¦OUTLOOK
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s 2011 comes to a close, the biomass industry can look back on a fairly active year, not necessarily all positive, and look ahead to a more advantageous one that brings recognition to its benefits and merit. With portions of the Maximum Achievable Control Technology (MACT) rules stayed and further changes expected, a delay on implementation of the EPA Tailoring Rule for biogenic emissions, and pending revisions of certain waste definitions, the biomass industry is suspended in a realm of political uncertainty. But what does 2012 hold in store? Could research to better understand biogenic emissions prove that biomass is indeed a clean replacement for fossil fuels and warrant more reasonable emission guidelines? Will development opportunities, support and funding sources grow for power and thermal applications? Charlie Niebling, chairman of the Biomass Thermal Energy Council board of directors, tells Biomass Power & Thermal what he expects in the biomass thermal industry in the year ahead, while Bob Cleaves, president and CEO of the Biomass Power Association, makes his predictions for the biomass power industry. Here’s what they had to say:
Opportunities Where do the best opportunities for biomass power/thermal currently lie and why?
Niebling: The best opportunities lie in providing residential, commercial and industrial heat consumers, who currently use heating oil or propane, with a cost-effective alternative heating fuel. Biomass fuels are less than half the heating cost of oil and propane. Cost savings is the single-most important factor driving market penetration for biomass thermal. Cleaves: Our members are engaged in development projects across the country. Conventional wisdom continues to be that the Southeast has the greatest opportunities, and the recent 100-megawatt Gainesville, Fla., project is probably the most dramatic illustration of such potential. That said, in the past 24 months, we have seen projects undertaken in Texas, New Hampshire, Wisconsin and the Pacific Northwest. While different, all of these projects are being undertaken in renewable portfolio standard (RPS)-friendly states and where biomass is welcomed. Do you see this changing in 2012 and why? Niebling: I don’t see this changing in 2012 as long as oil and propane prices stay high. Cleaves: In the near term, given the effect of natural gas on pricing and the lack of electricity generally, we see new projects as being “opportunistic” in nature, meaning in regions where fuel is competitively priced and where local markets value energy diversity, rural economic development and sustainable forestry.
32 BIOMASS POWER & THERMAL | DECEMBER 2011
Policy Which current or developing policies (state and federal) can/do help spur project development and how? Niebling: Unfortunately there is little policy developing at the federal level in support of biomass thermal. Biomass thermal is not recognized with investment tax credits (ITC) similar to solar thermal or geothermal. Expansion of tax credits seems unlikely in the current fiscal climate but BTEC continues to advocate for tax parity with other renewables, for both residential and commercial/industrial entities. The greatest need is to help build the market with demand-side incentives such as ITC’s or demonstration project grants through USDA, U.S. DOE or other agencies. At the state level, we are seeing some progress, particularly in the Northeast U.S. where heating oil is prevalent. Massachusetts is expected to unveil supportive policies during 2012 for small-scale biomass thermal. New York is funding a statewide biomass thermal “roadmap” strategic planning effort. New Hampshire is considering amending its RPS to include thermal renewables; if this moves forward New Hampshire would be the first state with a fuel/technology neutral renewable energy standard. Cleaves: We would like to see the Section 1603 Treasury Program extended. We also need the production tax credit (PTC) extended beyond 2013, and we need parity with other