Tag Archives: green
The Price of Being Politically Innocuous
When it comes to the price of an energy project, biomass power is often viewed as having a difficult time competing with natural gas and coal based power production. Conventional fossil fuels have a longstanding foundation as the primary fuels for electricity production and a lower levelized energy cost than biomass power, according to EIA . The EIA estimates that a biomass power plant entering service in 2018 will cost $108 per MWhr on national average. Compared to conventional coal ($100/MWhr) and conventional combined cycle natural gas ($67/MWhr), the EIA estimates that conventional fossil fuel plants will be more cost competitive that biomass power. While the EIA does include recent Clean Air rules and legislations into their levelized cost modules for power production, the EIA neglects to include market trends and likely future legislation as possibilities into their projections. Their reason for not doing so is unstated but understandable. Any projection that they release that leans towards one energy source will be seen by elected representatives that are opposed to that energy source as ‘biting the hand that feeds them.’ The EIA’s political abstinence from broader projections by including current market and political trends as a potential outcome is logical given their role as reporter of current realities in the energy sector to congress and the executive branch. By remaining politically innocuous, the EIA stays out of unnecessary and wasteful congressional hearings, but it comes at the cost of missing realistic predictions that offer a broad scope of pragmatic energy pathways. For example, there is a broad movement in Europe and the U.S. to move away from coal and inefficient natural gas generation, but much of these trends are omitted by EIA’s modules for the sake of not offending those in congress with strong ties to these industries. The EIA must walk a political tightrope of making projections while attempting not to offend the many stakeholders that make up the energy sector, particularly those that are politically active. Unfortunately, the balance required to stay on this political tightrope leads to narrow projections that do not realistically predict market realities. Continue reading
UK Approves 100 MW Biomass Plant In Northumberland
Taylor Scott International Continue reading
Natural Gas To Go Abroad; Biomass Says ‘Bon Voyage’
There is an obvious angst around the continued delay by the DOE to approve applications that would allow the export of natural gas from the U.S. to foreign markets. The angst for the DOE to approve natural gas exports is obvious given current price discrepancies in other countries. While the spot price for natural gas in the U.S. hovers around $4 an MMBtu, Europe pays around $12 and Japan $18 for the equivalent amount. The substantial difference in domestic and foreign prices has led twenty different groups to apply to the DOE for permission to export domestically produced natural gas. The natural gas boom in the U.S. and the companies behind it are looking to go abroad where greater profits await, and they have considerable support behind their effort. For the biomass-to-energy industry, the export of natural gas is a boon for future growth. There is no arguing that biomass projects compete directly with natural gas for electricity production, thermal demands, and (in much lesser terms) for transportation fuel production. When deciding the type of energy project to build, project developers weigh the many costs associated with potential energy inputs and the capital needed to convert the energy feedstock into a usable energy product. Most often, if not always, project developers go with the project that has lowest associated costs that accomplish the original goals. Biomass has many inherent advantages to natural gas, but in regards to price, natural gas currently wins. By expanding natural gas exports in the U.S., the price difference that allows natural gas to trump biomass as a raw energy feedstock would be reduced. Furthermore, by allowing natural gas export, the domestic spot price market for natural gas would be affected by fluctuations in foreign natural gas markets around the world. We can strongly assume that the added influence of foreign markets on domestic natural gas prices will instigate greater and more erratic domestic price fluctuations. Hedging and other tricks to mitigate erratic prices will become more widely needed to maintain profit from natural gas energy production. Greater stability in raw material prices for biomass is an asset that energy developers must take into account for the long-term economic stability of current and future energy projects. Biomass will likely see greater attention among developers as the DOE moves forward on the twenty applications pending approval, which it seems to be doing slowly . Continue reading
