Chemical Sales Jobs Corona Ca

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							 Value Networks for Biomass
     Power and Biofuels

Working Document to Support the Development
of Recommendations for a Bioenergy Action Plan for
            the State of California




                     FINAL
Purpose of Document




   This document contains information on biomass in California which is organized using
   Bioenergy Value Networks, a framework created by Navigant Consulting to facilitate
   analysis of policy options. This document was created with data extracted from the
   references reviewed as part of an assignment to capture existing information on
   biomass in California and to support the development of Recommendations for a
   Bioenergy Action Plan for the State (Contract No. 700-02-004). Value Networks for
   Biomass Power and Biofuels is a supporting document, and is not intended, in whole or
   in part, to be comprehensive or conclusive. The potential state actions listed in this
   document are a compilation from various sources and do not represent a prioritized or
   final list of recommended actions. This can be found in the Recommendations for a
   Bioenergy Action Plan. The reader should be advised that Navigant Consulting has not
   independently verified the data contained in the references utilized.




                                          1
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks


                    3   Biofuels Value Networks


                    4   Appendix




                                       2
     Bioenergy Value Networks » Overview

     Value Networks for Biomass in California produce power, heat,
     biofuels and chemicals and other products.
                              Collection &                                      Conversion &
       Resources             Transportation                                       Refining                    Distribution                  Markets

      AGRICULTURE                                                                  Power                         Electricity
• Agricultural Residues                                                                                        Transmission                  Electricity
• Energy Crops



                                   Collection & Transportation Infrastructure
                                                                                   CCHP                        & Distribution
• Food Processing Residues
• Animal Wastes (farm)                                                                   Waste heat              Excess
• Animal Renderings                                                                                            electricity


                                                                                       Heat                                                Thermal loads
         FORESTRY
• Forest Residues - Tree                                                                                       Biofuel imports
  thinnings, slash, etc.                                                                  Biodiesel
• Onsite Mill Residues
                                                                                                                  Blending,
                                                                                   Transport
                                                                                                                 distribution,
   MUNICIPAL WASTES                                                              Fuels; other                                                 Vehicles
                                                                                                                 marketing &
• Diverted Municipal Solid                                                       liquid Fuels
                                                                                                                    fueling
  Waste (MSW)
• Urban wood wastes
• Landfill Gas                                                                                                                              “Green” bio-
                                                                                 Chemicals &                   Distribution &
• Wastewater Biogas                                                                                                                          products &
                                                                                  Products                      Marketing
• Wastewater Sludge                                                                                                                          chemicals
• Waste oils/fats/grease
                                                                                                                                     Bio-product imports
         Resource Imports                                                        Co-products          e.g., food, feed, fertilizer

                                                                                   3
     Bioenergy Value Networks » Simplified Value Networks for Bioenergy

     The focus of this analysis was on power and fuels.
                              Collection &  Conversion &
        Resources            Transportation   Refining                                                       Distribution          Markets

      AGRICULTURE
• Agricultural Residues
• Energy Crops                                                                     Power                      Electricity



                                   Collection & Transportation Infrastructure
• Food Processing Residues                                                                                  Transmission           Electricity
• Animal Wastes (farm)                                                             CCHP                     & Distribution
• Animal Renderings
                                                                                      Waste heat              Excess
                                                                                                            electricity
         FORESTRY                                                               Process Heat
• Forest Residues - Tree                                                          & Space                                         Thermal loads
  thinnings, slash, etc.                                                          Heating
• Onsite Mill Residues                                                                                      Biofuel imports
                                                                                       Biodiesel

   MUNICIPAL WASTES                                                                                            Blending,
                                                                                  Transport
• Diverted Municipal Solid                                                                                    distribution,
                                                                                Fuels; other                                        Vehicles
  Waste (MSW)                                                                                                 marketing &
                                                                                liquid Fuels
• Urban wood wastes                                                                                              fueling
• Landfill Gas
• Wastewater Biogas
• Wastewater Sludge                                                             Co-products        e.g., food, feed, fertilizer
• Waste oils/fats/grease

    Resource Imports
                                                                                  4
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks


                    3   Biofuels Value Networks


                    4   Appendix




                                       5
     Biopower » Simplified Value Networks for Biopower

     Primary Value Networks for Biopower.
            Resources         Collection &                                      Conversion &
                                                                                                              Distribution            Markets
                             Transportation                                       Refining

      AGRICULTURE
• Agricultural Residues
• Energy Crops



                                   Collection & Transportation Infrastructure
                                                                                   Power                         Electricity
• Food Processing Residues
                                                                                                               Transmission           Electricity
• Animal Wastes (farm)
                                                                                   CCHP                        & Distribution
• Animal Renderings
                                                                                         Waste heat              Excess
         FORESTRY                                                                                              electricity
• Forest Residues - Tree
  thinnings, slash, etc.                                                               Heat                                          Thermal loads
• Onsite Mill Residues
                                                                                                               Biofuel imports
                                                                                          Biodiesel
   MUNICIPAL WASTES
• Diverted Municipal Solid                                                        Transport                       Blending,
  Waste (MSW)                                                                    Fuels; other                    distribution,         Vehicles
• Urban wood wastes                                                              liquid Fuels                    marketing &
• Landfill Gas                                                                                                      fueling
• Wastewater Biogas
• Wastewater Sludge
• Waste oils/fats/grease                                                         Co-products          e.g., food, feed, fertilizer


     Resource Imports
                                                                                   6
                                                                                                                           WORKING DRAFT
   Biopower » Common Issues

   Certain characteristics and issues are similar for many biopower
   resources. These are referred in succeeding slides as Common Issues.
                                                                                  Power                          Electricity




                                                      Transportation
                                                      Infrastructure
                                                                                                              Transmission &                      Electricity




                                                       Collection &
                                                                                  CCHP                         Distribution
           Biomass Resource                                                            Waste heat              Excess
                                                                                                             electricity
                                                                                   Heat                                                         Thermal loads


                                                                                Co-products         fertilizer (ash)


                                                   Collection &
                        Resources                                           Conversion & Refining                Distribution                      Markets
                                                  Transportation

               • Of the 34 MDT technically   • Current collection and    • Thermochemical processes      • Biomass capacity is about      • Most are operating
                 available today, only 4-5     transportation              (e.g., combustion,              2% of statewide peak             under negotiated fixed
                 MDT are currently             characteristics tend to     gasification) tend to be        power capacity (7 pg 33)         price amendments to
                 utilized. (7 pg 53)           be unique for each          high throughput as            • Current biomass accounts         Standard Offer 4 (SO4)
                                               resource types and are      compared with                   for 24% of California net        contracts created in 2001
                                               detailed in the following   biochemical processes and       renewable system power,          at a price of 5.3¢/kWh (7
                                               slide.                      can utilize a wide range of     and 20% of gross                 pg 40)
                                                                           biomass types (7 pg 33)         renewable power. (7 pg         • Many facilities receive
Utilization/                                                             • Existing and near-term          36)                              capacity payments
 Situation                                                                 planned biomass grid          • Because power is exported        under the SO4 contracts
                                                                           generating capacity in CA       to the grid, most facilities     of 2¢/kWh (7 pg 40)
                                                                           in 2005 was 969 MWe             require interconnection to     • Onsite, self-generation
                                                                           including solid fuel            transmission substation          and combined heat and
                                                                           combustion power plants                                          power (CHP)
                                                                           and engines, boilers, and     • Smaller onsite facilities
                                                                                                           may be entitled to utilize       applications also exist.
                                                                           turbines operating on
                                                                           landfill gas, sewage            simpler interconnection
                                                                           digester gas, and biogas        standards under Rule 21
                                                                           from animal manure.

                                                                            7
                                                                                                                WORKING DRAFT
Biopower »Common Issues




                                           Collection &
                Resources                                           Conversion & Refining             Distribution                     Markets
                                          Transportation

        • Fuel costs estimates       • Most transportation cost • Most conversion and            • Interconnection costs    • For new facilities, the 2004
          between $20 and $40/BDT      characteristics and        refining characteristics and     are high for standby       Market Price Referent (MPR)
          are assumed when             issues are unique for      issues are unique for each       and exit fees if plant     without Supplemental
          developing LCOE figures.     each resource and          resource and described in        is designed to satisfy     Energy Payments (SEP) is
          (7 page 50)                  described in the slides    the slides below.                local load.                ~5.8¢/kWh
                                       below.                                                    • Interconnection costs    • The more efficient the
Costs                                                                                              vary by location.          technologies, the less impact
                                                                                                                              feedstock price has on the
                                                                                                                              LCOE.
                                                                                                                            • Direct combustion plants
                                                                                                                              exceed the cost of wind and
                                                                                                                              geothermal because of fuel
                                                                                                                              costs.




                                                                    8
                                                                                                                          WORKING DRAFT
  Biopower » Common Issues


                                             Collection &
                    Resources                                          Conversion & Refining              Distribution                      Markets
                                            Transportation

              • Production costs for     • Transportation costs of • New biomass development to        • Interconnection     • Lack of Direct Access retail and
                biomass fuel exceeds       distributed resources       meet RPS requirements may         process is time       wholesale level (7 pg 57)
                that for fossil fuels (7   may limit size of           only occur when feedstock         and cost uncertain • RECs not permitted to meet RPS,
                pg 58)                     facility to the fuel that   supplies and long-term            (7 pg 60)             limiting market for biopower
                                           can be delivered            energy purchase contracts can   • Simplified onsite
                                           within a short distance     be assured. (7 pg 36)                                 • Net metering capped (7 pg 60)
                                                                                                         generation
                                           (7 pg 48)                 • Few programs exist for            interconnection     • Fixed price contracts or SEPs do not
                                         • Competition exists          training skilled personnel to     (Rule 21) can still   account for inflation. (7 pg 57)
                                           among vested utility,       work in biobased industry.        be costly (7 pg 60) • Increased capital costs for more
                                           fuel, and waste             Educational institutions                                efficient technology my reduce any
                                           management                  typically do not have the                               returns gained that could have offset
                                           infrastructures (7 pg       funds to develop these                                  SEPs not accounting for inflation
                                           56)                         programs. (7 pg 58)
                                                                                                                             • SRAC calculation uncertainty
                                       • Lack of coordination      • Uncertainties in new
                                         among jurisdictional        technologies make financing                             • Muni’s only have RPS ‚targets‛
                                         agencies (7 pg 56)          difficult (7 pg 57)                                       rather than requirements.
Constraints
                                                                   • A lack of environmental data                            • Muni contracts do not pay SEP
                                                                     in new technologies makes                                 payments since SEP monies are from
                                                                     permitting difficult. (7 pg 57)                           public goods charges (PGC) not
                                                                                                                               collected by munis
                                                                   • Lack of public awareness and
                                                                     advocacy (7 pg 56)                                      • Federal tax credits for biomass are
                                                                                                                               not as favorable as for other sources
                                                                   • Time consuming to permit (7
                                                                     pg 59)                                                  • No GHG market
                                                                   • Lack of environmental impact                            • Few direct development incentives
                                                                     data on projects in operation                             exist and lack of predictable state
                                                                     results in ‚worst case‛ public                            and federal management programs
                                                                     perception (7 pg 60)                                      (7 pg 56)
                                                                                                                             • Lack of stable long-term economic
                                                                                                                               and financial incentives and
                                                                                                                               compensation for public benefits
                                                                                                                               provided (7 pg 56)




                                                                            9
                                                                                                                          WORKING DRAFT
  Biopower » Common Issues


                                                       Collection &
                             Resources                                      Conversion & Refining                Distribution                     Markets
                                                      Transportation

                     •Co-firing with other         •Locations benefiting   •Gasification combined        •Smaller distributed             •Renewable Portfolio
                      fuels, such as natural gas    transmission system     cycle systems                 facilities may be able to        Standard (RPS)
                      and coal, allows greater      ‚Hotspot sites‛ have    advancements should           better capture benefits          contracts with IOUs
                      flexibility in fuel           been identified in      enable efficiencies to        associated with voltage          paying Market Price
                      selection. Improvement        the Strategic Value     increase from current 20-     support for the local grid,      Referent (MPR) +
                      in both thermo and bio        Analysis (37)           28% up to 35% or more, (7     reduced power                    Supplemental energy
                      conversion options will                               pg 33)                        transmission, decreased          Payments (SEP)
                      lead to greater fuel                                 •Conversion efficiency         transportation, and better      •SO4 contracts with
                      selection flexibility. (7                             improvements, growth in       potential for waste heat         IOUs or Muni’s paying
                      pg 33)                                                population, and dedicated     utilization in combined          higher SRAC or fixed
                     •Total feedstock expense                               crops resource should         heat and power (CHP) (7          prices
                      to supply the statewide                               enable an incremental         pg 34)
                                                                                                                                          •Federal Development
                      technical resource                                    generation growth of         •Some types of biomass            Incentives –Production
                      estimate of 34 MDT at                                 7,100MW by 2017. (7 pg        systems could operate in         Tax Credits ( PTC)
                      $30/BDT would equal                                   34)                           peak markets, or , could
                      approximately $1B.                                                                  serve as base load facilities   •Monetizing
Potential, Timing,                                                         •Without improving                                              environmental and
                      (biogas not considered)                               efficiencies, incremental     to conserve natural gas
  & Magnitude                                                                                             supplies for meeting peak        waste management
                     •Resources are available                               capacity in 2017 would be                                      benefits to defray fuel
                      to meet projected                                     closer to 4,800MW. (7 pg      demands (7 pg 14)
                                                                                                                                           costs and improve
                      demand, but such                                      34)                          •Distributed smaller              economics (7 pg 41)
                      development would                                    •By 2017, energy from          generation systems have
                      stimulate competition for                                                           wider access to CCHP            •Combining power
                                                                            biomass could reach                                            applications improves
                      biofuels like in the early                            60,000GWh or 18% of           opportunities. (7 pg 42)
                      1990s, but could be offset                                                                                           economics such as
                                                                            projected statewide          •Resource location relative       matching power and
                      by policies in waste                                  consumption of                to electric grid is critical
                      management to separate                                                                                               heat applications (16 pg
                                                                            334,000GWh. (7 pg 34)                                          42)
                      solid waste. (7 pg 36)
                                                                           •If biomass were to
                                                                            maintain a 20% share of
                                                                            net system power, then
                                                                            660MW of biomass
                                                                            capacity would need to be
                                                                            added by 2017, assuming
                                                                            an average capacity factor
                                                                            of 85%. (7 pg 36)


                                                                            10
                                                                                            WORKING DRAFT
   Biopower » Common Issues

                                     Collection &
                        Resources                         Conversion & Refining         Distribution        Markets
                                    Transportation

                                                      •The current technical                           •The future value of
                                                       potential is 4700MW which                        greenhouse gas
                                                       could generate about                             (GHG)/carbon
                                                       35,000GWh, or 12% of the                         credits, other
                                                       283,000 GWh of electricity                       emissions credits
                                                       currently used in the state (7                   or offsets and
                                                       pg 33)                                           renewable energy
                                                      •Incremental capacity                             certificates (RECs)
                                                       additions exclusive of                           will all have a
                                                       existing and near term                           significant impact
                                                       planned generation could                         on biopower
                                                       exceed 3,600 MW. (7 pg 34)                       economics.

                                                      •After meeting the RPS,
                                                       annual increment of 14-16
 Potential, Timing, &                                  MW would be needed to
Magnitude (continued)                                  maintain biomass share if
                                                       electricity demand continued
                                                       to increase at the same rate
                                                       and the RPS target remained
                                                       at 20% (7 pg 36)
                                                      •If the state accelerates the
                                                       implementation of the RPS to
                                                       33% by 2020, annual
                                                       additions would need to
                                                       increase to maintain 20%
                                                       share at approximately 70-
                                                       95MW per year and net
                                                       cumulative addition through
                                                       2020 of 1,450MW. This
                                                       would be ~2,400MW total. (7
                                                       pg 36)




                                                     11
                                                                                                     WORKING DRAFT
Biopower » Common Issues



                                      Collection &
                    Resources                           Conversion & Refining             Distribution                    Markets
                                     Transportation

            •Reduced dependence on                    •‚The renewable energy          •Flexible energy           •Meeting Renewable
             non renewable fuel                        sector generates more jobs      resource that can be       Portfolio Standard.
                                                       per MW for electric power
            •Rural economic                            installed, per unit of          dispatchable or            Biopower currently
             development                               energy produced, and per        baseload. (7 pg 41         provides 20 percent of
                                                       dollar invested than does       check)                     the renewable energy
                                                       fossil fuel sector‛ (7 pg 9)                               resources
                                                                                      •Distributed
                                                      •Biomass is estimated            generation can            •Using biomass in
                                                       create 3-6 jobs/MW (37 pg       alleviate load             conversion technology
                                                       30)(7 pg 9)                     pockets and provide        rather than natural gas
                                                      •Lower emissions, higher         grid support               reduces CO2 emissions
                                                       efficiency, better resource    •Onsite generation          from natural gas (7 pg 4)
                                                       utilization with new, more      avoids retail             •Resource Adequacy
                                                       efficient technology            electricity costs (7 pg    Contribution to help
 Benefits                                                                              42)                        provide power capacity
                                                                                      •Self-gen reliability       reserves to enhance grid
                                                                                                                  reliability and to help
                                                                                                                  reduce risk of electric
                                                                                                                  price volatility due to
                                                                                                                  possible power supply
                                                                                                                  shortages.
                                                                                                                 •Baseload capability. Use
                                                                                                                  of biomass power
                                                                                                                  facilities for this purpose
                                                                                                                  could help reduce the
                                                                                                                  amount of incremental
                                                                                                                  new gas-fired facilities
                                                                                                                  that would otherwise be
                                                                                                                  required.




                                                      12
                                                                                                              WORKING DRAFT
Biopower » Common Issues



                                             Collection &
                  Resources                                            Conversion & Refining           Distribution               Markets
                                            Transportation

          •Need to adopt a policy on    •Agency coordination       •Increase public and policy      •Grid benefits of     •Increased use of biomass
           CO2 sequestration to meet    •Smaller (onsite?)          awareness about technology       congestion            in RPS, RPS needs a
           state goals.                  applications to reduce     and benefits through             reduction and         category for transmission
          •Air quality permitting        handling cost              demonstration                    voltage support       benefits, baseload
           needs to take into account                              •Expediting of permits            could be              support or some
                                        •New technology to                                                                 combined category. (7 pg
           alternative fates of                                                                      monetized (16 pg
                                         improve fuel handling     •Research and development                               57)
           biomass fuels, which are                                                                  29, 42)
                                         and transportation         (R&D) to increase
           usually much worse (16        infrastructure             conversion efficiency with                            •Extension of PTCs,
           pg 26)                                                   without higher capital cost     •Uniform statewide     development programs,
                                        •Need better developed                                       interconnection       production tax incentives
                                         production systems (7     •Skilled operating personnel      standard
                                         pg 53)                                                                           •Carbon credits,
                                                                   •Need comprehensive                                     incentives for CO2
                                                                    lifecycle assessment for        •Expand net            sequestration through
 Needs                                                              integrated waste                 metering for          crop uptake
                                                                    management and other             biomass; eliminate   •Greenhouse gas (GHG)
                                                                    biomass strategies. (45 pg 7)    caps                  credits
                                                                   •Direct incentives for                                 •RECs need to account for
                                                                    development (7 pg 53)                                  direct environmental
                                                                   •Incentives for increasing                              services provided, so
                                                                    efficiency                                             biomass gets unique
                                                                                                                           compensation (16 pg 11)
                                                                   •Matching of power and
                                                                    heat applications and                                 •long-term contacts
                                                                    combining of conversion
                                                                    applications to gain
                                                                    economic competitiveness
                                                                    (7 pg 41)




                                                                  13
                                                                                                                               WORKING DRAFT
      Biopower » Common Issues

                                                                                 Potential State Actions1
                      2006
                      • CEC to provide permitting support to local agencies
                        — Develop a State New Source Review program
                        — Develop a single BACT for LFG projects
                        — Exemptions for biogas technologies as Pollution Control Projects
                        — Explore Cross or Inter pollutant netting
                      • Complete a comprehensive RD&D ‚roadmap‛ to guide future research, development and demonstration activities through the California
                        Biomass Collaborative and other organizations
                      • Create training programs for operating personnel
                      • Promote state, local government procurement standards to use more biopower
                      • Work on extension of Federal PTC’s
  Administrative
    Actions           • Establish standards for the sustainable development and use of biomass that ensure environmental objectives are met in all areas, including air
                        and water quality.
                      • Coordinate state production incentives: SEP, state production tax credits, tradable credits to make useful for new projects
                      • Work with WGA to influence federal funding decisions
                      • Develop programs to monetize the environmental benefits of biomass-to-energy by estimating the costs of alternative fates for the biomass
                        materials (e.g., forest fires). Could be implemented via a carbon tax, carbon adder, or other means).
                      • Conduct RD&D on cropping systems, harvesting, handling, storage & distribution practices and technology, in coordination with a larger state
                        and Federal level R&D effort.
                      • Appoint Bioenergy Interagency Working Group (BEIWG) to implement the Action Plan and coordinate biomass activities on a statewide level.
                      2007 – 2010
                      • Establish carbon tax that benefits biopower production
                      • Encourage congress to mandate utilization of biomass energy at federal facilities
                      •   Develop clear long-term biopower regulatory policy.
                      •   CPUC to expand role of biomass in RPS due to its baseload capacity abilities.
Regulatory Actions    •   CPUC to continue efforts on simplifying interconnection standards and practices
                      •   CPUC to expand net metering for biomass; eliminate caps
                      •   CPUC to create methodology that encourages long-term power contracts for new biopower projects
                      • Create state tax credits, energy investment tax credits or expand tax exempt financing from California Pollution Control Financing Authority
Legislative Actions   • Establish loan guarantee revolving fund to reduce risk
                      • Seek dedicated state funding in FY 2006 and FY 2007 budgets to support new financing, tax initiatives, and other programs.

1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.
                                                                                 14
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                             Agriculture
                             Forestry
                             Municipal Wastes

                    3   Biofuels Value Networks


                    4   Appendix




                                        15
    Biopower » Agriculture

    Value Networks for Biopower from Agricultural Resources.
       Resources              Collection &                                      Conversion &
                                                                                                            Distribution            Markets
                             Transportation                                       Refining

      AGRICULTURE
• Agricultural Residues




                                   Collection & Transportation Infrastructure
• Energy Crops                                                                     Power                       Electricity
• Food Processing Residues                                                                                   Transmission           Electricity
• Animal Wastes (farm)                                                             CCHP                      & Distribution
• Animal Renderings
                                                                                       Waste heat              Excess
                                                                                                             electricity
        FORESTRY
   Forest Residues - Tree
                                                                                                                                   Thermal loads
    thinnings, slash, etc.                                                          Heat
   Onsite Mill Residues                                                                                      Biofuel imports
                                                                                        Biodiesel
  MUNICIPAL WASTES                                                                                              Blending,
 Diverted Municipal Solid                                                          Transport
                                                                                                               distribution,
      Waste (MSW)                                                                Fuels; other                                        Vehicles
                                                                                                               marketing &
   Urban wood wastes                                                             liquid Fuels
                                                                                                                  fueling
       Landfill Gas
    Wastewater Biogas
    Wastewater Sludge
   Waste oils/fats/grease                                                        Co-products        e.g., food, feed, fertilizer


   Resource Imports

                                                                                  16
     Biopower » Agricultural and Food Processing Residues › Current Situations Assessment (1 of 2)



      Agricultural and Food                                                             Power                         Electricity




                                                            Transportation
                                                            Infrastructure
                                                                                                                   Transmission &                     Electricity




                                                             Collection &
      Processing Residues                                                               CCHP                        Distribution
Woody orchard and vineyard prunings,
field crop residues such as cereal straws                                                    Waste heat             Excess
and corn stover, vegetable crop residues                                                                          electricity
and; food processing residues: primarily                                                 Heat                                                       Thermal loads
woody rice hulls, shells and pits (7 pg17)1

                                                          Collection &                  Conversion &
                             Resources                                                                                Distribution                    Markets
                                                         Transportation                   Refining
                   • 1 MDT/yr prunings used for • Offsite residues           • Direct combustion              • Distribution and              • Existing markets are
                     power productions; typically   transported by trucks      technology (current)             interconnection                 similar for all biomass
                     with other other biomass (7  • Large storage area often • 93 MW orchard and vine           characteristics similar for     and are detailed in the
                     pg17)                          needed to balance          waste power producing            all biomass conversion          overall discussion
                   • Field crops not generally      timing of harvesting       facilities in operation          types and detailed in the       slides.
                     utilized in power              with energy production     producing 694 GWh/yr (7          overall discussion slides.

Utilization/         applications (7 pg17)          (7 pg 49)                  pg 35)
 Situation         • Vegetable crop residues         • Collection and costs      • 44 MW food processing
                     typically reincorporated into     depends on crop &           waste power production
                     soils. (7 pg 17)                  harvesting process (7 pg    facilities in operation
                   • 250,000 tons/yr food              48, 49)                     producing 328 GWh/yr (7
                     processing waste utilized for   • Densification not typical   pg 35)
                     power (7 pg17)                    in current infrastructure
                                                       (7 pg 49)




1. High moisture content food processing residues (e.g., cheese whey) can be utilized in onsite anaerobic digestion CCHP applications, or disposed of through municipal
   waste water and utilized as described in the WWTP section. (7 pg 33).

                                                                                   17
   Biopower » Agricultural and Food Processing Residues › Current Situation Assessment (2 of 2)

                                                    Collection &
                       Resources                                              Conversion & Refining              Distribution            Markets
                                                   Transportation
              •An average of $22/BDT for       •Short haul costs included •New biomass power plants       •See Common Issues.   •LCOE estimated at
               ag residues depending on         in resource cost, but do   are estimated to have an                              6.2¢/kWh without
               distance and quality of          not include storage and    installed capital costs of                            production tax credit
               resource (37 pg 11)              processing (37 pg 53)      between $1,500-$3,000/kW                              (PTC) for 25MW stoker
                                               •Facilities utilizing       (7 pg 38)                                             boiler facility (37 pg 60,
                                                feedstock onsite may                                                             62) assumed for ag
                                                have limited additional                                                          applications with fuel at
                                                collection and                                                                   $22/BDT assumed for
  Costs                                         transportation costs.(7 pg                                                       hauling prunings.
                                                48)                                                                             •LCOE estimated at
                                               •Residue management or                                                            4¢/kWh for onsite
                                                utilization costs not                                                            nutshell type food
                                                typically accounted for in                                                       processing applications
                                                commodity selling price                                                          with no fuel costs (37 pg
                                                (7 pg 48)                                                                        62)



              •Distance to fuel is critical.   •Production systems and       •Fuel quality is critical;   •See Common Issues    •See Common Issues.
               Low density, low BTU fuel        markets not well              combustion system fouling
               limits allowable distance. (7    developed. (7 pg 53)          more common with field
               pg 49)                                                         crops than woody biomass.
              •Some crops require retilling                                   (7 pg 17)
Constraints    of residue to maintain soil
               nutrients (7 pg 48)
              •Food processing wastes
               may only be seasonally
               available. (7 pg 49)




                                                                               18
 Biopower » Agricultural and Food Processing Residues › Opportunity Assessment (1 of 2)


                                                    Collection &                Conversion &
                          Resources                                                                        Distribution            Markets
                                                   Transportation                 Refining

                    • 4.9 MDT/yr prunings,     • Estimates assume a 25      • 496 MW & 3,691 GWh       • See Common Issues   • Reduced fuel costs
                      field crop, and            mile radius limit from a     technical at current                             could lower direct
                      vegetable crop             substation for               capacity factor (55%)                            combustion
                      residues, and food         transportation,              & efficiency (20%)                               application LCOE
                      processing residues        although some resource       (includes orchard and                            closer to that of
                      estimated technical        potential may be             vine, field and seed,                            wind projects. (7
                      potentially available      beyond feasible              vegetable and food                               pg 41)
                      today (8 tbl 4.1)          distance. (37 pg 72)         processing biomass) (7                         • Advanced more
                    • Orchard removals are                                    pg 35)                                           efficient conversion
                      available year round                                  • Could increase to                                technologies could
Potential, Timing     (7 pg 49)                                               ~750MW & 5,600                                   reduce LCOE
  & Magnitude                                                                 GWh/yr with new                                  closer to wind,
                    • Resource production
                      expected to remain at                                   technology (e.g.,                                although increased
                      current levels (7 pg                                    BIGCC @ 35%                                      capital costs could
                      28)                                                     efficiency)                                      offset this. (7 pg 41)

                    • SB 705 restrictions on                                                                                 • Valuing heat in
                      open burning and SB                                                                                      CCHP applications
                      700 repeal of ag air                                                                                     can reduce LCOE
                      permitting                                                                                               below wind.
                      exemptions increases                                                                                     Could reduce
                      resource availability                                                                                    LCOE to
                      (45 pg 26)                                                                                               .057¢/kWh. (7 pg
                                                                                                                               42)




                                                                      19
Biopower » Agricultural and Food Processing Residues › Opportunity Assessment (2 of 2)


                                               Collection &                Conversion &
                     Resources                                                                       Distribution              Markets
                                              Transportation                 Refining

               •Could create              •Local (rural) economy       •Local (rural) economic     •See Common Issues   •Decreased
                additional farm            benefits. A significant      boost (37 pg 30)(7 pg 9)                         decomposition of
                revenue from new           portion of the fuels and                                                      residues in open fields
                products and markets       feedstocks originate in                                                       reduces other green
                (7 pg xiv)                 rural areas of the state.                                                     house gas pollutants
               •Opportunities exist for    Could create new value-                                                       such as methane
                                           added markets and new
  Benefits      integrating dedicated
                                           local jobs.
                biomass crops into
                remediation programs
                to repair salt-affected
                and other
                contaminated lands.


               •Better Agency             •Agronomic practices and     •Restarting mothballed       See Common Issues   •Farm commodity
                coordination (Waste,       management approaches        plants                                           tax/fee to incentivize
                Ag and Energy) to          may need to change, (7      •See Common Issues                                development (45 pg 10)
                support increased use      pg 53)                                                                       •See Common Issues
                of ag resources           •See Common Issues                                                            •Need more developed
               •Biomass densification                                                                                    markets (7 pg 53)
   Needs        (7 pg 49)
                                                                                                                        •Power and heat
                                                                                                                         applications need to be
                                                                                                                         matched to gain
                                                                                                                         economic
                                                                                                                         competitiveness (7 pg
                                                                                                                         41)




                                                                  20
      Biopower » Agricultural and Food Processing Residues › Potential Actions

                                                                                Potential State Actions1
                      • Agency (Waste, Ag and Energy) coordination.
                           —Ag Agency report on market for agricultural crop residues
                           —Develop statewide system for capturing environmental benefits of biopower
                           —Widely disseminate broad based benefits of biopower – demo projects
                      • Facilitate long-term fuel delivery contracts to maintain collection and delivery infrastructure .
                      • Create training programs for operating personnel
                      • Establish (or provide loan guarantee for) a commercial demo biogasification project
Administrative        • Establish regional manure management centers as potential sites for dairy bio-digesters in the San Joaquin Valley.
  Actions             • Streamlined permitting.
                      • Develop clear long-term biopower regulatory policy.
                      • Expand and broaden programs such as the Dairy Power Production Program to encourage greater use of animal, food processing, and urban
                        residues and waste waters for power generation and biofuels production.
                      • See Common Issues
                      2007-2010
                      • Create new R&D programs on harvesting, handling, and storage practices and technology
                      • New R&D to solve fouling problem and increase efficiency
                      • Initiate a proceeding to address net metering opportunities for biomass (including consolidating net metering accounts on a farm, using
  Regulatory            existing power lines on their properties for grid access, & higher net metering limits).
   Actions


  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                                   21
     Biopower » Energy Crops › Current Situation Assessment


                                                                                             Power                           Electricity




                                                                Transportation
                                                                Infrastructure
                                                                                                                          Transmission &                      Electricity




                                                                 Collection &
     Biomass Energy Crops                                                                    CCHP                          Distribution
   Lignocellulosic crops including salt
                                                                                                  Waste heat               Excess
   and water tolerant species. Includes
                                                                                                                         electricity
    grasses, trees, and aquatic species1
                                                                                              Heat                                                          Thermal loads


                                                            Collection &
                              Resources                                              Conversion & Refining                   Distribution                     Markets
                                                           Transportation
                     • Not currently utilized in      • NA                          • 0 MW in operation              • NA                            • No specific market for
                       California                                                                                                                      energy crops, but could
Utilization/                                                                                                                                           compete in RPS
 Situation                                                                                                                                             solicitations just as
                                                                                                                                                       residue projects are
                                                                                                                                                       doing.
                     • Dedicated crops assume all • Pretreatment or sorting         • Higher capital costs for
                       production costs, but may    processes to remove               improved technologies to
                       also contribute to other     contaminants                      deal with pollutants
                       high value benefits such as
    Costs              soil remediation (7 pg 48)
                     • Variable production costs
                       due to species, production
                       site, level of management,
                       resulting yield (7 pg 48)
                     • Water is the likely the        • See Common Issues           • Pollutants contained in        • See Common Issues.
                       limiting resource (5g 27)                                      crops utilized for soil
                     • Crop yields are variable                                       remediation, then
Constraints            and depend on crop type                                        harvested for energy
                       and inputs (7 pg 27)                                           production, may cause
                                                                                      negative impacts to energy
                                                                                      conversion processes

1. It is assumed that sugar, starch and oil crops (as well as lignocellulosic crops) could be used to create biofuels. Refer to the biofuels section for discussion. The
   lignocellulosic portion of sugar, starch & oil crops (i.e., residues) could be used for power production as covered in the section on agricultural residues.

                                                                                      22
Biopower » Energy Crops › Opportunity Assessment (1 of 2)



                                                   Collection &               Conversion &
                        Resources                                                                         Distribution             Markets
                                                  Transportation                Refining

             • Specific crops can be used for    • Assumes full            • May help support         • See Common Issues   • PTC available for
               soil remediation                    allocation of             industry                                         ‚closed loop‛
             • Eucalyptus is currently used        production costs          development before                               biomass conversion
               in CA for integrated farm           in commodity              other resource                                   systems at 1.9¢/kWh
               drainage management                 price                     infrastructures are in                           over ten years (7 pg
               (IFDM) (7 pg 27)                                              place (7 pg 1)                                   11) vs. 0.9 ¢/kWh for
                                                                                                                              ‚open loop‛ biomass
             • Integrated systems, such as
               IFDM, and other soil
               remediation practices may
               ‚prove one of the major
               growth areas in the future‛ (7
               pg 53)
             • 4.5 MDT estimated to be
               grown in CA by 2020. This
Potential,     represents 1/3 total biomass
Timing &       resource growth by 2017. (7
               pg 28) (8 tbl 4.1) (note: it is
Magnitude      unclear what crop types
               makes up the estimate).
             • Best near-term opportunity on
               San Joaquin 1.5 M acres of
               lands that have never been
               drained or 100,000 acres that
               need better drainage and
               could be used for agriculture.
               (7 pg 27)
             • The decrease in Federal
               support from some ag crops
               could promote the
               development of alternative
               crops such as energy crops (7
               pg 27)


                                                                      23
Biopower » Energy Crops › Opportunity Assessment (2 of 2)



                                              Collection &            Conversion &
                   Resources                                                                     Distribution             Markets
                                             Transportation             Refining

            • Could supplement            • See Common Issues    • Waste heat from power     • See Common Issues.   • See Common Issues
              other biomass facilities                             generation could be
            • Soil remediation from                                used to purify drainage
              salt tolerant species and                            water by extracting
              those that uptake                                    salts (7 pg 28)
              pollutants including                               • Other conversion and
Benefits      trees, grasses and                                   refining benefits are
              halophytes, and                                      similar for all biomass
              improves over all                                    and detailed in the
              sustainability of                                    general discussion
              agriculture (7 pg 26, 27)                            slides.
            • Biomass growth can
              sequester CO2 in soils
            • Assessment of               • See Common Issues    • Continued testing to      • See Common Issues    • See Common Issues
              potentially viable crops                             determine any saline
              and land                                             impacts on thermal and
            • Promotion of planting                                bio processes (7 pg 29)
              renewable fuels                                    • Other conversion and
            • Concerted R&D effort                                 refining needs are are
 Needs        (7 pg 27)                                            similar for all biomass
                                                                   conversion applications
            • Analysis of types of                                 and are detailed in the
              crops needed for soil                                general discussion
              remediation , and for                                slides.
              other Valley
              environmental
              considerations (7 pg 28)




                                                                24
      Biopower » Energy Crops › Potential Actions



                                                                             Potential State Actions1
                      • See Common Issues.
                      • Conduct RD&D on cropping systems, harvesting, handling, storage, and distribution practices and technology, in coordination with a larger
                        state and federal level R&D effort.




Administrative
  Actions




                      • See Common Issues.
  Regulatory
   Actions

                      • Reduction in support to other agricultural commodities would influence the development of energy crops
  Legislative         • Incentives for growing energy crops need to be developed
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.
                                                                               25
   Biopower » Animal Waste › Current Situation Assessment (1 of 2)

                                                                                 Power                          Electricity
               Animal Waste




                                                      Transportation
                                                      Infrastructure
                                                                                                             Transmission &                Electricity




                                                       Collection &
           Includes manure from dairy                                            CCHP                         Distribution
           cows, range cattle, and boiler
                chickens (7 pg 17)                                                    Waste heat               Excess
                                                                                                             electricity
                                                                                  Heat                                                  Thermal loads



                                                   Collection &
                         Resources                                          Conversion & Refining                  Distribution            Markets
                                                  Transportation

               • Approximately 33,000 milk • Onsite collection if        • Methane from anaerobic            • See Common Issues   • CA Dairy Power
                 cows are supported by the   dairies                       digestion of waste fires                                  Production Program
                 Dairy Power Production    • Not currently feasible        reciprocating engines (7 pg 40)                           and other federal dairy
                 Program (7 pg 17)           for pastured animals (7     • Anaerobic digesters typically                             programs offer
                                             pg 48)                        50kW- several MW (7 pg 40)                                development incentives
                                                                                                                                     (7 pg 40)
                                                                         • Waste heat used to improve
                                                                           digester or for other onsite                            • Dairies can use net
Utilization/                                                               processes (e.g., cheese                                   metering programs or
                                                                           production) (7 pg 40)                                     RPS solicitations
 Situation                                                                                                                           (although smaller size
                                                                         • 4 MW in operation producing                               may limit the
                                                                           30 GWh/yr (7 pg 35)                                       practicality of latter
                                                                         • There are less than 7 animal                              option).
                                                                           and food processing digesters                           • See Common Issues
                                                                           operating in the state, and
                                                                           approximately 16 that are not
                                                                           operating. (37 pg 50)
               • Costs low when anaerobic • Costs low when               • ~$3,500/kW installed capital      • See Common Issues   • LCOE is estimated
                 digestion on site at dairy (7 anaerobic digestion on      costs and $300/kW O&M for                                 4.3¢/kWh for 100kW
                 pg 40)                        site of dairy (7 pg 48)     dairy waste biogas in 2005                                system in 2003 constant
   Costs                                                                   dollars (37 pg 19)                                        dollars for energy from
                                                                                                                                     an animal waste
                                                                                                                                     digester (7 pg 42)




                                                                           26
   Biopower » Animal Waste › Current Situation Assessment (2 of 2)



                                                  Collection &
                      Resources                                              Conversion & Refining                 Distribution              Markets
                                                 Transportation

              • Resource distributed in     • Collection costs for       • Sulfur in gas can cause             • See Common Issues   • See Common Issues
                nature for range cattle       range operations may         combustion system fouling in                              • Net metering for dairies
                operations                    be infeasible (7 pg 48)      older systems (7 pg 40)                                     expected to end 2006 (7
              • Increasing concerns over    • Need to have confined      • Despite new models equipped                                 pg 42)
                VOC emissions for             pens to be able to collect   to remove sulfur, additionally                            • Dairies and farms have
                confined animal feeding       waste                        required NOx scrubbing                                      different rules than
Constraints     operations (CAFOs) (45 pg                                  equipment still costly (7 pg 40)                            solar for Net Metering ,
                6)                                                       • Gas scrubbing and catalytic                                 and some provisions
                                                                           emission control devices may                                may be limiting their
                                                                           cause efficiencies to decline (14                           participation.
                                                                           pg 33)
                                                                         • Refer to Agriculture section for
                                                                           permitting constraints.




                                                                            27
Biopower » Animal Waste › Opportunity Assessment

                                                  Collection &
                        Resources                                     Conversion & Refining              Distribution               Markets
                                                 Transportation

               •~3.6 MDT/yr of all animal        •Onsite              •385 MW & 2,863 GWh net         •See Common Issues     •Anaerobic digestion
                manure technically available      applications         technical potential at                                 of animal wastes and
                today, ~2.0 MDT/yr of                                  current efficiency (7 pg 35)                           LFGTE systems could
                confined dairy manure                                 •~$3,000/kW installed                                   achieve a lower LCOE
                technically available today (8                         capital, $240/kW O&M –                                 than wind where
                tbl 4.1)                                               2010 , and ~$2,600/kW                                  there are no fuel costs
               •Expected to increase over                              installed capital, $150/kW                             (7 pg 41)
 Potential,     time, MSW and animal                                   O&M – 2017 (37 pg 19)                                 •See Common Issues
 Timing, &      waste expected to account
                for 2/3 gross resource
 Magnitude      growth by 2017, which could
                be estimated to be about 1-2
                MDT (7 pg 28)
               •Due to SB 700 and the loss of
                air permitting exemptions
                for agriculture, alternative
                waste management practices
                will increase the availability
                of the resource.
               •Utilization reduces methane                           •Conversion and refining        •See Common Issues     •See Common Issues
                release into atmosphere                                benefits are similar for all
               •Refer to Agriculture section                           biomass conversion
                for farm revenue benefits                              applications and are
  Benefits                                                             detailed in the general
                                                                       discussion slides.



               •Improved waste                   •Agency              •Incentives for increasing      •Refer to              •long-term contracts
                management practices              coordination         efficiency                      Agriculture section   •Increased use of
               •Existing costs of waste                               •Skilled personnel               for interconnection    biomass in RPS
                management practices                                                                   and net metering
   Needs                                                                                               needs.                •Extension of
                should compared against                                                                                       production tax credits
                conversion alternatives.
                                                                                                                             •Carbon credits


                                                                 28
      Biopower » Animal Waste › Potential Actions



                                                                             Potential State Actions1
                      • Increase funding for the Dairy Power Production Program
                      • See Common Issues




Administrative
  Actions




                      • Legislation to simplify and expand net metering for biomass and biogas
  Regulatory          • See Common Issues
   Actions


                      • See Common Issues
  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                               29
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                             Agriculture
                             Forestry
                             Municipal Wastes

                    3   Biofuels Value Networks


                    4   Appendix




                                        30
     Biopower » Forestry

     Simplified Value Networks for Biopower from Forestry Resources.
                              Collection &                                      Conversion &
          Resources                                                                                        Distribution            Markets
                             Transportation                                       Refining

      AGRICULTURE
• Agricultural Residues




                                   Collection & Transportation Infrastructure
• Energy Crops                                                                     Power                      Electricity
• Food Processing Residues                                                                                  Transmission           Electricity
• Animal Wastes (farm)                                                             CCHP                     & Distribution
• Animal Renderings
                                                                                       Waste heat             Excess
                                                                                                            electricity
         FORESTRY
• Forest Residues - Tree
                                                                                                                                  Thermal loads
  thinnings, slash, etc.                                                            Heat
• Onsite Mill Residues                                                                                       Biofuel imports
                                                                                       Biodiesel
   MUNICIPAL WASTES                                                                                             Blending,
                                                                                  Transport
• Diverted Municipal Solid                                                                                     distribution,        Vehicles
                                                                                 Fuels; other
  Waste (MSW)                                                                                                  marketing &
                                                                                 liquid Fuels
• Urban wood wastes                                                                                               fueling
• Landfill Gas
• Wastewater Biogas
• Wastewater Sludge
                                                                                 Co-products       e.g., food, feed, fertilizer
• Waste oils/fats/grease


     Resource Imports
                                                                                  31
    Biopower » On-Site Mill Residues › Current Situation Assessment (1 of 2)

                                                                                        Power                         Electricity




                                                          Transportation
                                                          Infrastructure
                                                                                                                   Transmission &                     Electricity




                                                           Collection &
                                                                                        CCHP                        Distribution
      Onsite Mill Residues
   Onsite Mill Residues include waste from                                                   Waste heat              Excess
       sawmill operations (7 pg 19, 20)                                                                            electricity
                                                                                         Heat                                                       Thermal loads


                                                    Collection &
                          Resources                                           Conversion & Refining                   Distribution                    Markets
                                                   Transportation
                 • Approx. 1.3 M tons/yr of   • Onsite mill residue        • Direct combustion technology      • Much of the power             • See Common Issues
                   sawmill residues used for    collection and               (current)                           generated is being used on
                   power production (7 pg 20)   utilization well           • 268 MW in operation                 site and is not exported to
                 • Onsite forest residues       established                  producing 1996 GWh/yr (7 pg         the grid. (7 pg 20)
                    located primarily in far                                 35)                               • See Common Issues
Utilization/        northern California; ~50%                              • CHP applications such as
 Situation          on public land                                           waste heat used for kiln
                 • Remaining available                                       drying lumber (7 pg 42)
                   residues are used for                                   • Most forest product
                   landscape and other                                       operations already generate
                   products. (7 pg 20)                                       power from their residues.
                 • Little or no costs assumed • Refer to Agriculture       • Refer to Agriculture section           See Common Issues          • See Common Issues
                   for onsite utilization of mill section for limited        for installed capital costs for
                   residues (37 pg 54)            cost of collection at      stoker boiler configurations
   Costs                                          onsite facilities.         assumed used in smaller
                                                                             onsite applications.


                 • Declining forest product                                • See Common Issues                 • See Common Issues.            • See Common Issues
Constraints        industry (33 pg 4)




                                                                                32
 Biopower » On-Site Mill Residues › Opportunity Assessment



                                                Collection &             Conversion &
                         Resources                                                                   Distribution                 Markets
                                               Transportation              Refining

                    •3.3 MDT of mill        •Sites that benefit     •Improved technologies      •Biomass meets utilities    •By products from
                     residues technically    transmission system     with higher efficiencies    baseload requirements       remaining forest
                     available today (7      (‚Hotspot sites‛)       are becoming available     •Range of facility sizes     product residues
                     pg 15)                  identified. (37)        like fluidized bed or       should allow for
                    •Resource size is                                gasification                interconnection at a       •See Common Issues
Potential, Timing    expected to remain                             •Restarting mothballed       variety of substation
                     at current levels in                            plants is one option        voltages, but resource
  & Magnitude        the future.                                                                 location relative to
                                                                    •1,666 MW & 12,408 GWh
                                                                     technical (7 pg 35) at      electric grid is
                                                                     current capacity factor     important (37)
                                                                     (85%) & efficiency (20%)
                                                                     (37)
                                                                    •Competitive at larger
                                                                     project size

                                                                    •See Common Issues          •Benefits to distribution
                                                                                                 are similar for all
                                                                                                 biomass conversion
                                                                                                 applications and are
    Benefits                                                                                     detailed in the general
                                                                                                 discussion slides.



                                                                    •See Common Issues.         •See Common Issues          •See Common Issues

     Needs




                                                                   33
      Biopower » On-Site Mill Residues › Potential Actions


                                                                              Potential State Actions1
                      • See Common Issues




Administrative
  Actions




                      • See Common Issues.
  Regulatory
   Actions

                      • Advocate policies that collect payments from beneficiaries of environmental benefits, for example surcharges on water bills for forest thinning
                        that improves water shed quality
  Legislative
                      • See Common Issues.
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.
                                                                                 34
    Biopower » Off-Site Forest Residues › Current Situation Assessment (1 of 2)



                                                                                        Power                          Electricity




                                                         Transportation
                                                         Infrastructure
                                                                                                                    Transmission &              Electricity




                                                          Collection &
           Forest Residues                                                              CCHP                         Distribution
      Thinnings, log slash, scrub, and                                                       Waste heat              Excess
                chaparral.
                                                                                                                   electricity
                                                                                         Heat                                                Thermal loads


                                                   Collection &
                         Resources                                           Conversion & Refining                    Distribution             Markets
                                                  Transportation
                • Current utilization of       • Forest residue           • See Common Issues                  • See Common Issues.   • See Common Issues.
                  forest thinnings and slash     collection and           • Development of mobile
                  is unclear. It is assumed to   transport is distance      biomass conversion systems
                  be chipped onto the forest     constrained
Utilization/      floor.
                                                                            (e.g., skid mounted) could
                                                                            facilitate utilization of forest
 Situation      • Chaparral is cleared                                      residues
                  primarily in the Southern
                  California region for fire
                  protection (7 pg 20)
                • ~$40/BDT forest thinnings    • Collection cost          • $2,800/kW installed capital                               • LCOE estimated at
                  and ‘timber stand              becomes prohibitive        costs and $232/kW O&M for                                   8.98¢/kWh for 25MW
                  improvement’ (37 pg 11)        on certain terrain         fluidized bed application in                                fluidized bed facility
   Costs                                                                    2005 at 2004 dollars, not                                   and assuming a 1¢/kWh
                                                                            including $40 fuel cost. (37 pg                             increase per $10/ton
                                                                            13)                                                         increase in fuel cost. (37
                                                                                                                                        pg 60, 62)




                                                                                35
   Biopower » Off-Site Forest Residues › Current Situation Assessment (2 of 2)


                                                     Collection &                   Conversion &
                       Resources                                                                            Distribution           Markets
                                                    Transportation                    Refining
              • Seasonal harvesting           • Forest terrain can be          • See Common Issues   • See Common Issues.   • See Common Issues
                limitation                      infeasible for thinning
              • Reliability, long-term        • Equipment access to lands
                supply of resource              may be limited seasonally
              • Controversy over how/if         due to winter or fire
                thinning should occur           seasons (7 pg 49)

              • No consensus between          • Refer to Agriculture section
Constraints                                     for transportation cost
                environmental agencies
                how to manage. (7 pg 53)        constraints to the size of
                                                the facility.
              • Chaparral has no
                commercial value (7 pg20)
              • No markets exist for forest
                management operations (7
                pg 53)




                                                                                                                                                  1.

                                                                               36
 Biopower » Off-Site Forest Residues › Opportunity Assessment (1 of 2)



                                                Collection &                 Conversion &
                        Resources                                                                        Distribution            Markets
                                               Transportation                  Refining

                    •2003 Healthy           •Long-term fuel supply      •Refer to onsite forestry    • See Common Issues   •See Common Issues
                     Forests Restoration     contracts would             for conversion potential.
                     Act and 2005            support consistent
                     Energy Policy Act       delivery
Potential, Timing    increases potential    •Onsite applications can
                     for thinnings (7 pg     minimize cost of
  & Magnitude        53)                     transportation
                    •11 MDT/yr
                     estimated technical
                     potential off-site
                     forest residue


                    •Decreased fire risk    •See Common Issues          •Emissions from power        •See Common Issues
                     benefits water and                                  plants is significantly
                     air quality and                                     less than impacts from
                     minimizes habitat                                   catastrophic fires.
                     destruction                                        •Decreased spending on
    Benefits        •Reduced wild fire                                   fire protection which
                     risks to large urban                                amounts to
                     populations near                                    approximately
                     fire prone areas.(7                                 $900M/year (45 pg 26)
                     pg 53)




                                                                       37
Biopower » Off-Site Forest Residues › Opportunity Assessment (2 of 2)



                                           Collection &                     Conversion &
                     Resources                                                                        Distribution             Markets
                                          Transportation                      Refining

                •Need better state    • Public awareness about          •Offset credits for       •See Common Issues.   •Long-term contacts for
                 policy regarding       benefit of thinning              thinning, prescribed                            harvesting/thinnings
                 forest thinning (7   • Integrated policy                burning, and wildfire,                         •Market must exist for
                 pg 53)                 between Energy and               should be developed                             forest management
                •Alternative fire       Forestry Agencies                and recognized by US                            biomass (7 pg 54)
                 prevention                                              EPA (45 pg 9)
                                      • Consensus between
                 strategies are         environmental
                 needed, since          organizations and land
                 suppression            management agencies
                 strategies have        that wildland urban
                 created the fuel       interfaces need to be
   Needs         load (7 pg 53)         managed to reduce fire
                                        risk. (7 pg 54)
                                      • Costs of biomass
                                        management should be
                                        reasonably allocated to
                                        the beneficiaries.
                                      • Need for increasing fuel
                                        supply infrastructure
                                        specifically related to
                                        fire prevention. (7 pg
                                        57)




                                                                   38
      Biopower » Off-Site Forest Residues › Potential Actions


                                                                                Potential State Actions1
                      • Determine geographic areas in the Wildland Urban Interface most in need of fuel reduction.
                      • Identify actions that can be taken by the Board of Forestry to encourage biomass production and use.
                      • Work with Federal government to implement policies under the Healthy Forest Act that would provide larger, long-term biomass supply from
                        Federal lands.
                      • Facilitate long-term fuel delivery contracts to maintain collection and delivery infrastructure .
                      • Work with Fed Govt to implement policies that would provide long-term biomass supply from federal lands.
                      • New R&D on harvesting, handling, and storage practices and technology

Administrative        • Identify ‚biomass energy zones‛ in key forest and range areas and key agricultural areas of California, based on known resource potential.
  Actions             • Examine the alternative methods for disposing of fuel reduction materials and determine the best practices for forestry management that have
                        the least greenhouse gas impacts compared to wildfires.
                      • Build upon the existing California Climate Action Registry protocols and continue development of additional protocols for forest management
                        and resource conservation (i.e., use of forest materials for fuels and wood products).
                      • Create fuel management surcharge fees to have beneficiaries pay for benefit of thinning activities.
                      • Assist the Department of Corrections and Forestry and Fire Protection in the installation of combined heat and power units at six facilities
                        statewide.
                      • See Common Issues


                      • Establish incentive for delivery infrastructure
  Regulatory          • Establish fuel management surcharge fees to have beneficiaries pay for benefit of thinning activities.
   Actions            • See Common Issues

                      • See Common Issues.
  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.
                                                                                   39
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                             Agriculture
                             Forestry
                             Municipal Wastes

                    3   Biofuels Value Networks


                    4   Appendix




                                        40
     Biopower » Municipal Wastes

     Simplified Value Networks for Biopower from Municipal Wastes
         Resources            Collection &                                      Conversion &
                                                                                                           Distribution            Markets
                             Transportation                                       Refining

      AGRICULTURE
• Agricultural Residues
• Energy Crops




                                   Collection & Transportation Infrastructure
                                                                                   Power                      Electricity
• Food Processing Residues
                                                                                                            Transmission           Electricity
• Animal Wastes (farm)
                                                                                   CCHP                     & Distribution
• Animal Renderings
                                                                                       Waste heat             Excess
         FORESTRY                                                                                           electricity
• Forest Residues - Tree
  thinnings, slash, etc.                                                                                                          Thermal loads
                                                                                    Heat
• Onsite Mill Residues
                                                                                                             Biofuel imports
                                                                                       Biodiesel
   MUNICIPAL WASTES
• Diverted Municipal Solid                                                        Transport                    Blending,
  Waste (MSW)                                                                    Fuels; other                 distribution,         Vehicles
• Urban wood wastes                                                              liquid Fuels                 marketing &
• Landfill Gas                                                                                                   fueling
• Wastewater Biogas
• Wastewater Sludge
• Waste oils/fats/grease                                                         Co-products       e.g., food, feed, fertilizer



      Resource Imports
                                                                                  41
     Biopower » Diverted Municipal Solid Wastes › Current Situation Assessment (1 of 2)


                                                                                           Power                          Electricity
            Diverted                                                                                                   Transmission &                      Electricity




                                                              Transportation
                                                              Infrastructure
                                                               Collection &
      Municipal Solid Wastes                                                               CCHP                         Distribution
             (MSW)                                                                              Waste heat              Excess
     High and low moisture content organics                                                                           electricity
   generated by municipalities, including clean                                             Heat                                                         Thermal loads
 construction waste (aka urban wood), paper and
  cardboard, green wastes and trees, food wastes
                                                                                         Co-products         fertilizer (ash)


                                                              Collection &                 Conversion &
                                Resources                                                                                  Distribution                    Markets
                                                             Transportation                  Refining
                    • Diverted MSW available for      • Well established             • Low moisture content or      • See Common Issues           • Specifics related to the
                      biomass conversion                collection of non              ‘solid fuel’ (urban wood)                                    sale of energy from
                      applications consist of 1.5 M     sorted materials               typically directly                                           urban wood are
                      tons of diverted clean          • Tipping fees are               combusted.                                                   unidentified.
                      construction/urban wood           charged for collection       • 239 MW planned or in                                       • See Common Issues
                      directly combusted in power       and disposal into a            operation producing 1780
                      plants. Demolition waste is not                                                                                             • Details of market sales
Utilization/                                            landfill and or transfer       GWh/yr (7 pg 35)                                             of any energy from
                      allowed for combustion due to     station                        although many biopower
 Situation            air containments (7 pg 23)                                                                                                    MSW is unidentified.
                                                      • 50% of all MSW                 facilities are capable of
                    • Diverted paper and cardboard      currently diverted             accepting urban wood
                      assumed to be recycled.           from land fills under          waste and very few burn
                    • Diverted green wastes used for    state requirement (7           this exclusively.
                      compost or alternative daily      pg 22)
                      cover.1 Quantities are
                      unidentified. (7 pg 22)




1. Diverted green waste is allowed as ‘alternative daily cover’ (ACD) in landfills and can be considered to contribute to the generation of landfill gas. Refer
   further to the discussion of landfill gas.

                                                                                    42
  Biopower » Diverted Municipal Solid Wastes › Current Situation Assessment (2 of 2)

                                                      Collection &
                         Resources                                             Conversion & Refining                   Distribution             Markets
                                                     Transportation
              • $22/BDT for clean construction • Tipping fees can            • $2,800/kW installed capital  • See Common Issues.       • LCOE estimated at
                waste( aka: urban wood) (37 pg   offset transport              costs and $392/kW O&M for                                 6.98¢/kWh without
                11)                              costs                         fluidized bed application in                              production tax credit
              • The cost of green waste or         • Transportation            2005 at 2004 dollars,                                     (PTC) for 25MW
                paper and cardboard is mostly        costs are similar for     including $22 fuel cost. (37                              fluidized bed facility (37
  Costs         unidentified, although it has        all biomass               pg 13) (note: capital and                                 pg 60, 62) assumed for
                been stated generally that           conversion                O&M costs for technologies                                large urban applications
                materials recovered at transfer      applications and          to combust unsorted MSW                                   with a with fuel at
                stations are assumed to be           are detailed in the       would be higher)                                          $22/BDT.
                available at little or no            overall discussion
                additional costs. (7 pg 48)          slides.
              • Lack of diversion credit can       • Mixed waste             • Public perception of waste        • See Common Issues   • ‚MSW‛ does not add to
                create limitations for long-term     stream                    conversion technologies (7                                RPS because it is
                supply reliability (7 pg 5)        • Collection and            pg 7, 60)                                                 disallowed in SB 1078
              • Waste conversion processes           delivery costs          • Conversion technologies                                 • See Common Issues
                development could increase                                     may discourage the public
                resource competition and                                       from producing less waste.
                change tipping fees. (7 pg 48)                                 (7 pg 60)
              • Green wastes may only be                                     • The ability for tipping fees to
                seasonally available. (7 pg 49)                                change for landfill disposal
Constraints                                                                    may inhibit competition
              • No state policies limit total
                disposal, and no consensus                                     from new conversion
                exists how to reduce disposal to                               technologies.
                landfills (7 pg 54)                                          • Permitting facilities due to
              • There is a perception that                                     NOx (7 pg 7)
                conversion technologies may
                draw resources away from
                existing users of biomass from
                MSW. (7 pg 60)




                                                                              43
Biopower » Diverted Municipal Solid Wastes › Opportunity Assessment (1 of 2)



                                                Collection &                    Conversion &
                    Resources                                                                              Distribution             Markets
                                               Transportation                     Refining

              •State polices aimed at     •Presorting                       •832 MW & 6,179 GWh         •See Common Issues   •Compost is by product
               reducing landfilled        •Onsite applications               technical potential at                           of diverted material
               material (7 pg 5, 54)                                         current efficiency (7 pg                         from landfill
                                          •Regulations to move               35)
              •~7.4 MDT/yr                 anaerobic digestion of                                                            •LCOE can decline
               technically available       MSW out of a                     •Bioreactor landfills                             with tipping fees, if
               today (8 tbl 4.1)           ‘transformation’ category         have efficiencies                                fuel and handling cost
              •MSW and animal              will allow it to receive          estimated to remain                              do not increase (7 pg
               waste expected to           diversion credits (7 pg 55)       constant over time at                            40, 41)
               account for 2/3 resource                                      30%. (7 pg 29)                                  •See Common Issues
Potential,                                •Definitions changes for
               growth by 2017 (7 pg        other types of biomass
Timing &       28) which could be          conversion applications
Magnitude      estimated to be less        could also result in the
               than 1-2 MDT, based         availability of diversion
               on the estimate that        credits. (7 pg 55)
               there will be a ~6.4
               increase from 33.6 MDT
               to 40 MDT, and if ~4.5
               MDT of that increase is
               expected from
               dedicated crops. (7 pg
               28)
              •Diversions from            •Can provide increase in          •New technologies like      •See Common Issues
               landfills, extends          jobs in urban areas (37 pg        gasification reduce
               landfill capacity and       30)(7 pg 9)                       environmental impact
               reduces methane                                               of MSW conversion
 Benefits      production (7 pg 29)
                                          •Tipping fees can increase
                                           transport distances. (7 pg       •Revitalize local (urban)
              •Reduced dependence          48)                               economy (37 pg 30)(7
               on non renewable fuel                                         pg 9)




                                                                       44
Biopower » Diverted Municipal Solid Wastes › Opportunity Assessment (2 of 2)



                                               Collection &
                     Resources                                              Conversion & Refining             Distribution             Markets
                                              Transportation

            •Changes in waste             •Incentives aimed to              •Change in public              •See Common Issues   •The portion of waste
             management policy that        reduce waste                      perception about waste                              that can be considered
             would open up market for      generation to increase            conversion technologies (7                          renewable for RPS
             large quantities of           collection infrastructure         pg 7, 60)                                           eligibility needs to be
             separated solid waste (7     •Improvement in                   •Full diversion credit for                           determined
             pg 36)                        handling and                      conversion technologies (7                         •See Common Issues.
            •long-term supply              separation technology             pg 5, 55)                                          •Monetizing
             reliability (7 pg 55)         (7 pg 54) (45 pg 12)             •Conversion options                                  environmental and
            •Expanded definition of       •Extended producer                 should rely on                                      waste management
             waste transformation to       responsibility programs           performance based                                   benefits to defray fuel
             include composting and        and limitations on                standards, environmental                            costs and improve
 Needs       biomass conversion (7 pg      quantities of organic             and life cycle assessment                           economics (7 pg 41)
             55)                           material that can be              for integrated waste
            •Increased diversion rates     landfilled (7 pg 54)              management and other
             need to be set (7 pg 58)                                        biomass strategies. (7 pg
                                                                             60) (45 pg 9)
            •Producer responsibility
             programs and limitation                                        •Conversion facilities
             on total organic carbon                                         should be characterizes as
             content and energy                                              refineries and be regulated
             content of waste such that                                      under non disposal facility
             have been implemented in                                        elements (NDFE) (45 pg
             EU.                                                             12)




                                                                       45
      Biopower » Diverted Municipal Solid Wastes › Potential Actions



                                                                                Potential State Actions1
                      • Limit amount of organic matter allowed in landfills
                      • Increase landfill tipping fees to provide stable funding for grant and incentive program
                      • Increase public and policy education and awareness about technology and benefits through demonstration
                      • Waste management limitations could be based on per capita disposal
                      • Implementing regulations to restricting total organic carbon into land fills or by energy content
                      • Evaluate potential for increasing in-state processing of municipal waste (decrease out-of-state disposal)
Administrative        • Improved handling and separation technology for MSW
  Actions             • Develop plan to deploy bioreactor landfill technology on a commercial basis to increase the decomposition of organic material
                      • Refer above to general actions that can be implemented.
                      • See Common Issues




                      • Define conversion technologies with environmental and life-cycle assessments
                      • Implement ‚extended producer-responsibility programs and limitations of the total organic content and energy content of waste going to
  Regulatory            landfills‛
   Actions            • Increase diversion credit for conversion technologies
                      • See Common Issues
                      • Propose amendments to existing law to provide diversion credits to local jurisdictions for solid waste processed by conversion technologies.
                        (AB 1090 is a possible vehicle).
  Legislative
                      • See Common Issues
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.
                                                                                  46
    Biopower » Landfill Gas › Current Situation Assessment (1 of 2)

                                                                                     Power                          Electricity




                                                         Transportation
               Landfill Gas




                                                         Infrastructure
                                                                                                                 Transmission &                   Electricity




                                                          Collection &
                                                                                     CCHP                         Distribution
     Landfill gas is a mixture of roughly 50%
    methane gas and 50% CO2 created from the                                             Waste heat               Excess
       natural decomposition of the organic
                                                                                                                electricity
     fraction of municipal solid waste (MSW)
           that is disposed of in landfills.                                          Heat                                                      Thermal loads


                                                                                   Co-products          fertilizer (ash)


                                                     Collection &
                          Resources                                          Conversion & Refining                  Distribution                  Markets
                                                    Transportation

                 • CA is a national leader in   • Onsite LFG collection    • Methane collected from         • 228 MW exported to grid     • See Common Issues
                   landfill gas recovery and      systems required in        landfill typically fires         (from a total of 258MW in
                   utilization.                   larger landfills           reciprocating engines.           operation) (37 pg 50)
                                                                           • Some CHP applications (7       • See Common Issues.
                                                                             pg 23)
Utilization/                                                               • Avg size approx 2-5MW
 Situation
                                                                           • 59 facilities currently
                                                                             operate in CA (37 pg 50)
                                                                           • 258 MW in operation
                                                                             producing 1,921 GWh/yr (7
                                                                             pg 35)(37 pg 50)
                 • Fuel resource is generally   • Resource efficient due to • Capital costs range from      • See Common Issues           • IOU RPS allows
                   free or of little cost         co-location of fuel and     ~$1,100/kW for gas gensets                                    payment up to MRP
                                                  plant                       to $6,000/kW (7 pg 40) for                                    w/o SEP. Currently
                                                • Collection system costs     advanced technologies like                                    5.8¢/kWh
   Costs                                          are not a part of landfill  fuel cells.                                                 • 2 MW landfill gas
                                                  gas to energy project                                                                     project is estimated to
                                                  costs                                                                                     have a LCOE in 2003
                                                                                                                                            constant dollars of
                                                                                                                                            4.4¢/kWh (7 pg 42)



                                                                              47
  Biopower » Landfill Gas › Current Situation Assessment (2 of 2)




                                                   Collection &
                      Resources                                            Conversion & Refining                  Distribution                      Markets
                                                  Transportation

              • Waste diversion away         • Not all landfills have     • Cost of permitting and        • Because most facilities are      • See Common Issues
                from landfills limits          collections systems in       development for small           less than 10 MW,
                expansion of LFG facilities,   place.                       facilities is high on a per     interconnection process
                however current waste in     • Flaring may be more          kW basis                        can be simplified, but not
                place still provides a         economical than            • Highly efficient bioreactor     always the case
                product through 2017. (7       producing energy and         landfills only at             • Because AB 939 does not
                pg 29)                         may produce less             developmental stages (7 pg      allow diversion credit for
                                               emissions (but does not      29, 55)                         most conversion
                                               provide offsets from       • Flaring still has lower point   technologies, siting
                                               electricity generation).     source emissions than           facilities in jurisdictions
Constraints                                                                 internal combustion             that have not met
                                                                            engine. (7 pg 59)               diversion requirement may
                                                                                                            be difficult.
                                                                                                          • Siting facilities is difficult
                                                                                                            due to the approval
                                                                                                            requirements under county
                                                                                                            siting elements which
                                                                                                            require majority votes
                                                                                                            from jurisdictions with the
                                                                                                            majority of the populations
                                                                                                            for disposal facilities.




                                                                           48
 Biopower » Landfill Gas › Opportunity Assessment (1 of 2)



                                                 Collection &
                      Resources                                               Conversion & Refining           Distribution               Markets
                                                Transportation

             •79 BCF/yr is technical          •Gas collection             •Bioreactor landfills employ     •Utility               •By 2017 1/3 of the
              potential                        systems can be              leachate recirculation and       interconnection        state’s 20% RPS could
             •Expected to increase with        installed as a retrofit     membrane covers to               standards exist        come from LFG and
              population growth (7 pg 29)      at existing landfills       increase the rate of gas         under Rule 21          WWTP biogas (7 pg
                                              •Pretreatment of             generation, as do high-rate      could be               28, 36)
             •It is estimated that 1/3 of                                  in vessel digesters.             considered for LFG
              increase of biomass              waste prior to                                                                     •Is a natural fit for
                                               landfilling could          •242 MW technical potential       facilities to lower    municipal utilities
Potential,    generation will come from                                                                     cost of
              landfill and WWTP (37 pg 65)     mitigate long-term          producing 1803 GWh (7 pg                               •See Common Issues
                                                                                                            interconnection.
Timing, &                                      methane emissions           35)
             •Gas storage could be added       issues. (45 pg 30)
Magnitude     to digesters to increase                                    •Successful
              resource availability during                                 commercialization of fuel
              peak generation times (7 pg                                  cells & microturbines may
              23)                                                          make smaller (<500kW) LFG
                                                                           projects economic
             •Immediate shifts to
              bioreactor landfills can                                    •Gas collection system cost
              increase rate of gas                                         could be attributed to the
              generation by 30% by 2017. (7                                landfill operation. (7 pg 40)
              pg 23, 29)
             •Biogas can also produce         •Reduces fugitive                                            •See Common Issues
              transportation fuels or be       methane emissions
              upgraded to pipeline quality.    into atmosphere (7
              (7 pg 23)                        pg 23)
 Benefits




                                                                         49
Biopower » Landfill Gas › Opportunity Assessment (2 of 2)




                                                 Collection &
                         Resources                                       Conversion & Refining           Distribution               Markets
                                                Transportation

                •LFG is a cost competitive      •Improvement            •Increase public and policy   •Siting of facilities   •See Common Issues.
                 technology that is widely       in handling and         awareness about technology    needs to be
                 deployed in CA. More effort     separation              and benefits through          considered under
                 is needed on accelerating       technology (7           demonstration                 ‚Non Disposal
                 deployment and creating         pg 54)                 •See Common Issues             Facility Elements‛
                 opportunities at smaller                                                             •See Common
                 landfills                                                                             Issues
   Needs
                •Change view of landfill to a
                 biochemical reactor
                •Identifying improved
                 management strategies (7 pg
                 29)




                                                                   50
      Biopower » Landfill Gas › Potential Actions


                                                                                 Potential State Actions1
                      • Develop plan for rapid development of landfill gas opportunities. Should include technology needs (e.g., emissions, permitting,
                        interconnection, cost effectiveness of smaller sites) and business model needs as well as incentives to encourage facilities to upgrade with new
                        technology.
                      • Establish a streamlined approach to the New Source Rule (NSR) for LFGTE and other biogas power projects, including:
                      • Explore exemptions for biogas power technologies as Pollution Control Projects (PCPs), ‚essential public services,‛ and ‚resource recovery
                        projects.‛
Administrative
                      • See Common Issues
  Actions




                      • See Common Issues.
  Regulatory
   Actions

                      • Create state tax credits, energy investment tax credits or expand tax exempt financing from California Pollution Control Financing Authority
                      • Establish loan guarantee revolving fund to reduce risk
  Legislative         • See Common Issues
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                                  51
    Biopower » Wastewater Biogas and Sludge › Current Situation Assessment (1 of 2)



                                                                                    Power                         Electricity
       Wastewater Treatment




                                                         Transportation
                                                         Infrastructure
                                                                                                               Transmission &                    Electricity




                                                          Collection &
         Biogas & Sludge                                                            CCHP                        Distribution
    Methane of 60% concentration and resulting                                           Waste heat              Excess
     biosludge is created from the anaerobic                                                                   electricity
    digestion of organic matter in waste water
                                                                                     Heat                                                      Thermal loads
                    (7 pg 23)


                                                      Collection &
                          Resources                                         Conversion & Refining                 Distribution                   Markets
                                                     Transportation

                 • Organic biosolids sludge      • Onsite collection of    • Methane fuels                 • Approximately 1 MW is        • See Common Issues
                   transported off site and        methane and biosludge     reciprocating engines           exported to grid of the 63
                   highly utilized in non        • Biosludge transported     typically to run onsite         MW in generation(37 pg
                   energy uses (e.g.,              by truck for off site     treatment plant operations,     50)
                   agricultural land               utilization               and the waste heat is used    • See Common Issues
                   applications, NOx control                                 to enhance digester
Utilization/       in cement mixes, or to                                    efficiency.
                   landfills where they                                    • 18 plants in operation
 Situation         contribute to LFGTE (7 pg                                 produce 63 MW produce
                   23)                                                       469 GWh/yr (7 pg 35)
                 • Total BCF utilized in                                   • 115 facilities exist in the
                   power operations unclear                                  state, the total number of
                   (7 pg 23).                                                plants operating needs to
                                                                             be verified (37 pg 50)




                                                                             52
   Biopower » Wastewater Biogas and Sludge › Current Situation Assessment (2 of 2)



                                                                           Power                          Electricity




                                                  Transportation
                                                  Infrastructure
                                                                                                       Transmission &             Electricity




                                                   Collection &
                                                                           CCHP                         Distribution
       Wastewater Treatment
                                                                                 Waste heat             Excess
         Biogas & Sludge                                                                              electricity
                                                                            Heat                                                Thermal loads



                                                Collection &
                       Resources                                    Conversion & Refining                 Distribution            Markets
                                               Transportation

              • $0 costs due to onsite                             • $1,350/kW installed capital   • See Common Issues    • 4.06¢/kWh at 2005
                collection (37 pg )                                  costs and $175/kW O&M                                  current dollars with no
              • Transport and disposal                               for WWTP biogas in 2005                                PTC for a 1MW facility
                costs of biosludge                                   at 2004 dollars (37 pg 20)                             (37 pg 60)
  Costs
                unidentified, or, unclear if
                any money is received
                from sludge utilization.


              • Onsite food processing                                                             • See Common Issues.   • See Common Issues
                power applications would
                decrease disposal through
                municipal waste water
Constraints     systems and could
                decrease organic matter
                availability at WWTP




                                                                     53
Biopower » Wastewater Biogas and Sludge › Opportunity Assessment



                                               Collection &                 Conversion &
                      Resources                                                                           Distribution              Markets
                                              Transportation                  Refining
               •11 BCF/y technically                                   •15 MW & 109 GWh net           •Onsite food industry   •See Common Issues
                available today (7 pg 15)                               technical potential today      digesters
               •Increased adoption of                                   at current efficiency (7 pg
                anaerobic technologies                                  35)
                by munis increases                                     •Biological conversion
                biogas availability(7 pg                                genset efficiencies
 Potential,     29)                                                     estimated to remain
 Timing, &                                                              constant over time at
 Magnitude                                                              30%
                                                                       •$1,250/kW installed
                                                                        capital, $171/kW O&M
                                                                        in 2010. $1088/kW
                                                                        installed capital,
                                                                        $168/kW O&M in 2017
                                                                        (37 pg 20)
                                            •Onsite application        •Utilization reduces           •See Common Issues      •See Common Issues
                                                                        methane release into
                                                                        atmosphere
  Benefits


                                                                       •See Common Issues.            •See Common Issues      •See Common Issues.


   Needs




                                                                  54
      Biopower » Wastewater Biogas and Sludge › Potential Actions



                                                                         Potential State Actions1
                      • See Common Issues




Administrative
  Actions




                      • Incentives for increasing efficiency
  Regulatory          • See Common Issues
   Actions

                      • See Common Issues

  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                           55
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks


                    3   Biofuels Value Networks


                    4   Appendix




                                       56
     Biofuels » Simplified Value Network for Biofuels


                               Collection &                                     Conversion &
       Resources                                                                                            Distribution            Markets
                              Transportation                                      Refining


      AGRICULTURE
• Agricultural Residues




                                    Collection, Transportation Infrastructure
                                                                                   Power                       Electricity
• Energy Crops                                                                                               Transmission           Electricity
• Food Processing Residues                                                         CCHP                      & Distribution
• Animal Wastes (farm)

                                              Processing & Storage
• Animal Renderings                                                                    Waste heat              Excess
                                                                                                             electricity

         FORESTRY                                                               Process Heat&
• Forest Residues - Tree                                                                                                           Thermal loads
                                                                                Space Heating
  thinnings, slash, etc.                                                                                     Biofuel imports
• Onsite Mill Residues
                                                                                        Biodiesel

                                                                                                                Blending,
   MUNICIPAL WASTES                                                                Transport
                                                                                                               distribution,
• Diverted Municipal Solid                                                       Fuels; other                                        Vehicles
                                                                                                               marketing &
  Waste (MSW)                                                                    liquid Fuels
                                                                                                                  fueling
• Urban wood wastes
• Landfill Gas
• Wastewater Biogas
• Wastewater Sludge                                                              Co-products        e.g., food, feed, fertilizer
• Waste oils/fats/grease

     Resource Imports
                                                                                  57
Biofuels » Resources and Feedstocks

Biomass resources for biofuel production can be put into four main
feedstock categories.
         Resources
                                                                                Primary Biofuels Options
      AGRICULTURE
• Agricultural Residues                                                                   Feedstock for
• Energy Crops                                               Resource                     Conversion/                Conversion Process
• Food Processing Residues                                                                 Upgrading
• Animal Wastes (farm)
• Animal Renderings                                Agricultural Crops
                                                                                                                   • Biological conversion to
                                                   (sugars/starches), Food                Sugars/Starches
                                                                                                                     ethanol
         FORESTRY                                  Processing Residues2
• Forest Residues - Tree                           Agricultural Residues3,                                         • Biological conversion to
  thinnings, slash, etc.                           Energy Crops, Food                                                ethanol
• Onsite Mill Residues                                                                     Lignocellulosic
                                                   Processing Residues2,                                           • Thermochemical
                                                                                              Biomass
                                                   Offsite and On-site Forestry                                      conversion to multiple
   MUNICIPAL WASTES                                Residues, Diverted MSW                                            transportation fuels
• Diverted Municipal Solid
                                                   Agricultural Crops                                              • Physio-chemical
  Waste (MSW)
                                                   (beans/oils), Waste                         Bio-oils              conversion to biodiesel
• Urban wood wastes
• Landfill Gas                                     oils/fats/grease
• Wastewater Biogas                                Animal Waste (farm)                                             • Biological conversion to
• Wastewater Sludge                                                                        Landfill Gas &
                                                   Landfill Gas, Wastewater                                          multiple transportation
• Waste oils/fats/grease                                                                      Biogas
                                                   Biogas, Wastewater Sludge                                         fuels
1. Animal renderings are not included in the analysis since the availability, in significant quantities is based on unplanned, periodic events,
   which is not conducive to development of a biofuels industry.
2. Majority of Food Processing Residues is lignocellulosic based. Some small fraction is waste sugar and starch material; it is probably too
   dispersed and seasonal to be the base for major ethanol production in the state.
3. Approximately 80% of Agricultural Residues is estimated to be lignocellulosic content.
                                                                      58
        Biofuels » Options for Conversion and Refining

        Using the four major feedstocks there are multiple pathways to create
        transportation fuels (and other liquid & gaseous fuels).
                                                                                                                                                Physio-
                                          Biological                                                Thermochemical
                                                                                                                                               Chemical
                                         Conversion5                                                  Conversion
                                                                                                                                              Conversion

                    Sugar &
                                             Ligno-                                                         Ligno-                              Bio-oils
                    Starches                                    Landfill Gas &
Feedstock         (Agricultural
                                           cellulosic
                                                                   Biogas
                                                                                                          cellulosic                         (Waste oils/fats
                                          (All sources)                                                  (All sources)                       and Ag. crops)
                     crops)



                                          Cellulose-to-            Anaerobic                Gasification/                                         Trans-
Conversion       Fermentation                                                                                         Pyrolysis &
                                           sugars, then            digestion,                  syngas                                        esterification or
& Refining         of sugars
                                          fermentation              cleaning,                processing
                                                                                                                      upgrading
                                                                                                                                             Hydrogenation
                                                                   separation


 Primary                                                      • Pipeline quality         • Fischer-Tropsch         Upgraded bio-
  Energy                         Ethanol                        gas                        liquids                 oils (not very                Biodiesel
 Products                                                     • CNG                      • Mixed alcohols1         likely for
                                                              • LNG                      • DME2                    transportation)
                                                              • Hydrogen (via            • Ethanol3
                                                                reforming)               • Methanol
                                                                                         • Hydrogen
   1. Via catalytic synthesis. 2. Dimethyl ether. 3. Via syngas fermentation. 4. Pyrolysis oils require substantial upgrading before they can be used for
   transportation applications (e.g., before they can be processed in a conventional refinery). It is more likely they would undergo more modest
   upgrading for use as boiler fuel or in a stationary IC engine or gas turbine. 5. Also includes direct microbial conversion of sunlight to hydrogen.
                                                                                59
       Biofuels » Options for Conversion and Refining

       NCI considered four main routes of biomass conversion to
       transportation fuels which rely on three main feedstocks.1
                                                                                                                                              Physio-
                                         Biological                                              Thermochemical
                                                                                                                                             Chemical
                                         Conversion                                                Conversion
                                                                                                                                            Conversion

                    Sugar &
                                            Ligno-                                                       Ligno-                               Bio-oils
Feedstock           Starches                                  Landfill Gas &
                                          cellulosic                                                   cellulosic                          (Waste oils/fats
                  (Agricultural                                  Biogas
                                         (All sources)                                                (All sources)                        and Ag. crops)
                     crops)


              1                      2                                                3                                                4
                                         Cellulose-to-          Anaerobic                 Gasification/                                         Trans-
Conversion        Fermentation                                                                                    Pyrolysis &
                                          sugars, then          digestion,                   syngas                                        esterification or
& Refining          of sugars
                                         fermentation            cleaning,                 processing
                                                                                                                  upgrading
                                                                                                                                           Hydrogenation
                                                                separation

Primary                                                                              • Fischer-Tropsch         Upgraded bio-
 Energy                                                    • Pipeline quality          liquids                                                Biodiesel
                               Ethanol                                                                         oils (not very
Products                                                     gas                     • Mixed alcohols          likely for
                                                           • CNG                     • DME                     transportation)
                                                           • LNG                     • Ethanol
                                                           • Hydrogen (via           • Methanol
                                                             reforming)              • Hydrogen

  1. While all are technical feasible, these are considered the primary options based on a combination of resource potential and technology status.

                                                                             60
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                    3   Biofuels Value Networks

                           Ethanol from Sugar & Starch Fermentation

                           Ethanol from Lignocellulosic Fermentation

                           Fuels from Lignocellulosic Gasification

                           Biodiesel from Bio-oil Transesterification

                           Cross-Biofuels Policy Recommendations


                    4   Appendix

                                        61
Biofuels » Ethanol from Sugar & Starch Fermentation › Overview

California uses ~25% of U.S. ethanol production, but produces almost
none in-state.
•   All U.S. ethanol is produced from sugars & starches
    (almost entirely from corn)                               Ethanol from Sugar/Starch Fermentation
•   CA’s current demand for ethanol is ~ 1 billion gpy (7
    p 44).
•   Nationally, production capacity is ~4.1 billion gpy,                            Biological
    with ~1.7 billion gpy under construction.                                       Conversion
•   Conversion of sugar & starch feedstock to ethanol is a
    fairly mature process, with opportunities for
    efficiency improvements.
•   Currently CA does not have dedicated sugar & starch                      Sugar &
                                                                                                Ligno-
    crops for ethanol production and is importing almost                     Starches
    all ethanol consumed in the state; ethanol plants         Feedstock    (Agricultural
                                                                                              cellulosic
    under construction in CA are importing corn from the                                     (All sources)
                                                                              crops)
    Midwest.
•   Currently CA gasoline is ~6% ethanol content by
    volume, a renewable/non-petroleum/biofuel market
    inroad that would be extremely hard to match in the       Conversion                     Cellulose-to-
                                                                           Fermentation
    near-term with any other option. (T. McDonald                                             sugars, then
    personal communication)                                   & Refining     of sugars
                                                                                             fermentation
•   The Federal Energy Policy Act of 2005 eliminated the
    oxygenate requirement, and while a renewable fuel
    standard was imposed it is to be met by companies (as      Primary
    opposed to geographic regions) and can be done so           Energy
    anywhere in the country. Thus the future of ethanol in                             Ethanol
    CA is uncertain. (31 p 3)                                  Products


                                                         62
        Biofuels » Ethanol from Sugar & Starch Fermentation › Current Situation Assessment (1 of 3)




                                                                        Transportation
                                                                        Infrastructure
                                                                         Collection &
               Sugar & Starches                                                                                                           Blending,
        (Includes: Agricultural Crops and                                                         Transport Fuels;                       distribution,
                                                                                                                                                                              Vehicles
      approximately 20% of Agricultural and                                                      other liquid Fuels                      marketing &
            Food Processing Residues)                                                                                                       fueling


                                                                                                      Co-products

                                                              Collection &
                                 Resources                                                Conversion & Refining                  Distribution                           Markets
                                                             Transportation
                         • CA uses residual              • None currently, other • Most CA ethanol comes                   • CA gasoline contains         • In 2004 ~900 million gal ethanol
                           sugars, cheese whey;            than importation of     from Midwest plants                       on average ~6%                 was used in CA 2004 (20+% of US
                           resulting in 10MM gpy           ethanol via train     • As of 1/2006, US                          ethanol.                       total).
                           of ethanol                      (well established);     production capacity ~4.3b               • 70 CA petroleum              • Historically, ethanol cost +40-50
                         • No/minimal use of               ethanol plants          gpy with ~1.7b gpy under                  products terminals are         ¢/gallon of gasoline equivalent
                           sugar/starch crops              currently under         construction                              upgraded for ethanol.          higher than gasoline production
                           grown for fuels.                construction will                                                                                cost.
                                                           import corn from the • CA has about 35 million                  • Gasoline refiners in
                         • CA starting to import           Midwest.                gallons per year produced                 CA have long-term            • Almost no E85 use; although size
                           corn from Midwest                                       in-state using residual                   contracts for ethanol          of FFV fleet in CA exceeds 260,000
                           (Pacific Ethanol,                                       sugars from food                          delivery from the              vehicles (<1% of on-road vehicles)
  Utilization/             Phoenix Biofuels/25                                     processing and imported                   Midwest. [95%                  and is an order of magnitude
   Situation               MM gpy facility);                                       corn.*                                    delivered by rail, 5%          larger than next most numerous
                           fermentation residues                                         • One other project is              by barge/marine                alternative fuel vehicle category in
                           for animal feed; crop                                           currently under                   tanker]                        CA. Although sales are
                           material not fermented                                          construction in California      • One E85 retail                 decreasing. (29 p2)
                           could be burned for fuel                                        that would add another 35         refueling station; 4         • FEPA 2005 extended AMFA CAFÉ
                           on-site (e.g. corn                                              million gallons per year to       fleet refueling stations       credits through 2010 which
                           stalks)(7 p 44)                                                 California’s in-state             in CA (26)                     provide support for technology
                                                                                           supply. **                                                       viability; but does not assure
                                                                                         • Dry milling is the                                               expansion of current FFV market
                                                                                           technology of choice for                                         share or in-use FFV population (29
                                                                                           new plants                                                       p 4)

* Parallel Products, Rancho Cucamonga, has been in operation since 1984, producing up to 5 million gal/yr of ethanol from food and beverage industry wastes. Golden Cheese of California,
Corona, has been in operation since 1985, producing up to 3.5 million gal/yr of ethanol from cheese processing wastes. Phoenix Bioindustries/Western Milling Co., Goshen, started up a 25 million
gal/yr ethanol plant in the fall of 2005.
** Pacific Ethanol has a 35 million gallon/year plant under construction in Madera, also to use corn, with operation scheduled for fourth quarter 2006.
                                                                                                 63
Biofuels » Ethanol from Sugar & Starch Fermentation › Current Situation Assessment (2 of 3)




                                           Collection &                   Conversion &
                  Resources                                                                             Distribution                      Markets
                                          Transportation                    Refining
         • Startup costs associated   • Investments in trucks      • Capital cost is about      • Ethanol benefits from federal • Ethanol projected to stay
           with putting additional      for feedstock transport      $1.5 m per 1MM gpy of        tax policy that provides tax    competitive as new
           land under cultivation.    • Importing feedstock          production.                  credits when blended with       supply comes on-line;
                                        into CA requires           • Producing co-products        petroleum fuels, among          currently ethanol may be
                                        contracts with railroad      with ethanol is              other incentives                in excess supply.
                                        companies (a 35m gpy         important for              • The value of the tax credits   • Price of ethanol highly
                                        ethanol plant requires ~     profitability, up to 50%     for the blender is 51¢ per       dependant on incentives,
                                        1 train delivery of corn     of revenue can come          gallon of ethanol.               price of feedstock, and
                                        per week)                    from sales of co-                                             price of gasoline, but has
Costs                                                                products (31 p 20)                                            historically been in the
                                                                                                                                   range of $1.00-1.50/gal.
                                                                                                                                 • E85 could cost less than
                                                                                                                                   gasoline in near-term
                                                                                                                                   (20,23), although recent
                                                                                                                                   studies show that on an
                                                                                                                                   energy-per-gallon basis,
                                                                                                                                   the equivalent price is
                                                                                                                                   still above regular
                                                                                                                                   gasoline (29 p 4)




                                                                     64
   Biofuels » Ethanol from Sugar & Starch Fermentation › Current Situation Assessment (3 of 3)



                                                Collection &
                     Resources                                            Conversion & Refining                  Distribution                       Markets
                                               Transportation
              • Currently, there are no   • In CA the infrastructure     • Modern corn dry-milling     • Because of its               • FEPA 2005 eliminates
                dedicated feedstocks        is currently not in place,     technology produces only      characteristics (phase         oxygenate requirement;
                grown in CA for             and would need to be           modest net energy gains       separation resulting from      making long-term demand
                ethanol production.         developed in parallel to       relative to petroleum fuels   solubility in water),          for ethanol in CA
              • The main candidate          crop production.               (when considering the         pipeline operators have        uncertain. Federal RFS can
                crops are corn and                                         entire fuel chain), but does  been reluctant to ship         be met by companies on a
                sweet sorghum                                              produce significant           ethanol or ethanol-gasoline    nation-wide basis. (31 p
                                                                           petroleum displacement        blends, on a commercial        17)
              • There are no                                               (Wang)                        scale. Ethanol is shipped
                comprehensive studies                                                                                                 • E10: Higher ethanol blends
                                                                         • Production in CA could        by truck or railroad to        with gasoline (e.g., E10)
                on what it would take                                                                    finished product terminals.
                to create dedicated                                        lead to some price pressure                                  opposed by CARB b/c/o
                                                                           on natural gas (5 p 44),      At higher ethanol blends       evaporative emissions and
                sugar & starch                                                                           separation is less likely to
                feedstocks for ethanol                                     unless other fuels (e.g.,                                    increased NOx (not an
                                                                           biomass residues) are used    occur and pipelines can be     issue with E85).
                in CA or what the                                                                        used to ship ethanol. (31 p
                potential is.                                              to meet mill energy needs.                                 • E85: There is some
                                                                           Every gallon of ethanol       11)
Constraints                                                                                                                             uncertainty if US auto
                                                                           requires ~40,000 Btu of     • One critical element for the   manufactures will
                                                                           natural gas.                  FFV is availability of         continue to make FFV & if
                                                                                                         infrastructure to provide      they will invest in E85
                                                                                                         E85 as an alternative fuel.    specific emissions issues
                                                                                                         (31 p 29) which is a           (26,20). Vehicles generally
                                                                                                         ‚daunting proposition‛ (29     require 1.34 g of E85 to
                                                                                                         p 4)                           replace 1 g of gasoline (29
                                                                                                          • Current distribution           p 4)
                                                                                                            network has limited          • Ethanol w/ Diesel: No
                                                                                                            capacity for ‚segregation‛     ASTM specs for use of
                                                                                                            (keeping E85 separate from     ethanol with diesel. Other
                                                                                                            other fuels) (need delivery    technical barriers also exist
                                                                                                            infrastructure, refueling      for using ethanol in diesel
                                                                                                            stations and certified vapor   engines (e.g., materials
                                                                                                            recovery)                      compatibility) (26)




                                                                              65
 Biofuels » Ethanol from Sugar & Starch Fermentation › Opportunity Assessment (1 of 2)


                                                  Collection &
                       Resources                                      Conversion & Refining           Distribution             Markets
                                                 Transportation

            • Best near-term opportunity for • Would need to         • In 2030 even if 4 million                     • Consuming over 20% of total
              dedicated crop development       develop alongside       FFVs in CA used E40 (on                         US production, in-state
              is on retired land in San        in-state production     average) and the rest of the                    ethanol production could
              Joaquin Valley                   capacity and be         fleet used E10, CA would                        support huge demand even
            • CA DFA studies identified        commensurate in         represent <20% of U.S.                          without any increase in
              sweet sorghum, kenaf,            scale.                  projected production.                           demand.
              Jerusalem artichoke sugar                                                                              • CA gasoline expected to
              beets and eucalyptus. If on                                                                              maintain 15-35 ¢/gallon
              1MM acres, could generate                                                                                retail premium, which could
              500MM gpy. (31 p 22)                                                                                     ensure ethanol supply to CA
            • Corn in CA generally                                                                                     market (over other states)
              considered uneconomical;                                                                               • Widespread E10 could
              recent industry analysis                                                                                 displace 9% of on road gas
              shows CA production more                                                                                 and diesel by 2025 and result
Timing &      energy efficient (dry corn w/                                                                            in demand of 1.4b gpy by
Magnitude     sun in CA) (31 p 22)                                                                                     2020, 40% of CA alternative
            • CA has approx. 1 mdt/y of                                                                                fuel goal. (20 p AD-2F-1)
              sugar & starch feedstock                                                                               • Elimination of Federal
              available from Agricultural                                                                              requirements for oxygenate
              and Food Processing Residues                                                                             means that these
              (7), however, this would be                                                                              requirements cannot be
              difficult for a dedicated                                                                                counted on to assure long-
              ethanol plant because the                                                                                term ethanol market
              feedstock may be highly                                                                                • Pursing an E85 strategy for
              dispersed and seasonal                                                                                   meeting state goals is a
            • Estimated dedicated crop                                                                                 longer-term strategy than
              technical potential by 2020 is 5                                                                         promoting/mandating E10
              M BDT/y with 90%
              availability (includes
              lignocellulosic and oil and
              sugar crops, no break-out for
              sugar & starch crops (5 p S.3).



                                                                       66
Biofuels » Ethanol from Sugar & Starch Fermentation › Opportunity Assessment (2 of 2)


                                                Collection &
                     Resources                                       Conversion & Refining            Distribution                   Markets
                                               Transportation

           • Local source of DDGS or         • Would provide        • Could combine               • Ethanol at a blend    • Higher ethanol content
             similar co-products may           additional             conventional ethanol          level of up to 10%      provides hedge against
             lower animal feed costs           employment to          production with use of        can be used in          petroleum price increases
           • Increased agricultural            trucking.              agricultural residues or      conventional          • Assuming CA refiners/
             production in CA                                         other biomass as fuel for     gasoline fuel systems   marketers exceed their
           • GHG emissions reductions                                 the ethanol plants            with little or no       Federal RFS requirements,
                                                                    • Additional in-state jobs      change from             they may have excess credits
           • CA could leverage residues                                                             production to end-
             to offset NG costs in ethanol                            associated with local                                 to sell.
                                                                      ethanol industry              use                   • ‚Ethanol blending is now
             production.
Benefits   • Dedicated crop production                                                                                      widely recognized as a
             might lead to crop shifting                                                                                    viable public policy strategy
             but could utilize marginal                                                                                     with greatest near-term
             lands (5 p 2.4)                                                                                                potential to reduce
                                                                                                                            petroleum dependence and
                                                                                                                            CO2 emissions.‛ (REAP)
                                                                                                                          • FFVs have merits as an
                                                                                                                            alternative fuel vehicle
                                                                                                                            because consumers have
                                                                                                                            option to fuel with
                                                                                                                            petroleum-based gasoline or
                                                                                                                            ethanol
           • Assistance for farmers       • In state crops for      • Continued improvements     • For E85 market to      • Consistent state policy on
             converting to new crops or     ethanol would             in conventional technology   expand, distribution     ethanol to stimulate high
             expanding production on        require                   to reduce energy needs and   infrastructure is        capital investment required.
             idle land.                     infrastructure; could     to improve value of co-      required               • For E85 market to expand,
           • Assessment of potential land   take advantage of         products (e.g., corn dry                              consumers need awareness
Needs        and water implications.        existing farm             fractionation)                                        of FFV options (26)
                                            infrastructure.         • If corn is not the main
                                                                      feedstock, finance
                                                                      community may need
                                                                      additional assurances to
                                                                      offset perceived risk




                                                                      67
      Biofuels » Ethanol from Sugar & Starch Fermentation › Potential Actions


                                                                                 Potential State Actions1
                       • Assess sugar/starch crop potential and issues relative to other energy crops or biodiesel crops
                       • Support RD&D to better understand which sugar/starch crops would be best suited to conventional ethanol production
                       • Conversion support or incentives for farmers to switch to sugar/starch crops
                       • Assistance in resolving air quality issues
                       • Examine a ‚systems‛ or ‚portfolio‛ approach to air quality` issues which allows tradeoffs along the value chain.
                       • Create ethanol (or more broadly, biofuel) purchasing program for state or local vehicle fleets (see Carl-Moyer program which accelerated
                         adoption of cleaner and cost-effective vehicles at the municipal level)
                       • Establish fuel specifications that promote the increased use of biofuels in transportation fuels.
                       • No backsliding – declare ethanol will be part of fuel mix at minimum of current levels for next 10 years, to maintain existing demand in order
Administrative           to create a market [production]).

  Actions              • Education/outreach
                       • Research exhaust emissions and permeation effects of low ethanol blends on environment (31 p 57)
                       • Encourage in-state production opportunities until blending issue is resolved and RFS is in place, create minimum annual statewide ethanol
                         consumption levels.
                       • Initiate an effort to install an extensive E-85 fueling network throughout California (in cooperation with the Energy Commission, ARB and the
                         Department of Food and Agriculture).
                       • Encourage auto companies to expand production of FFVs, including FFV hybrids.
                       • Create a FFV and alternative fuel purchasing program for state or local vehicle fleets (see Carl-Moyer program which accelerated adoption of
                         cleaner and cost-effective vehicles at the municipal level).
                       • Revise the state’s vehicle procurement process to encourage the purchase of flexible fueled vehicles. Develop convenient fueling infrastructure
                         to support FFV fleet.




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                                   68
      Biofuels » Ethanol from Sugar & Starch Fermentation › Potential Actions


                                                                                 Potential State Actions1
                       • Address air quality issues holistically to enable higher blends of ethanol in gasoline
   Regulatory
    Actions

                       • Legislation for a Renewable Fuel Standard that creates a longer term market for ethanol, consistent with other state goals on transportation
                         energy use and GHG emissions
                       • Like Minnesota, CA could adopt aggressive policies to provide incentives for E85 refueling stations.
   Legislative         • Package of tax incentives, production incentives, loan guarantees, and/or grants to encourage in-state production and use of biofuels. Exact mix
                         of incentives TBD.
    Actions            • Establish stable funding to establish needed bio-fueling infrastructure
                       • Consider phasing in requirement for FFVs for all vehicles sold in the state
                       • Take steps to facilitate transition of all vehicles to FFVs, including the phasing in of a requirement to have all vehicles sold in the state be FFVs




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                                   69
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                    3   Biofuels Value Networks

                           Ethanol from Sugar & Starch Fermentation

                           Ethanol from Lignocellulosic Fermentation

                           Fuels from Lignocellulosic Gasification

                           Biodiesel from Bio-oil Transesterification

                           Cross-Biofuels Policy Recommendations


                    4   Appendix

                                        70
    Biofuels » Ethanol from Lignocellulosic Fermentation › Overview

    The conversion of lignocellulosic feedstock to ethanol is not yet
    commercial; but could have tremendous benefit for CA.
•   Dedicated biomass crops, including herbaceous and
    woody crops, have not emerged as a large scale            Ethanol from Lignocellulosic Biomass
    agricultural enterprise in CA, but there is increasing
    interest due to changes in renewable fuels, including
    ethanol (5)                                                                    Biological
                                                                                   Conversion
•   Ethanol production from cellulosic biomass is still
    developmental (5)
•   Cellulose conversion may contribute over the long
                                                                            Sugar &
    term, and represents a larger resource base than                                           Ligno-
                                                                            Starches
    sugars and starches.                                     Feedstock    (Agricultural
                                                                                             cellulosic
                                                                                            (All sources)
•   Ethanol from lignocellulosic biomass can achieve                         crops)
    much higher net energy gains have the potential for
    lower cost than ethanol from sugars and starches. (5)
                                                             Conversion                     Cellulose-to-
•   ‚With high land prices and crop values, the                           Fermentation
                                                                                             sugars, then
    prospects of a flourishing CA ethanol industry           & Refining     of sugars
                                                                                            fermentation
    heavily depends on using cellulosic material for
    feedstock. ‚(26 p 3)
                                                              Primary
•   ‚Feasibility of *lignocellulosic+ ethanol industry in      Energy                 Ethanol
    CA depends largely on the development of new and
                                                              Products
    more efficient technologies that convert biomass to
    ethanol and significantly decrease cost.‛ (26 p 26)
                                                       71
     Biofuels » Ethanol from Lignocellulosic Fermentation › Current Situation Assessment (1 of 2)




                                                            Transportation
                                                            Infrastructure
                                                             Collection &
    Lignocellulosic Biomass                                                                                                Blending,
  (Agricultural Residues*, Energy Crops,                                             Transport Fuels;                     distribution,
                                                                                                                                                       Vehicles
  Food Processing Residues*, Offsite and                                            other liquid Fuels                    marketing &
  On-site Forestry Residues, MSW, Urban                                                                                      fueling
                   Wood)

                                                                                         Co-products



                                                      Collection &
                           Resources                                                Conversion & Refining                      Distribution            Markets
                                                     Transportation
                  • Current utilization of the     • CA has an               • Pilot facilities are in operation in the   • See ‚Ethanol from   • See ‚Ethanol from
                    lignocellulosic resource is      abundant amount           U.S. and Canada at scales <1 mmgpy.          Sugar & Starch‛       Sugar & Starch‛
                    detailed in the biopower         of feedstock;           • No commercial lignocellulosic plants         Fermentation          Fermentation
                    section.                         challenge is cost
Utilization/                                         competitive access.
                                                                               are in operation, but several have
                  • No lignocellulosic energy                                  been proposed over the years.
 Situation          crops are being grown in         (31 p 24)
                                                                             • Investment capital has been
                    CA                             • See relevant              unavailable (31 p 3); level of risk
                                                     biopower value            uncertain (31 p 21)
                                                     networks
                  • Unknown for ethanol            • See relevant            • Unknown but cost is targeted to be         • See ‚Ethanol from   • See ‚Ethanol from
                    production; but see              biopower value            similar to sugar/starch to ethanol           Sugar & Starch‛       Sugar & Starch‛
                    lignocellulosic feedstocks       networks                  productions.                                 Fermentation          Fermentation
                    in the biopower section for                              • Current state-of-the-art is about $4-
                    information on costs.                                      5/gallon-yr of capacity for a world
    Costs
                  • For cellulosic ethanol, each                               scale plant (>100 MM gpy). Target is
                    additional $10/ton for                                     much lower.
                    feedstock results in $0.07-                              • Long-term target is production cost
                    0.14/gal; feedstock cost is                                <$1/gal (7 p50).
                    critical (7 p 50)

* Approximately 80% is estimated to be lignocellulosic




                                                                                    72
   Biofuels » Ethanol from Lignocellulosic Fermentation › Current Situation Assessment (2 of 2)




                                           Collection &
                    Resources                                            Conversion & Refining                      Distribution            Markets
                                          Transportation
              • Current resource is   • See relevant biopower     • Commercial scale, low-cost cellulosic      • See ‚Ethanol from   • See ‚Ethanol from
                distributed.            value networks              ethanol will not be available for            Sugar & Starch‛       Sugar & Starch‛
                                      • Major production            several years; technology is just            Fermentation          Fermentation
                                        challenge is cost of        approaching readiness for
                                        collection and handling     commercial demonstration
                                        for forest, ag and other    (>10MMGPY).
                                        cellulosic wastes (31 p 3) • Cost issues related to enzyme
                                      • Plants may need to be        manufacturing, fermentation
                                        located near resources       technology and high-capital cost of
                                        (31 p 24)                    pre-treatment
                                                                  • Permitting process significantly
Constraints                                                         increases the cost of sitting an ethanol
                                                                    plant; it can take 12 – 18 months. (31 p
                                                                    27)
                                                                  • Plant size matters as economies of
                                                                    scale apply. However, size is limited
                                                                    by availability of feedstock (31 p 28).
                                                                  • CA producers have to compete with
                                                                    mature Midwest ethanol industry
                                                                    based on corn and other countries
                                                                    where production costs are lower
                                                                    (although import tax currently
                                                                    reduces this threat) (31 p 28)




                                                                         73
 Biofuels » Ethanol from Lignocellulosic Fermentation › Opportunity Assessment (1 of 2)



                                                            Collection &
                            Resources                                                 Conversion & Refining              Distribution          Markets
                                                           Transportation

               • Even without new energy crops, CA • See relevant biopower • If cost effective technology              • See ‚Ethanol from • See ‚Ethanol
                 has 27 mdt/y of lignocellulosic          value networks           exists to convert lignocellulosic     Sugar & Starch‛     from Sugar &
                 feedstock technically available.1      • Challenges related to    feedstock to ethanol, then there      Fermentation        Starch‛
               • Rice straw is most attractive source     collection of forest     are business opportunities in                             Fermentation
                 (31 p 24).                               materials (delicate eco- CA.

               • Cellulosic biomass could support         systems, cost) and
                 1.5b gpy (@ 70 gal. of ethanol per ton   agricultural residues
                 of biomass). The same amount from        (cost, storage, wet
                 corn would require 3 million acres       materials). (31 p 23)
                 (1/3 irrigated land in CA) and 12
                 million acre-feet of water (7)
Timing &
               • Trials underway on salt tolerant
Magnitude        species for application in salt-
                 affected San Joaquin Valley. (5 p
                 S.2.4)
               • Could achieve scale similar to
                 biopower w/ability to accept large
                 quantities of biomass (7)
               • Estimated dedicated crop technical
                 potential by 2020 is 5 M BDT/y with
                 90% availability (includes
                 agricultural oil and sugar & starch
                 crops, no break-out for
                 lignocellulosic ‚energy‛ crops) (5 p
                 S.3)




1. Approximately: 4 mdt/y Agricultural & Food Residues, 14 mdt/y on-site & Off-site Forestry Residues, 9.2 mdt/y Diverted MSW.

                                                                           74
Biofuels » Ethanol from Lignocellulosic Fermentation › Opportunity Assessment (2 of 2)




                                                        Collection &
                        Resources                                                 Conversion & Refining               Distribution          Markets
                                                       Transportation

           • Lignocellulosic plants may have        • See relevant biopower   • A biofuel plant could be sited      • See ‚Ethanol from • See ‚Ethanol
             environmental remediation                value networks            where a biopower plant cannot         Sugar & Starch‛     from Sugar &
             potential                                                          because large electricity             Fermentation        Starch‛
           • Additional farm income from new                                    transmission capacity out of                              Fermentation
             crops and/or sale or residues                                      facility is not needed for
           • Beneficial use of marginal land                                    biofuels.
           • If starch/sugar crops also grown for                             • Plants could be energy self
             ethanol, residues could be used for                                sufficient, thus contributing to
             cellulosic ethanol to bring additional                             the RPS and not impacting NG
             economies of scale.                                                markets.
Benefits
           • CA rich in ag and forestry
             lignocellulosic resources (31 p 23)
           • Dedicated crop production might
             lead to crop shifting but could
             utilize marginal lands (5 p 2.4)
           • Ethanol produced from
             lignocellulosic material is about 3
             times more effective in reducing
             GHG compared to corn (45 p 39)
           • Better inventory of available         • See relevant biopower    • Research on radically reducing      • See ‚Ethanol from • See ‚Ethanol
             lignocellulosic resources in CA.        value networks             cost of enzyme production and         Sugar & Starch‛     from Sugar &
                                                   • New/improved               fermentation. (7)                     Fermentation        Starch‛
                                                     techniques and           • Commercial scale plant is                                 Fermentation
Needs                                                technologies for           required to test recent
                                                     harvesting residues.       developments in enzyme
                                                                                manufacturing; high capital
                                                                                cost of pre-treatment is barrier.




                                                                       75
      Biofuels » Ethanol from Lignocellulosic Fermentation › Potential Actions


                                                                               Potential State Actions1
                      • Identifying financing for start-up companies will remain an important consideration in bringing new products to market.
                      • Assess energy crop potential and issues relative to other land uses
                      • RD&D on new/improved harvesting of agricultural residues
                      • Commercialization program for cellulosic ethanol in California
Administrative
                      • RFS should contain provisions that encourage in-state cellulosic ethanol (similar to Federal RFS)
  Actions
                      • Conduct RD&D on critical technology platforms needed to commercialize lignocellulosic biofuels, including enzyme production for cellulosic
                        ethanol and thermochemical conversion options.
                      • Figure out how to get an integrated biorefinery built in California
                      • Seek a larger portion of DOE research funds for bioenergy
                      • Streamlined permitting for cellulosic ethanol plants (maybe to also encourage cogeneration with lignin residues or co-location with existing
  Regulatory            biomass power plants)
   Actions


  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions. Implicit here is that all
   the market and fuel related issues from Sugar & Starch ethanol production also apply here. The actions listed here are focuse d more on resources
   and production technology.

                                                                                  76
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                    3   Biofuels Value Networks

                           Ethanol from Sugar & Starch Fermentation

                           Ethanol from Lignocellulosic Fermentation

                           Fuels from Lignocellulosic Gasification

                           Biodiesel from Bio-oil Transesterification

                           Cross-Biofuels Policy Recommendations


                    4   Appendix

                                        77
 Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Overview

 Gasification can turn almost any biomass resource into transportation
 fuel; NCI considered those most likely to contribute significantly.
                                                                                 Multiple Fuels from Lignocellulosic
 • There are benefits to CA considering                                             Gasification and Processing
   non-ethanol transportation fuel
   options given the air quality concerns                                                               Thermo-
                                                                                                        chemical
   associated with ethanol                                                                             Conversion
 • Gasification of lignocellulosic material
                                                                                                           Ligno-
   may be a better use of California’s                                         Feedstock                 cellulosic
   resources than the diversion of sugar                                                                (All sources)
   and starch crops to ethanol
   production.
                                                                              Conversion     Gasification/
                                                                                                                  Pyrolysis &
 • There are potentially large emissions                                      & Refining        syngas
                                                                                                                  upgrading
                                                                                              processing
   benefits for CA to develop substitutes
   for diesel fuel.                                                                        • Fischer-Tropsch    Upgraded bio-
                                                                                             liquids            oils (not very
 • Pyrolysis is less mature than                                                           • Mixed alcohols1    likely for
                                                                               Primary
   gasification, but in the long-term                                           Energy     • DME2               transportation) 4
   could also contribute to the overall                                                    • Ethanol3
                                                                               Products
                                                                                           • Methanol
   energy mix.                                                                             • Hydrogen
1. Via catalytic synthesis. 2. Dimethyl ether. 3. Via syngas fermentation.

                                                                         78
 Boilerplate Materials » Chevrons
 Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Technology Options (1 of 2)

 NCI considered three thermochemically-derived fuels as the most
 likely to contribute significantly to CA transportation fuel demand.

  Biofuel                                               Comments
                •High-performance diesel blendstock. Fischer-Tropsch (FT) liquids can be blended with
                 diesel. FT diesel is sulfur free, contains no aromatics and is high cetane. The conversion
  Fischer-
                 technology (for clean syngas to FT liquids) is relatively well established and several
Tropsch (FT)
                 large plants, based mainly on natural gas, are under construction around the world.
  Liquids
                 Crude FT liquids can be readily refined in stand-alone plants or can be brought to
                 existing petroleum refineries.
                •Gasoline additive. Mixed alcohols can be treated like ethanol, but offer higher octane
  Mixed          and energy density. The conversion technology (specifically, catalysts for MOH
 Alcohols        synthesis) is still is development, but one U.S. company (Power Energy Fuels Inc) is
 (MOH)           preparing to market a MOH product (Ecalene) and has received EPA registration, but
                 in general, will require certification for use in transportation applications.
                •Clean diesel replacement. DME is being considered in Europe as a substitute for diesel,
                 with significant emissions benefits (mainly NOx and particulates). However, DME
                 requires motor vehicle conversion since it must be stored similar to propane. For fleet
   DME
                 vehicles this is an option. DME production from clean syngas is straight forward, as it
                 is almost identical to methanol production. In the near-term DME could be blended
                 with propane for traditional cooking and heating applications.


                                                   79
Boilerplate Materials » Chevrons
Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Technology Options (2 of 2)

NCI did not consider other processes due to concerns regarding
potential to contribute to transportation fuel demand.

      Biofuel                                          Comments
    Ethanol (via    •Gasoline additive. The technology to produce ethanol via syngas
      syngas         fermentation is still in early stage development.
   fermentation)
                    •Gasoline additive. There are serious barriers to methanol uptake in the
     Methanol        marketplace due to concerns over toxicity and handling.


                    •Transportation fuel replacement. This is a long-term option dependant on
                     development of a hydrogen distribution and retail infrastructure within the
                     state, as well as hydrogen storage and hydrogen-powered vehicles.
     Hydrogen        However, biomass-derived hydrogen may be the lowest cost option for
                     renewable hydrogen, and developments with other thermochemically-
                     derived biofuels will benefit hydrogen production (e.g., gasification and gas
                     cleanup).




                                                  80
     Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Current Situation Assessment




                                                            Transportation
                                                            Infrastructure
   Lignocellulosic Feedstock




                                                             Collection &
                                                                                                                             Blending,
  (Agricultural Residues*, Energy Crops,                                              Transport Fuels;                      distribution,
   Food Processing Residue*, Offsite and                                                                                                                      Vehicles
                                                                                     other liquid Fuels                     marketing &
  On-site Forestry Residues, MSW, Urban                                                                                        fueling
                   Wood)

                                                                                          Co-products

                                                      Collection &
                            Resources                                               Conversion & Refining                      Distribution**                Markets**
                                                     Transportation
                   • No lignocellulosic biomass     • See relevant           • FT (BTL) has been produced in small        • CEC staff assume            • Not currently used
                     resource is being gasified       biopower value           quantities in Europe (20)                    existing diesel fuel retail
                     in CA for biofuels.              networks                                                              infrastructure can store
                                                                             • Developing thermochemical
                   • Utilization of the                                        technologies may provide alternative         and dispense diesel
Utilization/                                                                                                                with up to 20% RE
                     lignocellulosic resource are                              for large-scale lignocellulosic
 Situation           detailed in the biopower                                  fermentation for ethanol production          diesel content w/o
                     section.                                                  (7 p 44)                                     modifications (20)
                   • See also relevant biopower
                     value networks
                   • See relevant biopower          • See relevant           • FT (BTL) has the potential to be the                                   • FT (BTL) fuel is
                     value networks                   biopower value           most productive per acre of RE diesel                                    anticipated to have 0-
                                                      networks                 fuel options and produces higher                                         30% higher costs than
    Costs                                                                      quality fuel (20)                                                        diesel. Recent studies
                                                                             • In general, TC conversion options                                        say 7% higher. (20)
                                                                               should have highly yields per acre by
                                                                               virtue of utilizing the entire plant.
                   • See relevant biopower          • See relevant           • FT (BTL) has significant capital cost, • DME would require             • Current biodiesel tax
                     value networks                   biopower value           plant complexity and risk compared       new fuel infrastructure         incentives do not
                                                      networks                 to conventional crude production and                                     apply to FT (BTL) (20)
Constraints                                                                    refining (20).                                                         • Same is true of DME
                                                                             • FT (and DME and Mixed-OH)                                                unless can be blended
                                                                               facilities for biomass are conceptual at                                 with existing fuels
                                                                               this time (7 p 47)
* Approximately 80% is estimated to be lignocellulosic.
** Ethanol Distribution and Markets covered in ‚Ethanol from Sugar & Starch Fermentation‛

                                                                                     81
 Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Opportunity Assessment (1 of 2)



                                                  Collection &
                         Resources                                         Conversion & Refining                   Distribution2            Markets2
                                                 Transportation
                • Cellulosic biomass could       • See relevant     • Largely unknown due to multiple            • Would need to be • CEC staff assume 5%
                  support 1.5b gpy (@ 70 g of      biopower value     technology developments that are             developed in       displacement of diesel
                  ethanol per ton of               networks           required (gasification, gas cleanup,         parallel to        with RE diesel by 2015
                  biomass). The same                                  synthesis technologies)                      production & use   and 20% by 2025
                  amount from corn would                            • FT (BTL): unknown future volume (20)                            (1000m gpy)
                  require 3 million acres (1/3
                  irrigated land in CA) and                         • Generally speaking, could be large as it
                  12 million acre-feet of                             leverages California’s significant
                  water (7)                                           lignocellulosic resources.
                • Trials underway on salt                           • E.g., every 1 million dry tons could
                  tolerant species; for                               produce ~70 MM gal of FT liquids
Timing &          application in salt-affected
Magnitude         San Joaquin Valley
                • Even without new energy
                  crop, CA has 27 mdt/y of
                  lignocellulosic feedstock
                  technically available.1
                • Estimated dedicated crop
                  technical potential by 2020
                  is 5 M BDY/y with 90%
                  availability (includes
                  agricultural oil and sugar
                  & starch crops, no break-
                  out for lignocellulosic
                  ‚energy‛ crops) (5 p S.3)




1. Approximately: 4 mdt/y Agricultural & Food Residues, 14 mdt/y on-site & Off-site Forestry Residues, 9.2 mdt/y Diverted MSW.
2. Ethanol Distribution and Markets covered in ‚Ethanol from Sugar & Starch Fermentation‛

                                                                           82
 Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Opportunity Assessment (2 of 2)




                                                        Collection &
                              Resources                                              Conversion & Refining                  Distribution**             Markets**
                                                       Transportation
                    • Lignocellulosic plants may      • See relevant         • FT liquids offer a higher degree of         • FT liquids should • Higher FT costs may
                      have environmental                biopower value         tailoring for specific engines than           be largely          offset costs associated
                      remediation potential             networks               biodiesel (7 p 45)                            fungible with       with compliance with
                    • Dedicated crop production                              • In the long term, thermochemical              existing            low-sulfur diesel
                      might lead to crop shifting                              conversion could be combined with             infrastructure.     requirements.
                      but could utilize marginal                               traditional biological conversion plants    • MOH should be      • MOH currently eligible
 Benefits             lands (5 p 2.4)                                          to create fully integrated biorefineries.     largely fungible     for key Federal
                                                                             • Elements of TC biofuels plants can also       with existing        incentives
                                                                               be used for power generation (e.g.,           ethanol            • DME could have near-
                                                                               gasification, gas cleanup)                    infrastructure       term market blending
                                                                                                                                                  with propane to ease
                                                                                                                                                  transition to transport
                                                                                                                                                  fuel
                    • Assessment needed of            • See relevant         • Investment for production capacity to       • FT – no special  • Clear, long-term state
                      economic feasibility of           biopower value         meet 20% diesel replacement goal is           needs              government program
                      feedstocks for attaining          networks               unknown (20)                                                     to encourage
                                                                                                                           • DME – new
   Needs              20% diesel displacement                                • Impacts on cost of evolving technology        infrastructure     development of
                      CA goal. (20)                                            and possible increases in feedstock cost                         necessary
                                                                                                                           • MOH – similar to   infrastructure
                                                                               unknown (20)                                  ethanol




** Ethanol Distribution and Markets covered in ‚Ethanol from Sugar & Starch Fermentation‛


                                                                                    83
      Biofuels » Multiple Fuels from Lignocellulosic Gasification & Processing › Potential Actions


                                                                              Potential State Actions1
                      • Identifying financing for start-up companies will remain an important consideration in bringing new products to market.
                      • Assess energy crop potential and issues relative to other land uses
                      • Conduct RD&D on critical technology platforms needed to commercialize lignocellulosic biofuels, including enzyme production for cellulosic
                        ethanol and thermochemical conversion options.
Administrative        • RD&D on new/improved harvesting of agricultural residues
  Actions
                      • RD&D on critical technology platforms needed to commercialize thermochemical (TC) derived biofuels
                      • Commercialization program for TC-derived biofuels in California
                      • RFS should contain provisions that encourage in-state TC-derived biofuels (similar to how Federal RFS gives ‚bonus credits‛ to cellulosics
                        ethanol)
                      • Streamlined permitting for TC biofuel plants (maybe to also encourage co-location with existing biomass power plants)
  Regulatory          • Necessary fuel specs for the various TC-derived biofuels.
   Actions

                      • Incentives for TC-derived biofuels production, distribution and fueling infrastructure (e.g., production incentives, investment
                        tax credits, fuel excise tax exemptions)
  Legislative
   Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                                    84
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                    3   Biofuels Value Networks

                           Ethanol from Sugar & Starch Fermentation

                           Ethanol from Lignocellulosic Fermentation

                           Fuels from Lignocellulosic Gasification

                           Biodiesel from Bio-oil Transesterification

                           Cross-Biofuels Policy Recommendations


                    4   Appendix

                                        85
Biofuels » Biodiesel from Bio-oil Transesterification › Overview

NCI considered four main routes of biomass conversion to
transportation fuels which rely on three main feedstocks.
                                                                      Biodiesel from Bio-oil
• Biodiesel feedstock comes from two                                   Transesterification
  main biomass resources; waste oils,                                          Physio-
  fats and grease and agricultural crops                                      Chemical
  such as soybeans and oil seeds                                             Conversion

• There are currently no dedicated oils
  crops in CA being used for biodiesel                                          Bio-oils
                                                         Feedstock         (Waste oils/fats and
  production                                                                 Agricultural crops)

• Biodiesel’s maximum on-road
  transportation fuel displacement is                                            Trans-
  frequently characterized as 5% on an                   Conversion
                                                                            esterification or
                                                         & Refining         Hydrogenation
  average nationwide basis by the
  biodiesel industry; higher blends are                    Primary
  possible.                                                 Energy             Biodiesel
                                                           Products



                                                  86
    Biofuels » Biodiesel from Bio-oil Transesterification › Current Situation Assessment (1 of 2)




                                                           Transportation
                                                           Infrastructure
                                                            Collection &
                                                                                                                     Blending,
               Bio-Oils                                                        Transport Fuels;                     distribution,
                                                                                                                                                       Vehicles
  (Waste oils/fats/grease and Agricultural                                    other liquid Fuels                    marketing &
      Crops such as beans/oil seeds)                                                                                   fueling


                                                                                   Co-products

                                                      Collection &
                         Resources                                           Conversion & Refining                   Distribution                     Markets
                                                     Transportation
                 • No oil/bean energy          • Waste oils are currently   • Production is expanding        • In CA 4 production            • 2004 US production
                   crops dedicated to            collected for disposal.      rapidly. In 2004 27              facilities, 29 distributors     from 27 commercial
                   biodiesel production.                                      biodiesel plants in US           (primarily petroleum            plants >33 m g. (20)
                 • Oil crops for biodiesel                                    produced over 33 million         distributors), 23 retail      • CA consumption was
                   production are                                             gallons. (20 p AD-2J-4). In      outlets (34)                    less than 5m gallons in
                   currently in field trials                                  2005 the US produced over                                        2004 (20 p AD-2J-2).
Utilization/       within the states (5 p                                     75 MM gal (biodiesel.org).
                                                                                                                                             • Several gov’t and utility
 Situation         S.2.4)                                                                                                                      fleets in CA use
                                                                                                                                               biodiesel (26 p 3)
                                                                                                                                             • B20 considered
                                                                                                                                               alternative fuel under
                                                                                                                                               FEPA requirements. (26
                                                                                                                                               p 3)
                                                                            • Production cost for diesel     • Biodiesel receives tax        • Biodiesel appears
                                                                              from seed oil ~$2.50/gal         credits when blended with       broadly competitive as
                                                                              (driven by feedstock cost)       petroleum fuels (19)            a blending ingredient
                                                                            • Tax credit equivalent to       • Added expense for fuel          (19)
   Costs
                                                                              $1.00/gal enacted 2004 for       handling and logistics        • B20 retails 12 to 22 cents
                                                                              biodiesel from virgin oils       increase price (34)             per gallon more than
                                                                              (50¢/gal if from waste oils)                                     petroleum diesel (20
                                                                                                                                               AD-2J-4)




                                                                              87
   Biofuels » Biodiesel from Bio-oil Transesterification › Current Situation Assessment (2 of 2)




                                              Collection &
                     Resources                                 Conversion & Refining                   Distribution                    Markets
                                             Transportation
              • Because only the oil                          • DOE estimates that 1 gal of     • CEC staff assume terminals • Some compatibility issue
                component of crops can                          petroleum fuel is required        and racks will require $50-  with seals & gaskets in
                be used for biodiesel,                          to produce 3.37 gal of            $500k modification per       engines manufactured
                the yield of fuel per acre                      biodiesel on a ‚well-to-          terminal for biodiesel. (20) before 2004 with blends
                is relatively low. Co-                          wheels‛ basis (20)              • Concerns about fuel          higher than B20 (20)
                utilization of the                            • Tailoring the characteristics     quality by OEM’s and       • Biodiesel contains 7% less
                lignocellulosic fraction                        of biodiesel to specific          petroleum industry (34)      energy per gallon than
                of dedicated oil crops                          diesel engine requirements                                     CARB diesel (20)
                would improve overall                           is difficult (7 p 45)
Constraints     yields of energy per                                                                                         • Higher NOx emissions
                acre.                                         • Large scale production of                                      result in regulatory
                                                                biodiesel could drive up oil                                   problems in CA. (7)
                                                                crop prices (food oil                                        • According to a CEC study
                                                                demand is inelastic) (7 p                                      that evaluated the overall
                                                                45)                                                            social value of various
                                                                                                                               non-petroleum fuel
                                                                                                                               alternatives, biodiesel was
                                                                                                                               rated as slightly negative
                                                                                                                               ‚overall benefit‛ (19 p 6)




                                                                   88
Biofuels » Biodiesel from Bio-oil Transesterification › Opportunity Assessment

                                               Collection &              Conversion &
                    Resources                                                                         Distribution                        Markets
                                              Transportation               Refining

            • Oil crops production        • Would need to            • In general, market is     • CEC staff assume       • Biodiesel’s max. diesel
              could be developed in         develop alongside          growing rapidly (50-        existing diesel fuel     displacement is frequently
              CA; San Joaquin Valley.       in-state production        100% per year).             retail infrastructure    characterized as 5-10% on a
            • Oil crops for biodiesel are   capacity and be            According to                can store and dispense   nationwide basis, by biodiesel
Timing &      currently in field trials     commensurate in            biodiesel.org, at start     diesel with up to 20%    industry.
                                            scale.                     of 2006, 35 companies       RE diesel content w/o • CEC assumes 5% displacement of
Magnitude     (sunflower & safflower)
                                                                       reported plants under       modifications            diesel with RE diesel by 2015 and
                                                                       construction,                                        20% by 2025 (1000m gpy) (2025
                                                                       suggesting additional                                figure equivalent to 4.75% of on-
                                                                       capacity of 278 MM                                   road gasoline and diesel) (19 p 6);
                                                                       gallons could be                                     this is an aggressive case, base case
                                                                       online by mid-2007                                   is 40-80 m gpy by 2020 (26 p 5)
            • High value utilization of    • Would provide           • Net energy gains for      • B20 can be used in       • Over lifecycle, biodiesel produces
              waste oils could result in     additional                biodiesel                   conventional               78% less CO2 emissions than
              higher collection rates        employment to             (output/input=3.2) are      petroleum fuel             petroleum diesel.
              (this is speculative).         trucking                  greater than ethanol        systems with little or   • Lower toxicity and greater
                                                                       (1.3-1.6)                   no change from             biodegradability than diesel;
                                                                     • Biodiesel produces          production to end-use      emissions lower except for NOx.
                                                                                                   (19)
 Benefits                                                              byproducts of oil seed                               • B20 improves lubricity properties
                                                                       meal and glycerol.                                     of low-sulfur diesel
                                                                                                                            • Most engine manufactures
                                                                                                                              approve of B20 in heavy duty
                                                                                                                              engines (apart from VW) (26 p 4)
                                                                                                                            • Biodiesel is sulfur free, helping
                                                                                                                              meet low-sulfur diesel
                                                                                                                              requirements.
            • Assessment needed of         • In state crops for      • Investment for
              economic feasibility of        biodiesel would           production capacity to
              feedstocks for attaining       require                   meet 20% diesel
 Needs        20% diesel displacement        infrastructure; could     replacement goal is
              CA goal. (20)                  take advantage of         unknown (20)
                                             existing farm
                                             infrastructure.


                                                                         89
      Biofuels » Biodiesel from Bio-oil Transesterification › Potential Actions




                                                                             Potential State Actions1
                       • Identifying financing for start-up companies will remain an important consideration in brining new products to market.
                       • Identify after-treatment technology or other engine modifications for diesel cars that will eliminate NOx increases (could be part
                         of new cars, but issues remains with old vehicles).
                       • Conduct statewide assessment of biodiesel feedstock
Administrative         • Assess oil crop potential and issues relative to other energy crops or agricultural crops
  Actions
                       • Aggressively pursue collection of waste fats oils & grease in a manner that facilitates conversion to biodiesel
                       • Education/outreach
                       • Require state fleets to use biofuels (general, not just biodiesel).
                       • Develop programs to encourage private fleets to use biodiesel blends
                       • Does the state need fuel specs for biodiesel and biodiesel blends? ASTM standard already exists for B100 for us as fuel or for
   Regulatory            mixing with petroleum fuels (ASTM D 6751).
    Actions            • Address air quality issues holistically (e.g., NOx may go up, but other pollutants may go down, like PM, HC, CO).
                       • Address biodiesel emissions issue related to NOx.
                       • Incentives for biodiesel production, distribution and fueling infrastructure (e.g., production incentives, investment tax credits,
                         fuel excise tax exemptions
   Legislative
    Actions




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                               90
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks

                    3   Biofuels Value Networks

                           Ethanol from Sugar & Starch Fermentation

                           Ethanol from Lignocellulosic Fermentation

                           Fuels from Lignocellulosic Gasification

                           Biodiesel from Bio-oil Transesterification

                           Cross Biofuels Policy Recommendations


                    4   Appendix

                                        91
      Cross Biofuels Policy Actions » Potential Actions




                                                                           Potential State Actions1
                       • Create a demonstration and commercialization program for lignocellulosic biofuels (including those derived from municipal
                         wastes) in California.
                       • Urge the Governor to join the 31 other U. S. states that are members of the Governor’s Ethanol Coalition.
                       • Provide conversion support or incentives for farmers to switch to sugar/starch crops or other energy crops.
                       • Examine the air pollutant emissions performance of biofuels and biomass power and recommend appropriate emissions
                         performance standards. Ensure that the regulations maximize the flexibility to use biofuels while concurrently preserving or
                         enhancing the environmental benefits of the regulations.
                       • Work with federal agencies to coordinate on the possible development of national policies to reduce net greenhouse gas
                         emissions and improve infrastructure and public access to renewable fuels and products aimed at enhancing the value of
                         renewable energy and emission reduction credits to realize the intrinsic benefits of renewable resources.
                       • Establish incentive programs to support investments in new and emerging technologies relating to bio-energy, such as
Administrative           gasification, cellulosic ethanol, BTL, distributed energy systems, landfill gas-to-energy, and for technologies that are linked to
  Actions                alternative fuels and to climate change initiatives.
                       • Develop programs to monetize the environmental benefits of biomass-to-energy and bio-fuels by estimating the costs of
                         alternative fates for the biomass materials (e.g., forest fires). Could be implemented via a carbon tax, carbon adder, or other
                         means).
                       • Identify financing options for start-up companies to aid in bringing new products to market.
                       • Conduct emissions testing to measure benefits, tradeoffs, and impacts of biofuel use. R&D on engine modifications & after-
                         treatment to address emissions issues, including exhaust and permeation. Key examples include low ethanol blends and NOx
                         from biodiesel.
                       • Establish procurement standards to encourage other public entities (school districts, UC system) to use biofuels and purchase
                         biomass power.
                       • Direct CEC to prepare a comprehensive, peer-reviewed economic assessment of the costs and benefits of expanded use of
                         biofuels by fuel type, and impacted group (fuel producers, fuel distributors, agriculture, government and consumers).


1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                             92
      Cross Biofuels Policy Actions » Potential Actions




                                                                             Potential State Actions1
                       • Establish necessary fuel specifications for transportation bio-fuels used in blends and as neat fuels. Include low-ethanol blends
                         with gasoline, E85, E-diesel, FT diesel, B5, B20, B100. Spec should recognize the climate change benefits of renewable fuels. Work
   Regulatory            with existing specs, such as ASTM standard for B100 for us as fuel or for mixing with petroleum fuels (ASTM D 6751).
    Actions
                       • Develop streamlined permitting for cellulosic ethanol and thermochemical biofuel production plants (maybe to also encourage
                         cogeneration with lignin residues or co-location with existing biomass power plants)
                       • Develop the rules and regulation for the RFS
                       • Establish a Renewable Fuels Standard that covers biofuels that can be used in blends or as neat fuels. The RFS would cover all
                         biofuels and could contain special provisions to encourage in-state production and the deployment of new technology. The RFS
                         would be a way to help achieve existing state goals on transportation energy use and GHG emissions.
   Legislative         • Design and recommend a package of tax and other financial incentives to encourage use of biomass, biofuels and bio-products.
    Actions              These could include: in-state production or tax credits, investment tax credits for E-85 delivery infrastructure, insurance
                         products such as efficacy insurance to reduce cost of risk to private sector, fuel excise taxes based on energy content, fuel tax
                         exemptions.
                       • Develop appropriate incentives for growing energy crops
                       • Create a Public Goods type charge to fund biofuels production and infrastructure development




1. This list is a compilation from various sources and does not represent a prioritized or final list of recommended actions.

                                                                               93
Table of Contents




                    1   Introduction to Bioenergy Value Networks


                    2   Biopower Value Networks


                    3   Biofuels Value Networks


                    4   Appendix




                                       94
Appendix » Bibliography

Bibliography
1)   109th Congress of the United States of America, August 8, 2005, Federal Energy Policy Act 2005, Title IX, Subtitle C,
     Section 932, U.S. Congress, Washington, D.C.
2)   Blackburn, Bill, Tom MacDonald, Mike McCormack, Pat Perez and Val Tiangco, California Energy Commission,
     December 1999, Evaluation of Biomass-to-Ethanol fuel Potential in California, California Energy Commission,
     Sacramento, CA.
3)  Brown, Susan J., November 9, 2005, California Biomass Collaborative “Bio-Energy Interagency Working Group”. California
    Energy Commission, Sacramento, CA.
4) California Biomass Collaborative. 2004. An Assessment of biomass resources in California. PIER Consultant Report,
    California Energy Commission, Sacramento, CA, 2004
5) California Biomass Collaborative, April 2005, Biomass Resource Assessment in California, Draft Consultant Report in
    Support of the 2005 Integrated Energy Policy Report. California Energy Commission, Sacramento, CA, Publication
    number CEC-500-2005-066-D.
6) California Biomass Collaborative, January 2004, California Biomass Collaborative Policy Committee Progress Report.
7) California Biomass Collaborative, June 2005, Biomass Challenges, Opportunities, and Potentials for Sustainable
    Management and Development PEIR Collaborative Report, California Energy Commission, Sacramento, CA.
8) California Biomass Collaborative, September 2005, An Assessment of Biomass Resources in California, 2005, Draft Report.
    California Energy Commission, Sacramento, CA.
9) California Department of Food and Agriculture, 2006, Rice Straw Utilization Grant Program
    <http://www.cdfa.ca.gov/exec/aep/aes/rs_grant_ program/index.htm>.
10) California Department of Food and Agriculture, December 2005, Rice Straw Tax Credit Program
    <http://www.cdfa.ca.gov/exec/aep/aes/rstc_program/ index.htm>.
11) California Energy Commission, 2003 Net system power calculation, Publication 300-04-001R.
12) Clinton, William, October 25, 2000, Executive Order 13173 - Interagency Task Force on the Economic Development of the
    Central San Joaquin Valley <http://nodis3.gsfc.nasa.gov/displayEO.cfm?id=EO_13173_>.




                                                            95
Appendix » Bibliography
Ethanol » Notes

Bibliography
13) Coleman, Brooke, Danielle Fugere, January 5, 2006, Securing California’s Ethanol Market. Renewable Energy Action
    Project, Bluewater Network
14) Commission of the European Communities, July 12, 2005, Commission Staff Working Document, Annex to the
    Communication from the Commission, Biomass action plan, Impact Assessment, Commission of the European
    Communities, Brussels.
15) Commission of the European Communities, July 12, 2005, Communication from the Commission, Biomass action plan
    Commission of the European Communities, Brussels.
16) Environmental and Energy Study Institute Home Page, <http://www.eesi.org/>
17) European Commission Directorate-General for Energy and Transport, December 2005, How to support renewable
    electricity in Europe? An assessment of the different support schemes, Commission of the European Communities,
    Brussels.
18) European Commission Directorate-General for Energy and Transport, March 31, 2005, Public Consultation of the EU
    Biomass Action Plan, Results of the on-line website DG TREN “Questionnaire”, Commission of the European
    Communities, Brussels.
19) Fong, Dan, California Energy Commission, July 2005, Options to Reduce Petroleum Fuel Use (Second Edition), California
    Energy Commission, Sacramento, CA, Publication number CEC-600-2005-024-ED2.
20) Fong, Dan, California Energy Commission, June 2005, Addendum: Options to Reduce Petroleum Fuel Use (Second Edition),
    California Energy Commission, Sacramento, CA, Publication number CEC-600-2005-024-ED2-AD.
21) Gildart, M.C. and H. von Bernath, California Biomass Collaborative, December 2005, Scoping Study for Rice Straw
    Utilization in California Draft Report. California Energy Commission, Sacramento, CA.
22) Green, Nathanael, National Resources Defense Council, December 2004, Growing Energy, How Biofuels Can Help End
    America’s Oil Dependence, National Resources Defense Council, New York, NY.
23) Interagency Task Force for the Economic Development of the Central San Joaquin Valley, June 2004, 2003-2004
    Progress Report and Action Plan, U.S. Department of Housing and Urban Development, Washington, D.C.




                                                         96
Appendix » Bibliography
Ethanol » Notes

Bibliography
24) Jones, Melissa, Michael Smith, and Suzanne Korosec, California Energy Commission, September 2005, 2005 Integrated
    Energy Policy Report Committee Draft Report, California Energy Commission, Sacramento, CA, Publication number
    CEC-100-2005-007-CTD.
25) Kennedy, Robert, California Energy Commission, November 2005, Ethanol Market Outlook for California, California
    Energy Commission, Sacramento, CA, Publication number CEC-600-2005-037.
26) Koyama, Kenneth, California Energy Commission, May 2005, Alternative Fuels Commercialization, California Energy
    Commission, Sacramento, CA, Publication number CEC-600-2005-020.
27) MacDonald, Tom, California Energy Commission, January 2004, Ethanol Fuel Incentives Applied in the US, Reviewed
    from California’s Perspective, California Energy Commission, Sacramento, CA. Publication number P600-04-001.
28) MacDonald, Tom, Mike McCormack, Pat Perez, Todd Peterson, and Valentino Tiangco, California Energy
    Commission, March 2001, Costs and Benefits of a Biomass-to-Ethanol Production Industry in California, California Energy
    Commission, Sacramento, CA, Publication number P500-01-002.
29) MacDonald, Tom, September 26-28, 2005, Alcohol Fuel Flexibility – Progress and Prospects, Fifteenth International
    Symposium on Alcohol Fuels. San Diego, CA.
30) McCormack, Mike, Transportation Fuels Office, February 8, 2005, Outlook for Ethanol Use in California Transportation
    Fuels – Policy Drivers, Challenges and Opportunities, California Energy Commission, Sacramento, CA.
31) Moller, Rosa Maria, PhD., November 2005, A Brief on Ethanol, The Debate on Ethanol: Prospects and Challenges to
    California Producers, California Research Bureau, California State Library, CRB 05-009.
32) Moller, Rosa Maria, PhD., December 2005, Brief on Biomass and Cellulosic Ethanol California Research Bureau,
    California State Library, CRB 05-010.
33) Morris, G., Green Power Institute, July 31, 2003, The Status of Biomass Power Generation in California July 31, 2003,
    National Renewable Energy Laboratory, Golden, CO. Contract No. DE-AC36-99-GO10337
34) National Biodiesel Board, October 12, 2004, Report of the Biodiesel Working Group, California Energy Commission
    Sacramento, CA.




                                                          97
Appendix » Bibliography

Bibliography
35) Oregon Department of Energy, April 12, 2005, Oregon’s Renewable Energy Action Plan, Oregon Department of Energy,
    Salem, OR.
36) The Center for Resource Solutions Team, November 1, 2005, Achieving a 33% Renewable Energy Target, California
    Public Utilities Commission, San Francisco, CA.
37) Tiangco, Valentino, Prab Sethi, and Zhiqin Zhang, California Energy Commission, June 2005, Biomass Strategic Value
    Analysis, Draft Staff Report in Support of the 2005 Integrated Energy Policy Report, California Energy Commission,
    Sacramento, CA, Publication number CEC-500-2005-109-SD.
38) United States Department of Agriculture, 2006, Value Added Producer Grants
    <http://www.rurdev.usda.gov/rbs/coops/vadg.htm>.
39) United States Department of Energy, November 7, 2005, Funding Assistance Opportunity, Biomass Research and
    Development Initiative Grant Notification 2005, <https://e-center.doe.gov/iips/faopor.nsf/UNID/C2D6EAD8316FFEE585
    2570AD0077A88F?OpenDocument>.
40) United States Environmental Protection Agency, December 22, 2005, Notice of Proposed Rulemaking, Regulation of Fuel
    and Fuel Additives: Renewable Fuel Standard Requirements for 2006.
41) United States Environmental Protection Agency, Landfill Methane Outreach Program (LMOP) LMOP Landfill Database,
    California state operational landfills, http://www.epa.gov/lmop/proj/xls/lmopdataca.xls
42) Updated Informative Digest, Amendments to The Clean Fuels Regulations Regarding Clean Fuel Outlets.
43) Western Governors Association, September 2005, WGA Clean and Diversified Energy Initiative Draft Report of the
    Biomass Task Force, Western Governors Association
44) Western Governors Association, January 2006, Clean and Diversified Energy Initiative Biomass Task Force Report,
    Western Governors Association.
45) Williams, Robert, B., California Biomass Collaborative, December 2005, Environmental Issues for Biomass Development
    in California Preliminary Draft, California Energy Commission, Sacramento, CA.
46) Williams, Rob, California Biomass Collaborative, December 2005, Biomass in Solid Waste in California: Utilization and
    Policy Alternatives Preliminary Draft. California Energy Commission, Sacramento, CA.



                                                          98
      Appendix » List of Acronyms >> Biopower

Acronym     Explanation
$/kWh       Dollars per kilowatt hour. The standard unit of measure for the price of energy.
$/kW        Dollars per kilowatt. The standard unit of measure to represent the installed costs of power plants.
BTU         British thermal unit.
CCHP        Combined cooling, heat and power. CCHP applications examples include the use of water treatment plant generated methane
            combusted to energize onsite reciprocating engines to run plant operations, and the waste heat from the generator is applied to digesters
            to increase process rates.
CHP         Combined heat and power.
CO2         Carbon dioxide.
GWh         Gigawatt hours. The standard unit of measure for the total amount of energy produced over a period of time. One gigawatt is 1,000
            MW.
GHG         Greenhouse gas.
IOU         Investor Owned Utility
LCOE        Levelized cost of energy.
MDT         Million Dry Tons. The standard unit of measure for biomass.
MPR         Market Price Referent. Used to calculate payment of RPS contacts and SEPs.
MW          Megawatt. The standard unit of measure for the amount of power produced from a plant. One megawatt is 1,000 kilowatts.
PTC         Production Tax Credit
R&D         Research and Development
RPS         Renewable Portfolio Standard. The requirement that IOUs must contract a percent of there load with renewable energy.
SEP         Supplemental Energy Payments. These are funds available to pay renewable power producers who have been awarded contracts under
            RSP solicitations. The supplemental payment represents the cost of energy being pay above a calculated market price referent (MPR)
SO4         Standard Offer Contracts under PURPA
SRAC        Short run avoided costs. The calculated price at which energy prices are determined under SO4 contracts. The prices is typically
            calculated based on current natural gas market prices.

                                                                       99
Appendix » List of Acronyms >> Biofuel


Acronym       Explanation

B100          100% biodiesel

B20, B5, B2   Petroleum diesel blended with 20%, 5%, and 2% biodiesel, respectively

              Biomass-to-Liquids - produces primarily a high-quality synthetic diesel product through gasification of biomass followed
BTL           by conversion of the syngas to a liquid using a the Fisher-Tropsch reaction. Requires further upgrading (similar to
              conventional refining) to produce finished fuels

CARB          California Air Resources Board

              CA reformulated gasoline with 5.7 percent ethanol, the only oxygenated gasoline available in CA after MTBE was phased-
CaRFG3
              out 3/31/03

E10           Ethanol Blend - Gasoline blended with 10% ethanol

E85           Ethanol Hi-Content Blend - Gasoline blended with 85% ethanol

E40           Half-time use of E85 by drivers of FFVs

FFV           Flexible Fuel Vehicles – capable of running on any mixture of gasoline and E85

              California Low Emission Vehicle tailpipe and evaporative emissions standards. In the future all manufactures will have to
LEV2
              comply with LEV2.

RFG           Reformulated gasoline

              Thermal Conversion Process – creates diesel-like crude oil using temperate and pressure to breakdown and process
TCP
              biomass input

ZEV           Zero Emission Vehicle




                                                                  100
     Appendix » Biomass Resources Defined

     Definition of Biomass Resources for Power and Biofuels
                             Agricultural Residues: Woody orchard and vineyard prunings, field crop residues such as cereal straws and corn
      AGRICULTURE            stover, vegetable crop residues and; Food Processing Residues: primarily woody rice hulls, shells and pits (8pg17)
• Agricultural Residues
                             Energy Crops: ‚Dedicated Crops‛ which include lignocellulosic ‚Energy Crops‛ and also sugar and starch crops, and
• Energy Crops               oil crops such as sunflower and safflower. Sugar, starch, and oil crops, as well as lignocellulosic crops could be used to
• Food Processing Residues   create biofuels, whereas energy crops grown specifically for biopower would be limited to lignocellulosic crops.
• Animal Wastes (farm)
• Animal Renderings          Animal wastes (farm): Animal waste includes manure from dairy cows, range cattle, and poultry

                             Animal rendering: Residues from animal processing facilities and potentially, animal carcasses in the event of
                             outbreaks of avian flu or other diseases requiring the culling of animal populations.


         FORESTRY            Onsite Mill Residue: Onsite Mill Residues are waste streams from forest products mills, such as waste from sawmill
                             operations
• Forest Residues - Tree
  thinnings, slash, etc.
• Onsite Mill Residues       Forestry Site Residues: Off site forest residues are considered to be forest thinnings, log slash, scrub, and chaparral.


                             Municipal Solid Waste: Diverted MSW available for biomass conversion applications consist of both high and low
   MUNICIPAL WASTES          moisture content organics generated by municipalities, including clean construction waste (aka urban wood), paper
• Diverted Municipal Solid   and cardboard, green wastes and trees, food wastes, and . (8pg 22, 23)
  Waste (MSW)                Urban wood waste: clean wood waste, such as construction waste and tree trimmings. Generally excludes painted or
• Urban wood wastes          contaminated wood.
• Landfill Gas
                             Landfill gas: Landfill gas is a mixture of roughly 50% methane gas and 50% CO2 created from the natural
• Wastewater Biogas          decomposition of the organic fraction of municipal solid waste (MSW) that is disposed of in landfills. (8pg 23)
• Wastewater Sludge
• Waste oils/fats/grease     Wastewater biogas & sludge: Methane of 60% concentration and resulting biosolids (sludge) is created from the
                             anaerobic digestion of organic matter in waste water (8pg 23)

                             Waste oils/fats/grease: Various types of animal and vegetable waste (e.g., yellow grease from restaurants)




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