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Austin Energy’s first biomass power plant now in operation

Wednesday, July 18, 2012 by Charles Boisseau

The nation’s largest biomass power plant has begun operations near Nacogdoches in East Texas – the latest effort by the City of Austin to generate more than one-third of its electricity from renewable energy sources by 2020.


Austin Energy, the city-owned electric utility, has contracted to pay $2.3 billion over 20 years for the entire output from the Nacogdoches Generating Facility, which will have the capacity to produce up to 100 megawatts of electricity at any given time, enough to power about 70,000 homes. The plant now ranks as the nation’s largest biomass facility; another plant equal in size outside Gainesville, Fla., is planned to open next year, according to industry sources.


The Nacogdoches County facility, owned by a subsidiary of Atlanta-based Southern Co., will burn about 1 million tons each year of waste wood collected from within a 75-mile radius of the site just outside of Cushing.


The plant, with four air emission stacks and a Bubbling Fluidized Bed biomass boiler rising 240 feet, has been operating for about a month, said Jerry Don Williamson, Pct. 1 commissioner for Nacogdoches County.


“They’re loading about 100 (truck) loads a day of wood chips,” Williamson said. The $450 million plant, which will enjoy several years of local tax abatements, eventually will become by far the largest taxpayer in the county and will help the region’s wood products industry. “It’s going to be a tremendous benefit to Nacogdoches County,” he said.


The plant has been in development since 2008 when Austin City Council approved the fuel contract, a key part of the Austin Climate Protection plan designed to “make Austin the leading city in the nation in the fight against global warming.”


At the time Austin’s goal for renewably generated energy was 30 percent. Since then, the city has upped its goal to 35 percent. During fiscal 2011, about 10 percent of Austin Energy’s power came from renewable resources. Purchase power agreements for wind, solar and the Nacogdoches biomass plant will bring that number closer to 25 percent by next year, according to Austin Energy’s latest annual report.


One advantage the biomass plant has over other renewable sources is it will run day and night, with an online operating average of about 85 percent compared with a far lesser amount for solar and wind power, Austin Energy General Manager Larry Weis told In Fact Daily. There are times when the wind doesn’t blow and the sun doesn’t shine, but the biomass plant can serve as one of the utility’s base-load power units, counted on to run most all the time.


“So it will create a lot of energy,” said Weis, who plans to drive to East Texas early this morning to attend the plant’s 10:30am opening ceremony along with Austin Energy Chief Operating Officer Cheryl Mele and Senior Vice President Jackie Sargent.


Officials with Southern Co. were not available for comment as of In Fact Daily’s deadline last night.


Advocates say biomass plants make use of renewable forest waste products that would otherwise go unused, such as discarded wood unusable for lumber. Left to rot, such wood can create fuel that sparks wildfires and, as it decomposes, emits methane gas, a greenhouse gas that contributes to global warming.


Weis said: “Despite the fact that it emits (air pollution), the alternative also emits.”


Bob Cleaves, president of the Biomass Power Association, a trade group based in Portland, Maine, said of biomass: “if you use it to displace fossil fuels or natural gas, the environmental benefits are undeniable.”


Weis said the biomass plant will generate electricity for an average of about 15 cents a kilowatt-hour over the life of the contract. That’s more than the 9.5 cents per kilowatt-hour for natural gas, 11 cents for coal and 13.1 cents for nuclear, said utility spokesman Ed Clark, citing a recent market report from ERCOT, the Electric Reliability Council of Texas. Wind costs an average of 5.5 cents, making it the cheapest renewable in Austin Energy’s portfolio, while solar is the most expensive at 22 cents per kilowatt-hour.


The bulk of Austin Energy’s power comes from the city’s natural gas-powered plants, Decker Power Plant and Sand Hill Energy Center, and the city’s share of the coal-fueled Fayette Power Project and the South Texas Project, a nuclear plant near Bay City.


Despite the relatively higher costs, Weis said the biomass plant had no effect on the recent 8 percent rate hike Austin Energy imposed on residential customers and even higher increases for most commercial customers. Approved last month by City Council, the increases represent the utility’s first rate hike in 17 years.


“Overall, biomass does not represent a cost or a reason we raised rates,” Weis said. He attributed the rate increase to the city letting the utility’s reserves plunge starting when the economy got rocky in the early 2000s. He also noted that the cost of fuel from the plant – like all other fuels – is accounted for in the separate fuel charge added to customers’ bills.


Interestingly, the growth in biomass facilities has slowed since Austin signed its biomass contract. This is because natural gas prices have fallen sharply as a result of more supplies with the surge in fracturing extraction techniques used to free up natural gas trapped in underground rock formations, Cleaves said. If there is “buyers’ remorse” because of the higher cost of biomass, this could change quickly given the historic volatility of natural gas. “You’ll feel pretty good about yourself next time there is a spike in natural gas prices,” Cleaves said.


All told, there are about 200 U.S. biomass plants, with most in California and the Northeast. Nationally, biomass represented 1.3 percent of total U.S. utility generation in 2011, far less than hydropower (7.9 percent) and wind power (2.9 percent), but more than solar (0.1 percent) among renewable sources, according to the U.S. Energy Information Administration. Non-renewable sources – coal (42 percent), natural gas (25 percent) and nuclear power (19 percent) – represent 87.3 percent of the fuels used for electricity generation.


Environmental advocates say such biomass plants, because they emit air pollutants and use vast amounts of water, are less than ideal compared with wind and solar.


All things being equal, we prefer wind and solar that don’t have air emissions as opposed to biomass,” said Cyrus Reed, conservation director for the Lone Star Chapter of the Sierra Club.


The Nacogdoches plant received air permits from the Texas Commission on Environmental Quality to emit a maximum of 903 tons per year of carbon monoxide, 602 tons per year of nitrogen oxide, 277 tons per year of sulfur dioxide, 193 tons of particulate matter, as well as other air contaminants. It also obtained a permit to discharge up to 2.5 million gallons a day of effluent into the Angelina River.


If you have a comment or news tip, contact Charles Boisseau at

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