An energy company that wants to burn poultry waste for fuel has lost its bid to use the bird droppings as a green energy resource because of a quirk in North Carolina law.
A ruling by the N.C. Utilities Commission means that Peregrine Biomass Development will scrap plans for now to build several industrial boilers in the state. The company had planned to burn chicken droppings as an organic fuel to generate steam for factories and other industrial applications.
Advocates say the ruling is a setback to long-standing hopes of deriving green energy from the state's abundant supply of farm animal waste, which has proven one of the most challenging sources of renewable fuel because of high costs, transportation difficulties and other logistical problems.
"We just haven't had other viable proposals for poultry waste," said James McLawhorn, director of the electric division at the Public Staff, the state's consumer advocacy agency.
Peregrine, based in Greenville, S.C., was considering four potential sites in this state to build facilities that burn poultry waste to make steam, the company's president, Ralph Walker, said. The company was hoping to sell steam in Bertie, Craven, Halifax and Iredell counties, Walker said.
Peregrine's business model had counted on a dual revenue stream. The company had planned to sell steam to industrial customers and at the same time sell renewable energy certificates from the projects to Progress Energy, Duke Energy or regional power agencies. The renewable certificates are a subsidy to encourage development of the state's renewable sector. Electric companies and power agencies are required to buy a certain amount of the certificates to meet the state's renewable energy targets.
The 2007 law
The state's 2007 renewable energy law considers poultry waste a type of renewable resource - but only as long as the poultry waste is used to generate electricity. Peregrine's use of poultry litter didn't qualify as a renewable, the utilities commission ruled Friday, because the company planned to generate steam or boiling water, not electricity.
Walker said his company likely will ask the General Assembly to modify the state's energy law so poultry waste can be counted as a renewable resource for generating steam and boiling water.
The commission's ruling exposes some of the intricacies of this state's energy policy.
State law allows both solar electric and solar thermal to count as a green energy resource for the purposes of selling renewable certificates, even though the latter generates only steam and boiling water.
But state law makes no such allowance for poultry waste or swine waste, so the utilities commission felt it had no choice but to deny Peregrine's request.
Walker said that the same standard ought to apply to animal waste as to solar thermal technology, because both offset the use of electricity to generate heat needed to boil water.
"It displaces coal, it displaces fuel oil, it potentially displaces natural gas," Walker said. "We're using a renewable energy resource."
Pennsylvania competitor
Peregrine's request was opposed by a competitor, Fibrowatt, a Pennsylvania company that would like to build small power plants in Sampson and Montgomery counties fueled by poultry litter. Fibrowatt is vying to be the primary supplier of poultry waste energy for the state's limited requirement for that specific resource. But Fibrowatt's plans, under discussion for several years, have yet to lead to any contracts or construction.
Fibrowatt had also proposed a power plant in Surry County, but this year, officials in that country said they no longer support the Fibrowatt project.
Peregrine, established in 1993, specializes in owning and operating hydroelectric projects, coal-fired cogeneration facilities, natural gas-fired and electric boilers, and renewable energy plants that use wood waste as a biomass fuel.
