California’s Biomass Industry Currently Under Threat

California’s almond industry used to provide a plethora of shells to co-fire in biomass power generating plants in the state’s Central and San Joaquin valleys. After burning the shells to generate electricity in such 25 MW to 50 MW plants, these independent producers sold their power to utility giants, such as Pacific Gas and Electric (PG&E) and Southern California Edison (SCE).

Today almond shells – which used to bring up to $35 per ton as biomass – are being sold as cheap barn bedding for dairy cattle. Such shells are emblematic of a California biomass industry that is largely on the ropes, say insiders familiar with the regulatory and economic environment surrounding this once burgeoning sector.

Biomass is a very important outlet for the almond industry, Kelly Covello, president of the California-based Almond Hullers & Processors Association, said. But she said long-term power purchase agreements continue to expire.

“Without revenue from these power purchase agreements, biomass plants have not and will not be able to continue to operate,” Covello said. “At this point, survival of the biomass industry is questionable.”  

According to the California Biomass Energy Alliance (CBEA), there are 25 solid-fuel biomass electric generating facilities in California. Distributed across 18 counties, they re-use some 8 million tons of the state’s solid wastes and residues annually; and in the process generate some 550 MW. The CBEA reported that those plants now provide only about 7 percent of California’s renewable electricity – down from a high of more than 15 percent.

“Within the past year, two valley biomass plants have shut down,” Covello said. “At the end of 2015, [another] will also close. [All total], those four plants consumed more than 750,000 tons of ag biomass.”

What remains of the state’s biomass electricity production is being co-fired by forest residues, urban greenwaste, and ag wastes, including grindings from orchard removals, orchard prunings, and sticks that accumulate at the huller/sheller.

Even so, the California almond industry itself remains healthy.

Yet only 10 percent (or 45,000 tons) of the total shells generated by the state’s current almond crop is going for biomass, Covello said.

“If they haven’t already, most of the facilities using almond shells as a fuel are going to close in the next year,” Rick Spurlock, plant manager of Rio Bravo Fresno, said. Rio Bravo is a 25 MW plant owned by IHI Power Services.

IHI operates six biomass plants in California, and Spurlock notes that PG&E currently buys the electricity generated at the Rio Bravo facility. Their biomass fuel types vary from plant to plant but primarily falls into one of three categories, Spurlock said.

They include orchard prunings and removals, rice hulls, fruit pits, and nut shells; forest residues from saw mills and forest undergrowth; and urban greenwastes, such as construction wood scraps, used wood, and tree trimmings.

Some 70 percent of the fuel supply at Rio Bravo comes from a mix of almond, peach, plum, citrus, nectarine, and olive wood, Spurlock said.

“Nobody is buying almond shells for biomass,” Paul Parreira, a Central Valley almond grower and processor in Los Banos, said. “The almond industry itself is losing [at least] $3.2 million per year in lost revenue from not being able to sell its shells for biomass.”

Parreira is a partner in the Parreira Almond Processing Company.

As Parreira noted, biomass plants have all the urban greenwaste they can handle and at lower cost than almond shells.

However, the local biomass industry not only provides a way for California almond growers to maximize profits on almond shells, but also maintain current air quality standards.

“In the San Joaquin Valley, burning of ag waste, such as orchard prunings, is no longer allowed due to strict air quality regulations,” Covello said. “The alternative has been to grind and chip prunings and incorporate them back into the orchard floor.”

But that doesn’t always work, since precision irrigation techniques and movement away from flood irrigation often means the leftover sticks don’t break down into the soil. Instead, they have to be disposed of offsite.

Biomass aids in finding a profitable way to dispose of such ag byproducts.

The CBEA reports that biomass helps local air districts comply with federal air quality standards by preventing open burning of 1.5 million tons of agricultural and forestry residues each year. In the process, the CBEA said, biomass plants cut criteria pollutant emissions by up to 98 percent.

There is no other low-cost alternative to open burning, Spurlock said. As a result, he added, the San Joaquin Valley Air Pollution Control District is looking into changing their regulations to allow open burning of additional crops and acreage.  

That’s a prospect that neither the growers nor the general public welcomes. As Spurlock noted, the San Joaquin Valley air district was the first in the nation to move from non-attainment to attainment on PM-10 (or Particulate Matter up to 10 micrometers in size).

“That can be directly tied to the biomass industry, providing a low-cost alternative to open burning of ag material in the field,” Spurlock said.

But some of these older 30-plus year-old biomass plants simply cannot make the air quality control cut. And unlike other renewable technologies, the CBEA said that biomass generators also have to pay to collect, process and transport its fuels. As a result, they are more labor intensive.

But because biomass plants eliminate the need for open burning and landfilling and also help with forest management, Spurlock said California should pay for those societal benefits through use of greenhouse gas reduction funds.

“In his proposed January state budget, I’d like to see [California] Gov. Jerry Brown set aside greenhouse gas funds to support these biomass plants,” Spurlock said.

Spurlock contends that California already has the necessary laws for a long-term solution in the form of the SB-350 Clean Energy and Pollution Reduction Act of 2015. He said SB-350 allows for the California Public Utility Commission to approve the biomass industry’s societal benefits as part of the rate base.

“If the [biomass] plants received compensation for the environmental and societal benefits we provide, the industry would be financially viable,” Spurlock said.

PG&E did not respond to a request for comment for this story, but SCE pointed out that although it is currently not buying power from biomass plants, it does recognize that biomass has “operational value to the electric grid, because its output is more predictable than solar or wind.”

California’s biomass issues are more complicated than mere economics, according to Julee Malinowski-Ball, the CBEA’s executive director. She said that California’s Renewable Portfolio Standard Program actually presents the biomass industry with one of its biggest hurdles.

“On paper [it] is designed to provide electric ratepayers a portfolio of renewable technologies based on cost, best fit, benefit and technology,” Malinowski-Ball said. “Unfortunately, in practice, it has devolved into utilities purchasing the cheapest renewables regardless of fit or environmental and economic benefit.”

Malinowski-Ball said that situation is something that the state will need to rectify if base load renewable biomass facilities are to be part of the state’s post-2020 climate goals. She also noted that California already has enough biomass material to fuel every renewable facility and conversion technology that exists into the foreseeable future.

“Today, there is an entire existing [biomass] infrastructure in the ground, interconnected to the grid, converting millions of tons of woodwastes and residues into clean, renewable energy,” she said. “Preserving this industry is not just smart, but essential to the state’s environmental goals.”

Lead image: Almonds. Credit: Shutterstock.

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