Clean Energy In the News

Plant will push utility closer to goal of using 30 percent renewable fuels by 2020.

By Katie Humphrey
AMERICAN-STATESMAN STAFF
Saturday, July 26, 2008

Austin Energy is planning to spend $2.3 billion to build, operate and pull electricity for 20 years from a biomass power plant in East Texas.

The plant, expected to be the largest of its kind in Texas, would run on wood waste, such as sawdust from mills, tree trimmings and pallets. It could generate 100 megawatts of power for Austin Energy, or enough to supply 75,000 homes. The move is part of the city's ongoing effort to diversify its energy sources for environmental and economic reasons, and it comes as the utility is also planning to put solar power equipment on city-owned land near Webberville.

Nacogdoches Power LLC, a private company, will own the plant, which is expected to be online by summer 2012 in the East Texas town of Sacul. The price Austin Energy pays to purchase power from the plant is also expected to cover capital and operating costs.

Money for the plant will come from Austin Energy rate payer fuel charges, but it's too soon to say how it will affect customer utility bills, Austin Energy spokesman Ed Clark said.

The project, first reported in Friday's edition of the Austin Business Journal, will push Austin Energy closer to its goal of using 30 percent renewable fuels by 2020.

"We're getting both diversification of fuel and diversification of location by putting 100 megawatts out there," Austin Energy General Manager Roger Duncan said. "It is very significant in meeting our renewable energy goal."

He said he hopes to present the contract for the biomass plant to the City Council on August 7. Austin Energy has been discussing the plan with Nacogdoches Power for months, he said.

Duncan said Austin Energy chose to pay Nacogdoches Power to develop and operate the plant because that company, a joint venture between BayCorp Holdings LTD and Energy Management Inc., has more experience in biomass power plants, including projects under way in Florida.

The Electric Reliability Council of Texas, which operates most of the electric grid in the state, draws power from 37 generating plants producing 97 megawatts of power from biomass. Most of those plants are powered by landfill gas, and the rest draw from agricultural byproducts, like the proposed Nacogdoches Power plant, said Bill Bojorquez, vice president of planning for ERCOT. A 45-megawatt plant, running on agricultural byproducts is expected to come online in Lufkin next year, but the Austin Energy partnership will be the largest planned biomass plant in the ERCOT area, Bojorquez said.

Luke Metzger, director of the nonprofit group Environment Texas, said biomass from wood waste is "widely regarded among the environmental community as a very clean alternative energy source."

The wood waste would release carbon anyway as it decomposes, or is burned in some cases, so burning it to generate power doesn't necessarily add more, Metzger said.

The Nacogdoches Power plant will help Austin Energy meet future demand for electricity, and customers will start paying for it, through the fuel charge, once the plant comes online.

The cost of biomass fuel, once transportation to the plant is factored in, is comparable to that of natural gas, but the price of biomass won't change over the 20-year term of the agreement, Duncan said.

Tony Callendrello, vice president of Nacogdoches Power, said one of the other advantages of biomass is that it's more reliable than some other renewable sources.

"It isn't there only when the wind blows or the sun shines," Callendrello said. "It's there every hour of every day."

Solar power is also expected grow as a source of electricity for Austin Energy.

The utility plans to cover about 330 acres of the city-owned "Webberville tract" with solar power equipment to generate 30 megawatts of power. The utility has not yet asked companies for proposals or determined an estimate cost for the project, but one idea is to install 30 solar panels that could each produce 1 megawatt of electricity, Duncan said.

With council approval, that project could be online by 2010.

If both the solar installation at Webberville and the biomass plant go forward, 18 percent of the utility's fuel will come from renewable sources by 2012.

Mayor Will Wynn, whose Austin Climate Protection Plan established the utility's goal of 30 percent renewable fuels by 2020, said the biomass and solar plans are exciting.

"We all recognize there's going to be increasing demand for electricity with our growing population and economy, and so we're looking first to conservation, then efficiency and then renewables," Wynn said. "This is a really exciting opportunity to dramatically expand our renewable portfolio with state-of-the-art new concepts for renewable energy."

Austin Energy also plans expand its renewable fuels usage by adding 165 megawatts of wind power in December to its current supply of 274 megawatts.

Austin Energy is not expanding its coal or nuclear power usage, but it is expanding natural gas at Sandhill Energy Center in Southeastern Travis County.

In September, Austin Energy plans to ask people about their preferences for future power generation.

khumphrey@statesman.com; 445-3658