Biomass plants in the Northeast scramble to change business model

In the Northeast, biomass electricity plants are staring at some tough economics. For many standalone wood-fired electricity plants, the cost of fuel (wood chips) and operations exceed what they get paid for the electricity they generate. With natural gas (and thus wholesale electricity) prices expected to remain low—and state-level support for biomass fading—biomass plants are working hard to figure out how to continue operating.

New Hampshire and Maine have provided some short-term support to biomass electricity facilities in recent years with the expectation that the funding was a bridge to allow time for new economic models to be developed. We’re now starting to see some real efforts to find ways to improve the economic sustainability of these facilities, often in ways that add to the rural economy.

Biomass plants have a lot to offer as a co-location or re-use site. They have existing forest industry infrastructure (wood yards, scales, a procurement staff, etc.), permits, interconnection to the grid, as well as access to “behind the fence” electricity, steam and hot water. Companies are now seeking ways to utilize these assets to support continued (or expanded) markets for biomass fuel. The success of these efforts won’t be known for months or perhaps years, but clearly companies are thinking and trying.

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