Energy company aims for biomass facility
NorthWestern Energy is attempting to purchase the former Smurfit-Stone Container Corp. paper mill near Frenchtown with the intention of converting it to a biomass plant, a NorthWestern official told people at last week’s meeting of the Montana Wood Producers Association in Whitefish.
John Fitzpatrick, director of governmental affairs for NorthWestern Energy, said the electric and natural gas utility wants to stimulate biomass development.
NorthWestern is one of five companies bidding to obtain the Smurfit property, he said, and NorthWestern is the only bidder that’s not a demolition company.
The closed paper mill — with its multifuel boiler, rail service and truck access — is an attractive site to NorthWestern, Fitzpatrick said.
Company officials have estimated they could turn the Smurfit property into a 40-megawatt biomass plant for $60 million or $70 million, plus acquisition costs. NorthWestern could get tax credits to build the plant, but not to buy fuel for it, Fitzpatrick said.
“Fuel is the driver and the biggest problem we have in moving forward,” he said. “Can we fuel a project at Smurfit? If not, we’ll let that project go by the wayside and focus on other mills.”
Fitzpatrick took advantage of the fact many in the audience are in the business of producing what NorthWestern would use for fuel.
NorthWestern is prepared to enter into long-term agreements to buy fuel at “predictable, stable prices,” he said. The company wants to buy hog fuel and residuals — materials “that otherwise would be burned if a mill had that capacity.”
NorthWestern officials want to talk to timber companies within a 70-mile radius of wherever a plant is eventually located, or “farther if they have rail service,” he said.
According to Fitzpatrick, there’s enough fuel in Montana to create between 100 and 150 megawatts of energy from biomass.
One reason NorthWestern is interested in a biomass plant is the pending requirement that by 2015, at least 15 percent of its power must come from renewable sources.
Today, 9 percent of NorthWestern Energy’s portfolio comes from renewable energy sources. Most of the 9 percent comes from wind, but within the next three years more hydropower will be used, Fitzpatrick said.
NorthWestern Energy officials are concerned about the costs of wind energy. Turbines today cost twice as much as they did five years ago, Fitzpatrick said. Today, “wind is no cheaper than biomass.”
Most energy companies consider wind less desirable than biomass, he said. And, the appetite for wind in Montana is limited because of limited transmission capacity to move it out of the state.
A plus for biomass, he said, is it’s available 24 hours a day, as opposed to wind, which is an intermittent fuel source.
“We are long on power at nights and on weekends, when we don’t need it,” he said.
If NorthWestern opened a biomass plant and ever ran short of biomass fuel, “we’d supplement it with another fuel, most likely natural gas,” he said, because some flexibility in fuel sources is important.
Craig Rawlings of the Montana Community Development Corp., a private firm, told the wood producers that biomass energy supports the existing wood products industry and supports healthy forest management and better air quality.
An important step in biomass development is for state government to make biomass energy a priority development initiative and recognize its benefits to Montana citizens, Rawlings said.
“If we ever get the first biomass plant built in Montana, there will be a foot race to see who builds the second,” Rawlings said.
Reporter Shelley Ridenour may be reached at 758-4439 or by e-mail at sridenour@dailyinterlake.com.