1. CALIFORNIA BIOENERGY UPDATE IASC April 24, 2003 Chris Trott Covanta Energy

2. What’s a Bioenergy Plant Do? Bioenergy Plants Burn Wood in Modern Boilers and Make: Steam Electricity Ash Minimal Air Emissions

3. CA has 34 Operating Bioenergy Plants Y Range in size from 5 to 50 MW YProduce 1.5% of CA’s power YUse a variety of urban, forest, and agricultural wood residues Y18 Use wildland fuels

4. Waste DisposalEnergy Production Biomass Mill residues Agricultural residues In-forest residues Urban residues 8 mil. tons/year Open Burning Uncontrolled air emissions Landfill Disposal Landfill Accumulation Methane emissions Forest Accumulation Increased fire hazard Reduced water yield Diminished forest health Power Production Controlled emissions Avoided fossil fuel use 28% 62% 10% OR Renewable Benefits Worth 11.4 cents/kWh!

5. California Biomass Power Plants in 2002 Thinned Forest Survived Fire Source: Green Power Institute 2002

6. 26 Plants With Long-term Utility Contracts –Negotiated 5-year fixed price deals for 5.37 cents/kWh –Utilities continue to pay back money owed over time 3 Plants With Short-term (3-5 yr.) Contracts –Fixed energy prices: 5.3 - 7.5 cents/kWh 5 Merchant Plants –3 with 180-day contracts, terminate June 30 –Summer spot market? Spring of 2003

7. Bioenergy Support Programs Agricultural Biomass Grant Program –$10 million/yr for 3 years (expires 6/03) –$10/ton incentive for bioenergy plants to use ag waste otherwise open-burned –Very successful 1 st 2 years – decreased ag burning by 350,000 TPY –Not funded in FY 2002-03

8. Bioenergy Support Programs Renewable Energy Production Credit –Administered by CEC –Funded by utility ratepayers –Adds: 0.3 cents/kWh for plants with utility contracts 0.6 cents/kWh for merchant plants CA Renewable Portfolio Standard –20% all energy renewable by 2017 –Program rules being developed at CPUC –Impacts unknown

9. Source: Green Power Institute 2002

13. The Future? Federal Biomass Energy Tax Credit? Renewable Portfolio Standard? Phaseout of Ag Burning? Requirement for Bioenergy Plants to Use Ag Fuel? Ag/Wildland Open Burn ERC’s?