biomass at an extreme competitive disadvantage thereby discouraging expansion. In turn, this affects the country’s ability to meet its renewable energy targets and completely undermines an industry that has the potential to create 14,000 jobs every year.

In 2009, the American Recovery and Reinvestment Act extended the federal PTCs for biomass electricity as well as other renewable sources of electricity generation through 2013. These tax incentives help stimulate investments in bio-power and make it more cost-competitive with traditional fossil fuels.

3. Renewable Portfolio Standard (RPS):

US States With RPS/RPS Goals
Source: Database of State Incentives for Renewable Energy http://www.dsireusa.org
Blue-shaded–>States with RPS
Yellow-shaded ->States with RPS Goals

A Renewable Portfolio Standard, or an RPS, offers states a way to increase the generation of renewable energy. This is a market-based approach that turns out to be both cost-effective and administratively efficient. An RPS requires electric utilities as well as other electric providers to have a certain amount or percentage of their power plant capacities or electricity sales to come from renewable sources (example, biomass) by a given date. This will, undoubtedly, encourage investment in renewable energy thereby making it economically competitive with conventional forms of electric power.

As of March 2009, RPS obligations or goals have been set up in 33 states plus the District of Columbia. There is huge diversity that exists among these states in relation to the minimum requirements of renewable energy, implementation timing, and eligible technologies and resources.

For more information on RPS, click here.

Sources:

  1. Biopower Climate TechBook

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