Native American reservations are among the most economically disadvantaged regions in the United States; lacking access to economic and educational opportunities that are exacerbated by “energy insecurity” due to insufficient connectivity to the electric grid and power outages. Local renewable energy sources such as wind, solar, and biomass offer energy alternatives but their implementation encounters barriers such as lack of financing, infrastructure, and expertise, as well as divergent attitudes among tribal leaders. Biomass, in particular, could be a source of stable base-load power that is abundant and scalable in many rural communities. This case study examines the feasibility of a biomass energy plant on the Cocopah reservation in southwestern Arizona. It considers feedstock availability, cost and energy content, technology options, nameplate capacity, discount and interest rates, construction, operation and maintenance (O&M) costs, and alternative investment options. This study finds that at current electricity prices and based on typical costs for fuel, O&M over 30 years, none of the tested scenarios is presently cost-effective on a net present value (NPV) basis when compared with an alternative investment yielding annual returns of 3% or higher. The technology most likely to be economically viable and suitable for remote, rural contexts—a combustion stoker—resulted in a levelized costs of energy (LCOE) ranging from US$0.056 to 0.147/kWh. The most favorable scenario is a combustion stoker with an estimated NPV of US$4,791,243. The NPV of the corresponding alternative investment is US$7,123,380. However, if the tribes were able to secure a zero-interest loan to finance the plant’s installation cost, the project would be on par with the alternative investment. Even if this were the case, the scenario still relies on some of the most optimistic assumptions for the biomass-to-power plant and excludes abatement costs for air emissions. The study thus concludes that at present small-scale, biomass-to-energy projects require a mix of favorable market and local conditions as well as appropriate policy support to make biomass energy projects a cost-competitive source of stable, alternative energy for remote rural tribal communities that can provide greater tribal sovereignty and economic opportunities.

INTRODUCTION

Tribal lands are located primarily in remote, rural regions with few educational and employment opportunities [1]. Unemployment rates on reservations are far above the national average and the average income is less than US$8,000 compared with a countrywide average of US$21,587. This translates to 39% of Native Americans on tribal lands living below the federal poverty line [2]. A further impediment to tribal prosperity is that many reservations are considered energy insecure, i.e., they are not connected to the electricity grid and receive power only intermittently with frequent blackouts. Renewable energy development on tribal lands may thus offer multiple opportunities to improve the lives of Native Americans on reservations: a chance at economic revitalization, creation of new and higher-quality employment, reduced dependence on extractive industries as sources of revenue, and environmental quality improvements. While wind and solar photovoltaic power suffer from intermittency that is not easily buffered on tribal lands due to their remoteness and lack of grid infrastructure, biomass is a potentially stable energy source for reservations in rural, predominantly agricultural regions.

Although many Native American reservations are located in areas rich in solar insolation, wind, or biomass, there are a few utility-scale renewable energy projects located on tribal lands [3]. Experts list multiple barriers to developing renewable energy on tribal lands, among them financing, infrastructure, knowledge of renewable energy technologies, and attitudes held by tribal leadership [4]. Financing may be difficult to obtain for tribes due to lack of tribal resources and limited access to affordable credit and financial markets. Without outside funding, even medium-sized renewable energy projects are nearly impossible to undertake for many tribes that lack the millions of dollars in up-front capital to plan and construct the project. In addition, Native American tribes are not eligible to receive federal tax credits that are typically needed for such renewable projects to become economically viable [1]. Insufficient infrastructure, such as roads, transmission grid as well as lack of installation and servicing equipment can increase the cost of renewable energy projects on tribal lands. Although tribal leaders have authority and prominence within the tribal community, they often lack the necessary knowledge and institutional capacity for planning renewable energy projects. Native American leaders are also reluctant to form partnerships—especially economic partnerships—with non-tribal entities for fear of losing sovereignty and control of their own resources [5]. Many tribal governments, furthermore, view state and federal regulations, permitting and compliance requirements for renewable energy development as difficult and time-consuming. At the same time, state programs such as renewable portfolio standards (RPS) can create incentives and new markets for tribal renewable energy since the purchases and sales of renewable energy generated on tribal lands count toward an RPS. Overall, energy experts anticipate that tribes are more likely to undertake more small-scale renewable energy projects than utility-scale developments in the coming decades [4]. Among them, biomass energy is an important source of alternative energy because of its flexible and reliable nature.

This paper aims to contribute to the literature on tribal energy independence by presenting a case study of the feasibility for a biomass-to-energy plant on the Cocopah reservation in southwestern Arizona. It seeks to provide information, analysis, and a transferable template for analyzing potential biomass-to-energy projects on tribal lands by considering the range of typical factors determining project viability such as available biomass energy technologies, local energy feedstock supply and its reliability, necessary infrastructure, and financing.

METHODOLOGY

Selection of Case Study

The study site is the Cocopah Indian Community, a federally registered sovereign Indian tribe, located in southwestern Arizona (Figure 1). The reservation is a poor, rural community in the low-lying desert of Yuma County in the southwest corner of Arizona, about 13 miles south of the city of Yuma. It consists of noncontiguous lands known as the North, East, and West Reservations that together cover 6,524 acres or 10 square miles [6]. The Cocopah tribe was selected because of its demographic profile, lack of economic opportunities, and the desire of tribal leaders to maintain tribal sovereignty while improving the tribe’s energy supply and socioeconomic outlook. The Cocopah are comparable to other Native American reservations located in rural, expansive states with respect to their isolation, limited access to energy, and other sociodemographic and socioeconomic disparities.

FIGURE 1.

Map of the Cocopah Reservation near the city of Yuma in Yuma County, AZ.

FIGURE 1.

Map of the Cocopah Reservation near the city of Yuma in Yuma County, AZ.

According to Census data, 817 Cocopah lived on the reservation [7]. Of those, approximately one-quarter (207, or 25.3%) is under the age of 18 years. In addition, 222 Cocopah members are 65 years or older (27.2%). This is double the share of elderly in Yuma County and the state of Arizona [7]. The unemployment rate is 26%, and 33% of the reservation’s residents live below the federal poverty line, with 31% being classified as “severely poor,” because they earn less than half of the federal poverty threshold [8]. Approximately 82% of households rely on some form of federal income assistance such as Social Security, Supplemental Security, public assistance income, or the Supplemental Nutrition Assistance Program [7]. Of the total of 753 housing units on the Cocopah reservation, 312 are occupied and 70% of those units are renter-occupied [8].

The Cocopah tribe currently receives its power from the Arizona Public Service Electric Company (APS), a public utility in the Yuma region. Generating its own biogas or electrical power coupled with converting existing residential buildings to net-zero and improving environmental sustainability would allow the Cocopah tribe to fulfill its goals of “establish[ing] a strong, cohesive and financially stable community on its Reservation,” according to the Cocopah Indian Housing and Development Authority (CIHAD) [9]. CIHAD and the Cocopah tribe are committed to investing in renewable energy sources to power existing buildings on the reservation and the tribe has already undertaken energy efficiency improvements and received a US$30,600 energy efficiency block grant from the U.S. Department of Energy awarded Cocopah for its cultural center [10].

Data Sources

The data underlying the feasibility calculations are compiled from a variety of authoritative sources. Information on biomass technologies, conversion efficiencies, feedstock energy contents, and production potentials is from the National Renewable Energy Laboratory (NREL), the International Renewable Energy Agency (IRENA), the U.S. Department of Energy, and peer-reviewed scientific literature. Demographic, economic, and geographic data on Native American tribes and specifically the Cocopah Tribe is compiled from the U.S. Environmental Protection Agency, the Bureau of Indian Affairs, and the CIHAD.

Assessment Methodology

The feasibility assessment considers feedstock availability and quality, estimates power demand and plant capacity, and uses the levelized cost of energy (LCOE) and net present value (NPV) approaches to determine the economic viability of the project. LCOE is an economic measure allowing the comparison of different power sources taking into account initial capital requirements, discount rate, and costs of operation, maintenance and fuel acquisition. A general formula for LCOE is given below [11]:

 
LCOE=t=1nIt+Mt+Ft(1+r)tt=1nEt(1+r)t
(1)

In the above equation, t indexes time in years up to n, the expected lifespan of the system, I denotes investment expenditures in USD, M is operation and maintenance (O&M) expenditures in USD, F is fuel expenditures in USD, E is electricity generation in kilowatt hour, and r is the discount rate. Although the discounting of electricity is debated in the literature and practitioner community, the formula in Equation (1) is used by IRENA [12], and which was also used to obtain estimates on the cost of installation, fuel, and maintenance.

The NPV translates the LCOE to a unit-cost of electricity over the lifetime of a generating asset. Thus, the different biomass technologies will be compared on the basis of their NPVs per unit of energy generated and taking all major costs throughout the lifecycle of the plant into consideration.

RESULTS

Selection of Biomass Technology

Considering the comparatively small number of Cocopah living on the reservation and its modest energy needs, a small-to-medium-scale biomass plant will suffice to meet the tribe’s power demand at present and at foreseeable future. Although biomass is not an emission-free source of power, it burns cleaner than coal and oil and high-temperature biomass incineration combined with abatement measures such as scrubbers can achieve emission-reduction targets and burn the feedstock more efficiently [13].

Feedstock Potential

The biomass energy plant on the Cocopah reservation requires a reliable and sufficient feedstock supply. Native Americans currently operate four farms, but the land tilled by those four operators only totals 32 acres [14, 15]. Additional biomass could be sourced from other nearby farms and include primarily agricultural residues from crops such as lettuce, wheat, alfalfa, and grasses. In general, agricultural residues have moisture content of 20–35% and an average calorific content of 11.35–11.55 MJ/kg (lower heating value) [12].

Biomass Energy Technology Identification

The biomass conversion technologies for the project must be suitable for the available biomass feedstock options. Table 1 presents overviews of the typical options.

TABLE 1.

Suitability of biomass conversion technologies for agricultural residues

ProcessMethodEfficiency of current technology (energy output as% of energy input)Ability to accept dry agricultural residues
Biogas production Anaerobic digestion 10–15% (net facility efficiency) No 
 Landfill gas <39% (net facility efficiency) No 
Biomass combustion Direct combustion via industrial stokers 70–90% (boiler efficiency)
20–30% (net facility efficiency) 
Yes 
 Combustion CHP 60–90% (net facility efficiency) Yes 
 Waste-to-energy 22–28% (net facility efficiency) No 
 Co-firing 30–40% (net facility efficiency) Yes, also requires coal 
Gasification Gasification 15–30% (net facility efficiency) Yes 
 Gasification CHP 20–50% (net facility efficiency) Yes 
ProcessMethodEfficiency of current technology (energy output as% of energy input)Ability to accept dry agricultural residues
Biogas production Anaerobic digestion 10–15% (net facility efficiency) No 
 Landfill gas <39% (net facility efficiency) No 
Biomass combustion Direct combustion via industrial stokers 70–90% (boiler efficiency)
20–30% (net facility efficiency) 
Yes 
 Combustion CHP 60–90% (net facility efficiency) Yes 
 Waste-to-energy 22–28% (net facility efficiency) No 
 Co-firing 30–40% (net facility efficiency) Yes, also requires coal 
Gasification Gasification 15–30% (net facility efficiency) Yes 
 Gasification CHP 20–50% (net facility efficiency) Yes 

Based on [12, 16].

Although agricultural residues could potentially be used for digestion and subsequent production of natural gas, digestion is best suited for nutrient-rich wet biomass, such as sewage, animal manure, or the organic portions of municipal solid waste (MSW). Similarly, waste-to-energy plants are well suited for combusting heterogeneous MSW. Efficiency and supply reliability (e.g., feedstock storage) also need to be taken into account because the Cocopah do not have a large and consistently available feedstock supply. Table 2 lists the technologies that are most suitable for combusting dry agricultural waste and their associated capital costs and fixed O&M costs.

TABLE 2.

Capital costs and fixed and variable O&M of the selected biomass conversion technologies

ProcessMethodEstimated investment/capital costs ($/kW installed capacity)Fixed O&M costs (% of installed cost)Variable O&M costs ($/MWh)
Biomass combustion Direct combustion via industrial stokers 1,880–4,260 3.2–4.2 3.8–4.7 
 Combustion with CHP 3,550–6,820 3–6 3.8–4.7§ 
Gasification Gasification 2,140–5,700 3.7 
 Gasification with CHP 5,570–6,545 3.7§ 
ProcessMethodEstimated investment/capital costs ($/kW installed capacity)Fixed O&M costs (% of installed cost)Variable O&M costs ($/MWh)
Biomass combustion Direct combustion via industrial stokers 1,880–4,260 3.2–4.2 3.8–4.7 
 Combustion with CHP 3,550–6,820 3–6 3.8–4.7§ 
Gasification Gasification 2,140–5,700 3.7 
 Gasification with CHP 5,570–6,545 3.7§ 

Fixed O&M costs include items such as labor, scheduled maintenance, routine component/equipment replacement (for boilers, gasifiers, feedstock handling equipment, etc.), and insurance.

Variable O&M costs depend on the output of the system and include non-biomass fuels costs, ash disposal, unplanned maintenance, equipment replacement and incremental servicing costs.

§No specific data for CHP available, thus the conventional system data are used. Data based on [[15], p.34].

As shown in Table 2, adding “combined heat and power” (CHP) to the technology substantially increases the capital cost. CHP would be beneficial if the tribe was located in a cold climate, but Yuma is in a sub-tropical desert climate with average low winter temperatures of 12°C. In addition, pyrolysis, carbonization, and torrefaction are all pre-treatment processes that can be applied to the biomass inputs before combustion or gasification; however, installing such separate treatment is an added capital and O&M cost.

Capacity Specification

The peak monthly electricity consumption in Arizona is 4,645,000 MWh in the month of July due to air conditioning demands [17]. It is likely that homes on the Cocopah reservation actually consume less than the statewide household average, given the smaller square footage of the homes and widespread poverty. To ensure that the proposed plant can accommodate peak demand, the power plant size is extrapolated from average consumption for July. Average electricity consumption per household in Arizona in July is 1.668 MWh, which is extrapolated to a conservatively high annual consumption of approximately 20 MWh per household. For a total of 753 households on the Cocopah reservation, this yields a total upper demand bound of 15,075 MWh/year and hence an upper capacity bound of 1.72 MW.

The capacity factor, or actual energy production divided by the theoretical energy production, of a biomass plant, is around 85% [12], thus yielding a nameplate capacity of 2.02 MW. An important consideration for the size of the plant is its ability to account for daily peak hour usage. APS estimates that customers in the Somerton/Yuma region use about 3.5 kWh of electricity per hour during a summer on-peak period, and a slightly lower 3.3 kWh/hour during a winter on-peak period [18]. Given that there are 753 homes on the Cocopah reservation, the necessary rating of an 85% efficient biomass power plant that would accommodate peak usage is 3.1 MW. However, a reasonable projection of roughly 490 occupied homes (taking into account that more units may have become occupied since 2010 and additional units may be occupied over the 30-year life of the biomass system) would be consistent with the estimated nameplate capacity of 2.02 MW for the plant. If, in addition, the reservation remains connected to APS, it can cover any electricity demand above what the biomass power plant can produce and provide back-up in case of disruptions to plant operation. Utilities have solved the problem of the added cost of increased electricity supply by adopting time-variant pricing [19].

Levelized Cost of Energy

The Federal Energy Management Program of the U.S. Department of Energy sets annual discount rates to be used in cost-effectiveness, lease/purchase, internal government investment, and asset sales. For fiscal year 2018, the real discount rate was set to 3.0% and the nominal discount rate was 2.4% [20].

The useful life of a combustion stoker and a gasifier is typically between 20 and 30 years [3, 12]. IRENA lists the average prices for a variety of feedstocks and transportation costs, and states that the typical cost for U.S. local agricultural residues (20–35% moisture content) is US$1.73–4.23/GJ, or US$20–50/metric ton, including collection, premiums paid to farmers, and transportation [12]. Given that all of the commercial farms considered in this feasibility study are located no more than five miles away from the Cocopah Reservation, IRENA’s estimated rate for cost of feedstock will be used in the LCOE calculation.

The LCOE calculation, furthermore, assumes that 1 metric ton of agricultural feedstock produces approximately 1 MWh of electricity, equivalent to an efficiency of about 20% for converting feedstock to electricity without CHP. Considering the peak demand of 15,075 MWh/year, this translates into 15,075 metric tons of feedstock per year at a cost of US$301,500–753,750/year [21]. The LCOE analysis was carried out for the two most suitable biomass energy technologies—gasifiers and combustion stokers. It includes scenarios for the low and high end of capital expenditure costs, respectively, as well as different discount rates and financing costs. Table 3 shows the high and low estimates for the technology-specific variables in the LCOE formula for combustion stokers and gasifiers, while Table 4 shows the resulting LCOE estimates for the two technologies based on different assumptions.

TABLE 3.

Investment, O&M, and fuel costs of combustion stokers and gasifiers

TechnologyInvestment cost ($/kW)Fixed + variable O&M costs ($/kWh)Fuel costs ($/ton)
Combustion stoker 1,880–4,260 0.0119–0.0287 20–50 
Gasifier 2,140–5,700 0.0123–0.0266 20–50 
TechnologyInvestment cost ($/kW)Fixed + variable O&M costs ($/kWh)Fuel costs ($/ton)
Combustion stoker 1,880–4,260 0.0119–0.0287 20–50 
Gasifier 2,140–5,700 0.0123–0.0266 20–50 

Based on [21] Mott MacDonald Group, 2011.

TABLE 4.

LCOE for combustion stoker and gasifier using low and high end of cost estimates of investment, O&M, and fuel as well as 3 and 5% discount rates

ScenarioLCOE ($/kWh) at 3% discount rateLCOE ($/kWh) at 5% discount rate
Stoker, low end of assumed ranges 
Investment ($) 3,797,600 
O&M ($/year) 178,808 
Fuel ($/year) 301,500 
LCOE ($/kWh) 0.0443 0.0475 
Stoker, high end of assumed ranges 
Investment ($) 8,605,200 
O&M ($/year) 432,271 
Fuel ($/year) 753,750 
LCOE ($/kWh) 0.1069 0.1140 
Gasifier, low end of assumed ranges 
Investment ($) 4,322,800 
O&M ($/year) 185,462 
Fuel ($/year) 301,500 
LCOE ($/kWh) 0.0465 0.0501 
Gasifier, high end of assumed ranges 
Investment ($) 11,514,000 
O&M ($/year) 401,198 
Fuel ($/year) 753,750 
LCOE ($/kWh) 0.1144 0.1239 
ScenarioLCOE ($/kWh) at 3% discount rateLCOE ($/kWh) at 5% discount rate
Stoker, low end of assumed ranges 
Investment ($) 3,797,600 
O&M ($/year) 178,808 
Fuel ($/year) 301,500 
LCOE ($/kWh) 0.0443 0.0475 
Stoker, high end of assumed ranges 
Investment ($) 8,605,200 
O&M ($/year) 432,271 
Fuel ($/year) 753,750 
LCOE ($/kWh) 0.1069 0.1140 
Gasifier, low end of assumed ranges 
Investment ($) 4,322,800 
O&M ($/year) 185,462 
Fuel ($/year) 301,500 
LCOE ($/kWh) 0.0465 0.0501 
Gasifier, high end of assumed ranges 
Investment ($) 11,514,000 
O&M ($/year) 401,198 
Fuel ($/year) 753,750 
LCOE ($/kWh) 0.1144 0.1239 

The LCOE for a 30-year lifetime using local agricultural residues and a small nameplate capacity of 2.02 MW are US$0.0443–0.1140 per kWh for combustion stokers and US$0.0465–0.1239 per kWh for gasifiers. They are within the range of IRENA’s estimates of US$0.06–0.24 per kWh.[[12], Key Findings].

Net Present Value

The LCOE estimates do not yet include NPV analysis. The total investment costs for each proposed biomass plant for a 30-year lifespan and a high and low estimate are shown in Table 5 (in current $), Table 6 (discounted at 3%) and Table 7 (discounted at 5%), respectively.

TABLE 5.

Total investment cost (current $) for each proposed type of biomass plant using high and low estimates for the 30-year life of the plant

Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 5,364,246 12,968,127 5,563,845 12,035,925 
Fuel ($) 9,045,000 22,612,500 9,045,000 22,612,500 

 
Total ($) 18,206,846 44,185,827 18,931,645 46,162,425 
Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 5,364,246 12,968,127 5,563,845 12,035,925 
Fuel ($) 9,045,000 22,612,500 9,045,000 22,612,500 

 
Total ($) 18,206,846 44,185,827 18,931,645 46,162,425 
TABLE 6.

Total investment cost (discounted at 3%) for each proposed type of biomass plant using high and low estimates for the 30-year life of the plant

Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 3,504,720 8,472,700 3,635,127 7,863,648 
Fuel ($) 5,909,533 14,773,833 5,909,533 14,773,833 

 
Total ($) 13,211,853 31,851,733 13,867,460 34,151,481 
Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 3,504,720 8,472,700 3,635,127 7,863,648 
Fuel ($) 5,909,533 14,773,833 5,909,533 14,773,833 

 
Total ($) 13,211,853 31,851,733 13,867,460 34,151,481 
TABLE 7.

Total investment cost (discounted at 5%) for each proposed type of biomass plant using high and low estimates for the 30-year life of the plant

Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 2,748,720 6,645,063 2,850,998 6,167,389 
Fuel ($) 4,634,794 11,586,985 4,634,794 11,586,985 

 
Total ($) 11,181,114 26,837,248 11,808,592 29,268,374 
Stoker lowStoker highGasifier lowGasifier high
Capital ($) 3,797,600 8,605,200 4,322,800 11,514,000 
O&M ($) 2,748,720 6,645,063 2,850,998 6,167,389 
Fuel ($) 4,634,794 11,586,985 4,634,794 11,586,985 

 
Total ($) 11,181,114 26,837,248 11,808,592 29,268,374 

The costs for each plant are high, between US$18.2 million and US$44.2 million for combustion stokers and US$18.9 million and US$44.2 million for gasifiers in current dollars (see Tables 6 and 7 for the discounted costs). This is a substantial investment and the Cocopah will likely need to borrow some or all of it by partnering with an outside organization or taking out an independent loan. As noted, Native American tribes are reluctant to enter into a financial relationship with a non-tribal entity, so it is most likely that the Cocopah would choose to borrow directly from a bank, incurring additional loan financing costs.

The NPV analysis compares the savings that would result from reduced electricity costs (in the form of cash flow over 30 years) with the dollar amount that would result from accrued interest in an investment over the same period. It is assumed that only the capital needed to build the plant are financed, while fuel and O&M costs are covered by the tribe without financing. Non-use compounding interest rates of 3 and 5% are used to calculate the compounded value of the investment over time and compare it to the fiscal savings from biomass energy at 3 and 5% discount rates. The fiscal savings from the biomass plant were calculated using an electricity price of US$0.13412/kWh, which is the rate that APS charges for customers on the Premier Choice Large plan. This figure is likely to increase year-over-year by a factor of about 3.1%, so savings will increase more each year, but to be conservative, the current electricity price is used here [22]. Tables 812 show the NPV and adjusted LCOE for each biomass conversion technology, using high and low estimates.

TABLE 8.

Total investment cost for each proposed type of biomass plant over 30 years, before and after financing

Stoker—lowStoker—highGasifier—lowGasifier—high
Total before interest 18,206,846 44,185,827 18,931,645 46,162,425 
Total after interest on installment cost (5%) 21,748,206 52,210,827 22,963,005 56,900,025 
Stoker—lowStoker—highGasifier—lowGasifier—high
Total before interest 18,206,846 44,185,827 18,931,645 46,162,425 
Total after interest on installment cost (5%) 21,748,206 52,210,827 22,963,005 56,900,025 
TABLE 9.

NPV and adjusted LCOE (with financing) for a combustion stoker using low estimates

Stoker biomass plantReturn on alternative investment/saving
Capital ($) 3,797,600 3,797,600 3,797,600 3,797,600 
O&M ($) 5,364,246 5,364,246 5,364,246 5,364,246 
Fuel ($) 9,045,000 9,045,000 9,045,000 9,045,000 
Total cost ($) 18,206,846 18,206,846 18,206,846 18,206,846 
Installment cost + financing at 5% interest 21,748,206 21,748,206 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.0443 0.0475   
Savings/kWh ($) 0.08982 0.08662 0 0 
Savings/year ($) 1,354,023 1,305,784 0 0 
Term (years) 30 30 30 30 
NPV ($) 4,791,243 −1,675,113 7,123,380 17,093,671 
Adj. LCOE (with financing) ($/kWh) 0.0560 0.0620   
Stoker biomass plantReturn on alternative investment/saving
Capital ($) 3,797,600 3,797,600 3,797,600 3,797,600 
O&M ($) 5,364,246 5,364,246 5,364,246 5,364,246 
Fuel ($) 9,045,000 9,045,000 9,045,000 9,045,000 
Total cost ($) 18,206,846 18,206,846 18,206,846 18,206,846 
Installment cost + financing at 5% interest 21,748,206 21,748,206 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.0443 0.0475   
Savings/kWh ($) 0.08982 0.08662 0 0 
Savings/year ($) 1,354,023 1,305,784 0 0 
Term (years) 30 30 30 30 
NPV ($) 4,791,243 −1,675,113 7,123,380 17,093,671 
Adj. LCOE (with financing) ($/kWh) 0.0560 0.0620   
TABLE 10.

NPV and adjusted LCOE (with financing) for a combustion stoker using high estimates

Stoker biomass plantReturn on alternative investment/saving
Capital ($) 8,605,200 8,605,200 3,119,200 3,119,200 
O&M ($) 12,968,127 12,968,127 5,879,192 5,879,192 
Fuel ($) 22,612,500 22,612,500 123,480 123,480 
Total cost ($) 44,185,827 44,185,827 9,121,872 9,121,872 
Cost + financing at 5% interest 52,210,827 52,210,827 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.01069 0.1140   
Savings/kWh ($) 0.02722 0.02012 0 0 
Savings/year ($) 410,337 303,306 0 0 
Term (years) 30 30 30 30 
NPV ($) −44,168,032 −47,548,271 20,927,05 45,546,576 
Adj. LCOE (with financing) ($/kWh) 0.1333 0.1470   
Stoker biomass plantReturn on alternative investment/saving
Capital ($) 8,605,200 8,605,200 3,119,200 3,119,200 
O&M ($) 12,968,127 12,968,127 5,879,192 5,879,192 
Fuel ($) 22,612,500 22,612,500 123,480 123,480 
Total cost ($) 44,185,827 44,185,827 9,121,872 9,121,872 
Cost + financing at 5% interest 52,210,827 52,210,827 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.01069 0.1140   
Savings/kWh ($) 0.02722 0.02012 0 0 
Savings/year ($) 410,337 303,306 0 0 
Term (years) 30 30 30 30 
NPV ($) −44,168,032 −47,548,271 20,927,05 45,546,576 
Adj. LCOE (with financing) ($/kWh) 0.1333 0.1470   
TABLE 11.

NPV and adjusted LCOE (with financing) for a gasifier using low estimates

Gasifier biomass plantReturn on alternative investment/saving
Capital ($) 4,322,800 4,322,800 4,322,800 4,322,800 
O&M ($) 2,850,998 2,850,998 2,850,998 2,850,998 
Fuel ($) 4,634,794 4,634,794 4,634,794 4,634,794 
Total cost ($) 11,808,592 11,808,592 11,808,592 11,808,592 
Cost + financing at 5% interest 22,963,005 22,963,005 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.0465 0.0500   
Savings/kWh ($) 0.08762 0.08412 0 0 
Savings/year ($) 1,320,858 1,268,096 0 0 
Term (years) 30 30 30 30 
NPV 2,926,402 −3,469,256 5,179,525 15,287,926 
Adj. LCOE with Financing ($/kWh) 0.0598 0.0666   
Gasifier biomass plantReturn on alternative investment/saving
Capital ($) 4,322,800 4,322,800 4,322,800 4,322,800 
O&M ($) 2,850,998 2,850,998 2,850,998 2,850,998 
Fuel ($) 4,634,794 4,634,794 4,634,794 4,634,794 
Total cost ($) 11,808,592 11,808,592 11,808,592 11,808,592 
Cost + financing at 5% interest 22,963,005 22,963,005 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.0465 0.0500   
Savings/kWh ($) 0.08762 0.08412 0 0 
Savings/year ($) 1,320,858 1,268,096 0 0 
Term (years) 30 30 30 30 
NPV 2,926,402 −3,469,256 5,179,525 15,287,926 
Adj. LCOE with Financing ($/kWh) 0.0598 0.0666   
TABLE 12.

NPV and adjusted LCOE (with financing) for a gasifier using high estimates

Gasifier biomass plantReturn on alternative investment/saving
Capital ($) 11,514,000 11,514,000 11,514,000 11,514,000 
O&M ($) 12,035,925 12,035,925 12,035,925 12,035,925 
Fuel ($) 22,612,500 22,612,500 22,612,500 22,612,500 
Total cost ($) 46,162,425 46,162,425 46,162,425 46,162,425 
Cost + financing at 5% interest 56,900,025 56,900,025 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.1144 0.1239   
Savings/kWh ($) 0.01972 0.01022 0 0 
Savings/year ($) 297,276 154,065 0 0 
Term (years) 30 30 30 30 
NPV −51,073,283 −54,531,669 6,832,676 30,807,205 
Adj. LCOE with financing ($/kWh) 0.1497 0.1681   
Gasifier biomass plantReturn on alternative investment/saving
Capital ($) 11,514,000 11,514,000 11,514,000 11,514,000 
O&M ($) 12,035,925 12,035,925 12,035,925 12,035,925 
Fuel ($) 22,612,500 22,612,500 22,612,500 22,612,500 
Total cost ($) 46,162,425 46,162,425 46,162,425 46,162,425 
Cost + financing at 5% interest 56,900,025 56,900,025 N/A N/A 
Electricity generation (kWh/year) 15,074,850 15,074,850 
Discount rate/Interest rate (%) 3 5 3 5 
LCOE ($/kWh) 0.1144 0.1239   
Savings/kWh ($) 0.01972 0.01022 0 0 
Savings/year ($) 297,276 154,065 0 0 
Term (years) 30 30 30 30 
NPV −51,073,283 −54,531,669 6,832,676 30,807,205 
Adj. LCOE with financing ($/kWh) 0.1497 0.1681   

The NPV analysis shows that under the assumptions made, the investment in a biomass facility for residential space-heating purposes is not profitable under any of the tested conditions. For both, the combustion stoker and the gasifier, the project is closest to viability under the low input costs, 3% discount rate over 30 years and 3% non-use interest rate, while both still result in losses of US$2.1–2.5 million over 30 years. However, considering a zero-interest loan to finance the construction of the plant would make the low-cost stoker option cost-competitive.

DISCUSSION

The present study evaluated the feasibility of a biomass-to-energy project to serve the Cocopah Reservation’s energy needs while maintaining a high level of tribal sovereignty. However, each project requires a careful and information-intensive assessment that takes into account local contexts and tribal objectives. The case study assessment found that none of the tested scenarios for a 2.2 MW nameplate capacity plant yield cost-competitive results, although the stoker option comes close under the lost cost scenarios and discount/interest rates of 3%. If the loan for installing the plant could be obtained at zero interest, the projects would achieve cost-competitiveness, a proposition that would be further buttressed by future rises in utility power charges [2326]. Projecting future utility rates depends on many factors, including policy and market forces as well as changes in the energy mix. The Energy Information Agency (EIA) foresees short-term increases in electricity rates for residential, commercial and industrial customers of between 0.8–2.9% between 2018 and 2020 [27]. Under this assumption, the low-cost stoker option could become a more robust choice, depending on whether the underlying economic factors would also influence the operating costs of the biomass facility. In light of the tribe’s interest in energy autonomy and economic development, the results indicate the need for a careful decision-making process that takes not only investment returns into account, but also opportunities for social and economic improvements.

It is also noted, that the Cocopah reservation’s energy demand consisted solely of residential energy usage, while many tribes operate commercial facilities, such as casinos, hotels, etc. that require larger, stable energy supplies. These could potentially create opportunities for economies of scale that could positively affect the calculations. There are also other industrial uses of biomass-based energy that could be beneficial for the Cocopah, for example, in agricultural processing. And as market conditions change and technological innovation continue to evolve, the calculations would change as well and lead to different conclusions. It is also noted that the analysis did not take environmental abatement costs, such as emission controls, into consideration due to lack of detailed information. Air pollution control measures should be considered as part of a comprehensive environmental impact review and to avoid environmental justice concerns. Also not addressed in the study is the issue feedstock-related slagging and fouling—common problems in pure biomass combustion plants—that can be addressed through different designs such as unstaged and air-staged co-combustion but need to be evaluated with respect to their influence on facility design and cost.

CONCLUSION

This analysis examined options for a small, rural, and remote Native American tribes to diversify and decarbonize their energy supply, especially in light of objectives such as tribal sovereignty and local economic development. Biomass energy has advantages over solar and wind power and can also be custom-tailored to accept a variety of inputs as feedstock and meet the residential energy demand of a smaller tribal community. While the tested scenarios were not yet cost-competitive in this specific context, there are additional factors such as energy independence, local employment opportunities, and climate benefits to consider. Given the often limited administrative capacity and expertise of small, isolated tribes to initiate and manage such projects, it could be helpful for geographically-proximate tribes to join forces in an intertribal consortium to share technical, administrative, and financial resources. Supportive policies, such as zero-interest loans, by state and federal governments and agencies are also critical as are fewer bureaucratic hurdles for tribes to navigate the renewable energy development landscape.

CASE STUDY QUESTIONS

  1. What are some of the reasons that biomass-to-energy project may be a suitable/unsuitable energy supply choice for rural tribal reservations.

  2. In assessing the feasibility of a biomass-to-energy project what are the key factors that should be considered in the analysis and why?

  3. Which factors have dominant impacts on the results of the feasibility assessment? How could they be addressed to make biomass-to-energy projects more feasible?

  4. What are the short-term and longer-term factors most likely to influence utility energy prices and do these factors also influence the cost of biomass-to-energy plants.

  5. Which geographic regions and local economic contexts are most suitable for biomass-to-energy projects for Native American tribes? Is the case study illustrated in this paper widely generalizable to other locations and why or why not?

  6. How does the NPV analysis influence the cost of the biomass-to-energy project and are there additional cost factors that should be taken into account or be excluded from the analysis?

  7. The Cocopah Tribe project is only considering residential energy demand. How does the inclusion of additional infrastructure such as casinos and resorts or other industrial process uses affect the scoping of the project and necessary back-up planning in case of disruptions in biomass-based energy generation?

  8. How could state and federal governments assist Native American tribes to assess renewable energy projects in general and biomass projects in particular? How can they, furthermore, help with overcoming the cited obstacles of financing, knowledge and expertise, and promote tribal sovereignty at the same time?

AUTHOR CONTRIBUTIONS

LD conceived the study and conducted the background research. WA provided research input and overall guidance. TS provided additional input and guidance. LD and TS drafted the manuscript. LD, WA, and TS edited and agreed on the submitted version of the manuscript.

FUNDING

None to declare.

COMPETING INTERESTS

The authors have declared that no competing interests exist.

SUPPLEMENTARY MATERIALS

Teaching Notes S1. Docx.

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Supplementary data