New Findings on Biomass Cofiring from Clemson’s IE Department
Coal-fired power plants in the United States face a major decision: shutting down plants or investing in transforming their current electricity generation technology. New research from Clemson University’s Industrial Engineering department investigates how biomass can help coal plants transition smoothly toward a low/zero carbon economy.
What is biomass cofiring and where does it stand as a U.S. energy alternative?
Put simply, cofiring is a low-cost option to cleanly convert biomass (organic matter used as fuel, usually used for the generation of electricity). Biomass cofiring means adding biomass (e.g., wood and forest residues) to coal as a combustions fuel, to which the end goal is reducing carbon dioxide emissions.
In general, to implement biomass cofiring requires small infrastructure changes and capital investment. Although biomass cofiring helps coal plants transition toward a low/zero carbon economy, companies and governments are concerned with considering the impact on the job market and energy security. Fortunately, cofiring can be implemented without significant impact on either.
The key is to have governmental support mechanisms to incentivize biomass. Unlike Europe, who has incentivized biomass and seen environmental and social benefits as a result, it is hard to tell in the United States whether the current incentives and policies are as effective.
Investigating the Efficiency and Fairness of Cofiring Biomass:
Researchers in the Industrial Engineering department at Clemson University were featured in the latest IISE Journal for their research on how the government can boost biomass cofiring in American coal plants. These researchers proposed ways that government subsidies can help transition coal plants towards biomass, and thus reduce carbon dioxide emissions.
Doctoral student Hadi Karimi, Associate Professor Sandra D. Eksioglu, and Assistant Professor Amin Khademi used operations research and economic justice theory to investigate the efficiency and fairness of current biomass related subsidies, alongside proposing approaches for improvement. In their paper, “Analyzing Tax Incentives for Producing Renewable Energy by Biomass Cofiring,” they develop and integer optimization framework based on the resource allocation model that captures the potential profits and biomass utilization levels at coal plants under various incentive schemes.
Governmental Incentives Toward a Future of Cofiring:
The findings show that existing production tax credits are not effective enough to motivate small to average-sized plants to convert to biomass cofiring. As an alternative, researchers from Clemson University propose new production tax credit schemes that are functions of plant characteristics (i.e., power capacity), or a plant’s operated biomass to coal ratio. Current tariff models practiced in Europe inspired this incentive. Results in Europe have shown that capacity-based schemes lead to the greatest renewable energy generated and the largest number of participating plants, whereas ratio-based schemes generate the least amount of renewable energy, but maximizes coal plant profits.
The results of this research can help government agencies better understand the different approaches to distributing subsidies in the form of renewable energy production tax credits (PTC) under a limited budget. This study provides valuable insight for policymakers to design efficient and fair support mechanisms under a budget limit, while aiming to grow a carbon economy.
This article was featured in IISE Transactions, IISE’s flagship research journal, which is published monthly. The full paper, “Analyzing Tax Incentives for Producing Renewable Energy by Biomass Cofiring,” will appear in the IISE Journal’s April 2018 issue (Volume 50, No. 4).