Governmental regulations are pressuring coal-fired power plants in the United States to curb their greenhouse gas emissions (GHG). There are a few alternatives to reduce GHG emissions, one of which is biomass co-firing. New research from Clemson University’s Industrial Engineering department evaluates the economic and environmental impacts of this technology in an effort to help power plants make informed decisions about their investments.
What is biomass cofiring and where does it stand as a U.S. energy alternative?
Biomass cofiring means adding biomass (e.g., forest and agricultural residues) to coal as a combustion fuel, to which the end goal is reducing carbon dioxide emissions. This is not necessarily a low-cost option to generate renewable power, unless your plant is located in the Southeast USA, which is rich in biomass.
In general, to implement biomass cofiring requires small infrastructure changes and capital investment. However, biomass collection, storage and transportation are expensive. These costs have been a barrier for adopting cofiring.
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.
Researchers agree that co-firing offers a near-term solution to reduce GHG emissions since viable and long-term solution alternatives (such as, carbon capture and sequestration) remain in the early to mid-stages of development
Investigating the Efficiency and Fairness of Incentives for Biomass Cofiring:
Researchers in the Industrial Engineering department at Clemson University were featured in the March Issue of the ISE Magazine for their research on how the existing government incentives can be improved to boost biomass cofiring in American coal plants, and thus, reduce GHG 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 new approaches for improvement. In their paper, “Analyzing Tax Incentives for Producing Renewable Energy by Biomass Cofiring,” they develop an 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 the existing incentive, known as production tax credit (PTC), is not effective enough to motivate small to average-sized plants to convert to biomass cofiring. As an alternative, researchers from Clemson University propose new PTC 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. The numerical results in this study show 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 zero-carbon economy.
This article was featured in the March Issue of ISE Magazine and published in the IISE Transactions Journal, IISE’s flagship research journal, which is published monthly. The full paper, “Analyzing Tax Incentives for Producing Renewable Energy by Biomass Cofiring,” IISE Transaction, Volume 50, No. 4, April 2018.
