WOOD-FIRED GENERATION: NEW DRIVERS MAY EASE SOME FUTURE MARKET STRUGGLES
Wood biomass combustion for power generation has faced difficult challenges in the United States for the past 15 years following a boom triggered by the Public Utility Regulatory Policies Act of 1978 (PURPA), but renewable energy growth and other drivers could encourage some future expansion. Wood fuel offers several environmental benefits and is a potential renewable base-load alternative in some regional markets. Wood biomass power also suffers from cost and fuel supply issues that make it less attractive than most other forms of renewable power. Market conditions and policy development over the next five years will determine whether substantial growth will follow.
- State renewable energy policies do not always treat wood biomass consistently, but generally are the strongest market drivers for this form of generation.
- Forestry wildfire prevention policies now being developed may be a key complement to renewable energy program incentives for biomass power, but implementation remains a question.
- Over the next few years wood biomass expansion will be limited and sporadic, based on individual project successes that leverage local market conditions and site advantages as the market waits for more broad-based, longer-term signals.
