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Austin Energy biomass plant up for consideration this week

Monday, August 4, 2008 by Austin Monitor

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Austin residents may get two chances this week to give their opinion on Austin Energy’s plan to spend $2.3 billion over the next 20 years to buy power from a soon to be built biomass-powered electric generation plant near Nacogdoches in East Texas.

Nacogdoches Power LLC will build and operate the 100 MW plant, which will sell all of its power to Austin Energy under an exclusive contract. The facility would burn wood chips and other waste from the milling process to generate electricity beginning in 2012.

Nacogdoches Power, in a joint venture with BayCorp Holdings LTD of Nashua N.H., will own the plant and sell its energy exclusively to Austin Energy. The plant will utilize advanced emissions control technology to achieve the best available emissions and because of its use of wood waste as fuel it is considered a carbon neutral generation facility.

The main concern that has been expressed to city officials about the plant, so far, has been cost, according to utility spokesman Ed Clark.

“The price is an attention-getter,” he said. “$2.3 billion dollars is a lot of money, but when you stretch it out over 20 years, it makes this a fairly cost effective purchase. The cost of energy for this plan will be roughly the same in the beginning as we pay now for natural gas.”

Clark said Austin Energy anticipates a steady rise in the cost of natural gas, while the fuel costs of the biomass plant are fixed for the 20-year term of the contract. According to Clark, Austin Energy customers would begin paying for it through the utility’s fuel charges once the plant is online in 2010. He said he did not have an estimate of how much the average customer would pay to use the plant.

The proposal goes before the city Resource Management Commission this morning, and it is on Thursday’s City Council agenda. The Electric Utility Commission has already approved it.

Biomass is one of several alternative energy sources Austin Energy is investing in to meet a goal of generating 30 percent of its electricity by renewables by 2020, according to spokesman Ed Clark. The city-owned utility is also investing in wind and solar power. Its primary generating fuels remain coal, natural gas and nuclear. 

The East Texas plant would generate up to 100 megawatts of power, enough to supply 75,000 homes, making it the largest biomass-powered plant in the country. It will use a variety of wood waste fuels such as forest residue, mill residue, waste pallets and municipal wood waste.

According to Clark, biomass has some advantages as a power source over other renewables like wind and solar.

“We expect the plant to be up and running almost all the time,” he said. “The wind doesn’t always blow, and the sun only shines about half a day. But we plan for this plant to be up and running 24/7. That’s a major advantage.”

Currently, there are several small biomass plants operating around the state, mostly usingmethane gas from landfills or agricultural byproducts, to producea total of 97 megawatts of power.  However, the Nacogdoches area plant will be twice as large as any of the other plants in the state when it becomes operational.

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