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Biomass Energy Use in U.S. Electricity Set to Double by 2020
Sep 2, 2009
By Seb Brinkmann
The U.S. Energy Information Administration (EIA) has projected that renewable energy will account for roughly 16 percent of total U.S. electricity generation in 2020.
This equates to roughly 800 Terawatt hours (TWh) and is an almost 100-percent jump from current levels. This outlook is supported by the extension of federal tax credits in the American Recovery & Reinvestment Act. These figures will, however, need to be revised should climate change legislation in the form of the Waxman-Markey bill win approval in the U.S. Congress. The bill, officially titled the "American Clean Energy & Security Act," or ACES, includes a requirement to generate 20 percent of total electricity demand from domestic renewable sources by 2020 (See Graph 1 below). Significantly, the bill recognizes biomass energy, including landfill gas, wastewater treatment gas, and qualified waste-to-energy (WTE) projects, as renewable energies.
Source: EIA, The American Clean Energy and Security Act of 2009
The United Kingdom, meanwhile, has signed on to the European Union Renewable Energy Directive and has made a binding commitment to source 15 percent of its total energy requirements from renewables by 2020. This target equates to a sevenfold increase in total U.K. renewable energy consumption from 2008 levels, and the U.K. government has estimated that this will provide GBP 100 billion (USD 162.7 billion) worth of investment opportunities.? Again, the electricity sector will see the largest increases, with forecasts estimating that 30 percent of all electricity generated in the U.K.(about 117 TWh) could come from renewable sources, compared with roughly 5.5 percent doing so today (see Graph 2 below).
Source: UK Department of Energy & Climate
While wind and solar power tend to grab the headlines as climate change energy solutions, a significant portion of this energy will also be derived from biomass energy, including gas captured from landfills and energy converted from waste, with estimates ranging from 22 percent (25.74 TWh) of renewable electricity generation coming from biomass energy in the U.K. by 2020?and 31.6 percent (231 TWh) of it derived that way by 2030 in the U.S.
There exist a limited number of companies with vertically integrated waste, landfill gas, and WTE operations. While Pennon Group PLC of the U.K. and Waste Management Inc. of the U.S. now have only 110 and 650 net Megawatt hours (MWh) of biomass generating capacity, respectively, they are enhancing their positions by recognizing the potential growth in this market and synergies with existing waste collection and landfill operations.
Waste Management has developed 100 landfill gas projects, and in 2008 commissioned eight new landfill gas power plants. It also worked with industrial partners on a further three projects to generate a combined capacity of 30MWh. Waste Management also has stated that it intends to build a total of 60 new landfill gas-to-energy power plants, with an additional capacity of 230MW, by 2012. Another, more significant source of U.S. Environmental Protection Agency-classified renewable energy is the company's Wheelabrator division. Wheelabrator is a leading player in the U.S. WTE market, owning or operating 16 WTE plants and five independent power production facilities that have a capacity to generate up to 836MW of energy. Waste Management's current WTE operations (not including landfill) generated around USD 924 million in revenue, and the company has targeted a doubling of all of its waste-based energy production by 2020.
Pennon is similarly aiming for an increase in generating capacity, with emphasis on its WTE production. This is largely attributable to the U.K. landfill directive, which mandates a decline in waste sent to landfill. As more waste is separated into different waste streams the company is expecting to expand its recycling and WTE operations. The company is either developing or has submitted planning permission for operations with 50MW of generating capacity as well as a Combined Heat Power plant with 120MW of generating capacity.? To offset a decline in absolute levels of landfill the company is rapidly expanding its recycling division, which will enhance synergies between its other waste management and WTE businesses.
Both companies have holistic waste strategies that seek to maximize profit from all waste streams. This increasingly diversified strategy will serve each company by managing any decline or leveling-off in waste volumes handled, while capturing maximum upside potential from a variety of energy and recycling streams. Both companies are rated AA by RiskMetrics Sustainability Solutions' Carbon Beta analysis, - and lead the Public Services competitive set in the recently published Carbon Beta update for the sector.