Modular biopower yet to take root in Colorado despite beetle-kill epidemic
Friday, May 15, 2009 at 7:37 am
Walt, a former Westinghouse engineer, sells modular units about the size of a tractor trailer that use a high-heat gasification process to convert woodchips and other biomass into thermal energy and electricity. The units power and heat schools, government offices, shopping centers, wineries, orchards and other commercial facilities.
While CPC for several years ran small 15-kilowatt experimental units at a school in Walden on a U.S. Forest Service contract, Walt says that program served to work the kinks out for the larger commercial units of up to 100 kilowatts that he currently sells.
But CPC is based in Colorado because of its proximity to the National Renewable Energy Laboratory in Golden, a federal facility that backed the start-up company in 1995, not because its customer base is in the state. And Walt says there are significant challenges to using his Biomax line to tap into the fuel loads of the bark-beetle epidemic.
“[NREL is] why we’re here, but our business is not locally driven,” Walt said. “We haven’t sold any systems in Colorado. The markets for us are U.S. military, government, international, Ireland, Italy, other states, Alaska, California. All the drivers are ripe in California.”
Agriculture operations there can use renewable byproducts such as grapevine prunings, olive and peach pits, and walnut, apricot, almond and pistachio shells to displace primarily propane power that costs about $30 per million British Thermal Units.
Those byproducts don’t have to be processed before going into a Biomax unit, they’re all on private land, and they’re in close proximity to the modular biopower units, which can produce a million BTUs for about $1.
As for electricity, in California and Hawaii, a kilowatt hour sells for around 40 cents, and in Alaska, subsidized prices hover between a dollar and half and two dollars a kilowatt-hour. Biomax units can produce electricity for about 10 cents a kilowatt hour, depending on feed stock and processing costs.
In Colorado, electricity currently costs about 8 cents a kilowatt hour, depending on the area, and natural gas costs about $6 or $7 for a million BTUs.
“It’s hard to make it work [in Colorado] unless there are other drivers, and the other drivers are what are we going to do with all of this beetle kill?” Walt said.
That’s a question mountain resort communities have been grappling with since the bark-beetle epidemic first took off in the mid-1990s. Ski towns like Vail and Avon for several years have been looking into biopower similar to centralized systems in operation in Europe.
The problem is most of the dead trees are on public lands, where the Forest Service is required to get top dollar in timber sales, and there is a high cost associated with cutting the trees down, chipping them up for consumption in a gasifier and transporting them to either a modular or centralized biopower plant that can then efficiently distribute the heat and electricity. But some officials are optimistic those hurdles can be overcome.
“I actually think we’re getting closer,” Vail Town Councilman Mark Gordon said. “We’re dealing with a couple of different companies; we’re talking to the governor’s Energy Office; there are a lot of good things moving in the right direction with this thing.”
Gordon and other Vail officials are trying to locate a multi-megawatt (one megawatt equals 1,000 kilowatts) central biopower plant on a town-owned maintenance facility site, then install a network of water pipes that would circulate hot water throughout town to be tapped into for radiated heat in hotels and other buildings.
“Those small [modular] ones, while they’re very interesting, don’t really satisfy the need,” Gordon said. “To me, I started with the need of trying to make our snowmelt system [under streets and sidewalks] sustainably powered, and then it grew to create this utility, and it makes sense.”
Walt said someone in Colorado needs to build a business case for either using modular biopower on a large scale — installing 20 or 30 units in one town — or using a multi-megawatt centralized system. His focus is currently on selling individual units for on-site biopower generation.
Schools, municipalities and private companies like ski resorts don’t necessarily want to get into the energy generation business, which means third-party energy service companies need to develop business models that work. One such company working on the problem is Littleton-based Colorado Forest & Energy.
CFE’s Phil Kastelic is a big believer in the modular model.
“I’d love to sell systems tomorrow, and we can sell them, so our initiative is 50 schools, 12 months, energy independent using bark-beetle devastation, and it works,” Kastelic said, at the same time acknowledging the hurdles. “They’re available and they’re deployed, but the fact is the broad-scale, aggressive commercialization of that deployment is only now in the early funding stages, but the technology works.”
Holy Cross Energy CEO Del Worley, head of the rural electric co-op in the Vail area, says it’s unlikely his REA would be interested in owning a centralized facility.
“It’s all under discussion and there’s a lot of possibilities, but I think just because of potential tax breaks you’d have somebody else own it, and who knows who would operate it,” Worley said. “It could be a private operating company. Basically our interest would be we’d be a market for the power.”
And both Gordon and Worley agree that negotiating a long-term stewardship contract with the Forest Service to remove the trees is critical to making a large-scale biopower plant work. State officials say they have been working on the concept with Vail.
“[The governor’s Energy Office] has talked to the town of Vail, Vail Resorts and consultants developing plans for their biomass plant,” said GEO spokesman Todd Hartman. “The Colorado Carbon Fund and the GEO’s biomass program are both potential funding opportunities for projects like this, but GEO hasn’t committed any funding or resources at this point.”