A handful of Democratic politicians on Wednesday stood in the snow outside an obsolete power plant and reversed their party’s customary line of attack when an industrial facility closes. Instead of blaming greed or billionaires or out-of-state corporations or winged monkeys for the recent closure of two N.H. biomass power plants, they blamed the government.
Well, not the government in general, just Republican Gov. Chris Sununu. They objected to his having vetoed bills that would have forcibly taken money from average people and given it to large, out-of-state corporations.
These Democratic politicians were attacking a Republican for opposing corporate welfare.
Specifically, the vetoed legislation would have created new ratepayer subsidies for biomass power plants. The vetoes caused two of the six plants (ones owned by a private New Jersey corporation) to close, they alleged.
Never mind the plants that didn’t close (one of which did get new state subsidies).
Never mind that the governor doesn’t run the shuttered power plants, didn’t make the decision to close them, and didn’t prevent their parent company from investing in them more heavily.
Also ignore a 2018 study published by none other than the State of New Hampshire, which showed the state’s biomass power plants to be expensive and inefficient compared to rival power producers.
The Office of Strategic Initiatives study showed two unmistakable trends, both driven by consumer demand for lower energy prices:
The removal or reduction of artificial price supports over many years.
The innovation-driven drop in the cost of other fuel sources.
Supposedly, the state has to force all Granite State residents and businesses to subsidize biomass power plants because they buy and burn wood pulp, thus keeping New Hampshire’s tiny timber industry alive.
But the state doesn’t have similar subsidies for paper companies or home construction, which are more important for the timber industry. Biomass accounts for only 3 percent of the value of a timber harvest, but sawlogs account for 90 percent, according to New Hampshire Business Review.
The state’s report showed that biomass plants might not have become so reliant on subsidies if they had invested more cost-savings initiatives or experimented with new business models. To conclude that the governor alone, rather than company officers and directors, was responsible for the fate of 1/3 of New Hampshire’s biomass plants (just the ones that closed) is a rather interesting position to take.
The state’s report concluded that biomass plants would continue to struggle because they inefficiently produce expensive electricity while most competitors, even other renewable power generators, more efficiently produce cheaper electricity.
“As new projects are connected to the grid, predominantly wind and solar, biomass will cede its market share to other forms of generation. These more flexible resources will contribute to more volatile, but lower market prices, leaving biomass generation at a steeper competitive disadvantage. New Hampshire ratepayers would likely need to provide continuous subsidies at above market prices to sustain Class III biomass generation.”
In short, burning wood (at least with existing technologies) is not the way to power a 21st century economy. A March U.S. Energy Information Agency report on the future of U.S. power generation didn’t even mention biomass, concluding that “most of the electricity generating capacity additions installed in the United States through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).”
Biomass power generation is dying a natural death. That’s why companies that own biomass plants are reluctant to sink any more money into them. Forcing ratepayers to make up the difference between what people are willing to pay for power and what biomass power costs is neither compassionate nor morally defensible. It is massively wasteful — of other people’s money.