60MW Biomass power plant shutdown

[mudfarmer]

There is a large biomass facility in Watertown, NY that powers Fort Drum (home of 10th Mtn Division). I will let their own corporate press release set the stage:

ReEnergy Black River submitted a proposal in Spring 2013 to the Defense Logistics Agency as part of a competitive procurement process to provide renewable power to Fort Drum, a U.S. Army installation that is home to 37,000 soldiers and family members and employs almost 4,000 civilians.
The federal government is increasing its demand for long-term renewable energy as a result of renewable goals established in the Energy Policy Act of 2005, Executive Order 13423, and the Energy Independence and Security Act of 2007. In addition, the Army has established a goal to achieve 1 gigawatt of renewable energy by 2025.
This contract is the largest renewable energy project in the history of the U.S. Army.
The ReEnergy Black River facility, located inside the fence at Fort Drum, has 60 megawatts of generation capacity. Before it was idled in early 2010 by its former owner, the facility primarily burned coal to produce electricity. ReEnergy acquired the facility in December 2011 and invested more than $34 million to convert the facility to use biomass as its primary fuel

Source: https://reenergyholdings.com/2014/09/29/reenergy-black-river-awarded-contract-to-provide-power-to-fort-drum/



In 2019 the Defense Logistics Agency considered renegotiating the contract to only use this facility as backup, but ultimately decided to stick with it:

the Defense Logistics Agency considered amending or ending their contract and only using the biomass facility as backup. That would have been a big financial blow to Re-energy. 
And Fort Drum never said why they considered going back on the contract. But some energy experts say Fort Drum could have paid less money for their electricity if they used National Grid.

That same year ReEnergy shutdown a nearby plant because the government wasn't giving them enough money to break even:

ReEnergy recently shuttered a biomass plant in nearby Lyonsdale in Lewis County. The company said the state wasn’t offering enough renewable energy credits to make the plant financially viable.

Source for both above quotes: Fort Drum to stick with Re-Energy for biomass power | NCPR News


Fast forward to March, 2022 when ReEnergy started publicly announcing that they were likely going to shut down the Fort Drum/Black River plant unless the government met their demands:

“For the first time, they defined in statute what renewable energy resources were, and they did not include any form of bioenergy,” said Sarah Boggess, vice president of external affairs, ReEnergy.
New legislation in the state Assembly and Senate would allow for the continued operation of the plant through its existing contract until November 2034. If the bill passes, the plant would be the only remaining utility-scale biomass facility in New York state.
[...]
If the legislation does not pass, ReEnergy would be forced to shut down the facility next year. That means Fort Drum would rely on transmission lines coming onto the post from outside the gates, which would be subject to physical damage and cyberattacks.

Source: https://www.wwnytv.com/2022/03/22/fort-drums-electricity-source-danger-closing/


The legislation did not pass. This is where my negative views about corporate welfare come in and I will leave it at that.

ReEnergy filed a petition with the state, hoping for changes, in the summer of 2022.
In an email, a company spokesperson tells 7 News ReEnergy plans to terminate operations on March 31. However, the closure won’t proceed if the state’s Public Service Commission acts on the petition before January 31.

It looks like even the Army does not classify this as a Renewable Energy Source:

Fort Drum will likely revert back to depending on National Grid for energy, but also has to follow the Army’s climate strategy, which requires carbon-free electricity for all installations by 2030.
There is language in the 2023 National Defense Authorization Act that would require the Defense Department to consider biomass as a renewable energy source.
What is Fort Drum doing to find a carbon-free energy source? The U.S. Army Corps of Engineers is studying to see if a hydro facility could be built along the Black River, which runs across Fort Drum.

Source: https://www.wwnytv.com/2022/12/21/biomass-plant-that-powers-fort-drum-close-march/

Previously ReEnergy had submitted a petition in July to the state Public Service Commission where it requested that a program be established that would allow for the facility to be financially viable.
 The petition had asked for the commission to establish a program that would allow for the facility to be compensated for their environmental attributes once their contract with New York State Energy and Research Development Authority expired.
 After the Climate Leadership and Community Protection Act was passed in 2019, bioenergy was not included in renewable energy resources, which had previously not been the case in years prior.
 The facility has a contract with NYSERDA in order to sell renewable energy certificates, which ends in May. ReEnergy states that the project would have to replace the lost revenue in order to continue to be financially viable.
 “Although we enjoy strong local support, including our local state legislators, we were unable to secure the support we needed from the State Legislature or Public Service Commission,” said ReEnergy Chief Executive Officer Larry Richardson in a news release.
 The release states that ReEnergy needed a favorable action by the commission on their petition by the end of January to avoid shutting down. Friday was the last session of the commission by the end of the month.

Source: Biomass plant that powers Ft. Drum will close | News, Sports, Jobs - Adirondack Daily Enterprise




My takeaway from all of this is that even though they had a 20 year signed contract to provide electricity, they did not actually have a profitable business and were relying on the ability to sell "renewable energy credits" to stay above water. The state took away their ability to sell these credits (who were they selling them to?) and now they are saying they can't meet the obligations of their contract.


The local utility company says they will have no problem meeting the needs of the base, and there is a buried quote in one of the above that suggests it may actually be less expensive for them to go this route.

If the biomass plant closes on Fort Drum, what does the military post do for power?
The ReEnergy plant provides Fort Drum with all of its power.
However, the plant runs on wood waste and chips and New York state doesn’t consider that a renewable energy source.
The company says the lack of tax incentives will make the plant close by March 31.

Fort Drum will revert to National Grid for its power.
A utility spokesperson says National Grid has no concern about serving all of Fort Drum’s needs if the post returns as a full-time electric customer.
National Grid says it has invested $100 million into the infrastructure in the north country to upgrade transmission lines and enhance the resilience of its system.

source: https://www.wwnytv.com/2023/01/25/national-grid-says-it-can-handle-fort-drums-energy-needs/

[Southside]

I have seen this movie. Beaver Energy, might not be the exact name, played the exact same hand with the State of Maine back in the '80s and '90s. Eventually they shut down, and received a massive settlement from the state for the remainder of their contract, that they didn't operate for. They pocketed millions of dollars. 

I bought some of their mothballed equipment for under a penny on the dollar, it was insane how much money they made. 

[Don P]

A big company came through and bought all the local newspapers. Its been a popular thing lately. They then closed the offices, sold everything, the reporters have small rented office space and send their copy to one printer that prints all the papers on one set of the old overworked equipment. Our paper came today and it was illegible. I made the comment that it wasn't worth resubscribing.

That was the plan, drive it to dissatisfaction, silence free press and use the proceeds of corporate raiding to do it. genius.

We had a wood waste cogen plant here. it was invested in, built, sabotaged, and then the sharp knives exclaim "that wood cogen plant don't pay." I wonder who trashed it  

[Tarm]

This is a classic example of the fate of biomass generating plants across the country. Natural gas prices were trending up in the early 2000's, hitting $15 or so by 2005. At that time a cord of wood burned in a biomass generation plant could produce the same amount of electricity as $200 of gas burned in a natural gas generating plant. The numbers worked and so many biomass plants were built. Then fracking got rolling and the price of natural gas started to drop and just kept dropping, bottoming out at $2 in the late 2010's. Now none of the numbers worked. That same cord of wood now had a break even price of $35. That would barely cover the biomass harvesting cost let alone trucking, plant operation or construction loans. Plants shifted to peaking units so they could sell their electricity at a higher price. They requested and sometimes received renewable energy subsides. When the government(s) pulled the plug on the subsides most of them went bankrupt and/or shut down.
The irony of this is that the biomass industry was not wrong, they were just early. Natural gas is a fossil fuel and is being depleted every day. Eventually natural gas will run out and will be partially replaced with biomass.