June Biomas Power & Thermal

INSIDE: MILITARY RENEWABLES PUSH BENEFITS BIOMASS

June 2012

Green Machine Biomass Conference Exhibitors Showcase Equipment, Services Page 20

Plus:

Poultry Litter Energy Applications Reduce Chesapeake Bay Pollution Page 26

www.biomassmagazine.com

Industrial Grade

GasiďŹ cation

INSIDE ¦ ADVERTISER INDEX¦ JUNE 2012 | VOLUME 6 | ISSUE 6 2012 Algae Biomass Summit

35

2012 National Advanced Biofuels Conference & Expo

34

2013 International Biomass Conference & Expo

12

Agra Industries

5

Airoflex Equipment

17

BBI Consulting Services

36

Buhler Inc.

30

Continental Biomass Industries, Inc.

28

CPM Roskamp Champion Dieffenbacher Elliott Group Fagen Inc. Himark bioGas

9 15 7

ICM, Inc.

34

Indeck Power Equipment Co.

14

KEITH Manufacturing Company

18

Pellet Fuels Institute

33

PHG Energy

20

6 23

2

PRODESA

25

ThermoEnergy Corporation

22

West Salem Machinery

19

Wolf Material Handling Systems

29

FEATURES

DEPARTMENTS 04 EDITOR’S NOTE

20 EVENT Biomass a Mile High Fresh content, new faces and first-time features attracted almost 1,300 people to the annual International Biomass Conference & Expo in April.

By Lisa Gibson, Anna Simet and Luke Geiver

26 FEEDSTOCK The Poultry Litter Landscape New technologies in the poultry waste-to-energy sector could help spur development and curb agricultural pollution.

By Luke Geiver

Success for Biomass in Denver

By Lisa Gibson

06 INDUSTRY EVENTS 08 POWER PLATFORM Capitol Gains, Commonwealth Setbacks

By Bob Cleaves

10 THERMAL DYNAMICS Opportunity in the Midwest

By Brian Brashaw

11 ENERGY REVIEW Fuels of the Future

By Bruce C. Folkedahl

13 LEGAL PERSPECTIVE Military Renewables Plan: A Bioenergy Booster

By Roger Stark, Daniel Simon, Darin Lowder

14 BUSINESS BRIEFS 16 FIRED UP 32 MARKETPLACE

INSIDE: MILITARY RENEWABLES PUSH BENEFITS BIOMASS

June 2012

Biomass Power & Thermal: (USPS No. 5336) June 2012, Vol. 6, Issue 6. Biomass Power & Thermal is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices.

POSTMASTER: Send address changes to Biomass Power & Thermal/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

Green Machine Biomass Conference Exhibitors Showcase Equipment, Services Page 20

Plus:

Poultry Litter Energy Applications Reduce Chesapeake Bay Pollution

ON THE COVER: CPM displays its biomass pelleting equipment at the International Biomass Conference & Expo.

Page 26

www.biomassmagazine.com

PHOTO: MICHAEL KODAS, NARRATIVE LIGHT

JUNE 2012 | BIOMASS POWER & THERMAL 3

¦EDITOR’S NOTE

Success for Biomass in Denver

LISA GIBSON Editor lgibson@bbiinternational.com

I can’t say enough about the dynamite content of this year’s International Biomass Conference & Expo, held April 16-19 in Denver, Colo. I’ll spare you some of the details, though, since the Biomass Power & Thermal team compiled a feature article for this issue to help tell you all about it. But we would have needed to double the size of the magazine in order to get all the good stuff in. It was all good.

Particularly exciting for me this year was BBI International’s choice to include a forest health seminar.

The Rocky Mountain Forest Restoration & Bioenergy Summit took place the first day of the event, overlapping with the first of two tour days, and highlighted not only the mountain pine beetle epidemic and other issues plaguing the Rockies, but also the biomass industry’s unique position to offer a helping and healing hand.

A biomass availability analysis recently conducted by the Colorado State Forest Service found 3 million acres in the state with high potential for biomass production and another 3 million with moderate potential, based on forest type, ownership, management and accessibility.

Some Colorado companies, communities and entire counties are looking to local forest thinnings for bioenergy applications. Boulder County, Colo., is using its biomass resources harvested from the tens of thousands of acres it thins every year to heat five buildings, a total of 95,000 square feet. The project is so successful from both renewable energy and forest management standpoints that another biomass boiler was set up to heat a jail. The county’s forest operations and the first district heating plant were stops on the second day of conference tours. Read more about Boulder County’s biomass solution in the event feature beginning on page 20.

Many panel discussions and presentations throughout the conference echoed the benefits of integrating bioenergy with forest health and management, referring back to the summit and its helpful and factual message. Too often, the biomass industry gets the stigma of being uncaring tree killers, focused only on profiting from the forests’ demise. That’s untrue. Holding events like this summit is a good way to start chipping away (pun intended) at that false stereotype.

The summit, the tours, the presentations, the new speakers, and the opportunities for networking culminated in a successful event, prompting a multitude of compliments from attendees. The conference drew almost 1,300 people from 32 countries, and that doesn’t even include the U.S. I had been blogging and talking about this event for months before it took place and I can proudly say it surpassed my highest expectations.

The Biomass Power & Thermal magazine website is about to hit 1,000,000 impressions.

Targeted online advertising It’s amazing that nearly 1,000,000 impressions have happened worldwide since April 2011 – almost as amazing as the magazine itself. Be sure to have Biomass Power & Thermal part of your marketing plan, both online and print.

Contact a knowledgeable account manager today and discuss an advertising plan that fits your business and drives your revenue. venue.

visit www.biomassmagazine.com

(866)746-8385 service@bbiinternational.com m www.biomassmagazine.com m

Become a part of the premier trade journal for the biomass industry.

Contact an account representative today.

866-746-8385 | service@bbiinternational.com | www.biomassmagazine.com

4 BIOMASS POWER & THERMAL | JUNE 2012

AGRA

Industries

EDITORIAL

Ag Processing and Bio-Energy Systems

EDITOR Lisa Gibson lgibson@bbiinternational.com ASSOCIATE EDITORS Anna Simet asimet@bbiinternational.com Luke Geiver lgeiver@bbiinternational.com

FROM CHOPPING

COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Elizabeth Burslie bburslie@bbiinternational.com

TO MATERIAL HANDLING

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com

TO WET OR DRY STORAGE

EXECUTIVE ACCOUNT MANAGER Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Jeremy Hanson jhanson@bbiinternational.com ACCOUNT MANAGERS Marty Steen msteen@bbiinternational.com Bob Brown bbrown@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Dave Austin daustin@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com ADVERTISING COORDINATOR Marla DeFoe mdefoe@bbiinternational.com

TM

SENIOR MARKETING MANAGER John Nelson jnelson@bbiinternational.com

Subscriptions Biomass Power & Thermal is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside of the United States, Canada and Mexico. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Power & Thermal Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (701) 746-8385 or service@bbiinternational.com. Advertising Biomass Power & Thermal provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production.

To find out more about Biomass Power & Thermal advertising opportunities, please contact us at (701) 746-8385 or service@ bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Power & Thermal Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

AGRA HAS A CUSTOM-DESIGNED BIOMASS SOLUTION FOR YOU! AGRA is your turnkey source for design, fabrication, erection, and general contracting for a wide variety of large scale projects. Whether you are building an entirely new facility or adding on, our services are provided from the ground up.

800-842-8033 WWW.AGRAIND.COM Please recycle this magazine and remove inserts or samples before recycling

Ability. Reliability.

TM

COPYRIGHT Š 2012 by BBI International

JUNE 2012 | BIOMASS POWER & THERMAL 5

¦INDUSTRY EVENTS International Fuel Ethanol Workshop & Expo June 4-7, 2012 Minneapolis Convention Center Minneapolis, Minnesota Evolution Through Innovation Now in its 28th year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. As the largest, longest running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine.

(866)746-8385 www.fuelethanolworkshop.com

You deserve consistency and quality through your entire biomass pelleting process —from chips to load-out.

Get it with CPM. U Equipment for your total biomass process U Integrated biomass expertise U Engineered for quality, durability and consistency U Energy efficient Look to your Partner in Productivity—CPM—for your biomass pelleting solutions.

Algae Biomass Summit September 24-27, 2012 Sheraton Denver Downtown Hotel Denver, Colorado Advancing Technologies and Markets Derived from Algae Organized by the Algal Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. Register today for the world’s premier educational and networking junction for the algae industry.

(866)746-8385 www.algaebiomasssummit.org

National Advanced Biofuels Conference & Expo November 27-29, 2012 Hilton Americas - Houston Houston, Texas Next Generation Fuels and Chemicals Make plans to attend the 2012 National Advanced Biofuels Conference & Expo in Houston, Texas. Understand the latest techniques being developed in the industry and continue building relationships that last. Contact a knowledgeable account representative to reserve booth space now.

(866)746-8385 www.advancedbiofuelsconference.com

International Biomass Conference & Expo April 8-10, 2013

800-428-0846 6 BIOMASS POWER & THERMAL | JUNE 2012

Minneapolis Convention Center Minneapolis, Minnesota Building on Innovation Organized by BBI International and coproduced by Biomass Power & Thermal, the International Biomass Conference & Expo program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasification to pyrolysis and combined heat and power.

This dynamic event unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals.

(866)746-8385 www.biomassconference.com

¦POWER PLATFORM

Capitol Gains, Commonwealth Setbacks

BY BOB CLEAVES

The month of April saw, on the national level, several positive signs for the biomass industry in general. We are continuing to see challenges in the commonwealth of Massachusetts, however, that will drastically impede the progress of the industry in the Northeast, and could lead to additional consequences in other states.

First, the good news. Two crucial developments on Capitol Hill in April show that elected officials know about the benefits of biomass, and they are fighting for laws that will help us stay strong and grow.

One of biomass’ longest and most ardent supporters, Rep. Wally Herger, R-Calif., made a convincing argument to his colleagues to extend to biomass the same tax credits enjoyed by our renewable energy brethren. While Herger is retiring from Congress at the end of this term, biomass will remain indebted to him for his steady and outspoken commitment to our industry throughout his tenure.

At a House Ways and Means Committee hearing on expiring tax credits, Herger said, “To the extent that some tax incentives for renewable energy may be maintained, I believe we should aim to make them technologically neutral and avoid picking winners and losers.

Currently, wind energy receives a production tax credit that is double the level of other renewable resources, such as biomass and hydropower. The Renewable Energy Parity Act, which I have introduced with Mr. Thompson, would equalize the PTC for all renewables, and I urge the subcommittee to consider this reform.”

On the same day as the Ways and Means Committee hearing, the Senate Agriculture Committee held a markup on its 2012 Farm Bill, which passed the committee with a vote

8 BIOMASS POWER & THERMAL | JUNE 2012

of 16-5. Thanks to Sen. Richard Lugar, R-Ind., and Sen. Kent Conrad, D-N.D., this legislation includes an Energy Title that would keep the Biomass Crop Assistance Program alive and well with a $193 million mandatory commitment over the next five years.

BCAP’s collection, handling, storage and transportation allowance has proven invaluable to the industry in recent years and we are very pleased to see the program extended with a healthy budget. The next step for the bill is a vote by the entire Senate, but even the symbolic support shown by the committee’s vote is an important win for us.

Now for the not-so-good news. The Massachusetts Department of Energy Resources (DOER) is continuing with its mission to make it as difficult as possible to produce biomass energy in its state. Despite having volumes of peer-reviewed scientific evidence showing that biomass is good for forests and for the carbon cycle, DOER persists under the assumption that biomass energy is destructive to forests.

This couldn’t be further from the truth, and these regulations are worrisome to us as the Natural Resources Defense Council cheerleads for similar regulations in other states. The rules are bad for the entire renewable energy industry, and worse for biomass. Biomass Power Association continues its fight against these rules.

As is often the case, in April we saw two steps forward for our industry and one step backwards. We continue to work on both the federal and state level for favorable laws that will promote the use of biomass done right.

Author: Bob Cleaves President and CEO, Biomass Power Association www.USABiomass.org bob@biomasspowerassociation.com

Q

Customer: Palm oil mill, Southeast Asia.

Q

Challenge: Add biomass power generation and process steam on a limited budget.

Q

Result: Elliott delivered a two-turbine solution that was exible and cost-effective.

They turned to Elliott for innovative thinking.

The customer turned to Elliott because the solutions others offered were inadequate.

Who will you turn to?

EBARA CORPORATION www.elliott-turbo.com

C O M P R E S S O R S

Q

T U R B I N E S

Q

G L O B A L

S E R V I C E

The world turns to Elliott.

¦THERMAL DYNAMICS

Opportunity in the Midwest

BY BRIAN BRASHAW

Does the age-old energy resource—wood and agricultural biomass—have an exciting future? “Absolutely,” remarked Kenneth Smith, president and CEO of District Energy in St. Paul, Minn., during his keynote presentation at the first Heating the Midwest Conference and Expo, held in Eau Claire, Wis., in April.

Even a partial switch to biomass heating can result in economic growth, energy independence and environmental stewardship for the Midwest, according to biomass economist William Strauss, president of FutureMetrics. “Biomass already plays an important role in heating homes and businesses, with future potential to create new economic opportunities and energy security for the Midwest,” said Strauss, noting that propane, electricity and fuel oil currently fill more than 30 percent of all Midwestern heating needs. “A switch of 20 percent away from propane and fuel oil would create over 60,000 jobs,” he explained during a roundtable discussion.

More than 170 people attended the conference, which included a preconference tour aimed at building a Midwest vision for heating with renewable biomass. Chris Wiberg, conference co-chair and manager of the Biomass Energy Laboratory, was especially proud of the significant participation for a first-time conference. “The 170plus conference attendees actively participated in building a vision for this renewable energy source, embracing its potential economic benefits for residents and businesses,” he said. “Our goal was to start the momentum, and we succeeded.”

Important topics were addressed that focused on understanding the potential for biomass thermal and combined-heat-and-power systems. The Midwest Biomass Inventory Assessment was released as a snapshot of the current biomass availability relative to energy consumption in seven Midwest states. “Biomass can play a role in offering affordable, renewable energy options that consumers are looking for,” said Becky Philipp, Agricultural Utilization Research Institute team leader for the assessment. “This inventory can serve as a platform to begin the development of biomass-related projects.”

Case study examples of home, residential, small commercial, school districts, institutional and large projects were presented by various speakers to help attendees understand modern combustion technologies, installation strategies, and the positive economic paybacks. Presenters

10 BIOMASS POWER & THERMAL | JUNE 2012

also noted that new cost-effective and sustainable installations of biomass heating are planned at Gundersen Lutheran Hospital in La Crosse, Wis., and the Chillicothe, Ohio, Veterans Administration Medical Center.

Heating with biomass has a wide range of potential benefits for the Midwest, including new jobs and increased uses of urban wood, logging residues, and agricultural grasses. Speakers also pointed out that biomass utilization improves the potential for forest and grassland management, reduces carbon dioxide emissions over fossil fuels and connects energy use to homegrown resources.

The preconference tour emphasized the real-world applications of thermal biomass, showcasing several local schools that heat with wood chips, residues and pellets.

Monti Hallberg, superintendent of the Barron, Wis., school system said they have a proven, cost-effective track record of heating with biomass at the high school since 1981, and recently extended wood heating and cooling to the middle school. Attendees also toured Indeck Energy pellet plant.

The sold-out indoor and outdoor expo hall offered a wide range of heating appliances, along with biomass processing equipment suppliers and affiliated testing, research, and business development organizations. On-site vendors were pleased with the attendance and traffic for a first-time conference, and said they are looking forward to participating in 2013.

The final morning speakers, Hans Kordik, counselor of agriculture for the Austrian Embassy in Washington, D.C., and Charlie Niebling, chairman of the Biomass Thermal Energy Council and general manager of New England Wood Pellet, provided valuable evidence that the use of biomass for thermal applications has been a tremendous success in Austria, and is growing significantly in the Northeastern U.S. Wiberg closed the conference by encouraging all attendees to become involved in Heating the Midwest by advocating for thermal biomass and participating in the Heating the Midwest Steering Committee or Action Teams.

For more information on Heating the Midwest, visit www.heatingthemidwest.org.

Author: Brian Brashaw Director, Wood Materials and Manufacturing Program University of Minnesota Duluth

ENERGY REVIEWÂŚ

Fuels of the Future

BY BRUCE C. FOLKEDAHL

Ten years ago, the Energy & Environmental Research Center instituted the Center for Biomass Utilization, which has evolved into a world-class research program, inventing, demonstrating, and commercializing new technologies for converting biomass to fuels, power, heat, and chemicals.

This program has grown considerably since its inception, and as part of that continued growth, the EERC is just completing a new facility that will be instrumental in developing future biobased and alternative fuels.

The Fuels of the Future facility incorporates a 70foot-tall, high-bay area with multiple levels and two control rooms to accommodate a wide range of biomass and processing systems. The facility will enable the EERC to perform proof-of-concept studies for novel applications converting biomass to fuels, heat, power, and chemicals that otherwise may not have been possible because of a lack of required vertical space. The 7,500-square-foot facility is adjoined to the National Center for Hydrogen Technology and is set to become a leading center for innovation and demonstration.

The EERC has already been heavily involved in converting crop and algae oils to drop-in-compatible hydrocarbon jet fuels for the U.S. Department of Defense.

That research has involved upgrading catalytically cracked hydrocarbon fuel products using tall columns for distillation, separation, and reaction. This new facility will make those types of operations much more efficient and costeffective.

While the facility will be ready for occupancy in July, a growing list of commercial entities is waiting to fill it with new systems and test equipment. Some of the early projects to be housed in the facility include a modular gasification system for producing heat and power from agricultural wastes and manures. The technology will aid in

reducing runoff of valuable nutrients from the soil, which enter the local watershed and cause eutrophication of rivers and lakes.

The facility will also house work in renewable jet fuel development, testing new improvements to the catalytic cracking and upgrading process for renewable jet fuel, green diesel, and other renewable byproduct fuels and chemicals. A system design for a subscale pilot facility has already been completed and will be optimized for conversion of nonfood-grade biomass oils derived from crambe, camelina, pennycress, and even algae into liquid fuels. In addition, the Fuels of the Future facility will host development of new biochemical production systems that can be pilot-tested, allowing for easy scale-up. And several projects have been proposed for prototyping systems that make liquid transportation fuels from a combination of both unconventional natural gas and biogas or syngas.

Along with the technical projects, the EERC will utilize the space for outreach activities, providing dissemination of lessons learned and clear and obtainable alternative pathways to a sustainable future for fuels.

Because of the dramatic increase in U.S. oil and gas production, fossil fuels will continue to be a dominant energy source, but biobased fuels and chemicals will continue to gain ground. The EERC is committed to moving these sustainable technologies into the marketplace using new critical infrastructure such as the Fuels of the Future facility.

Author: Bruce C. Folkedahl Senior Research Manager (701) 777-5243 bfolkedahl@undeerc.org

JUNE 2012 | BIOMASS POWER & THERMAL 11

LEGAL PERSPECTIVE¦

Military Renewables Plan: A Bioenergy Booster

BY ROGER STARK, DANIEL SIMON, DARIN LOWDER

Roger Stark

Daniel Simon

Darin Lowder

Federal law requires that the Department of Defense purchase 25 percent of its energy from renewable resources by 2025. Presently, the Army obtains just 2 percent of its electricity from renewable energy technologies. Biomass electric and thermal generation facilities are explicitly included in the statutory definition of renewable resources.

In response to these requirements, the U.S. Army recently issued a request for information seeking public comment on a draft solicitation to procure up to $7 billion in large-scale renewable and alternative energy on or near Army land. These projects will be financed, constructed, operated and maintained by private contractors using longterm offtake agreements. Biomass is an eligible resource under the solicitation.

The finalized solicitation should be issued shortly and will likely contemplate multiple indefinite delivery / indefinite quantity contracts with qualified offerors. Individual task orders will then be competitively awarded under these contracts for specific renewable energy projects of varying sizes and technologies up to the budgeted $7 billion in project value. The Army plans to purchase electric energy from the projects, but will not own the generation assets.

The draft solicitation, and similar efforts across the Department of Defense, are being undertaken to meet Congressional mandates and other military objectives, including energy independence and security, and supply chain simplification. These efforts also will serve the Army’s net zero objectives for U.S. installations. Net zero energy installations are defined as projects that produce as much renewable energy on site as they use on an annual basis, and may include conservation and efficiency efforts in addition to renewable energy generation.

The Army previously satisfied its renewable energy mandates by purchasing renewable energy certificates or clean energy generated offsite. Biomass projects that convert waste to fuel and generate heat or power from those fuels will assist the Army in achieving its renewable energy mandates and net zero objectives. Biomass facilities also are an important component of a renewable energy portfolio for the military because the power is not generated intermittently, as is the case with wind and solar facilities.

Two complementary trends are aligning to potentially benefit biomass projects near military installations. First, market observers estimate that 40,000 to 60,000 MW of existing coal-fired capacity will be retired or mothballed by 2020. Much of that lost coal capacity will likely be replaced

by new gas-fired generation, which is not a renewable energy resource and has a significant carbon footprint. By contrast, biomass facilities can serve the military’s renewable energy and energy security objectives and already qualify as renewable energy technologies under some state renewable portfolio standards.

Second, biomass projects developed as part of the U.S. Army or Department of Defense’s efforts will benefit from the Department of Defense’s willingness to enter into longterm offtake contracts, which facilitate project financing and are increasingly difficult to obtain because of ongoing litigation regarding the ability of electricity buyers to subsidize capacity payments under long-term contracts.

The Army’s initiative (and other Department of Defense efforts) is being implemented from both the top down and the bottom up. Base commanders will have significant input on the procurement and selection process, while the Pentagon brass continue to establish policy directives that will be implemented in contracts to be negotiated and administered by the Army Corps of Engineers. Additional information about the Army’s renewable energy efforts is available at the Army Energy Initiatives Task Force website (www.armyeitf.com). It is expected that information on the solicitation, when final, will be posted to the website.

Biomass projects, especially those using waste streams from military installations, will benefit from their ability to simultaneously meet several of the military’s objectives, including increased clean energy production, energy independence, net zero facility goals, and supply chain simplification.

Because biomass qualifies as a renewable energy resource under the Army’s program as well as state renewable portfolio standards, the military’s multi-billion dollar initiative to expand its use of onsite renewable energy presents a significant new opportunity for biomass project developers.

Authors: Roger Stark Partner, Ballard Spahr, LLP (202) 661-7620 starkr@ballardspahr.com Daniel Simon, Partner, Ballard Spahr, LLP (202) 661-2212 Simond@ballardspahr.com Darin Lowder Associate, Ballard Spahr, LLP (202) 661-7631 lowderd@ballardspahr.com

JUNE 2012 | BIOMASS POWER & THERMAL 13

Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Parton joins Forest2Market Stan Parton has joined Forest2Market and will lead the company’s bioenergy practice.

Parton will be responsible for the expansion of Forest2Fuel, Stan Parton the company’s suite of services for buyers and sellers of renewable energy fuels, and for managing product evolution and derivative product development.

These services include biomass supply availability studies, tipping point analyses, site selection studies, wood fuel indexing for supply and off-take agreements and a price benchmark that buyers and sellers of wood fuel use to compare their performance and improve their positions in the market.

Before coming to Forest2Market, Parton was principal in The Parton Group, a company he established in 2001. A provider

of project development support services for the renewable energy and forest products sectors, The Parton Group conducted studies, including technology options analyses, plant evaluations, and many of the same services offered by Forest2Market.

Komptech hires new sales manager Tom Geissinger has joined Komptech USA Inc. as an area sales manager covering Ohio, Indiana, Kentucky, and western Pennsylvania. Geissinger has more than 15 years of sales experience and most recently was the Doppstadt Sales Specialist for Gibson Machinery in Ohio.

Metso expands in India Metso has opened a new valve supply and service center in Vadodara, India. The new supply center supports the company's strategy to grow its valve business globally and strengthens its service capabilities in India for

major petrochemical, energy, and oil and gas companies.

Metso is also expanding its valve production premises in the U.S. and Finland, and opened a new valve facility in Shanghai, China in 2010. The company also has industrial valve facilities in Brazil and Germany.

The new supply center in India is 400 kilometers north of Mumbai in the state of Gujarat, where Metso's service center has been in operation for more than two years. The state of Gujarat has the fastest growing economy in India, and is also one of the most industrialized states, with a per capita gross domestic product almost double the national average.

The industrial city of Vadodara houses major customers and engineering, procurement and construction companies.

Maine Energy Systems recognized for sustainability Wood pellet boiler manufacturer Maine Energy Systems has been recognized as part

BUSINESS BRIEFS¦

of the first state-sponsored environmental achievement awards handed out in Maine since 2005.

The Bethel-based business was honored as one of six stewards of sustainability presented with the 2012 Governor’s Awards for Environmental Excellence by Gov. Paul LePage and Patricia Aho, commissioner of the Maine Department of Environmental Protection.

The awards, administered by the Maine DEP and scheduled in conjunction with Earth Day, recognize entities that voluntarily go beyond regulatory requirements to creatively and collaboratively initiate innovation that is both environmentally and economically sustainable.

Maine Energy Systems won in the Businesses Under 15 Employees category for helping Maine homes, public facilities and businesses—including Waterville High School and Mt. Abram Ski Resort—transition to a cleaner fuel sustainably harvested

from Maine’s forests. Conversion to pellet heat can lower fuel costs for users by about half and cut the carbon footprint of an average-sized home by about 16 tons per year, while helping retain and create jobs in Maine’s vibrant forest products industry.

Boiler & Steam Systems develops multiclones Boiler & Steam Systems of Bellevue, Wash., has developed new high-efficiency ceramic multiclones for coal- and wood-fired boilers. The use of ceramic materials and a new casting technology has resulted in a new generation of ultra-high efficient multiclones.

The new design provides a quantum reduction in particulate emissions compared with existing collectors. The new 10- and 6-inch diameter models are currently available and 9-, 11.5- and 12-inch diameter ceramic cones will be available soon.

The new ceramic castings are a direct replacement for existing collector tubes

of the same diameter. The high-efficiency designs will also help marginal boiler plants meet the new Boiler Maximum Achievable Control Technology standards.

The new cone geometry evolved through a combination of multiclone research projects, CFD modeling and recent studies on high-efficiency cyclonic separation. The new designs maximize the particulate capture of the collector spinner and cone as an assembly through precision casting. A custom ceramic mix is used to create a very smooth surface with an abrasion life five times longer than that of iron castings.

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Industry Briefs, Biomass Power & Thermal, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to lgibson@bbiinternational.com.

Please include your name and telephone number in all correspondence.

PHOTO: RUSSELL BIOMASS

FiredUp

THE WAITING GAME: Russell Biomass is one of several Massachusetts developers who put plans on hold in anticipation of the state's new guidelines.

A Blow to Biomass

Massachusetts’ final RPS regulations could quash biomass energy in the state

On April 27, the Massachusetts Department of Energy Resources released its months-overdue proposed final regulations for the qualification of woody biomass under the state’s renewable portfolio standard (RPS). Massachusetts biomass developers and foresters alike have expressed concern that the regulations could effectively kill the state’s biomass industry.

“While we have no doubt that the Department of Energy Resources intended to protect the state’s and region’s forests with these rules, they are not based on sound science and, in reality, will have the opposite effect,” says Bob Cleaves, president and CEO of the Biomass Power Association.

Among a number of changes from the draft regulations filed in May 2011, is an increase in the minimum efficiency mandate from 40 to 50 percent. Now, biomass plants will receive half a renewable energy credit (REC) upon reaching 50 percent efficiency, and one full credit beginning at 60 percent. “This provision fundamentally will shift biomass development from power-

only generation units typically operating at efficiencies around 25 percent,” the DOER writes in its summary of changes.

Many developers in Massachusetts have been waiting for the regulations before finalizing project plans. “They don’t make it easy in Massachusetts,” says John Bos, of Russell Biomass LLC, which has held development of its 50 MW biomass power plant in Russell, Mass., in the midst of regulation uncertainty.

The DOER also made changes to the regulations in the areas of carbon accounting, biomass fuel certificates and certificate registry, annual compliance and provisions for under-compliance, treatment of previously qualified biomass units, and eligible forest biomass and residue retention.

“The administrative requirements for documenting fuel sources and verifying qualification will greatly burden small biomass facilities, raising a question as to whether they can or will comply,” says Peter Bos, developer for Russell Biomass.

“The further delay in enacting the final

16 BIOMASS POWER & THERMAL | JUNE 2012

regulations serves to delay and likely kill all biomass projects.” Adjacent state biomass projects will use Massachusetts wood for fuel, he adds, and are not subject to the forestry requirements in the DOER regulations.

“The main or overarching constraint to any biomass development is not even in the biomass regulations,” Bos emphasizes.

“It is the inability of any biomass plant to compete with wind for a power purchase agreement from an electric utility.”

The regulation change, following decades of subsidizing biomass power, came swiftly after the infamous Manomet study, which reported woody biomass releases more carbon dioxide per unit of energy than some fossil fuels. Despite several reports challenging the findings for numerous reasons, Massachusetts has continued with its goal of prompt policy change.

“As we have pointed out repeatedly, the Manomet study upon which these regulations are based did not explore the carbon accounting of energy using waste wood—the fuel used by the vast majority of biomass facilities,” Cleaves says. “More important, the use of waste wood by the biomass industry actually promotes forest health by removing the dead, rotting material. This allows new growth to replace it and, in the process, absorb more carbon.

If forests remain at constant levels or increase, then the net effect is that carbon that is being removed is being reabsorbed, and indeed is better than ‘carbon neutral.’”

A comment period on the proposed final regulations is open from May 19 to June 18. A link to the full regulations and information for submitting comments can be found here: www.mass.gov/eea/energyutilities-clean-tech/renewable-energy/ biomass/renewable-portfolio-standardbiomass-policy “If the true objective here is to reduce the use of fossil fuels in favor of homegrown, alternative energy sources—thereby reducing the carbon in our atmosphere— then Massachusetts is making a grave error,” Cleaves adds. —Lisa Gibson

FIREDUP¦

BCAP Could Be Back The Biomass Crop Assistance Program might not be dead yet. The Senate Agriculture Committee passed a version of the 2012 Farm Bill in late April, which includes an amended Energy Title section that will mandate energy program funding.

The Energy Title, tweaked and brought forth by Sen. Kent Conrad, D-N.D., allocates roughly $800 million over five years to programs that include BCAP and the Rural Energy for America Program. The support for the Energy Title was strong, passing with a vote of 16-5, and the co-sponsors of the bill make the future life of BCAP appear even stronger. Both Republican and Democratic senators from Indiana, Minnesota, Pennsylvania, Iowa, North Dakota, South Dakota, Ohio and Nebraska co-sponsored.

Many steps have yet to be taken in the legislative process, not to mention the fact that this is an election year, but the Senate meeting on the Farm Bill has instilled hope that BCAP has a solid chance at passing. “We have good news on the energy front,” says Senate Committee Chairwoman Sen. Debbie Stabenow, D-Mich. Through savings found in other places in the Farm Bill, the 2012 version

of the Energy Title is completely paid for. “As a result of a number of additional savings, we have been placed in a situation where we can, in fact, have a strong energy title with dollars we have saved,” Stabenow says.

Those dollars have come, in part, by removing funding for the economic adjustment assistance to users of the upland cotton RENEWED HOPE: Aloterra has relied on BCAP for its miscanthus program, which will free up projects, and now might see a continuance of the program. $476 million. Other areas of savings come from excludout, adding that it’s amazing how uninformed ing catastrophic risk premium reduction those critics are. offset funding, among others.

The vast amount of funding goes to “This bill is a win for tax payers, clearly,” Conrad says. “This is a win for reformers, this nutrition programs directed toward chilis a win for farm and ranch families all across dren, he says. “Only six percent of farm this country, this is a win for the economy of bill spending, less than two tenths of one America.” Streamlining programs like BCAP percent of overall federal spending, goes to farm programs,” Conrad says. “Somehow will make accessing funds easier, but more important to Conrad’s win is the fact that the that gets lost.” —Luke Geiver bill is fully funded with money from savings.

“Farm policy has many critics,” he points

JUNE 2012 | BIOMASS POWER & THERMAL 17

PHOTO: ALOTERRA ENERGY LLC

Legislation allocates mandatory funding to the 2012 Energy Title

¦FIREDUP

Project Structure Secrets How to reduce costs or lessen responsibility to the customer

The hierarchy of a biomass project structure matters. Richard Bellefleur, general manager for biomass boiler and equipment provider Wellons FEI Corp., knows all about it.

Bellefleur and his team are installing biomass boilers for the U.S. Veteran’s Affairs in Chillicothe, Ohio, and in Canadaigua, N.Y. Both are scheduled to come online in 2012, and each has a different project structure varied by contractor responsibility, duties and financial wiggle room. The structures, dubbed the design-build and piecemeal models, have their own advantages and disadvantages.

The design-build model was used in Canadaigua at a VA hospital. The VA, which was the top of the hierarchy, was tasked with completing a biomass project and enlisted the help of a general contractor, the next rung in the hierarchy. The responsibility of the general contractor is completing the project’s execution from one end to the other, Bellefleur says. The general contractor selects other subcontractors, equipment suppliers, takes care of permitting issues, coordinates the project and project schedule, presents materials to VA for approval of standards ranging from cement selection to building design, manages project risk and controls cost.

“He (the general contractor) can’t go back to the VA and ask for money because he has the contractual obligation to present the VA with a finished product,” Bellefleur explains. The general contractor’s work will be verified by a third-party commissioning agent. The design-build model offers a great advantage to the end user paying for the project because that end user has limited responsibilities. And there is a reduced possibility of a cost overrun because the general contractor is brought on after the price of the

18 BIOMASS POWER & THERMAL | JUNE 2012

project is set. But in this model, the overall cost of using a general contractor will be more, as the general contractor will include contingency plans because he doesn’t have all of the details of the project prior to construction.

In the piecemeal model, an approach Bellefleur worked under in Ohio, a general contractor’s role is different and comes in on the third tier of the hierarchy, under an entity that will act as the final decision maker in place of the VA. In this case, it was the Army Corps of Engineers. The model utilizes the input of more parties. Prior to bringing on the general contractor, the boiler provider, the architecture and engineering firm and even the commissioning agent will all work together to clarify and describe the main details of the project. The second tier of the hierarchy will then pass that along to the general contractor, allowing him to reduce the cost of services based on access to more upfront information.

The model also utilizes a single decision maker for the mechanical, piping and electrical needs of the project, which Bellefleur says makes for a pretty smooth process. “You didn’t have the different trades pitching the ball to themselves.” The advantages of this project structure are simple. Although the project can be done for a smaller price tag, it puts more responsibility on the buyer.

In the Ohio project, the piecemeal model was used based on the VA’s ability to completely relinquish responsibility to the Army Corps. But in New York, the VA opted for the design-build model, choosing to pay more for a general contractor and reduce its responsibility in the project. —Luke Geiver

FIREDUP¦

Pending Policy The U.K. biomass industry is waiting for regulatory clarity

THE BRIGHT SIDE: Regulatory uncertainty in the U.K. is destabilizing the nuclear energy market.

The good news about the U.K. Department of Energy and Climate Change’s pending decision for Renewables Obligation support levels from 2013 to 2017 is that it is coming this fall. The bad news, according to Gaynor Hartnell, chief executive of the Renewable Energy Association, is that the decision should have already been made.

“We should have had the legislation by the end of April this year,” she says. The delay is affecting investment in projects and feedstock purchases as producers wait to find out what level of support they will receive.

“Biomass has been the story of waiting,” Hartnell says.

The Renewables Obligation awards renewables obligation certificates (ROCs) for every megawatt hour produced by a renewable source. The number of ROCs is determined by technology type. By 2017, the entire Renewables Obligation scheme will end, which is already creating confusion about biomass investments beyond that year. Fortunately, the Electricity Market Reform program will replace it and is expected to clear up any doubt in the renewable energy sector by starting a number of different programs to solidify investment, showing investors that prices for

renewable energy electricity generation will be fixed. “Investors should be comfortable with this because the total income they will get is totally predictable,” she says.

Although government decisions on renewable energy can be unpredictable, there are a few reasons for the biomass industry to remain optimistic in the U.K. “We are facing a time when a lot of our generation capacity is going to be shut down over the coming years,” she says. “Renewables look good.”

And several of the large energy providers that were previously interested in nuclear power have dropped all aspirations for developing those projects. In addition, any uncertainty, decision delay or other floundering by the DECC will only move nuclear energy further from the picture.

Regardless of nuclear’s role in the U.K.’s energy future, there is one more thing Hartnell says will please biomass backers. A recent report completed by the REA shows the growth in the industry from 2009 to 2011. The report, “Renewable Energy: Made in Britain,” shows that the overall increase in biomass market value in that time frame was 11 percent, outstripping general economic growth over the same period (1.4 percent) by a factor of 8. The EMR program should spur even further growth. —Luke Geiver

JUNE 2012 | BIOMASS POWER & THERMAL 19

ÂŚEVENT

TALKING POINTS: Biomass industry leaders discuss election year growth at the International Biomass Conference & Expo. From left: moderator Tim Portz, BBI International, Gary Melow, BPA; Joseph Seymour, BTEC; Jennifer Hedrick, PFI; Michael McAdams, ABA; and Joe Jobe, NBB. PHOTO: MICHAEL KODAS, NARRATIVE LIGHT

20 BIOMASS POWER & THERMAL | JUNE 2012

EVENTÂŚ

Biomass A

High

Mile

The 2012 International Biomass Conference & Expo in the Mile High City drew attendees from around the world, eager to learn and meet others who share their passion

BY LISA GIBSON, ANNA SIMET AND LUKE GEIVER

JUNE 2012 | BIOMASS POWER & THERMAL 21

¦EVENT

PHOTO: MICHAEL KODAS, NARRATIVE LIGHT

T

he U.S. Department of Defense has many needs, but electricity tops them all, according to Dan Nolan, a 26-year U.S. Army veteran and current CEO of energy and military consulting firm Sabot 6. He authors the DoD energy blog and captivated his audience as the keynote speaker of the International Biomass Conference & Expo, held April 16-19 in Denver, Colo.

The annual event featured a number of new additions this year, including the co-located Rocky Mountain Forest Restoration & Bioenergy Summit, which focused on the unique opportunity for the biomass industry to advance forest management in disease-ridden and wildfire-prone forests. The conference also included two full days of tours instead of the traditional one. But one aspect that remains the same each year is the pertinent and newsworthy panel topics. Many of the 1,300 in attendance were impressed with the speakers, presentations and fresh content.

Nolan was no exception. In perhaps the most gripping aspect of his presentation, Nolan ended his speech with a night-view photo of the world. He highlighted the major conflict areas, including Iraq, Afghanistan, Iran and others. The safer regions of the world were brightly lit, but all the regions in turmoil were dark in comparison. Nolan offered advice to those who wonder where conflict will arise without energy security in the U.S. “Look at the world at night.”

He also explained the link between the U.S. Department of Defense and renewable energy, specifically biomass. “DoD is a market driver,” he said. “It is the gorilla in the room.” The DoD is

FINDING THE KEY: Keynote speaker Dan Nolan, CEO of Sabot 6, told conference attendees about the importance of energy security in the U.S. military.

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EVENT¦ an unrivaled entity in terms of its reach into the energy sector. It’s also the nation’s largest employer, and if all its acres were linked together, it would be the size of Pennsylvania. Nolan said the potential for biomass use within the agency is barely tapped.

He then highlighted several military initiatives biomass producers can take advantage of, including $7.1 billion put forth by the U.S. Army Corps of Engineers. That initiative will help develop an infrastructure market and energy generation facilities at military installations across the U.S., inside the gates of the military communities. Applications to the program can be submitted for another six to eight months, and projects will begin in about a year.

A History of Biomass During the general session discussion “Director’s Roundtable: Priorities for Industry Growth in an Election Year,” Gary Melow, Biomass Power Association state projects coordinator, gave an overview of the biomass power industry’s history, pointing out that things have changed dramatically for producers over the years. He also explained how the industry got where it is today.

“Our industry was born back in the 1980s as a result of federal PURPA (Public Utilities Regulatory Policy Act) legislation, which required utilities to purchase power from independent power producers,” Melow said.

But coal reserves found in the Western U.S. in the 1990s drove down the price of coal, and subsequently, the price of energy. “As a result, states were deregulating their electricity markets,” Melow

said. “So you had this perfect storm of utilities selling contracts and biomass power facilities upside down on their fuel contracts, and without subsidies or incentives or other economic financial instruments, so we started to see plants close.”

Things changed again in the 2000s, when the country began to see states adopt renewable portfolio standards (RPS), and plants started to come back online, according to Melow. “We started seeing some small coal plants convert to biomass, and in the last few years, we’ve seen some green developments.” Unfortunately, little or no growth has occurred in states without RPSs, he said.

The BPA’s main initiative is emphasizing to lawmakers the benefits of biomass power, according to Melow. “We’re sort of going back to the future, promoting and marketing the intrinsic values that have been the core of our industry since the beginning.” Those values include local resource utilization, support of jobs and local communities, production of a high-value product delivered to the marketplace using existing infrastructure, environmental benefits, and more.

Following Melow, Joseph Seymour, executive director of the Biomass Thermal Energy Council, and Jennifer Hedrick, executive director of the Pellet Fuels Institute, touched on issues affecting the biomass pellet and densified fuel industry.

Like BPA, BTEC and PFI are watching pending federal regulations such as the Maximum Achievable Control Technology rules, and they have been promoting the inclusion of biomass thermal in any national renewable energy legislation. Seymour pointed out

that it’s important for the industry to have trade organizations to unify the biomass thermal sector, and to properly convey messages to policymakers. “When we walk into a congressperson’s office, they usually don’t understand biomass thermal, let alone biomass,” he said. “So what we try and do is avoid too many cooks in the kitchen.”

Seymour admitted one particular hurdle is competing with natural gas. “I won’t deny that natural gas is changing the economics of some thermal projects,” he said.

During her speech, Hedrick shined some optimism on the growing pellet stove market, telling the crowd that 1.5 million U.S. homes are currently heating with pellet stoves, and a small but growing number are utilizing pellet boilers and furnaces. “The residential market has been a steady market over the last several years,” she said. One of PFI’s major initiatives for this year is rolling out its new third-party certification standards program, with the help of the U.S. EPA. Michael McAdams, president of the Advanced Biofuels Association, discussed progress that his members are making on their first commercial-scale advanced biofuel plants, emphasizing that the advanced biofuel industry is now a reality. “It was just a year and a half or two years ago that people were saying that it didn’t exist; that it was pixie dust and unicorns,” he said, adding that he recently witnessed renewable diesel and jet fuel production at Dynamic Fuels’ plant in New Orleans.

Joe Jobe, president of the National Biodiesel Board, highlighted in his presentation a milestone the biodiesel industry hit in 2011—reaching more than 1 billion gallons of production—and described the hurdles the industry encountered while trying to get there. “I’ve read about the biodiesel industry being an overnight success story, and that makes me chuckle because it was more of a 20-year overnight success story,” he said.

The following day’s general session, “Groundbreakers Roundtable: Examining Projects that Survived the Development Gauntlet and Broke Ground in 2011,” featured Joshua Levine, vice president of project development for American Renewables,

PHOTO: ANNA SIMET, BBI INTERNATIONAL

¦EVENT

TAKING IT IN: Tour attendees saw piles of wood chips that will fire a biomass boiler in Boulder County, Colo.

Pete Nájera, vice president of operations for Enviva, Mike Scott, president and CEO of Nexterra Inc., and Mike Levin, vice president of government affairs for FlexEnergy Inc. Each speaker brought a positive and inspiring story about his project’s success.

Nájera told the crowd that one company’s win in the biomass arena is a win for the entire industry, a success for all of us.

Complex Cash Charles Grecco, executive vice president of Cate Street Capital Inc., knows about the hurdles that can hinder a biomass power project, and he explained at the event how to overcome them. In developing Cate Street’s Burgess BioPower in Berlin, N.H., Grecco has battled public opposition and complicated debt financing options. “Many of life’s failures are people who did not realize how close they were to success when they gave up,” Grecco said, quoting Thomas Edison.

One of the main reasons for the 75 MW project’s success, Grecco pointed out, was the negotiation process with the region’s utility providers early in its conception. “We

24 BIOMASS POWER & THERMAL | JUNE 2012

started talking with the utilities long before we spent any money in other places,” he said. The Berlin facility also benefited from the team’s ability to take advantage of an active renewable energy credit market. For the power purchase agreement, the team had to get creative.

The 20-year PPA is structured to allow the utility provider the option to purchase the biomass facility if it has been paying more than the agreed-upon rate for the biomass electricity.

But the project would not have been possible without the complex debt structure Cate Street Capital was able to put together.

The company used four main funding sources: 55 percent senior secured notes totaling $150 million; 18 percent senior floating rate notes totaling $50 million; the U.S. Department of the Treasury’s 1603 grant funding and a New Market Tax Credit (NMTC) bridge loan, combined for 20 percent or $55 million; and 7 percent NMTC equity totaling $17.5 million. “We structured every project from a debt perspective,” Grecco said. “So all of our contracts are long term, even our waste and sewer contracts.”

EVENT¦ Touring Twice The district heating plant in Boulder County, Colo., is another great success story for the industry, supplying five buildings and a total of 95,000 square feet. The plant was a trailblazer in Colorado’s forest-residue-to-bioenergy industry and is a perfect example of integrating forest management with biomass applications.

It was a stop on the second set of tours corresponding with the International Biomass Conference & Expo, which also offered attendees a dazzling view of the forests of Boulder County’s foothills and mountains, forest thinning and treatment operations, and a stop at New Belgium Brewery in Fort Collins, Colo.

Boulder County Parks and Open Space manages more than 30,000 acres of forest, thinning 100 to 200 acres per year. Before the biomass plant was operating, that forest management resulted in the burning of about 1,600 slash piles annually, according to Terese Glowacki, natural resources manager.

While different forest regions are treated in different ways at different times, much of it involves thinning. Years ago, Boulder County Parks and Open Space chipped the thinnings and left them on the forest floor in a three-inch thick layer to analyze the effect on forest health, but results were not favorable. “We had a scientist study what the effects were, and it turned out that it actually increased the growth of noxious weeds,” Glowacki said.

The county’s biomass boiler was installed following a very positive feasibility study, and began operating in 2005. “It has been so successful that in 2011, we installed a second biomass system,” Glowacki said, adding that the second system heats a jail.

Wood at the treatment sites is chipped directly into a chipper truck—which Boulder County parks and Open Space rents about a dozen times a year—and is hauled to the county’s fully-automated district heating plant or a storage area about two miles away.

The final tour stop was the New Belgium Brewery in Fort Collins, Colo., where attendees learned about the history of the

brewery, its culture and sustainability program, and sampled some of its most popular and seasonal beers.

Katie Wallace, New Belgium Brewery sustainability director, said the brewery hosts an on-site process water treatment plant (PWTP). Water that was used in the beer-making process is sent through a series of aerobic and anaerobic basins, and the resulting methane is piped back to the brewery where it powers a 292 kilowatt (kW) combined-heat-and-power engine.

That system was installed about seven years ago, and a second biogas generator was recently commissioned. One generates power for the PWTP, and the other is utilized to supplement brewery electricity, up to 15 percent. The brewery also participates in the Smart Grid program, Wallace said, and has a solar photovoltaic panel array on top of its packaging hall.

The two days of tours straddled the event, offering a hands-on opening and closing to the conference. The first day included stops at the U.S. DOE’s National Renewable Energy Laboratory in Golden, Colo., Community Power Corp.’s modular biomass system in Littleton, Colo., and emissions monitoring systems developer Cisco in Englewood, Colo.

All in all, the International Biomass Conference & Expo offered not only learning opportunities, but exceptional networking venues. The evening trade show receptions were well-attended and the Coors Field baseball event sparked industry discussion while the Colorado Rockies beat the San Diego Padres.

Against a backdrop of the breathtaking snow-capped Rocky Mountains, the event was destined for success.

Authors: Lisa Gibson Editor, Biomass Power & Thermal (701) 738-4952 lgibson@bbiinternational.com Anna Simet Associate Editor, Biomass Power & Thermal (701) 751-2756 asimet@bbiinternational.com Luke Geiver Associate Editor, Biomass Power & Thermal (701) 738-4944 lgeiver@bbiinternational.com

JUNE 2012 | BIOMASS POWER & THERMAL 25

¦FEEDSTOCK

A BEVY OF BIRDS: Roughly 800,000 tons of poultry litter are produced on the U.S. Eastern Shore annually.

PHOTO: USDA

26 BIOMASS POWER & THERMAL | JUNE 2012

FEEDSTOCKÂŚ

The Poultry

Litter Landscape Bioenergy from farm waste can help solve well-known runoff issues in the Chesapeake Bay

BY LUKE GEIVER

JUNE 2012 | BIOMASS POWER & THERMAL 27

¦FEEDSTOCK

PHOTO: ECOCORP INC

T

he Chesapeake Bay region is undertaking the most aggressive nutrient reduction effort to date. According to a report by the Chesapeake Bay Commission, the Chesapeake Bay Foundation, the Maryland Technology Development Corp. and Farm Pilot Project Coordination Inc., states and local governments in the region mandate a combined annual reduction of 60 million pounds of nitrogen and 4 million pounds of phosphorus by 2025 from the six states associated with the watershed. That includes Maryland, Virginia, Pennsylvania, Delaware, West Virginia, and New York, as well as the District of Columbia. So, something has to change for poultry and other agricultural outfits that produce high levels of nutrient-rich manure, adding to the region’s oversaturated soil and resulting water runoff issues.

According to the report, “Manure to Energy: Sustainable Solutions for the Chesapeake Bay Region,” three major areas hold the greatest concentration of livestock: the Lower Susquehanna River region in Pennsylvania features dairy, beef and chicken farms; the Shenandoah Valley in Virginia and West Virginia has a group of chicken and turkey producers; and the Delmarva Peninsula in Delaware, Maryland and Virginia is dominated by chicken production.

The animal manure and poultry litter problems are exacerbated by the logistical complexity of transporting excess litter away from the region. Aside from the variance in nutrient levels from one load of litter to another, the cost of long-distance transport typically outweighs the benefit. But fortunately, the organizations linked to

POULTRY SCHEMES: EcoCorp has designed a rendering of a poultry litter facility for a Maryland prison.

the Chesapeake Bay report think the problem is solvable, and for the biomass industry, that’s a good thing. “As long as the American consumer relies on a diet of milk, meat and eggs, there will be a steady supply of animal manure as feedstock for energy projects,” the report states.

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FEEDSTOCK¦

EcoCorp Inc., a Virginia-based renewable energy developer with a knack for anaerobic digestion (AD), is already working in the Eastern Shore to reduce the amount of excess poultry litter. The company signed a 20-year power purchase agreement with a Maryland correctional facility, allowing a 1 MW poultry litter and corn stover AD system to provide one-third of the facility’s power needs.

“Nobody has opposed it up to this point,” says John Ingersoll, president of EcoCorp, adding that there is no indication anyone will.

EcoCorp’s AD process doesn’t destroy the nutrients, and the nitrogen is converted to ammonia, according to Ingersoll. Of the 800,000 tons of chicken litter he says is produced between the Bay and the Atlantic Ocean every year, his project is using roughly 1 percent. “That gives you an idea of the potential,” he says, adding that 100 digesters could be built to help process the chicken litter in that area.

Ingersoll’s AD system is prefabricated, allowing utilization wherever needed. And the system uses a dry fermentation process, which greatly reduces water requirements. The project at the cor-

PHOTO: CAMBRIDGE ENVIRONMENTAL TECHNOLOGIES

Digesting the Possibilities

ELIMINATING EMISSIONS: Cambridge Environmental Technologies has developed an emissions control system for its poultry litter gasifier.

JUNE 2012 | BIOMASS POWER & THERMAL 29

¦FEEDSTOCK rectional facility will be complete in early 2013, he says.

While AD could be the choice process for many farmers whose operations contribute to Chesapeake Bay pollution, it isn’t the only answer.

Heating Up In Rockingham County, Va., Oren Heatwole is heating his poultry houses through combustion of poultry litter gath-

ered on-site, thereby also improving the environment for his birds.

In Accomack County, Va., Farm Pilot Project Coordination Inc. is working to produce both heat and power from 2,200 tons of poultry litter per year sourced from 11 farms with a total of 1.8 million birds. The energy will be used on-site with the resulting ash from the gasifier sold as fertilizer for local vegetable crops, further reducing phosphorous runoff.

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And in Virginia’s Shenandoah Valley, BioEnergy Planet is partnering with Virginia Tech on a pyrolysis process that converts poultry litter to bio-oil and biochar. The partnership is developing a business model that allows technology providers to generate income from the energy produced, as well as the resulting biochar.

But Perdue Agribusiness and Fibrowatt LLC have a project that might provide the best glimpse into the real power of poultry litter. In response to a Maryland Clean Bay Power request for proposals (RFP) by Gov. Martin O’Malley last year, the two companies submitted a project proposal that would reduce runoff, help the state meet those lofty nutrient reduction goals, and generate 10 MW through gasification at a facility in Salisbury, Md. The project would also create 70,000 pounds of steam per hour to be used at Perdue’s adjacent soybean processing facility.

As of 2001, Perdue’s business arm, AgriRecycle, has shipped 12 million pounds of nitrogen and 7.5 million pounds of phosphorus out of the region, and perhaps more important, has become the state’s largest buyer of poultry litter. Jim Potter, president and chief operating officer of Fibrowatt’s parent, Homeland Renewable Energy Inc., says the prospect of poultry litter used with an AD application is good, but nothing beats combustion. “The combustion of poultry litter provides far superior value versus any other renewable energy technology,” he says.

For several years, Potter’s team has successfully run the world’s largest poultry litter-topower combustion facility, producing 55 MW in Benson, Minn.

But Potter’s company also owns and operates Homeland Biogas Energy LLC, a company that develops large-scale biogas facilities. “AD systems are geared more toward wetter materials such as dairy and swine (manure) with high volatile organic solids,” he says, adding that the process doesn’t meet the needs of the Eastern Shore states to remove nitrogen and phosphorus from the litter.

Perdue and Fibrowatt’s Maryland project proposal doesn’t, however, hinge on the poultry litter or even the process technology.

FEEDSTOCK¦ It’s more about the typical project dynamics seen in other biomass projects. “The state is the vehicle in which a project creates a predictable cash flow or the mechanism to secure non-recourse project finance debt,” Potter says.

Maryland has agreed to sign a 15- or 20-year power purchase agreement with the project it chooses from the Clean Bay Power RFP. Building a first-of-its-kind facility to learn about the financial project dynamics, and then applying the lessons learned to reduce cost and improve efficiency on future projects is an applicable strategy for Eastern Shore poultry litter projects, according to Potter. Thus, he believes Fibrowatt and Perdue will make a perfect fit for the region, in part because of Fibrowatt’s global experience. “We know the issues associated with biosecurity, with odor control, with combustion, dealing with the high-ash, high-alkaline fuel,” Potter says.

But the Chesapeake Bay report, in combination with other activity in the poultry litter arena, shows the industry can support multiple projects. “Our region has the potential to verify multiple technologies,” says Dion Banks, director of governmental affairs for Cambridge International, the parent company to Cambridge Environmental Technologies, formed in 2007 to develop biomass gasifers that can utilize poultry litter.

Banks has already testified before the Maryland State Senate regarding a bill that would qualify biomass thermal energy systems for renewable energy credits. And Banks and his team have also hosted a roundtable discussion with roughly 30 industry representatives and members of the USDA on the potential of using poultry litter to prevent runoff from the Eastern Shore.

But poultry litter-to-power development isn’t only reserved for those on the Eastern Shore. In Quebec, Biofour Inc. is using a government grant to validate a biomass boiler specifically designed to run on agricultural residues and, of course, poultry litter. A boiler already installed at a poultry litter facility features a two-chambered system that allows for complete combustion, using both the feedstock and the resulting gases (pumped

into the second chamber) for combustion.

While some systems are still under development, poultry litter doesn’t have to wait, as Potter has proven with his combustion and AD systems. And Ingersoll and his team are already looking at projects that would mimic the prison’s AD setup. Banks believes that Maryland could be on the cutting edge of technology and project development in terms of poultry litter use and, as the report points out, the entire region has ample opportunity.

Whether it is optimism or insight, Banks and the others just might have it right about poultry litter. “The development of poultry litter-based renewables is an opportunity for the world,” he says.

Author: Luke Geiver Associate Editor, Biomass Power & Thermal (701) 738-4944 lgeiver@bbiinternational.com

JUNE 2012 | BIOMASS POWER & THERMAL 31

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