Electricity Production
Electricity production and heating have been a major use of forest biomass in many developed countries and have shown to be promising in the U.S. as well. In addition, technology for generating electricity from forest biomass is more mature than that for converting forest biomass to liquid fuels as the commercial production of bioelectricity and heat from biomass has existed for a while. For these reasons and given the lack of cost data on the commercial-scale production of cellulosic ethanol, this section focuses on the cost competitiveness of bioelectricity compared with coal-generated electricity.
Electricity generation costs using the integrated coal gasification combined cycle system and the conventional pulverized coal system were estimated to be about $35/MWh with the fuel price in 2005. This cost estimate is consistent with the current national average cost of electricity generated from coal. The cost may be higher if more stringent environmental standards have to be met. The cost of using poplar biomass in a biomass gasification combined cycle system is considerably higher than that of using conventional coal or gasification systems. The electricity production cost using the biomass gasification system for hybrid poplar was estimated to be $58/MWh (Gan and Smith 2002) (at right).
Logging residues appear to be more competitive than poplar plantations. Costs ranged from $47/MWh (marginal cost) to $50/MWh (full cost) (Gan and Smith 2006) (at left). Similar cost estimates have also been reported in other regions of the U.S. and Canada. Based on the optimal size (137 MW) of power plants for forest harvest residues in Canada, Kumar and others (2003) estimated the electricity production costs at US$63/MWh.
There are several reasons for this cost difference. First, the initial capital cost for a biomass gasification system is almost 50% higher than the costs for a conventional coal or gasification system (EIA 2001). The non-fuel costs of the biomass plant would be almost the same as the total cost of electricity generated at the coal plant. Second, fuel costs also play a role in the cost differential. Biomass fuel is more costly than fossil fuels on a per unit energy basis (Gan and Smith 2006).
There are several ways to make biomass more economically competitive with fossil fuels (Gan and Smith 2002). One is to reduce the non-fuel costs of biomass power generation via improving the efficiency and effectiveness of current biomass conversion technology. Another way is to reduce fuel costs. This can be accomplished through improvements in feedstock productivity and biomass harvesting and transporation systems. Imposing a tax on carbon dioxide emissions or providing an incentive for biomass energy that displaces carbon dioxide emissions would also enhance the competitiveness of biomass energy. For logging residues to be competitive with coal in electricity generation, an emissions tax of $25/ton of carbon dioxide or higher would be needed (below left). Alternatively, global greenhouse gas emissions would need to be curtailed by 20-30% for logging residues to become competitive (below right). For poplar plantations to be competitive with coal, emissions reductions and taxation would have to be further increased. Emisssions would need to be reduced by at least 40% to make poplar plantations competitive in electricity production, while taxation would have to be at least $65/ton of carbon dioxide.
The above estimates were based on the electricity generation solely fueled by forest biomass and current general market and technological conditions. They reflect only electricity production costs not environmental or other costs/benefits. Note that electricity production costs vary with technologies used, production scale, fuel costs, and other factors. For instance, co-firing biomass with fossil fuels may help bring the electricity production cost down under certain circumstances; too small or too large power plants may increase the production costs as the costs of biomass transport and electricity generation depend on the scale of the power plant.
Encyclopedia ID: p1175
