Out in the Piney Woods of East Texas, on the outskirts of a town that’s supported a thriving logging industry for more than a century, there’s a hulking power plant for sale. But it hasn’t run since 2015 and never turned a profit. The most likely outcome is getting bought, dismantled, and hauled off to some place where producing electricity from burning wood makes economic sense; the numbers don’t work here anymore.
The cold, dark facility in Lufkin, Texas, is a biomass plant. Biomass was once considered a moneymaker, but even in a region surrounded by four national forests, it’s no longer profitable. Biomass generates only 1% of the electricity in the U.S., and its downfall illustrates just how potent cheap natural gas and tax breaks are when it comes to shaping American electricity markets.
It’s a different story in other parts of the world, where biomass is supported by climate policies and government subsidies. Utilities in Europe are converting old coal facilities to burn wood, including the U.K.’s biggest power plant, and they’re building new ones in Japan and South Korea.