Austin Energy will soon seek approval from the City Council for a 20-year, $2.3 billion contract to build a biomass plant in East Texas that would significantly boost the utility’s renewable energy portfolio. The utility has a letter of intent with Nacogdoches Power LLC, which would develop and operate the 100-megawatt plant, Austin Energy Chief Operating Officer Michael McCluskey says. Austin Energy would be the sole buyer of the power from that plant, which would be fueled by waste wood from lumber and mill operations.
If the council approves the contract Austin Energy would enter a 20-year supply agreement with Nacogdoches Power. The $2.3 billion contract would go toward the cost of fuel, construction, plant maintenance and two decades of operating expenses. The fuel from the proposed biomass plant would account for one-third of Austin Energy’s renewable energy portfolio, spokesman Ed Clark says. Once it’s running in a couple of years, the plant’s capacity would boost Austin Energy’s renewable portfolio from 11 percent of its fuel mix to 18 percent.
Austin Energy has a goal of getting 30 percent of its energy from renewable sources by 2020, and McCluskey says the utility has heavily invested in wind. But wind and solar don’t provide so-called firm capacity, meaning reliable fuel at all times. Because biomass plants burn a solid fuel, as fossil fuel-burning plants do, they run at a higher capacity than wind or solar facilities, McCluskey says. While wind and solar facilities typically run at 35 to 40 percent capacity, “we’re expecting this to operate at 95 percent, so it will produce roughly three times the amount of energy each year that a 100-megawatt solar facility or 100-megawatt wind facility will produce,” he says.
Tony Callendrello, vice president of Nacogdoches Power, says the company has completed its pre-development activities in Sacul, where the plant will be built. The plant is slated to come online in mid-2012, at which point Austin Energy would begin its 20-year power supply agreement with Nacogdoches Power. Nacogdoches Power is a joint venture between New Hampshire-based Bay Corp Holdings Ltd. and Massachusetts-based Energy Management Inc.
Callendrello says biomass fuel can cost roughly 80 percent less than natural gas, adding that emissions from biomass plants are either carbon neutral or carbon negative. Pointing to a study by the U.S. Department of Energy that compared carbon emissions from a biomass plant to emissions from a coal-burning plant with equivalent capacity, Callendrello says biomass plants reduce greenhouse gas emissions by 148 percent.
The largest biomass plant to date in the Electric Reliability Council of Texas’ grid is a 45-megawatt plant under construction in Lufkin, which is expected to open in 2009, ERCOT spokeswoman Dottie Roark says.
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