New Contract to Yield First Biomass Power Plant in New Mexico

August 9, 2006

The largest electric and gas utility in New Mexico has signed a contract to buy 35 megawatts of power from the state's first biomass power plant. PNM announced on July 31st that it signed a 20-year power purchase agreement with Western Water and Power Production, which plans to build the plant near Estancia, about 40 miles southeast of Albuquerque. The plant will burn wood produced from forest thinning efforts in the area and will use state-of-the-art technology to minimize air emissions. It will be located next to Tagawa Greenhouses, which will use waste heat from the power plant to heat the greenhouse. PNM expects the plant to begin operating in early 2009. PNM must still file the agreement with the New Mexico Public Regulation Commission for its approval. See the PNM press release.

Photo of heavy machinery conveying stacks of lumber.

This lumber company in Oregon will soon be generating 1.2 megawatts of power.
Credit: Rough & Ready Lumber Company

The Estancia plant is an example of a combined heat and power (CHP) plant, producing both heat and power for commercial uses. Biomass-fueled CHP plants are more commonly found in the Pacific Northwest, where sawmills and paper mills can use their own waste as an energy source. One example is the Rough & Ready Lumber Company in Cave Junction, Oregon. Drawing on a grant of $1.7 million from the Energy Trust of Oregon, the lumber company plans to install a new boiler and generator next year to provide steam for the company's two sawmills and lumber dry kilns while generating 1.2 megawatts of power. The power will be sold to the local power grid, allowing a four-year payback on the investment. The company plans to provide half the fuel for the boiler from its sawmill waste and draw on nearby forest thinning operations for the remainder of the fuel. To encourage such projects, the Energy Trust's Biopower program is open to project proposals on a rolling basis. See the Energy Trust press release (PDF 30 KB) and the Energy Trust Biopower program. Download Adobe Reader.