MINNEAPOLIS -- Agriculture cooperatives have a role to play in the emerging biomass energy market, said speakers at the Cooperative Network's annual meeting Nov. 18 in Minneapolis.
Cooperatives are valuable because of their relationships with grower-members, knowledge of agronomy and commodity pricing and their skills in processing, storing and delivering commodities.
"I think agriculture will come around and see this opportunity and get into this market...Co-ops bring a lot to the table," said panelist Gary Radloff, the Midwest energy policy director of the Wisconsin Bioenergy Initiative, a part of the University of Wisconsin.
Premier Cooperative, an agriculture and consumer supply business based in Wisconsin, is already taking steps to enter the biomass market. Matt Severson, energy division manager, said they are testing the feasibility of creating pellets from biomass that would be burned for electricity.
The co-op's new feed manufacturing plant in Mineral Point, Wis., may be retrofitted to create and store the pellets. It's estimated the mill could take in 50,000 tons of biomass each year to turn out 50,000 tons of pellets. They're looking into working with owners of marginal land, highly erodible land or property in the Conservation Reserve Program, who would supply the material.
Marginal land is an untapped opportunity for growing biomass, Radloff said. Wisconsin has an estimated 1.7 million to 2.4 million acres of marginal land. Some of it is marginal for a reason, but some could be used for energy crops, giving producers more revenue.
Approximately two tons of grasses from CRP land were recently tested in the Premier Cooperative mill to see if the facility could form pellets.
"The test was positive. We are capable of producing biomass fuel," Severson said.
In January, the pellets will undergo a burn test. Meanwhile, the cooperative is in a dilemma. Producers want to know what they would be paid for supplying biomass but the cooperative doesn't know what price to set because it's unknown what utility companies will pay for the electricity.
Someone will have to take risk, Severson said.
David Donovan, manager of regulatory policy for Xcel Energy, said his utility company is facing requirements to increase their use of renewable energy. Minnesota's renewable energy standard requires 30 percent of their retail sales come from renewable sources by the year 2020, and Wisconsin has a similar policy.
It's partly the reason why Xcel Energy is planning to make it's Bay Front Power Plant in Ashland, Wis., the largest biomass plant in the Midwest. The company received approval in early November from the Public Service Commission of Wisconsin to convert one of the plant's coal-fired boilers to a biomass gasification system. Its other two boilers were already using woody biomass to generate electricity.
The conversion is expected to cost approximately $58 million and reduce pollution. The gasifier will primarily use lower quality, unused materials left in local forests after a traditional harvest, such as tree tops or damaged trees. Bay Front will generate 68 mega watts once it's using 100 percent biomass.
Donovan said biomass has a great future because of its dispatchability, a quality lacking in other renewable sources. Wind, for example, is an intermittent source.
"We know biomass will be there," he said.
Attendees asked about biomass emissions, efforts to design efficient biomass facilities, Europe's progress with biomass and the viability of other feedstocks.
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