(Bloomberg) -- Rocky Mountain Power, a unit of Warren Buffett's Berkshire Hathaway Inc., will test a new biomass fuel that may reduce the amount of coal being burned by power plants.
The U.S. utility, which is part of Pacificorp, will use a plant in Utah to test a biomass fuel made by Active Energy Group Plc, Paul Murphy, a spokesman for RMP, said by phone. Active Energy's fuel, called CoalSwitch, is processed from low-grade forestry residue.
Active Energy, which manages woodlands and develops clean-energy products, is seeking to supply its fuel to utilities willing to switch to biomass in order to cut carbon emissions. The London-based in November obtained funding for its first industrial-scale plant. It will be located in Canada and turn waste and wood into CoalSwitch.
Rocky Mountain is preparing an 18-hour test, with a 10 percent blend of CoalSwitch and 90 percent coal, to see if it could reduce emissions, Murphy said. The trial is scheduled between the last quarter of 2017 and the first quarter of 2018.
While Rocky Mountain has tested the “grindability” of some CoalSwitch in a laboratory, it has not performed a combustion test, and neither did it find CoalSwitch performed better than coal in the lab, according to Murphy. He disputed a Nov. 28 statement from Active saying that said CoalSwitch outperformed the fossil fuel.
“No boiler testing has been performed to support the statement that biomass performs better than coal in every respect,” he said. “It may be an amazing product but we don't know yet.”
Active Energy acknowledged Rocky Mountain's outstanding questions about its product in an e-mailed response sent from Philip Scalzo, chief technology officer of AEG CoalSwitch.
Active Energy projects revenue from the facility in Canada of more than $6.3 million a year. It will process low-grade forestry residue, such as sawdust, woodchip and bark into biomass, according to the statement.
Seventeen utilities want to sample CoalSwitch as a possible means of keeping alive old power stations that are facing growing pressure from regulators to close because of their high carbon emissions, Chief Executive Officer Richard Spinks said in an interview.
The company is seeking to reach financial close on a second factory located in Latvia during this quarter that will require $40 million of investment. A third third planned facility in Malaysia will use low-grade residue from palm oil producers, Spinks said.
To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net. To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone
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