Two Maine biomass plants will be closed in March, triggering alarm in the state’s logging industry.
Covanta Holding Corp., which operates biomass plants in Jonesboro and West Enfield, intends to take the two plants offline at the end of March.
“Unfortunately, this happens with some frequency in the biomass industry when energy prices are not sufficient to cover the costs of operation and fuel supply,” according to James Regan, a company spokesman who issued a news release. “We have experienced similar situations in the past and resumed operations when the economics improved. We will continue to evaluate the future of the facilities.”
The facilities in Washington and Penobscot counties, respectively, were bought by Covanta in 2008. The Morristown, New Jersey, company operates 40 other biomass plants in North America.
The announcement sparked an immediate response Thursday from the Professional Logging Contractors of Maine, who in a release said the move will affect up to 2,500 jobs. Loggers have sold wood waste from logging operations to the plants for years, but the recent low cost of oil has depleted the demand for biomass.
“This announcement should serve as a wake up call to both the LePage administration and Maine legislators about the dangers of inaction when it comes to formulating energy policies that will benefit our state’s economy, environment, and future,” said PLC Executive Director Dana Doran in the release. “This is a perfect example of an area where common sense needs to be applied to policy to consider the true cost of our energy, not just the price per kilowatt hour.”
Biomass accounts for 60 percent of Maine’s renewable energy portfolio and 27 percent of its electricity generation, according to data from the U.S. Energy Information Administration.
Biomass electricity is generated by combusting woody debris and low-grade fiber from forest thinning operations in special boilers to generate electricity. Both Maine plants produce 24.5 MW hours of electricity for the New England grid, enough to power almost 50,000 homes daily, according to Covanta.
In states with renewable energy portfolio requirements, woody biomass is valuable to buyers seeking a percentage of their power from renewable sources.
Doran said the economic value of a strong Maine biomass industry and the direct and indirect jobs, payroll, and tax revenue it generates will more than offset the current higher cost per kilowatt hour of such energy, while preserving the industry for the day when fossil fuel prices inevitably rise again. The group is concerned that continued depressed prices for fossil fuels will continue to weaken the demand for biomass — delivering another blow to an industry already clobbered by the closures of three paper and pulp mills in the state. Additionally, expiring renewable energy subsidies in Massachusetts and Connecticut have the potential to eliminate the market for Maine biomass altogether as soon as 2017, said the release.
The loggers intend to work with Gov. Paul LePage, legislators and biomass electricity producers to find ways to sustain the industry.
There are four other biomass plants in Maine, operated by ReEnergy Holdings.