Gainesville, FL Chooses Biomass; American Renewables Perseveres to Build Facility Despite Many Obstacles
In 2000, the City of Gainesville, Florida, began discussions on its future energy generation needs. For decades the community, for its baseload power needs, had relied on a coal facility that was fast approaching 30 years of service and would need considerable upgrades to continue operating. Initially, the discussions revolved around simply how large a new coal facility they should build. After numerous public meetings, the Gainesville elected officials and residents expressed concerns about the cleanliness and other environmental impacts of coal-produced energy and acknowledged that they would like to rely on a cleaner, locally-produced, more sustainable energy source to meet their future generation needs.
Over the course of many years, the community carefully researched available energy generating technologies, including biomass, solar, wind, natural gas and nuclear. After investigating the pros and cons of each source, the City of Gainesville determined that biomass would be the best way to move forward. Residents and elected officials liked the reliability of biomass power, and the fact that north central Florida has an abundant source of wood waste material available for biomass energy. Not only would biomass produce clean energy, it would also result in a sizable reduction of the open-burning of this material, creating more space in area landfills by diverting it to a biomass facility.
In late 2007, Gainesville issued a competitive "request for proposals" specifically for a biomass energy facility. After being shortlisted with two other developers, American Renewables was ultimately selected by Gainesville in May 2008 to negotiate a long-term contract to sell clean, renewable baseload power to Gainesville from the Gainesville Renewable Energy Center ("GREC"), a 100-megawatt net biomass facility similar to the one the company was developing in Nacogdoches, Texas.
But that was only the beginning of the approval process. American Renewables then had to negotiate a power purchasing agreement ("PPA") over a year-long process with the local municipal utility, and demonstrate its sustainability credentials to the local and state governments in several rounds of hearings. This was happening at the same time the company was negotiating a long-term lease with Gainesville and preparing for the complicated logistics required to build one of the largest biomass facilities in the country. Meanwhile, the EPA issued new Industrial Boiler Maximum Achievable Control Technology ("IB MACT") rules, necessitating a new design for the facility's bag house to nearly double the size of the structure.
Three years, over eight public permitting hearings and a complete bag house redesign later, American Renewables was finally able to break ground on GREC in March 2011, soon after Governor Charlie Crist and his cabinet unanimously voted to approve its construction and operation in December 2010. The company received its final construction air permit on December 28, 2010 – a mere three days before the EPA's new Tailoring Rule was scheduled to go into effect on January 1, 2011.
As of March 2012, the facility is well underway and right on schedule. With a 32-month construction period, GREC is slated to begin operations in late 2013. Over 400,000 man-hours have gone into the construction of GREC to-date and currently an average of 400 construction workers each day are employed on site, although it will eventually employ more than 800 workers daily. Once GREC is operational in late 2013, 47 staff will operate the facility around-the-clock and approximately 160 foresters, loggers and truckers will supply the facility with clean, woody biomass material. In addition, GREC is expected to create an additional 500 or more indirect/induced jobs in the region for a total job creation impact in the region of over 733 permanent jobs, or 7.33 jobs per megawatt of capacity.
Perhaps the best aspect of the project is that, if it qualifies for an approximately $120 million Section 1603 grant from the U.S. Department of the Treasury, the company has agreed to discount each megawatt-hour of energy produced by the facility by $8.10 – savings that the local municipal utility will pass along to its ratepayers. The total estimate of ratepayer savings over the 30-year life of the PPA from the receipt of the Section 1603 grant is nearly $200 million.