From the testimony submitted by Michael Vickerman on behalf of RENEW Wisconsin filed with the Public Service Commission on August 11, 2008:
In my testimony I will survey the windpower prospects under development by independent power producers (IPP’s) in the parts of Wisconsin served by WPL. This information will include an estimate of their annual production (in the aggregate) as well as the current permitting and interconnection status for each prospect. The second half of my testimony outlines RENEW’s concerns with WPL’s proposal to co-fire biomass at Nelson Dewey 3 [proposed Cassville plant] . . . .
There are seven IPP-owned wind prospects under development. All range in generating capacity from 50 MW to 100 MW, totaling 609 MW altogether. . . .
RENEW’s reservations about WPL’s stated plans to co-fire biomass at NED3 flow from the specifics of the proposal. RENEW strongly supports using biomass for space and process heating. RENEW also supports generating electricity from dedicated biomass facilities that are considerably smaller than a new baseload facility.
One reservation we have this proposal is the idea of marrying a low-grade biomass fuel to a very expensive new power station with a capacity cost of about $4,000/kW. There are less expensive avenues for acquiring renewable energy, such as windpower, that have lower capital costs and zero fuel costs. There are also less expensive venues for burning biomass for electricity, such as the soon-to-be-retrofitted E. J. Stoneman plant or Xcel’s Bay Front 3 unit. Unlike building a new 300 MW coal plant, retrofitting those power stations to burn biomass fuel won’t require a capital investment in excess of $1 billion. It is a far more efficient use of ratepayer dollars to wed biomass fuel with smaller power stations (<50 MW) than with a larger and very expensive brand-new power plant. With smaller power plants, it is possible to configure them as dedicated biomass generating units. This is not possible with a 300 MW facility.
RENEW’s second reservation is triggered by the configuration of NED3. WPL’s selection of a circulating fluidized bed combustion boiler creates an opportunity to co-fire biomass energy sources at NED3. WPL’s plans, however, call for the biomass fuel to supplement the coal being fed into the boiler, which could easily be fueled with 100% coal. There is nothing about the boiler design that is dedicated specifically to biomass generation. Coal is the mainstay in this configuration, while biomass is simply an opportunity fuel to be used when available. The possibility of being unable to acquire enough biomass fuel for co-firing will not in any way hinder the operation of NED3, because there will always be enough coal on hand to operate the plant at its full rated capacity. Also, because the biomass portion of the plant’s output can vary, depending on how much biomass fuel is available, there is no possible way to predict how many renewable kilowatt-hours will be produced at the plant. Depending on NED’s variable biomass output to help satisfy in-state renewable energy requirements introduces a level of risk that can be avoided by relying on other renewable generation strategies.
Our third reservation stems from WPL’s need to lock up significant supplies of fuel sources of wood and energy at a lower cost than what the same resources would fetch in other markets, especially the biomass thermal market. As a general proposition, burning biomass in an electricity-only facility is a low-value use for a resource that can deliver substantially more energy to an end-user in the form of space and process heat. If biomass is burned at NED3, two-thirds of the energy value of the fuel, be it wood, agricultural residues, or switchgrass, is discharged into the atmosphere. In contrast, a modern wood-fired heating system serving a forest products company can convert 65% of the energy embedded in the fuelwood to useful heat. The higher the conversion factor of a particular energy application, the greater the energy return, which generally translates into a higher economic return. Thermal market participants are well-positioned to pay top dollar for the fuel they use, because they receive an energy return that is double what the same fuel yields when burned in a biomass electric facility. Because NED3 will, if approved, have a low thermal efficiency, WPL would be at a disadvantage if forced to match the prevailing biomass fuel price set by thermal market participants in order to secure upwards of 300,000 tons of biomass a year. . . .
In response to a rebutal of his testimony by one of Alliant’s expert witnesses, Vickerman said:
WPL’s 60 MW biomass initiative is piggybacked on a power plant that, if approved and built, would add four times as much coal-fired capacity estimated to cost more than $4,000/kW.