| Biomass Energy Project Guide |
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A successful biomass energy project requires diligent research and planning. Areas of project research include understanding the energy conversion technology, assessing the quality and availability of biomass resources and investigating the characteristics of potential sites. Project planning involves consideration of economics, permit requirements and site-specific design elements. The following suggested planning steps provide general guidance for the development of biomass energy projects.
- Choose the technology.
Biomass energy is not one technology. The first step in a biomass energy project is choosing the technology to develop. Technologies include biomass energy, biogas and biofuels.
- Biomass resource assessment.
The choice of technology will determine the kinds of biomass resources the project will require. Each technology has its own set of fuels or feedstocks. Find out what areas of the state have supplies of those fuels or feedstocks. Consider using an outside contractor to do the resource assessment. Based on the resource assessment, list possible sites for the proposed biomass energy facility. Identify fuels or feedstock resources available in each location. Because the proposed facility could experience interruptions in the supply of preferred biomass resources, research the availability of backup fuels (including fossil fuels) and feedstocks.
- Preliminary project plan.
Drawing up a preliminary plan is a way to organize the project. Developing a general description of the proposed project is a necessary step before deciding whether the project is feasible. Identify project goals. Describe the technology and develop a conceptual process design. Include basic information about facility size and design considerations. List the outputs or products of the proposed facility. Calculate the estimated production of usable energy and the estimated value of any marketable by-products. If development of the facility will reduce or mitigate an environmental problem, describe and quantify the environmental benefits. Describe the market for the electric power, steam, fuels and other products the project will produce.
- Select the project site.
Select preferred and alternate sites. Secure rights to the site or sites through options, ground leases or other agreements. Selection criteria may include:
a) Fuel or feedstock supply (availability, quality, quantity, competing users)
b) Land costs
c) Access to markets for energy products (for example, the likelihood of negotiating a power sales contract)
d) Site access and transportation costs
e) Local social and economic impacts
f) Labor availability and skills
g) Local environmental impacts
h) Zoning restrictions
i) Necessary permits
j) Water use rights and availability
k) Utility availability
l) Waste disposal
- Examine the economics.
Prepare a financial and economic feasibility assessment. Estimate construction and operation costs and projected revenue. Include any by-product revenue. Include offsets or savings made possible by the project.
The preceding steps should provide the information necessary to decide whether the project is feasible. If the project appears eligible for the required permits and if anticipated benefits and revenues outweigh the estimated costs, then the project can move forward.
- Work with the public agencies.
Development of biomass energy facilities in Oregon is subject to required permits and standards. Discuss the preliminary project plan with local planning departments. City or county planners can supply information about zoning, land use regulations and ordinances. Call the Oregon Department of Energy to ask about eligibility for energy loans, tax credits or other incentives. The Oregon Department of Environmental Quality will answer questions about permit requirements. For new business information, call the Oregon Economic and Community Development Department. Contact the responsible federal agencies if a possible project site is on federal land.
- Project proposal.
Review the preliminary project plan. Develop a project proposal that includes cost, design and site details. Prepare preliminary plant and system engineering designs. Examine technical options and alternative plans. Identify potential emissions, effluents and other environmental impacts. Describe the local social and economic effects. Draw up a construction plan.
- Negotiate with buyers for energy products.
Contact potential buyers of the project´s energy output. Having a contingency contract with a buyer will in-crease the likelihood of obtaining financing. Absent signed contracts, obtain letters of interest from potential buyers.
Make the final selection of a site for the proposed project before moving to the next step.
- Business plan.
Have an accountant or business consultant prepare a financial evaluation and business plan. Financing should cover estimated costs including contingencies for possible delays in permitting, construction and startup. Include tax incentives. Analyze effects of fuel supply costs and fluctuations. Analyze electricity sales prices, if applicable. Include estimated costs of environmental compliance. Assess potential financing options.
- Project financing.
Contact financial institutions and present the business plan. Work with the Oregon Department of Energy if the project is eligible for tax credits or energy loans.
- Apply for local, state and federal permits.
Contact the city or county for zoning information, land use permits and building permits. Contact the Oregon Department of Energy and the Oregon Department of Environmental Quality for information about environmental permits. The National Environmental Policy Act requires an environmental assessment for projects located on federal land or otherwise involving action by a federal agency.
- Project timetable.
Identify tasks and project milestones. Establish project deadlines using critical path analysis. Include permit application dates. Allow sufficient time for processing of permit applications. Obtaining necessary permits for a small project may take a few months; obtaining permits for a larger facility could take a year or longer.
- Permit compliance plan.
Incorporate permit conditions in the project plan. Some permits will be issued with conditions. Permits may require monitoring of environmental impacts. Developers may need to take actions and incur expenditures to mitigate environmental impacts.
- Construction.
Construction can begin after all required permits and authorizations have been issued. Construction activities may require separate permits. Obtain legal advice before signing engineering, procurement and construction contracts.
- Startup.
Completing construction requires attention to detail. Document all modifications to the design plan made during construction. Conduct on-site review to prepare a final checklist of items needing correction or completion. Startup and testing may require environmental monitoring. Optimize facility operation during the startup period.
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