Energy cost savings and the use of renewable energy are fundamental energy management objectives of pulp, paper, packaging, tissue and wood products manufacturers. The industry is a leader in the generation and use of renewable energy and highly-efficient combined heat and power (CHP), or cogeneration technology.
- Pulp, paper, packaging and wood products facilities account for 62 percent of the renewable biomass energy consumed by all manufacturing sector facilities.
- Pulp, paper, packaging and wood products mills produce one third of the CHP electricity generated by manufacturing facilities. In fact, 97.6 percent of electricity produced by the industry is CHP-generated.
Purchased energy is a major manufacturing cost for the paper and wood product industry even though the industry is the largest manufacturing sector producer and user of renewable biomass energy. In fact, in 2015, the industry spent over $9 billion on purchased energy.
AF&PA supports policies that:
- Reduce the cost of energy and thereby enhance the industry’s competitiveness by encouraging fuel diversity, increasing access to supplies both on and offshore, investing in breakthrough technologies, and promoting conservation.
- Encourage power generation from highly-efficient energy sources, such as CHP facilities.
- Fairly compensate demand response resources, which are a cost-effective way to reduce electricity demand, thereby reducing costs for all rate payers.
Greenhouse gas regulation could increase energy costs and decrease the reliability of the electric system. AF&PA supports the Trump Administration’s proposed repeal of the Clean Power Plan, and consideration of a replacement.
Provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA) are still needed to ensure equitable treatment of industry CHP units. To the extent there are claims that PURPA results in the purchase of unneeded or more expensive power, or that certain facilities are not properly obtaining Qualified Facility status, those issues can be addressed through guidance or other mechanisms, and not through revising the statute or regulations.
While the organized Regional Transmission Organization/Independent System Operator markets can be improved, their existing policies have ensured the reliability and resilience of the grid. Accordingly, we do not support the Department of Energy Grid Reliability and Resilience Pricing Proposal, which would subsidize certain “baseload” power, driving up electricity costs for consumers and harming our competitiveness.
While the industry is a leader in the use of renewable biomass for energy, it is concerned about the new demands being imposed on the resource from market-distorting government mandates and incentives. When government policies increase demand for forest-based renewable energy, they should be coupled with policies to increase biomass supply.