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Environmental and socio-economic implications of woody biomass co-firing at coal-fired power plants

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  • Picciano, Paul
  • Aguilar, Francisco X.
  • Burtraw, Dallas
  • Mirzaee, Ashkan

Abstract

We apply a detailed power sector model to explore the near-term role of woody biomass co-firing at existing coal facilities in the Eastern US in the decarbonization of US electricity generation. We evaluate five public policy interventions: a biomass co-firing subsidy, two carbon emissions fees, and two clean energy standards. Treating woody biomass as a carbon neutral feedstock, we find co-firing weakly supports decarbonization. However, policies subsidizing co-firing can delay retirement of coal facilities and reduce generation from nuclear, natural gas, wind and solar. Consequently, corresponding sector-wide emissions of CO2 and SO2 may increase (slightly) due to greater utilization of coal plants including relatively inefficient facilities. We assume NOX emissions increase due to generation efficiency losses, but this remains uncertain. Due to higher emissions, a biomass subsidy for co-firing yields small (near zero) economic welfare losses, while in contrast other policies advance decarbonization and yield significant welfare gains. We find justification for biomass use from a local perspective based on first-order impacts on employment and economy activity, but less so air quality.

Suggested Citation

  • Picciano, Paul & Aguilar, Francisco X. & Burtraw, Dallas & Mirzaee, Ashkan, 2022. "Environmental and socio-economic implications of woody biomass co-firing at coal-fired power plants," Resource and Energy Economics, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:resene:v:68:y:2022:i:c:s0928765522000136
    DOI: 10.1016/j.reseneeco.2022.101296
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    1. Tan, Zhizhou & Zeng, Xianhai & Lin, Boqiang, 2023. "How do multiple policy incentives influence investors’ decisions on biomass co-firing combined with carbon capture and storage retrofit projects for coal-fired power plants?," Energy, Elsevier, vol. 278(PB).

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