Can Renewable Biomass Combined Heat and Power Replace Coal Power?

A number of recent reports have highlighted the role that combined heat and power (CHP) can play meeting the nation’s energy needs in the decades ahead. Distributed CHP systems can replace retiring coal-fired power plants, improve overall efficiency in the electric power sector, reduce energy costs, and reduce greenhouse gas emissions. Most analyses presume new CHP systems will be fueled by natural gas. Yet, relatively little attention has been given to the potentially significant contribution renewable biomass CHP systems could make when used in current and future integrated biorefineries.

At the end of August, the White House released an Executive Order to increase installed CHP capacity in the United States by 50 percent (40 Gigawatts (GW)) by 2020. At the same time, the Department of Energy released a report on the status and trends in CHP deployment. For brief summaries, see our previous SBFF post on this here .

More recently, on October 5, the Energy Information Administration (EIA) released its own report “Combined Heat and Power Technology Fills an Important Energy Niche.”

Among the report findings:
• “At the end of 2011, there were nearly 70 gigawatts (GW) of combined heat and power (CHP) generating capacity spread across the United States, accounting for almost 7% of total U.S. capacity, with 25 GW in the industrial sector, 2 GW in the commercial sector, and 43 GW in the electric power sector. In 2011, the average capacity factor for generators at industrial CHP plants was 57%, the equivalent of running at full capacity 57% of the time.”
• “CHP installations are also common in states with a history of utility regulation that is favorable toward CHP, such as California and New York.”
• More than 65 percent of CHP plants use natural gas as fuel.
• “Twenty-three states recognize CHP in one form or another as part of their Renewable Portfolio Standards or Energy Efficiency Resource Standards. A number of states, including California, New York, Massachusetts, New Jersey, and North Carolina, have initiated specific incentive programs for CHP.”

Also, on September 20, the American Council for an Energy-Efficient Economy (ACEEE) released a new report “Coal Retirements and the CHP Investment Opportunity.” This study found that CHP systems could theoretically replace more than 100 percent of the anticipated retirements of coal-fired power plants across a dozen states by 2020, “but given current policies and recent installation trends, it appears taking advantage of that technical potential could be a challenge.” “Policies and regulations do not always encourage CHP deployment, though, and this report finds that almost all of the states that are facing higher levels of potential coal retirements do not have most of the critical policies in place that yield a healthy investment environment for CHP.” Nonetheless, the report finds that “while CHP is not positioned to fully replace the lost capacity, it can play a substantial role in meeting these needs, especially in certain states.” ACEEE believes that electric utilities, with favorable regulatory environments, are best positioned to make these substantial long-term investments.

However, none of these reports considers the potentially significant contribution to power production that CHP systems in integrated biorefineries, fueled by renewable biomass, could make in the next decade – especially in some of the states facing the most retirements of coal-fired power plants. There are currently about 200 corn ethanol plants operating, mostly across the Midwest. All generally operate 24/7 and have high needs for thermal energy and power. And all could have access through existing supply chains to ample quantities of renewable biomass (e.g., from agricultural residues, anaerobic digesters, or perennial biomass crops). Further, if the Renewable Fuel Standard is to be met by 2022, as many as 500 new biorefineries will need to be built. Most will have significant needs for heat and power, and most will be using cellulosic feedstocks.

If a large percentage of these plants installed or converted to biomass CHP systems, they would likely generate several gigawatts worth of surplus electric power for the grid – given the right policy incentives and utility regulatory environment. Power production could be another co-product of biofuel production, and it could help displace one of the nation’s dirtiest fuels with renewable biomass. This would be another way to “Do Corn Ethanol Better and Do Better than Corn Ethanol” from a climate and sustainability perspective.

This was the focus of a recent article in Biofuels Digest “Industrial CHP in the U.S. Gets Bump from Executive Order and Biorefinery Expansion.” Mackinnon Lawrence of Pike Research estimates that if only 15 percent of future biorefineries in the United States deploy CHP, they could generate about 4.4 GW of power for the grid.

A new biorefinery in Florida is already leading the way. The INEOS Bio plant , which is still being commissioned, will soon produce 8 million gallons of biofuel from cellulosic biomass per year, adding 6 MW of renewable power capacity to the grid.

Danish firm Inbicon is showing how an integrated biorefinery , using cellulosic biomass such as corn stover, can produce biofuel and substantial amounts of power to the grid. It burns lignin and biogas, co-products from the biofuel production system, to produce heat for the plant and excess power for the grid.

Vance Morey at the University of Minnesota shows in this recent PowerPoint “Using Biomass at Ethanol Plants for Combined Heat and Power” how Minnesota corn ethanol plants could produce as much as 500 MW of power using biomass CHP.

The key headwinds to converting existing ethanol plants is, of course, the low price of natural gas, generally unsupportive policy and utility regulatory environments in many states, and the depressed condition of the corn ethanol industry today in the wake of the drought and sluggish economy. However, moving ahead, new biorefinery developers may be able to chart a different course with a longer term view, and help the nation end its dependence on coal power.