Austin’s Bet on Biomass: Billions up in Smoke

Open_wood_fireThe Future of Austin Energy?

In August of 2008 a $2.3 billion, 20-year contract was signed between Austin Energy and Nacogdoches Power LLC, which operates the 100 megawatt biomass power plant located in Nacogdoches, Texas—approximately 145 miles northeast of Houston.

With the city of Austin committed to generating 30% of its energy from renewable sources by 2020, the deal was promoted as both an environmentally progressive stand against the increasing threat of climate change and a hedge against the then rising price of traditional fuel sources. However, neither of these claims were legitimate.

While packaged in Austin Energy’s renewables portfolio alongside wind and solar, the burning of wood for electric generation actually emits more carbon than does coal and nearly three times as much as natural gas.  Biomass is also responsible for the emission of carbon monoxide, nitrogen oxides, and numerous other harmful particulates.  So while lauded by some as a proactive attempt to reduce the city’s environmental impact, Austin’s investment in biomass fuels may end up making Central Texas even hotter.  And worse, it’s costing us to do so.

The Austin American Statesman cites that the AE’s investment in the biomass plant will result in $2 added to the average customer’s $100 monthly bill.  Meanwhile, the price of natural gas (which AE had forecasted to rise) has since plummeted, going from $8.63 per thousand cubic feet in August, 2008 to a mere $3.74 as of November, 2012.

If there is any bright spot in this otherwise unsettling account, it is that when municipal energy consumption falls below capacity, Austin Energy chooses its energy source based upon market rates.  Lately this has meant a heavy reliance on cheap and plentiful natural gas while the carbon spewing Nacogdoches plant sits idle.  So while Austin may have spent $2.3B on a brand new power plant, at least we can claim we hardly use it.

Written by Avery Thompson
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One response to “Austin’s Bet on Biomass: Billions up in Smoke

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