Biomass Power Puts Old Plants to Work

Laidlaw Energy Group is taking yesterday's discards -- in the form of shuttered natural gas and wood processing plants -- and turning them into renewable energy powerhouses. At facilities being reconditioned in Berlin, New Hampshire and Cattaraugus County, New York, wood waste will replace fossil fuels to provide clean electric power.

Biomass power generates electricity and heat by converting trees, plants or other organic waste into energy. While biomass is gaining greater interest in the U.S. investment community as a feedstock for biofuels such as cellulosic ethanol, Laidlaw CEO Michael Bartoszek says biomass power should not be overlooked.

Bartoszek says biomass is the most popular renewable feedstock for electricity production globally. In sub-Saharan Africa, for example, 70 percent of the energy is produced from biomass, according to David Yuko of the Institute of Research in Sustainable Energy and Development in Nairobi, Kenya. According to the DOE's department of Energy Efficiency and Renewable Energy, biomass is the second highest producer of renewable energy in the country, ahead of wind and solar but behind hydropower.

 Laidlaw Energy's New York plant will be a 7 megawatts facility. The project is a conversion of a natural gas plant where the heat and some power will be used by an adjacent lumber mill. The company received a grant from the state to start the project and will sell the excess power to a local utility. The Berlin plant was a lumber mill and will generate 65 megawatts. Bartoszek says 1,000 jobs were lost in pulp and paper industry in the area, and the biomass plant would return some of those jobs.

Laidlaw is still going through the permitting process so that it can be sold to a local utility. According to Bartoszek, Laidlaw is unique in pursuing retrofit projects for biomass power instead of building new plants. His company provides the beginning capital and assumes the initial risk and then brings in equity partners, often preferring to work with investors in the energy sector who are familiar with the cost and risk.

Biomass power can be cheaper than coal or natural gas, especially when the project is a retrofit, Bartoszek. "It allows utilities to get (inactive plants) back into action," he says. Biomass plants emit less greenhouse gases than natural gas or coal-fired power plants. According to a study by the National Renewable Energy Laboratory done in 2004, a direct-fired biomass power plant reduces the "global warming potential" by 148 percent when compared to a coal power plant.

Biomass power plants may never become as hot as ethanol plants with investors because they are a niche play and are not as capital intensive, Bartoszek says. However, "It's only a matter of time before pubic investors take notice," Bartoszek says."