presentation regarding biomass electricity in Maine and New England, made to the Forest Resources Association April 2016

1. Biomass 101
Forest Resources Association – Maine Forest Forum
April 7, 2016
Eric Kingsley
Innovative Natural Resource Solutions LLC
kingsley@inrsllc.com
Phone 207‐233‐9910

2. Innovative Natural Resource Solutions LLC
• Founded in 1994
• Offices in New Hampshire and Maine
• Focus at the intersection of forest industry, energy and economic
development
• Author of Maine Future Forest Economy Project (2005)
• Services include:
‐ consulting in renewable energy
‐ advocacy
‐ forest management and protection
‐ forest certification and sustainability
• Clients from the private, non‐profit and government sectors
• Conducted work in all regions of North America
• www.inrsllc.com

3. Note
• INRS has significant experience with a number of biomass energy
producers, and has worked with both Covanta and ReEnergy
Holdings in the past.
• All of the numbers shared are generalized based upon significant
experience with biomass plants around New England and beyond,
and do not necessarily represent the situation at any specific plant.
• All biomass prices are, of course, hypothetical and may not reflect
market conditions
• Today’s discussion is specific to biomass electric generation.
Biomass thermal (heating) and biomass CHP have different
economics and drivers.

4. ‐
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
2007 2008 2009 2010 2011 2012 2013 2014
Maine Timber Harvest by Product
Data Source: MFS Timber Processor Report
Data in tons (INRS conversion)
SW Sawlog HW Sawlog SW Pulpwood HW Pulpwood Biomass

5. ‐
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
2007 2008 2009 2010 2011 2012 2013 2014
Maine Timber Harvest by Product
Data Source: MFS Timber Processor Report
Data in tons (INRS conversion)
SW Sawlog HW Sawlog SW Pulpwood HW Pulpwood Biomass

6. 12%
7%
19%
39%
22%
Maine Timber Harvest by Product
Data Source: MFS Wood Processor Report, 2014
All data converted to tons by INRS
SW Sawlog
HW Sawlog
SW Pulpwood
HW Pulpwood
Biomass

7. 12%
7%
19%
39%
22%
Maine Timber Harvest by Product
Data Source: MFS Wood Processor Report, 2014
All data converted to tons by INRS
SW Sawlog
HW Sawlog
SW Pulpwood
HW Pulpwood
Biomass

8. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sawlogs Pulpwood Biomass
Volume (Tons)
Value ($)
Volume and Value to Landowner of Products from a Timber Harvest
North East State Foresters 2013 (All NH 2010 data)

9. Maine Future Forest Economy Project
2005

10. Most facilities with multi‐fuel options have a chart
that looks something like this, and tells them what
fuels to use at what price points.
MBTU Efficiency Net MMBTU
Natural Gas (1000 cubic feet) 1,025 85% 871
Biomass Fuel (green ton) 8,625 60% 5,175
Biomass 22.00$ 24.00$ 26.00$ 28.00$ 30.00$ 32.00$ 34.00$ 36.00$ 38.00$ 40.00$
$ / MBTU 4.25$ 4.64$ 5.02$ 5.41$ 5.80$ 6.18$ 6.57$ 6.96$ 7.34$ 7.73$
Natural Gas $ / MBTU
4.00$ 4.59$ Wood NG NG NG NG NG NG NG NG NG
4.50$ 5.16$ Wood Wood Wood NG NG NG NG NG NG NG
5.00$ 5.74$ Wood Wood Wood Wood NG NG NG NG NG NG
5.50$ 6.31$ Wood Wood Wood Wood Wood Wood NG NG NG NG
6.00$ 6.89$ Wood Wood Wood Wood Wood Wood Wood NG NG NG
6.50$ 7.46$ Wood Wood Wood Wood Wood Wood Wood Wood Wood NG
7.00$ 8.03$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
7.50$ 8.61$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
8.00$ 9.18$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
8.50$ 9.76$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
9.00$ 10.33$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
9.50$ 10.90$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood
10.00$ 11.48$ Wood Wood Wood Wood Wood Wood Wood Wood Wood Wood

11. Biomass Electric Plants
• 4 plants owned by ReEnergy Holdings
• Participate in CT REC market
• 2 plants owned by Covanta
• Participate in MA REC market
• Now disqualified from participation
• (3‐year phase‐in to an unattainable
standard)
• Plants in Portsmouth, Ossipee and
Berlin, NH
• Other places in NH as well, but these are
the close facilities.

12. $‐
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Jan‐10
Apr‐10
Jul‐10
Oct‐10
Jan‐11
Apr‐11
Jul‐11
Oct‐11
Jan‐12
Apr‐12
Jul‐12
Oct‐12
Jan‐13
Apr‐13
Jul‐13
Oct‐13
Jan‐14
Apr‐14
Jul‐14
Oct‐14
Jan‐15
Apr‐15
Jul‐15
Oct‐15
Jan‐16
Apr‐16
Jul‐16
Oct‐16
Jan‐17
Apr‐17
Average Real Time Wholesale Electricity Prices, Maine
Futures Prices as of 4/1/2016 10:00 AM
Actual Futures
Average over the next year
$44.28

13. Biomass
Electricity
(MWh)
“Green” Attributes
(Renewable Energy Certificate)
Electricity (MWh)
(Wholesale)

14. Biomass Electricity – Fuel Costs
• ~1.7 green tons of fuel per MWh
• That means if biomass fuel is $35 / tons, fuel cost is ~$59.50
per MWh
• Add in staffing, consumables (emissions control),
maintenance, debt service, etc.
• Cost of generation (absent profit) is somewhere around
$90 per MWh

15. Biomass Fuel Cost ‐ $ per MWh (estimated)
$0
$10
$20
$30
$40
$50
$60
$70
$80
$22.00 $24.00 $26.00 $28.00 $30.00 $32.00 $34.00 $36.00 $38.00 $40.00

16. Biomass Electricity – RECs
• Plants need Renewable Energy Certificates (RECs) to
operate economically
• MA has effectively excluded stand‐alone biomass
• Set an efficiency standard that cannot be met by a stand‐alone facility
• Also a forestry standard, which suppliers were responsible for
• CT has a phase‐down for biomass beginning in 2018(?)
• Biomass a huge economic boost to local regions, forestry
• Only renewable with ongoing economic benefits
• Apparently not as important to Southern New England as
we would hope…

17. REC Prices (Connecticut, indicative, broker quote, 4.3.2016)
$‐ $10 $20 $30 $40 $50
2017
2016
2015
Prices dropped about $15 per REC between
Friday and Monday, given new information
from ISO‐NE about total electricity load

18. What does it take to operate biomass in 2016?
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Revenue Expenses
Electricty RECs (CT) Fuel O&M
• Assumes:
• Electricity at current futures price
for the next year
• RECs at current broker quote
• Biomass fuel at $32, 1.7 green
tons per MWH
• O&M at $30 per MWh
• With these assumptions, the
business doesn’t work

20. Eric Kingsley
Innovative Natural Resource Solutions LLC
Phone 207‐233‐9910
Email kingsley@inrsllc.com