IdahoWoodyBiomassProjectDeveloper’sHandbook

AReferenceGuidetoResourcesandContacts

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AboutReportpreparedbySustainableNorthwestfortheIdahoStatewideWoodEnergyTeam.This guidebook aims to inform project developers interested in the potential for smalldiametertimberandbiomassutilizationinIdaho.ThegoalofthispublicationistoofferachecklistofquestionstoconsiderforprojectsinIdaho.AsapublicationoftheIdahoOfficeof Energy and Mineral Resources, this guidebook complements many online resourceslistedthroughoutthetext.TableofContentsAboutBiomass 5ProductTypesandConsiderations 6BiomassProducts 7HarvestingandResourceAvailability 8BuildingType&HeatingDemandsandGeneratingElectricity 9BiomassEnergyTechnologies 10Permitting&EnvironmentalConcernsandAirQuality 11Financing 12Conclusions 13ContactMattWiggsIdahoGovernor’sOfficeofEnergyandMineralResourcesMatt.Wiggs@oer.idaho.gov

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AcknowledgementsThis material is funded by the U.S. Forest Service through its Statewide Wood Energy TeamProgram, Cooperative Agreement No. 13-CA-11010000-022, to the Idaho Office of Energy andMineralResources.CoverImageU.S.DepartmentofAgriculture

TheTowerFireintheColevilleandIdahoPanhandleNationalForestsinIdahobeganonAug.11, 2015 and has consumed an estimated 26,083 acres. The fire was caused by lightning.USFSphoto.https://www.flickr.com/photos/usdagov/20818232604/

Images1-3:WisewoodEnergyImages4-15:MarcusKauffman,BiomassResourceSpecialist,OregonDepartmentofForestryNondiscriminationStatementIn accordance with Federal law and U.S. Department of Agriculture Policy, this institution isprohibitedfromdiscriminatingonthebasisofrace,color,nationalorigin,sex,age,ordisability.(Notallprohibitedbasesapplytoallprograms.)To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W,WhittenBuilding,1400 IndependenceAvenue, SW,WashingtonDC20250-9410 or call(202)720-5964(voiceandTDD).USDAisanequalopportunityproviderandemployer.DisclaimerThis report was prepared as an account of work sponsored by an agency of the United StatesGovernment.NeithertheUnitedStatesGovernmentnoranyagencythereof,northeIdahoOfficeofEnergyandMineralResources,noranyoftheiremployees,makesanywarranty,expressorimplied,orassumesanylegalliabilityorresponsibilityfortheaccuracy,completeness,orusefulnessofanyinformation,apparatus,product,orprocessdisclosed,orrepresentsthatitsusewouldnotinfringeprivatelyownedrights.Referencehereintoanyspecificcommercialproduct,process,orservicebytrade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply itsendorsement, recommendation, or favoring by the United States Government or any agencythereof. The views and opinions of authors expressed herein do not necessarily state or reflectthoseoftheUnitedStatesGovernmentoranyagencythereof.

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ContainerizedBiomassinClearwaterCounty,IdahoImages:WisewoodEnergy

1.AnagingoilboilersystematthePierceCommunityCenterandrisingcostsofkeepingtheindoorpool heated prompted the Pierce Recreation District to look for opportunities to upgrade thebuilding's infrastructure. With funding from the Forest Service Secure Rural Schools andCommunitySelfDeterminationAct,theIdahoDepartmentofCommerce,andtheNorthwestFarmCreditService,theDistrictbrokegroundonanewpellet-firedbiomassboilerin2016.2.Thesystemincludestwopellet-firedboilersandstorageforabout20tonsofpelletsinasingle40-footshippingcontainer.Installingboilerequipmentandwoodstorageinoneortwoshippingcontainersreduceson-site construction costs and makes implementing small biomass systems more feasible forremote locationswith limitedaccesstoconstruction services.Two-thirdsofthecontainer isusedforpelletstorage.Pelletswillbepneumaticallyconveyedtothetwoboilers.3.Threehatchesarelocated on the top of the container for easy fueling access. Most of the biomass system wasassembledoff-siteanddeliveredtothefacilityforfinalinterconnections.

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AboutBiomassIdahohasmorethan16.7millionacresofnon-reservedtimberlands,with72.8%managedbytheU.S.ForestService.Manyof Idaho’s rural communitiesdependon the forest productsindustryandseebiomassutilizationasastrategytoprovidejobs,restoreforesthealth,andreducetheriskofwildfire.‘Biomass’referstomanydifferentmaterials.TheU.S.ForestService’sdefinition includes“the by-product of management, restoration, and hazardous fuel reduction treatments,including treesandwoodyplants (i.e., limbs,tops,needles, leaves,andotherwoodyparts,growninaforest,woodland,orrangelandenvironment).”Thisguidebookfocusesonusesfornon-merchantabletimber.

Whoisagoodcandidateforbiomass?• Entrepreneursandprojectdeveloperswithexperienceworkinginforestoperations

or manufacturing; strong local connections with industry, government, andcommunitygroups;skilledataccountingandfinance,businessplanningandstrategy,andcommunicationsandmarketing.

• Institutions with a significant heating and electricity demand, including hotels,resorts,schools,hospitals,andotherpublicfacilities.

• Customers outside of natural gas service areas, or those primarily heating withpropane.

• Localresidentsconcernedaboutforesthealthandwildfireriskreduction.GoalsandBenefitsofBiomass

1. Revitalize rural communities by providing local employment, cost-savings, anddomesticenergyoptions;

2. Provide useful wood products and, as a by-product, renewable energy feedstocksthathelpreduceairpollution,fossilfuelemissions,andlandfilldisposalburdens;and

3. Restoreforesthealth,increaseresiliencetowildfires,andimprovewildlifehabitat.Box1.BiomassProjectResourcesTheU.S.ForestService,stateagenciesandnonprofitshavecompiledasignificantnumberofpublicationsandresources.Thesearehighlightedintextboxesthroughoutthisguide.IdahoGovernor’sOfficeofEnergyandMineralResources’websiteonbioenergy,biomass&StateWoodEnergyTeam(SWET).Availableat:https://oemr.idaho.gov/sources/re/bioenergy/CommunityBiomassManualVolume1:ThermalWoodEnergy(2014)Volume2:Alaska,WhereWoodyBiomassCanWork(2015)Volume3:HowWoodEnergyisRevitalizingRuralAlaska(2016)Volume4:EnterpriseDevelopmentforIntegratedWoodManufacturing(2017)https://www.fs.fed.us/pnw/research/biomass-bioenergy.shtml

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ProductTypesandConsiderationsExamplesofbiomassproducts range fromminimallyprocessedcordwoodtomanufacturedwoodpellets.Cordwood–commonlysplitandsoldasfirewood–isoftenpurchasedbylocalbuyerswhoheatwithwoodandareinterestedinaclean-burning,pest-freeproduct.Woodchips from logs form thebulk of inputs to pulp andpapermanufacturing, but also canbeused as a fuel source for industrial-scale furnaces and institutional boilers. Compressedpelletsareamanufactured-productandofferauniform,high-energy-denseoptionforuseincommercialandresidentialboilers.Biochar–producedinaprocesssimilartocharcoal–hasemerging applications as a soil amendment for improved soil fertility and carbonsequestration. Other small-diameter products might include posts & poles, hops trellises,andfencing.

IsBiomassanOption?• Whatisthetreespeciesmixgrowninmyregionandwhatproductsaresuitedto

thephysicalqualitiesoftheirwood?• What physical properties such as moisture content, ash content, and ease of

storageareneededforeachtypeofproduct(i.e.cordwoodvs.pellets)?• What other companies operate nearby and what products are competitors (or

complements)totheirproductslines?• Have you contacted local fuel suppliers to confirm quality, cost, and delivery

obligations?• Howmuchbrandingandmarketingarerequiredtodifferentiateyourproduct?• Howfarwillproductsshiptomarketandwhatarethetransportationoptions?• Whatmanufacturingequipmentandqualitycontrolarerequiredforeachproduct

line?• Whatistheavailabilityoflocalworkers,workforcetraining,andskills?

Box2.BiomassProjectResourcesBiomassThermalEnergyCouncil(BTEC).Resourcecenter,policyissues,andnewshttp://www.biomassthermal.orgBiomassEnergyResourceCenter.55 Case Studies of Community-Scale Biomass Systems in the US, Canada, and Europe.http://www.biomasscenter.org/WoodyBiomassDeskGuideandToolkit.http://www.nacdnet.org/wp-content/uploads/2016/06/Woody-Biomass-Desk-Guide-and-Toolkit.compressed.pdfMapofexistingbiomasspelletfacilities.http://biomassmagazine.com/plants/map/pellet/

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BiomassProductsImagesM.Kauffman.

4.Adeckof low-grade logsprovides fuel for theDarbySchoolDistrictbiomass system. Local forestlandownersdonatelogs.TheDistrictpaysforthehaulandchipsupthematerial-loweringtheirfuelcosts.Darby,Montana.5.BundledfirewoodawaitsshipmentatTuleCreekForestProductsinHayfork,CA. Located in frequent-fire country, TuleCreek takesadvantageofburntand fire-salvaged logs fortheirrawmaterial.6.AnemployeesortspeeledpolesintobinsatParmaPostandPoleinParma,ID.ParmaPostandPoleoperatesahighlyintegratedoperationthat includesapostandpoletreatmentfacility,twosmallsawmillsandafurnitureplant.

7.Manufacturing scrapand forest residuals co-mingleatBiomassOne inMedford,OR.The30MWfacilitycombustsover250,000tonsofmaterialperyearmakingitoneofthelargestwastetoenergyfacilitiesinOregon.8.LargechunksandchipsofponderosapinefueltheHarneyCommunityEnergysystem inBurns,OR.Thenewdistrictenergysystemsuppliesmultiple facilitieswith stable low-costheat made from minimally-processed forest biomass. 9. Energy in the palm of your hand. Smallbiomass heat systems often perform best with predictable moisture content, consistent size andminimalfines.

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Harvesting&ResourceAvailabilityThe two greatest constraints on Idaho’s forest products industry – timber supply andhauldistance–applytobiomassaswell.Agoodruleofthumbisthataprojectneedsa10-yearsupply or stewardship agreement to be commercially viable. In addition, timberlands thatprovide supply shouldbeamaximumhauldistanceof50-75miles.Facilitydesign,productlines, andoperating structure also play a significant role in the viability ofa project.Manydevelopers are now considering more diverse and complex enterprises to utilize materialefficientlyandincreaseoperatingmargins.OneexampleistheIntegratedBiomassResourcesin Enterprise, Oregon. Instead of focusing on individual products, an integrated biomasscampus and log sort yard is able to takemixed loads of small-diameter timber from pre-commercial or restoration thinnings and produce a variety of products according to theirhighestcommercialvalue.SupplyConsiderations

• Whatisyourfeedstocksupplyarea(FSA)?Ifyoursupplyisoriginatingfrompubliclands, are harvest projections and stewardship programs of sufficient size andlengthinplace?Howwillyouobtaincontracts?

• Is your project appropriately sized for the available long-term woody biomasssupply?Arethereotheragriculturalororchardoperationsnearby?Whatproductsubstitutesmightcompeteforbiomass?

• Have you considered resource sustainability, forest planning goals, communitydevelopmentplans,andothersocialfactorsthatwillhelpgatherbroaderpoliticalsupportandminimizeconflict?

Box3.SupplyResourcesSeealso,theU.S.ForestService’sForestInventoryandAnalysis(FIA)reportonIdaho’sForestProductsIndustry.Availableat:https://www.fs.fed.us/rm/pubs_series/rmrs/rb/rmrs_rb019.pdfUSDAloggingcostssoftware.https://www.fs.usda.gov/detail/r6/landmanagement/resourcemanagement/?cid=fsbdev2_027048 StewardshipContractingonFederalPublicLands.Stewardshipcontractingcasestudies,programmaticreview,andwhitepapershttp://www.pinchot.org/gp/Stewardship_ContractingContactsIdaho Department of Lands. Land board, leasing, forestry, and other resources related tocontractingopportunities.https://www.idl.idaho.govUnitedStatesDepartmentofAgriculture.ForestService-NorthernRegion1(NorthernIdahoandMontana)ForestService-MountainRegion4(CentralandSouthernIdaho)http://www.idahoforests.org/foresthq.htm

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BuildingType&HeatingDemandsBiomassasafuelsourceoffersacost-competitivesourceofheatandpowerwhencomparedto fuel oil and propane. Engineering studies of potential pilot projects across Idaho havefoundpaybackperiodsof 10-years or less for institutional-scalecombinedheat andpower(CHP)applications,butprojectsvarygreatly.

• Are you concerned about the impact of current or future energy costs on yourbusiness?

• Areyouconcernedaboutpowerreliability?Doyouhaveanemergencygenerator?• WhatistheHVACsystem?Centralheatingorcoolingplant?• Doyouanticipateafacilityexpansionornewconstructionwithinthenext3-5years?• Do you have adequate space for the equipment and for fuel storage? Does your

system have a reliable source of backupheat, in case there is a disruptionof fuelsupply?

GeneratingElectricityIdaho has some of the lowest electricity prices in the nation, with an average cost of9.6¢/kWhforresidentialand5.85¢/kWhforindustrialcustomersinFebruary2017,howevercombinedheat andpower (CHP) systemscan be competitive under certain circumstances.Idaho does not have a state-mandated net metering policy, but individual utilities haveadopted similar policies for residential and small commercial projects, up to 25kW in size.Commercialor industrialcustomersmaybeeligiblefornetmeteringupto100kW.Systemsexceedingthesecapssellpowerattheavoidedcostrate

• Whatisthecurrentandpredictedenergypriceinyourregion?• Energy demand – will the facility offset existing demand under a net metering

agreement?Will theproject deliver power under a Power PurchaseAgreement?Haveyoudiscussedacceptabletermswiththepurchaserandtheutility?

• Electrical transmission line capacity –Checkwith the local utility if pre-feasibilitystudiesarerequired.

Box4.ResourcesBiomassThermalFactsheetsandcasestudies.http://www.biomassthermal.org/IdahoEnergyPrimer.https://oemr.idaho.gov/wp-content/uploads/2016/08/2016.03.01_Idaho_Energy_Primer.pdfEPA'sCombinedHeatandPowerPartnership.(www.epa.gov/chp)AverageElectricityPricesbyState.https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_aContactsRockyMountainPower(PacifiCorp).https://www.rockymountainpower.net/env/nmcg/nm/re.htmlAvista.https://www.avistautilities.com/services/electricity/interconnection/pages/default.aspxIdahoPower.ScottGatesandPattiBest208-388-2559netmetering@idahopower.com

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BiomassEnergyTechnologiesImagesM.Kauffman.

10. A stout augur delivers fuel at the Harney Community Energy system in Burns, Oregon. Robustconveyanceequipment costsmorebut suffersfewerbreakdownsandallowsuseofwider varietyoffuels. 11. Biomass boiler and emission control equipment at Integrated Biomass Resources inWallowa, Oregon. IBR uses biomass to lowers their energy costs and raises the value of theircommercial firewood products. 12. Roll-off truck bins hold the biomass fuel supply at HarneyCommunity Energy in Burns, Oregon. The bins are significantly less expensive than below-gradestorageandcanbetransportedtoforestedsitesforeasyloading.

13.AviewintothecombustionchamberatHarneyCommunityEnergysysteminBurns,Oregon.Thetwo-stagesystemdrivesofthegasesandcombuststhemintheupperchamber,creatingaverycleanandefficient burn. 14.Many larger process heat users, such as dry kilns,use steam.Highpressuresteamcanbeusedforco-generation:creatingelectricityandheat.15.Boilerinabox.ThewoodpelletboileratGrantCountyRegionalAirportinJohnDay,Oregoniscontainerizedtosavespaceandspeedinstallation.

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Permitting&EnvironmentalConcernsPermit requirements will vary depending on the scale of the operation – from minimalbuilding code and electrical requirements for boiler installations to full-scale land useplanningrequirementsforintegratedbiomassmanufacturingfacilities.Hiringanfull-serviceengineering and planning firm can help streamline the project development process andensurecompliance.

• Comprehensive plan – has your community engaged in long-range planning orvisioningtohelpcoordinatefuturedevelopment?

• Zoning–haveyouidentifiedasitethatcanaccommodateindustrialuses?• Access–transportationneedsincludegoodroads,gates,andaccesscontrols.• Wherehavewoodproductsmanufacturing facilitiesbeenbuilt in thepastandhow

canyouco-locatewithotherbusinesses?• Wateruseanddischargepermits–willthefacilityrequireanywateruseordischarge

permits,specialwastedisposalvariances?• Siteassessment–haveindustrial facilitiesbeen locatedherebefore?WillaPhaseI

environmental assessment be required to screen for contamination? (i.e. forasbestos,leadpaint,oiltanks)?

AirQualityAny new woody biomass facility (large or small – thermal or electric generation) willemit certain air pollutants and will require an air quality Permit to Construct (PTC) orexemption fromIdahoDEQ. Thepermittingprocesscantake3-4monthsforsmallprojectsandup to1year for largerprojects. DEQhasa streamlinedpermitapplicationprocessandrecommendsanywoodybiomass developertofollowtheseinitialsteps:

• Read“AirQualityPermits–ApplicantandDEQResponsibilities”documentlocatedat DEQ’s website: http://www.deq.idaho.gov/media/656219-applicant-deq-responsibilities.pdf

• Call theAir Quality PermittingHotline at 1-877-5PERMIT (1.877.573.7648) to askquestionsandscheduleapre-applicationmeeting.

• Need to contract with a qualified environmental engineer for the permittingrequirementsofyourproject?https://www.deq.idaho.gov/media/1118830/hazardous-waste-comprehensive-contractors-list.pdf

• Are there air quality concerns in your region that may require additionalconsideration?

Box5.AdditionalResourcesIdahoDivisionofBuildingSafety.https://dbs.idaho.gov/(permittingandcoderequirements)PhaseIEnvironmentalAssessmentGuide.http://dnr.wi.gov/files/pdf/pubs/am/am465.pdf

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FinancingFinancing can be the most challenging aspect of a project. Lenders are typicallyrequiring borrowers to purchase all-new equipment and make substantial downpayments. Terms of debt beyond 15 years are rare and these may require 20-yearpower purchase agreements. The fuel supply, sources, contracts and financial viability ofthesupplierswillbesubstantially scrutinizedandverified. H owe ve r , therearenumberoffederal tax credits and financing subsidies that can assist in the financialworthinessoftheproject. One significant benefit of biomass-based products is that they can utilize small-diameter logs, low-gradespeciesorgrowth,andwastestream,meaning that inputscanbecheap.Ultimately,thebusinesswillrunmostprofitablybysellingadiversifiedbundleoflow-tohigh-valueproducts.

• Haveyoudevelopedaninvestment-gradepro-formaandbusinessplanwithwhichtoapplyforfinancing?

• Haveyouidentifiedseveralqualifiedlenders?• Have you determined the type of financing – equity, investor-based, debt, bonds,

etc.?• Haveyouidentifiedandsecuredtheappropriatedownpayment–ofatleast20%?• Haveyouidentifiedanypotentialstateorfederalgrantprograms?• Canyouutilizetaxcreditsaspartofthestateorfederal-basedincentivespackage?

Box6.FinancingResourcesWood Energy Financial Calculator, Handbooks, State Policy Database, and Useful Links.http://woodenergyproject.comWood-Based Entrepreneurs Toolkit. 2006-2017.OregonWood InnovationCenter.Availableathttp://owic.oregonstate.edu/publicationsBiomassEnterpriseEconomicModel.Version2.2.0.Dec19,2016.http://owic.oregonstate.edu/biomass-enterprise-economic-modelU.S. Department of Energy Database of State Incentives for Renewables and Efficiency.www.dsire.govUSDARuralDevelopment.Grants,loans,andtechnicalassistance.https://www.rd.usda.govUSDASmallBusinessInnovationResearchProgram(SBIR).https://nifa.usda.gov/program/small-business-innovation-research-program-sbir

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ConclusionForest products have long been a central part of the state’s economy, and local projectdevelopersenjoyaccesstoexpansiveforestresources,skilledworkers,andbusiness-friendlypolicies.Biomassworks for rural communitiesbyproviding localemployment, cost-savings,and domestic energy options - while also creating economic incentives for foreststewardship,fireriskreduction,andimprovewildlifehabitat.Howmanychecklistquestionshaveyouansweredwithcertainty?Section(“goahead”þ or“needsadditionalreview”ý ) ProductTypesandConsiderations HarvestingandResourceAvailability BuildingType&HeatingDemandsandGeneratingElectricity

Permitting&EnvironmentalConcernsandAirQuality

Financing Additional resources listed throughout the text canhelp fill in technical details andoffer aseries of potential contacts. Reaching out to successful project developers, technologyproviders,andagencystaffishighlyrecommended.Box7.CaseStudiesandPressCaseStudy:QuillayuteValleySchoolDistrictBiomassBoiler:Astoryaboutthebiomassboilerswitchoutprojectat theForksMiddleSchoolandForksHighSchool inForks,Washington.Producedin2016.Oregon Biomass Heat Case Studies: A showcase of five biomass heat projects that wereinstalledinpublicfacilitiesacrossthestateofOregonin2010and2011.Wallowa Resources. Non-profit dedicated to sustainable resource management – helpedfoundIntegratedBiomassResources(IBR).http://www.wallowaresources.org/index.php/what-we-do/community-development/biomass-campusBox8.ContactsIdaho Governor’s Office of Energy and Mineral Resources. Resources, links, and contactshelpfulforbiomassandrenewableenergyprojectdevelopment(https://oemr.idaho.gov)Idaho Department of Commerce. Resources for starting a business, finding incentives andfinancing,understandingthetaxcode,propertyandmarketresearch.(http://commerce.idaho.gov).University of IdahoExtensionForestry. Programming, publications, and resourceson IdahoForestIssues.(https://www.uidaho.edu/extension/forestry)

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BoiseNational Forest -ThomasBarnett,aMarch 2013graduateof theCentennial JobCorpsCivilianConservationCenter, works on building slash piles to help thin unwanted forest fuels on the Boise National Forest in 2012.Recentlyhiredbythe forest,Barnettwill startworkaspartoffirecrewinMayandputhisnewlymintedwildlandfirefighting skills to work as he pursues a career in firefighting. Photo Credit: U.S. Forest Service photo/ MichaelDelaneyAvailableat:https://www.flickr.com/photos/usdagov/8734946971/