Business Operations Sustainable Ops Open Mic,, Webinar

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1 Business Operations Sustainable Ops Open Mic,, Webinar Development of Bioenergy Facilities Using Woody Biomass July 15, 2009 Ed Gee, Team Leader, Woody Biomass Utilization Team, USDA Forest Service, Washington, DC

2 Development of a Federal Bioenergy Facility in Using Woody Biomass Overview Background Barriers & Challenges Criteria for success The next steps involved in successfully implementing a federal bioenergy facility.

3 ... to sustain the health, diversity, and productivity of the nation s forests and grasslands to meet the needs of present and future generations...

4 Shift from commodity production to restoration of ecosystem function and resiliency while at the same time A decade long drought in the West A multi-decade increase in the forest density and increased incidents of fire, insects and disease An expansion of residential developments into forests Growing concern over the effects of climate change on forests

5 1960 The Size and Intensity of Wildfire Has Increased In Recent Years Fire Year National Fire Plan Acres burned in millions

6 Putting towns at risk and damaging watersheds

7 In 1996, the Buffalo Creek Fire in Colorado did major damage to Denver s s water supply, with one storm dumping more than 300,000 cubic yards of soil into the Strontia Springs Reservoir, causing millions of dollars of damage. (And killing two people) Buffalo Creek Fire

8 Forest growth greatly exceeds removals on NFS lands in the Interior West Forest Growth and Removals National Forests of the Interior West Millions of Cubic Feet When net forest growth exceeds removals, 800 live biomass is increasing Net Growth Removals Source: Forest Resources of the United States, 1997; GTR-NC-219. USDA-Forest Service, 2001.

9 When dense forests combine with extended drought, the ecological stress sets the stage for increased insect epidemics and wildfire Western Pine Bark Beetle Damage -- Prescott National Forest, Arizona

10 We can decrease the effect of drought, pests, and wildfires Strategically placing these bioenergy facilities in areas close to the raw material Decrease the many large fires that are in diseased and drought- stressed forests.

11 For most of human history, renewables were predominant energy sources. Biomass, Water, Wind, Solar, Geothermal

12 U.S. Energy Consumption, By Energy Source Quadrillions of BTUs Wood/Biomass Coal Oil Natural Gas Hydropower Nuclear

13 The Role of Renewable Energy Consumption in the Nation s s Energy Supply, 2008

14 Key Recent Development Growing concern about unintended consequences of using food crops to produce biofuels. Focus of US biomass energy policy has started to shift away from corn-ethanol toward ligno-cellulosic feedstocks.

15 National Renewable Energy Goals National Biomass Initiative President s Biofuels Initiative 30 x 30 Goal Areas Biofuels 68 billion gallons by 2030 Biopower 10 quads by 2030 Bioproducts 55 billion pounds by 2030 Cellulosic ethanol 30% gasoline displaced by billion gallons 20 in 10 Reduce U.S. gas use by 20% in 10 years (2017) Energy Act 2007 Advanced Biofuels 36 billion gallons per year by x 25 Wind, Solar, Biofuels 25% energy displaced by quads Approach Vision workshop to update goals; followed by peer review. (final: Sept. 06) Three Region-specific Roadmap workshops Convened 30x 30 industrial workshop Convened government biofuels implementation planning workshop RFS for 35 billion gallons of renewable and alternative fuels RFS Renewable Fuel Standard Holding planning meetings and established workgroups** Outcomes Roadmap of R&D and policy strategies and timelines (regional and national perspective) Guidance to R&D Board Guidance for annual joint USDA/DOE solicitation Used to monitor progress by agencies R&D & policy strategies to provide basis for DOE R&D planning Federal Implementation Plan to map agency roles Facilitated growth in short time frame with expanded scope of fuel sources 21 billion by 2022 from non-starch Must have 50% GHG reduction Roadmap of R&D and policy recommendations, (draft: Oct. 06) Adapted from BR&Di Biomass Research & Development Initiative

16 Today, there is a resurgence of interest in renewables. Oil Prices National Security Climate Change Agriculture Policy

17 Wood is an obvious feedstock choice for biomass energy in some regions.

18 Concept Federal, State, Tribal and privateowned forests provide wood residues Private sector firms 16 Energy Savings Contractorsdesign, construct, and operate power plants RTOs manage dedicated green energy markets for federal agencies Federal agencies purchase the green energy Government Private Sector Government

19 Thinned to Improve Aspen for Wildlife Before After

20 Thinned to Reduce Hazardous Fuels & Forest Health Restoration Before After

21 Thinned to Protect California Spotted Owl Before After

22 Enhancing Future RCW Habitat

23 Harvey Sale Lassen NF USFS Goshawk Management Area: biomass harvested four weeks prior to photo Eagle Lake Ranger District, Lassen National Forest

24 Piedmont National Wildlife Refuge Red-Cockaded Woodpecker and Nest Tree

25 Private Sector Developer 2-3 Years 1 Year Development Stage Financing Negotiations Close O&M Fuel PPA Site Staffing Feasibility Study Design Government Establish agreement with RTO RTO to create dedicated wholesale green energy market for the government Engineering review of developer s plans Negotiate PPAs with federal agencies

26 Private Sector Developer 2 3 Years Years < 1 Year Construction Phase Commercial Operations Site Work Fabrication, erection, etc Start-up, testing Provisional Acceptance Punch List Final Acceptance Shakedown Government Continued development of PPAs with federal agencies

27 Government Sector Functions Strategic Planning Establish MOUs with federal agencies as needed Identify new projects Project Management and Facilitation Identify biomass resources and broker their acquisition Provide list of potential federal green energy buyers Conduct independent Power Plant design engineering review Conduct System analysis and modeling, i.e. Supply- Generation-Transmission Transmission-Sale

28 Private Sector Functions Design/Construction Firm Overall Project Owner Feasibility Study Legal Review Project Risk Management Permitting Land acquisition Site analysis/planning/development Plant design Construction Operation

29 Barriers Supply Chain Feedstock Fear of over-scale and non-sustainability Transportation costs Economic resources for start-up Lifecycle analysis vs capitalization costs Mixed support from legislative branch

30 Challenges Competing priorities of appropriated funds Climate change Wildfire suppression Forest health restoration Providing green jobs Economic resources Socio-political support

31 Criteria for Success Social licensing Reliable and predictable supply of woody biomass Efficiency & Scale Transportation network Close proximity to transmission lines/substations Financial support Power purchase agreement Climate Change

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34 The Next Steps Involved in Successfully Implementing a Federal Bioenergy Facility Developing a strong federal partnership with DOE- Federal Energy Mgmt Program 16 ESCO s Secure the geographical location vertical alignment Use ESCO/traditional financial venture Pre-feasibility study Assurance of feedstock supply stewardship contracting Construction of bioenergy facility-thermal thermal and CHP Power Purchase Agreement Monitor pilot bioenergy projects

35 Cost efficiency and potential savings of various sources to generate thermal energy. Source Price Unit MMBtu/unit $/MMBtu Commerical Residential Wood Chips $ 40 grn ton 10.1 $6.09 $27,525 n/a Wood Pellets$ 160 ton 16.4 $12.20 $67,805 $1,153 Cordwood $ 175 cord 19.5 $12.82 $62,372 $1,060 Natural Gas $ 1.05 therm 0.1 $13.13 $72,975 $1,241 Heating Oil $ 2.95 gallon $28.30 $147,500 $2,508 Propane $ 2.10 gallon $29.01 $161,271 $2,742

36 Critical Issues for Effective Development of Biomass Energy Efficiency Scale Wood Biomass Supply Sustainable Harvest Emissions Climate Change

37 Key Concepts to Advocate: The government doesn't just dictate to the public but leads by example. The 'example' includes demonstrating how to advance 2 important sustainability principals, i.e.residual/waste minimization and generation of green energy. It also includes use of the latest and cleanest resource- to-energy technologies - many of which were developed with government funds.

38 Accomplishment s s with Bioenergy Facilities Meeting Executive Order Decreasing fossil fuel dependency Decreasing wildfires through hazardous fuel reduction Decreasing thermal and CHP costs Decreasing GHG through wood substitution Decreasing our CO2 emissions - climate change Increasing Forest Health Restoration Increasing National Security

39 Thank You Q&A s