Turning wood scraps from the forest into electricity seems to make so much sense in the Northwest. Just look at all those trees.
But when banks look at proposals to build woody biomass plants, they need to see more than a forested landscape.
Bankers want to see a guaranteed 20-year supply of wood that’s going to keep the plant going and keep loaned money flowing back to financiers.
Renewable energy tax credits are driving a surge of interest in woody biomass. But several factors affect whether this kind of electricity generation is actually worth financing. This report from Doug Nadvornick highlights how trucking costs to get wood from the forest to the plant from farther and farther distances can whittle down profits. Hence, more communities are finding financing for smaller plants that demand less fuel.
But when bankers come up short, the U.S. Department of Energy might pitch in. DOE recently granted nearly $2 million for Oregon biomass projects in Lake and Wallowa counties that use forest thinnings and wood waste to generate electricity.