Environmental and Socio-Economic Implications of Woody Biomass Co-firing at Coal-Fired Power Plants

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.

• Modeling shows scarce woody biomass co-firing under decarbonization.
• Biopower co-firing subsidy can increase total emissions (CO2, SO2, NOX).
• Co-firing subsidy yields small welfare loss; other decarbonization policies yield gains.
• Co-firing subsidy can increase jobs and economic activity in selected states.