Will Biomass Power the Utilities of the Near Future?

12/17/08

Oil prices have recently dropped well below $100 in response to slower economic growth around the world. But this decline doesn’t necessarily mean that the utilities industry will be able to provide cheaper power to millions of American consumers and companies.

In fact, utilities are going to face huge and upward price pressure on the electricity they deliver over the course of the next decade because of environmental clean-up costs, rising world market prices for energy sources like natural gas, much-needed infrastructure improvements, and an eventual restoration of economic demand. All of this will lead to larger energy bills—at least triple what we’re paying now—for citizens across the country.

Fortunately, there’s a significant new business model coming of age in the utilities industry today, a localized energy distribution system that will gradually replace the centralized approach that has somehow managed to stand the test of time in American cities and towns since the 19th century.

This 21st century distributed model is facilitating the development of exciting new alternative energy technologies, which will ultimately lower electricity prices for business and residential customers while allowing them to customize and control their energy intake in the home or at the factory or warehouse. When it takes hold, the localized model will even enable companies and consumers to generate their own energy, or sell it to a utility.

Clearly, this is a profound and sweeping technology transformation in the making. For over 100 years—ever since Westinghouse and Edison fought over AC and DC current standards—utilities have functioned like mainframe computers; hulking and centrally located power plants have done all the work and then sent the electricity out along a tangle of old, antiquated transmission lines. Unlike the one-way central-station-to-customer model, the new distributed model puts energy users in charge, thanks to smart grids, digital meters and intelligent appliances that talk to each other the way PCs do in a distributed computing network.

Next-Generation Biomass Furnaces

Producing energy—and greater efficiency, economy and green-collar job growth—at the local level is the wave of the future for the utility industry. And one of the most under-estimated and under-publicized delivery systems for this decentralized but potentially large-scale approach is the new generation of clean-burning and cutting-edge biomass furnaces. These state-of-the-art mobile furnaces, which are based on the latest breakthrough technology, utilize readily available and tremendously inexpensive feedstock like wood and wood waste. [Disclosure: The author is the founder of Greenwood Technologies, which develops clean-burning, biomass furnaces---Eds.]

Our recent analysis of available fuel sources in a cold-weather region like New England shows just how cost-effective these wood-burning biomass furnace systems can be. Assuming that home heating oil is currently about $3.50 a gallon, we calculated equivalent prices that range from $0.26 a gallon to $0.90 a gallon for cord wood, utility-scale wood and wood waste.

We believe that the new “biomath of biomass”—which reflects a considerable pricing differential between wood / wood waste and just about any other fuel possibility—is sustainable, structural and solid for the long haul. And our projections for future energy production confirm this. Indeed, after crunching the numbers, we anticipate that overall domestic energy production will grow 0.8% annually between 2006 and 2030 versus 4.3% for biomass.

The story behind these production numbers revolves around regulatory uncertainty, the cost of technology, and global energy flows and pricing. Carbon capture, for example, is a very well understood process, but no one is certain if it will really work on a large scale. These doubts, plus the government’s ambivalence about a carbon cap-and-trade program or tax of some sort, have effectively taken new coal plants off the table. Even without carbon capture, the costs of a new coal plant are massive, on the order of $2 billion, so very few utilities can afford to make a financial commitment this large—especially in a credit-constrained environment.

If coal is a no-go, then what about natural gas? Natural gas plants are relatively … Next Page »

Tom Eckmann is chairman and CEO of Greenwood Technologies, a Bellevue, WA-based startup that develops clean-burning, alternative-fuel heating solutions. He was a vice president at Anova Electronics and Digital Systems International, and has started four companies. Follow @

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  • http://www.dodenergy.blogspot.com Andy Bochman

    Nice article Tom. In the way Shai Agassi and Better Place are targeting automotive “islands” like Israel and Hawaii, would it be possible to find a good biomass demo community for this capability to prove the utility of the approach for those who don’t get it yet? … Or have you done that already?

  • http://www.GreenwoodUSA.com Tom Eckmann

    Thanks, Andy. Over 200 sites already use our Pelco commercial boilers to heat schools, greenhouses and other commercial structures with wood chips or agricultural waste, so we know the concept works on a small scale from both a technical and economic standpoint. With our next generation biomass boiler, we’d like to expand the list of fuels that can be used. Specifically, we’d like to leverage the work done at Syracuse ESF, Cornell and elsewhere to develop “purpose grown” crops. I think there’s an exciting opportunity to create a demonstration project that shows how these fuels can be burned cleanly and efficiently, and in the process reduce the need for fossil fuels and create local “green collar” jobs. Early discussions have been encouraging. Stay tuned!

  • http://www.mcgough.com Laurence Harmon

    What, in your opinion, is the likely long-term future of biomass? We’re a big construction company in the Twin Cities, and we’re considering extending our capabilities into the renewable energy market. Why would we consider biomass rather than, say, wind energy?

  • http://www.GreenwoodUSA.com Tom Eckmann

    Laurence,
    As the founder of a company that develops and manufactures biomass boilers, I have a large vested interest in the success of biomass. That said, I believe wind, solar, biomass, energy efficiency, and a growing list of other technologies will all play a role in moving us toward reduced carbon emissions and energy independence. I believe biomass will play a larger role than others because the fuel is cheap, carbon-neutral, renewable, and already available in some form in almost every community. Today, solar and wind combined provide less than 1% of the energy produced in the U.S. For that number to grow substantially, billions will have to be invested in solar and wind farms, and hundreds of billions in rebuilding the electrical grid to get the power to market. Biomass, on the other hand, fuels roughly 3% of today’s energy production, and according to a recent USDA study, there is sufficient feedstock available in the U.S. to increase this to more than 30%. And since biomass energy is typically produced and consumed locally, we can benefit from it today, not in 10-20 years when a rebuilt grid is completed. So back to your question… if I were in the construction business, I’d keep my options open. Wind and solar may reap all the publicity but biomass will quietly play an ever-increasing role in energy production. I think you’ll find a lot of work in all these areas.

  • Casey Doyle

    When will biomass energy be easily accessible to the general public?

  • http://www.AllGreenRenewables.com Tom Eckmann

    Casey,

    Good question. We’re suffering through the difficult “chicken and egg” quandary that occurs whenever a new industry forms, i.e., a lot of work has been done to develop biomass fuels from various feedstocks, and a variety of fuels are available now. Unfortunately, we’ve yet to reach the critical mass of demand needed to justify further investment in scaled-up production facilities and delivery infrastructure. The good news is… there are many entrepreneurs working on the problem (my new company included). With new economic incentives (federal and state) and increased availability of clean-burning, high-efficiency combustion appliances, I believe both commercial and consumer demand will accelerate as part of the economic recovery process.

  • http://whichwoodburningstoves.co.uk Tony

    Seattle your leading the USA, Pls lead the US so it can help the world.Love U all

  • Lyle Brian Morton

    Have a biomath number with a chip that has a 3d projection in the air with a touch sreen that controlls the biomath Email megenesis9869@gmail.com Phone number 1-403-225-8718