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 NO_X 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.