Wood Pellets Angeles Millwork

Furnace Fodder: When logging companies harvest timber, they discard millions of tonnes of branches. Could the debris help ease the economic sting associated with sending coal power plants into early retirement?

With a helpful nod from policy makers, the humble wood pellet could play a starring role in Alberta’s clean-energy transition.

Climate activists popped champagne corks in 2016 when Alberta’s previous government promised to shutter all 18 of the province’s coal power units by 2030. But in the offices of the companies that own and operate the facilities in question, the mood was likely low key.

That’s because the firms stood to lose decades worth of revenue as their power stations head into early retirement. For policy makers, it’s a classic energy-transition conundrum: How best to minimize stranded fossil-fuel assets and commission new renewable-energy facilities to replace them without passing on a big bill to ratepayers?

Cue Victor Keller and other PICS-funded researchers in the 2060 Project. They recently investigated whether Alberta might lower energy-transition costs by keeping four of those otherwise-mothballed coal-plant “units” running on bioenergy instead of fossil energy. Spoiler: Yes, it could.

“Biomass will enable some coal units to extend their lifetime, and enable the province to meet its carbon emission targets at a lower cost,” says Keller. 

The secret ingredient is slash, or forest residue—the leftover bark, stumps, and branches that forestry companies currently leave behind when they harvest timber. Logging operations in Alberta and British Columbia generate up to 10 million tonnes of forest residue each year; at the moment, they either burn it in piles, or leave it on the ground to eventually decay in place.

According to Keller’s research, that resource could have a higher purpose; it could fuel Alberta’s four otherwise mothballed coal units until 2030.

“The study asked, ‘What if, instead of burning that slash, we collected it, made it into wood pellets, and used them to refuel a number of coal units?’” says Keller.

The Pellet Solution

Keller used Natural Resources Canada data to confirm the availability of the resource, then crunched the numbers with OSeMOSYS, a popular open-source energy-planning model. He estimated the cost of delivering the needed biomass to the coal plants, and the cost and GHG emission benefits to the electricity system associated with the conversion of coal units to bioenergy, under the province’s carbon pricing regimen.

He found that, although bioenergy has a higher levelized cost than wind power, it requires less backup capacity and fewer renewable energy credits to meet the province’s then-target of meeting 30 percent of its power needs from renewable sources by 2030. In addition, Keller concluded that as of 2060, the total electricity system cost would be slightly lower with biomass in the mix than it would be without it. 

“If you just compare the cost of electricity made with wind with that made from biomass, it will look like wind is cheaper,” says Keller. “But when you include ‘system intervention’ costs, a system with biomass led to a cost reduction of 5 per cent reduction.”

That might sound minimal, but it pencils out at about $3.4 billion.

In other words, the variable nature of wind and solar means system operators must pair them with storage or always-on electricity sources. “The firm capacity provided by biomass compensates for its higher levelized cost of energy,” Keller says.

As for plant modifications, it’s not exactly plug and play to swap out rocks for pellets, but close to it. The companies would need to modify their fuel-handling systems and build silos to keep the pellets dry. Keller factored those one-time costs into his model.

The team shared their findings directly with Alberta’s electricity-system stakeholders, who welcomed the research.

One Fossil Fuel Replaces Another

Energy policies come and go with governments. In April 2019, Albertans elected a new government and a few months later, the new crew in Edmonton cancelled the province’s renewable-energy program. The fate of the accelerated coal-plant retirement program is up in the air, but even if it sticks, power companies aren’t exactly chomping at the bit to bring in biomass.

“If you are a coal generator, it is quite a bit cheaper for you to convert to natural gas than it is to biomass,” says Keller. “So, if you are the generator or owner, you would need an incentive from the government to [use pellets].”

Without enabling policy, biomass loses against fossil fuel. But if and when Alberta decides to again embrace renewable power, Keller, and PICS, will be there to inform the conversation.

Keller, Victor & Lyseng, Benjamin & English, Jeffrey & Niet, Taco & Palmer-Wilson, Kevin & Moazzen, Iman & Robertson, Bryson & Wild, Peter & Rowe, Andrew. (2018). “Coal-to-biomass retrofit in Alberta –value of forest residue bioenergy in the electricity system.” Renewable Energy. 125. 10.1016/j.renene.2018.02.128.