Power plant to run on Wisconsin biomass

Submitted: The Two Sides Team September 17, 2013

At the newest power plant in Wisconsin, fuel will come from close to home. Unlike coal, which is brought in by train from Wyoming and Appalachia, biomass will be culled from the sawmills and forests of northern Wisconsin.

Milwaukee Journal Sentinel – August 31, 2013

At the newest power plant in Wisconsin, fuel will come from close to home.

Unlike coal, which is brought in by train from Wyoming and Appalachia, biomass will be culled from the sawmills and forests of northern Wisconsin.

Most of the waste wood that will supply the $268 million We Energies and Domtar power plant will come from within 75 miles of Rothschild, said Jim Freiberg of Domtar.

The plant, which will provide electricity for We Energies and steam for Domtar's paper mill, will burn wood waste from sawmills and pulp mills as well as leftover wood removed from the forest floor after logging operations.

We Energies and Domtar Corp. executives joined then-Gov. Jim Doyle in announcing the project four years ago. At the time, Doyle touted the project as another step toward his goal of the state generating 25% of its power from renewable sources by 2025.

The 2010 election meant that policy goal won't be pursued, as the administration of Gov. Scott Walker stresses affordability and reliability of energy over environmental attributes.

To We Energies, the biomass power plant will add a new dimension to its renewable energy, as the plant will generate energy around the clock, unlike intermittent green energy sources such as solar and wind power.

Construction of the project is nearly complete and testing of the generator is taking place.

The project is expected to burn 500,000 tons of biomass a year. The utility hired Domtar to find the sawmills, paper mills and loggers to supply the plant.

"They know the suppliers up there, they've dealt with them for years," said utility spokesman Brian Manthey.

For Domtar, the project helps boost the economic competitiveness of a mill that makes premium printing and writing paper and employs 400 people.

"We will be purchasing steam from the plant from We Energies," said Freiberg, project manager for operations at the Rothschild mill. "It allows Domtar to shut down its own existing steam generation facilities, and having a larger plant creates some efficiencies that allows Domtar to lower the energy costs to make its product."

The biomass project, which will lead to a rate hike for We Energies customers in January, is the last big piece that will enable the state's largest utility to comply with the state's renewable energy mandate.

That mandate requires We Energies to generate 8.2% of its power from renewable sources by 2015, up from 4.8% last year. The renewables target is based on a percentage of the utility's electric sales. Power companies are required to continue to meet the target after 2015.

Before the recession, We Energies forecast it would need to build more wind farms or buy power from other wind power projects to comply with the renewables mandate.

But the economic downturn sharply reduced demand for electricity, and growth forecasts are soft enough that We Energies now says the biomass project will enable it to remain in compliance with the renewables target through 2021.

Although the energy source is renewable, critics question how environmentally friendly the energy produced by the plant will be. That's because burning biomass generates greenhouse gas emissions, just like burning coal or natural gas.

That generated controversy when the project was proposed, and the issue of how to regulate biomass plants remains in dispute. A federal court this summer rejected the Obama administration's plan to delay regulation of these projects for two years.

The total price tag for the project is $268 million, but a federal grant that is expected to be awarded next year will trim that by about $80 million.

We Energies is confident it will receive the grant. The power company began returning $80.3 million to customers through bill credits appearing on monthly bills this year and next.

The credits helped offset the $188 million rate increase the state Public Service Commission approved for We Energies late last year.

That 5.6% increase for residential customers pushed up a typical home customer's bill this year by almost $5, to more than $90 a month.

After taking into account a forecast of less costly coal for its other power plants, the utility forecast this summer that the biomass project will tack on another $1.30 a month, or about 1.4%, beginning in January.

Testing begins

Construction of the project began two years ago, with Boldt Construction of Appleton leading the work as project manager and general contractor. At the peak, as many as 450 workers were on site.

The plant, to be supervised by a We Energies manager and run by 30 Domtar employees, is expected to be fully operational by the end of the year, and generate enough power to supply 32,000 homes.

Supplying the fuel for that plant will be forestry companies and saw and pulp mills from north-central Wisconsin. The partners in the project forecast that the supply of wood waste to the power plant would create 150 jobs.

With construction nearly wrapped up, the plant began testing this month by starting up using natural gas as a fuel. The plant will soon begin test-firing the power plant burning wood.

When it was first proposed, the project was one of several on the drawing board in the state. Alliant Energy Corp. sought to burn coal and biomass together at a plant in southwestern Wisconsin that state regulators denied. Another was canceled when Xcel Energy Corp. decided that a plan to burn biomass at its power plant in Ashland would be too costly.

Then, in one of his first moves after taking office, the Walker administration canceled plans to burn biomass at a power plant serving the University of Wisconsin-Madison campus – a project championed by Doyle. That power plant instead will burn cheaper natural gas only.

In the end, two biomass projects persevered – the We Energies project and DTE Energy's biomass power plant on the Mississippi River in Cassville.

Biomass power generation projects are growing around the world, with Navigant Research forecasting last week a global market valued at more than $11 billion by 2020.

"These markets are growing and projects are popping up, and it seems like it's one here and one there," said Gary Radloff, director of Midwest energy policy analysis at the Wisconsin Energy Institute, at UW-Madison. "But when you start to add them all up it's a growing market."

The Rothschild project, he said, "is a good and significant step for using more biomass for energy in Wisconsin."