6. Biomass: Wood
C. The Biomass Power Industry
The biomass power industry is a decentralized, loosely knit
coalition of firms, such as independent power producers, electric
utilities, engineering and construction firms that use or develop
biomass products, and fuel suppliers. Unlike many large utilities,
biomass power producers typically are not vertically integrated
(where one firm owns supply, generation, and distribution
facilities) but, rather, are horizontally integrated in some areas,
such as construction and engineering firms that specialize in
biomass projects or provide turbines and other specialized
components. Most biomass power companies today are independent
power producers or are in the forest industry.
The Energy Policy Act of 1992 offers a production tax credit of 1.5
cents per kilowatthour to biomass power producers that purchase
biomass fuels from "closed-loop systems." A closed-loop system has
been interpreted to mean an energy crop farm. Today, there are no
such facilities in existence to allow capture of the tax credit,
although several have been proposed recently.
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