Woody Biomass Energy

Woody Biomass Energy Tuesday, January 1, 2019

Author(s): Adam Smith
Pile of wood chips.

Heavy dependence on fossil fuels obtained from politically volatile areas, an emerging consensus that carbon emissions must be substantially reduced, and dramatically increasing costs of fuel oil and natural gas are driving the urgent need for alternative energy sources, both in Nebraska and nationally.

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Wood Energy

Rising energy costs are negatively impacting Nebraska’s rural communities, many of which were already facing serious economic declines. Woody biomass is a carbon-neutral,
clean-burning, renewable energy resource that can help solve these problems.

Nebraska-grown wood is an underutilized, plentiful, economic energy resource that can stimulate and revitalize our rural economies. Woody biomass is a proven, reliable energy source for both heating and cooling, as well as industrial applications, electricity generation, and ethanol production.

Wood energy can help Nebraskans by: 

  • reducing Nebraska’s energy dependence on fossil fuels;
  • creating jobs and new sources of income in depressed rural areas;
  • reducing forest fuel loads and risk of catastrophic wildfires;
  • ting markets for undesirable tree species, such as eastern redcedar cleared from grazing lands and Russian olive cleared from riparian areas;
  • addressing scarce water issues in drought-stressed watersheds through sound forest and grassland management; and,
  • creating more productive, healthier forests and revitalized rural communities.

Available Biomass Resources

  • Nebraska has 1.3 million acres of timberland.
  • These forests contain more than 41 million oven-dry tons of standing woody biomass.
  • Of this biomass, 87 percent is on private land.
  • Nebraska’s timberland produces at least 1 million net tons of wood per year, every year in perpetuity.
  • 117,000 tons of waste wood from urban wood waste and wood processing by-products are produced annually, much of which is not utilized.
  • Rapidly growing forest fuel reduction programs in the Pine Ridge and Niobrara Valley produce 72,000 tons of wood/year while creating healthier, safer forests.
  • 422 boilers located in public institutions across the state (e.g., jails, hospitals, schools, and universities) are more than 40 years old and are prime candidates for conversion to woody biomass.

Current Users of Biomass

USER WOOD USE (TONS) ESTIMATED ANNUAL SAVINGS
Chadron State College, Chadron 9,000 $360,000
Lied Lodge & Conference Center, Nebraska City 3,500 $140,000
Northwest Missouri State University, Maryville, MO 16,200 $1,100,000
Consolidated Blenders, Inc., Hastings 1,200 $62,400
Hillside Dehy, Inc., Uhling 400 $21,000
Dehy Alfalfa Mills, Inc., Arlington 1,500 ~ 60 percent
Gothenburg Feed Products, Gothenburg 2,300-2,500 ~ 60 percent
Island Dehy Company, Inc., Cozad unavailable ~ 60 percent
American Wood Fibers, Clarks Uses an undocumented, but large, amount of waste wood generated by their saw-mill operations.  ~ 60 percent
American Walnut, Council Bluffs, IA Uses an undocumented, but large, amount of waste wood generated by their saw-mill operations.  ~ 60 percent

Feasibility Studies for Conversion to Woody Biomass Energy

FACILITY ECONOMIC FEASIBILITY CONVERSION COST WOOD USE (TONS) PAYBACK PERIOD* ESTIMATED ANNUAL SAVINGS
Chadron Community Hospital, Chadron Positive  $396,000 400 8 years $50,000
Crow Butte Resources, Inc., Crawford  Positive  $717,000 350 13.9 years $52,000
Nebraska College of Technical Agriculture, Curtis Positive  $675,000 1,040 13.5 years $52,000
Peru State College, Peru Positive  $1,100,000 3,200 6 years $186,000
University of Nebraska–Lincoln, East Campus Positive  $4,520,000 26,400 3.5 years $1,306,000

*Payback periods shorten as costs increase for natural gas, propane and fuel oil. 

Facilities Interested or Conducting Feasibility Studies

FACILITY

APPROXIMATE WOOD USE
(TONS)

APPROXIMATE PAYBACK PERIOD ESTIMATED ANNUAL SAVINGS
Bluebird Nursery, Clarkson 2,000 5 years $100,000
Cargill Soybean Processing Facility, South Sioux City 50,000 5-7 years $2,000,000
Husker Ag Ethanol, Plainview 100,000 unavailable unavailable
IAMS Pet Food, Aurora inquiry only
Nebraska Public Power District, Lexington inquiry only

Emerging Opportunities for Wood Energy in Nebraska

Cellulosic ethanol: Emerging technologies show great promise for converting low-quality wood to ethanol. 

Electrical power generation: Wood could be used to co-fire coal-burning power plants, reducing air pollution and offsetting carbon emissions.

Energy source for industrial applications: Replacing natural gas with woody biomass would increase the profitability of corn ethanol plants and reduce net carbon emissions. At early 2008 prices, wood chips are 60 percent cheaper per million BTUs than natural gas.

Industrial energy products: Businesses that process wood into pelletized fuels show excellent potential for operation in rural forested areas.

Significant Barriers to Woody Biomass Utilization

Despite positive feasibility studies and short payback periods, Nebraska institutions have not been able to raise adequate funds for conversion to woody biomass utilization.

To assist institutional conversion to woody biomass as a primary energy source, fi nancial assistance is needed to meet the substantial capital cost requirements. Capital costs are the major barrier preventing large-scale institutional conversion to woody biomass as an energy source. A revolving loan fund would provide a sustained source of capital to help institutions fund these conversions.  

Components of the Wood Energy Revolving Loan Fund Program:

  • Available to public institutions.
  • Loan funds provided at a reduced interest rate for institutional conversion.
  • Funds provided for engineering feasibility studies.
  • Institutions pay back loans with savings in energy costs.
  • Loan period approximately corresponds to estimated payback period (generally 5-10 years). Potential carbon offset payments to consumers of carbon-neutral woody biomass may reduce payback periods.
  • As loans are repaid, recycled funds can be loaned out for additional institutional conversions to woody biomass energy.

Currently, there are four public institutions in Nebraska with positive feasibility studies seeking funds to support conversion to woody biomass energy:

  • Peru State College,
  • Chadron Community Hospital,
  • Nebraska College of Technical Agriculture at Curtis, and
  • University of Nebraska–Lincoln East Campus.

Total costs for converting these institutions to wood energy = $7 million. 

Total woody biomass utilized = 31,000 tons/year.

Total CO2 reduction = 19,492 tons/year (potentially worth between $72,000 and $579,000/year depending on carbon markets).
Combined annual savings in energy costs = $1.6 million.
Average payback period = 7 years.
Estimated economic impacts =

  • $3.7 million/year in local economic gains;
  • at least 22 new jobs created in rural areas; and,
  • development of new businesses and expansion of existing businesses.