Last week I was fortunate enough to attend two excellent meetings that focused on different aspects of forest products and biomass utilization.  The first was the Restoring the West Conference held at the Utah State University Campus in Logan.  The conference was sub-titled “sustaining forests, woodlands and communities through biomass use” and covered a wide range of topics ranging from forest and range management to marketing and biomass utilization technologies.  The focus was very much on pinyon-juniper ecosystems found throughout the inland west including areas in California (such as east of the Sierra Nevada and the north eastern part of the state).

It is great to visit other geographic areas outside of California as it helps to put our situation and challenges with respect to forest ecosystem restoration and the utilization of woody biomass in context.  California is lucky that it still has a forest products industry infrastructure.  There are still 23 operational sawmills in the state along with 30 operational biomass power plants, and 7 other primary processing facilities (including veneer, panelboard and wood shavings).  It is easy to forget how fortunate we are that some industry continues to exist in California and gives land managers options for material disposal that are simply not available in the interior west.  We are also lucky that we deal with a variety of tree species that means that we have a choice of utilization options from sawmilling down to compost and electricity generation.

Presentations from the conference were recorded and I believe they will be available online soon.

On Friday I headed to Anderson for a workshop organized by the California Licensed Foresters Association on California’s Forest Products Markets.  There was a significant focus on the export markets for logs which is having a major impact on west coast saw log prices.  Prices for log export at west coast ports (including Samoa and Oakland) range from $500-$1100 per MBF.  The major historical markets were Japan and Korea which allow export of logs with the bark on.  In the past couple of years China has become the major player and requires the bark to be removed from the logs.  There was an interesting discussion on the different business practices of the alternative markets.  It appears that the Chinese market can be very volatile compared to Japan and Korea.  It was interesting to hear descriptions of the Chinese sawmills where the logs go – they typically consist of two bandmills, lots of workers and no other mechanization.  It was questioned how it is possible for them to make money based on Chinese lumber prices versus the prices paid in the US for logs and the transportation costs.  The presenters were excellent and also covered topics such as the state and Federal log export bans, Forest Service Stewardship Contracting, distribution centers, transportation systems, specialty markets, electrical markets and carbon.  It was a full day and very informative.

Links:

California Licensed Foresters Association
Restoring the West Conference

Potential changes to Feed-in Tariffs (Public Utilities Code: 399.20)
Feed-in tariffs in California allow a small renewable electricity generator (including those fueled by biomass) to sell electricity to a utility at predefined terms and conditions, without contract negotiations.  The current rules mean that there is no price incentive in the rate paid for electricity.  Price is linked to the Market Price Referent (MPR) which the CPUC determines by the long-term ownership, operating, and fixed-price fuel costs for a new 500 MW natural gas fired combined cycle gas turbine (CCGT) power plant.  Feed-in tariffs for renewable electricity in Europe are very different and include a price incentive in the tariff paid in addition to streamlined contract procedures. 

A ruling was issued by an Administrative Law Judge (ALJ) on June 28, 2011, seeking comments on or before July 21, 2011 with respect to proposed changes to the program.  This presented an opportunity to suggest changes to the program.  Representatives from the broad forestry and biomass sector suggested changes that would make investments in smaller biomass to electricity facilities (less than 3 MW) economically viable.  This is important in order to develop a viable market for the waste generated from ecosystem restoration projects on public lands and to help offset the cost of this work. 

The next step will be workshop on the proposed changes that is to be scheduled by the CPUC soon.  If the pricing for the new feed-in tariff is based on actual development, ownership, operating and fuel costs for small scale biomass to electricity projects then this could be a really exciting opportunity for community scaled facilities in the state.

UPDATE (September 19 2011)
The CPUC has scheduled a workshop for September 26th at the Commission Auditorium (505 Van Ness, San Francisco) from 9am-5pm.  Workshop information here.

CPUC Feed-in tariff page

You can subscribe to the Woody Biomass Blog to be kept up to date on further developments with these and other programs relevant to biomass to electricity in California.

SB489 – Modification of Net Energy Metering (NEM)
This bill which would open up NEM tariffs to include renewables other than wind, solar, biogas, and fuel cell generation.  NEM allows a customer-generator to receive a financial credit for power generated by their onsite system and fed back to the utility.  The credit is used to offset the customer's electricity bill.  Up until now biomass to electricity facilities were not eligible for the tariffs. 

According to KQED News “It won significant bipartisan support as it moved through various committees in both the Senate and the Assembly. The next hurdle will be a full Assembly vote and another full Senate vote to reconcile some small changes. Senate sponsor Lois Wolk (D-Stockton) says Governor Jerry Brown has been supportive of the bill and that if it gets to his desk before the end of the legislative year on September 9th, he’s likely to sign it.”

If the bill becomes law this could be a great opportunity for small scale biomass (less than 1 MW) to electricity projects including those using gasification. 

CPUC NEM page
Around The Capitol information on SB 489

Check back soon for the next post on proposed changes to Feed-in Tariffs in California.

You can subscribe to the Woody Biomass Blog to be kept up to date on further developments with these and other programs relevant to biomass to electricity in California.

There are a number of changes either approved or proposed for some of the California Public Utilities Commission (CPUC) renewable energy programs that may be beneficial for biomass to electricity projects.  This post will briefly look at the Renewable Auction Mechanism rules that have been adopted recently.  Follow-up posts will cover a proposal to modify Net Energy Metering and potential changes to Feed-in Tariffs. 

Renewable Auction Mechanism (RAM)
These rules adopted on August 18 2011 by the CPUC allow a simplified market based mechanism for the procurement of renewable distributed generation projects within the service territories of the three investor owned utilities (IOUs) in California (Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric).  The RAM will run for two years with two reverse auctions by each utility (lowest priced bidders win) per year.  Auction winners will be awarded a standard power purchase agreement (PPA) for either a 10, 15 or 20 year period.  The IOUs are authorized to procure up to 1000 MW of projects from 1-20 MW through the RAM.  Projects that apply can be pre-existing or new facilities.  Applicants will need to meet several criteria in order to apply:

• Site control (lease or ownership)
• Previous experience with similar projects
• Use of commercialized technology
• Interconnection application filed with California Independent System Operator (CAISO)

The IOUs need to hold the first auctions by November 15 2011 and the second by May 31 2012. 

The RAM applies to renewables including biomass based projects and may be an opportunity for project developers.  It will be interesting to observe the outcomes of the first auction and the electricity sales prices that are determined through this process. 

CPUC Resolution E-4414 outlines RAM (pdf document).  The CPUC RAM page also has information on this program.

The policy environment seems fluid at present and a number of other changes are proposed.  Check back soon for the next two posts on proposed changes to Net Energy Metering and Feed-in Tariffs.

You can subscribe to the Woody Biomass Blog to be kept up to date on further developments with these and other programs relevant to biomass to electricity in California.