Texas Provides Grants for Biomass Power Generation; 100-Megawatt Plant To Use Waste that Qualifies

June 25, 2007

On June 19, Texas Governor Rick Perry signed into law House Bill (HB) 1090, which provides grants for gathering and use of waste agricultural and forest materials to generate electricity. The bill signing coincided with an announcement by Nacogdoches Power, LLC that it has completed the permitting for a 100-megawatt (MW) biomass-fired power plant in eastern Texas that will receive biomass material that qualifies under the grant program.

Under the program, farmers, loggers, and others will receive a financial incentive to collect excess biomass material, which would otherwise be burned or disposed of in landfills, and deliver it to a biomass-fueled facility that generates electricity. Grants will also be available for the use of excess biomass material created from severe storms such as Hurricane Rita.

The new plant will be built in Sacul, Texas, about 150 miles southeast of Dallas. The facility, which will cost $300 million, will be the first major biomass-fired electric generating plant in Texas and the largest such plant in the United States. The facility will use approximately 1 million tons of wood fuel a year. The area in which the site is located has no transmission constraints, so the plant will provide baseload renewable generation 24 hours a day, 365 days a year.

Nacogdoches Power says that consumer savings realized from the electricity production of the power plant will exceed the cost of the incentive program, so there will be a net financial benefit to electric customers. In addition, the plant will provide about 500 new permanent jobs in the region.

The company is pursuing purchase contracts for the project. Construction will begin shortly after financial closing. Nacogdoches Power, LLC is a joint venture between BayCorp Holdings, Ltd. and Energy Management, Inc.

For more information on the biomass plant, see the Nacogdoches Power project information site .

Source: June 22 article in SNL Energy Renewable Energy Week

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