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Biomass Energy – Mixed Signals

 

Standing in front of 200 New Hampshire loggers on a cold night last February, it was my job to explain electricity markets and why biomass power projects are facing a tough time. For these guys, it wasn't an academic discussion of the influence of natural gas prices on wholesale power prices. It wasn't a class on supply and price interactions in the market for Renewable Energy Certificates (RECs). It was about their jobs.

New Hampshire biomass plants use 1.8 million green tons of biomass each year, or 155 truckloads each and every day of the year.  Add to this wood pellet manufacturing, biomass use at schools and other community-scale setting, and (let’s not forget) firewood.  In total, New Hampshire uses lots of wood for energy.  And the Granite State is not alone – while the numbers and mix vary a little, Vermont and Maine use lots of wood for energy production as well.

Biomass power plants – particularly those unaffiliated with utilities and without power purchase agreements – are having a tough time.  It is probably about to get tougher.  These plants sell electricity on a spot market basis, and I would expect that we’ll see some idled this spring.  “Why?” is a reasonable question – some of these facilities have been operating for 25+ years without major downtime.

 

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