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ASHLAND, Wis.--(BUSINESS WIRE)-- Xcel Energyannounced today that the Public Service Commission of Wisconsin (PSCW) has created a docket to begin evaluating the company's request to install biomass gasification technology at the Bay Front Power Plant in Ashland, Wis. This represents the first step in the regulatory review process for the innovative project that, if approved, would transform Bay Front into the largest biomass-fueled power plant in the Midwest, and one of the largest in the nation. When completed, the project will convert the plant's remaining coal-fired unit to biomass gasification technology, allowing it to use 100 percent biomass in all three boilers. Currently, two of the three operating units at Bay Front use biomass as their primary fuel to generate electricity.

In 1979, the facility became the first investor-owned utility plant in the nation to burn waste wood to generate electricity.

This is the first time biomass gasification technology will be used to convert a coal-fired boiler at an existing base-load power plant. The project will require new biomass receiving and handling facilities, an external gasifier, modifications to the plant's remaining coal-fired boiler and an enhanced air quality control system and is expected to cost $55-$70 million.

In biomass gasification, biomass reacts with a controlled amount of oxygen at high temperatures to create a gas mixture called synthetic gas ("syngas") that is then used as a fuel in the boiler. By converting biomass to gas, the resulting fuel is much cleaner and has far fewer emissions than fossil fuels.

When complete and operational, the project will reduce emissions of nitrogen oxides by more than 60 percent, sulfur dioxides by more than 80 percent and particulate matter by more than 80 percent. In addition, displacing coal with sustainably harvested biomass will also reduce net carbon dioxide emissions, contributing to the state of Wisconsin's carbon management goals.

Biomass gasification technology has been studied and developed over the past 50 years and continues to have global appeal due to the growing interest in clean, renewable energy. Hundreds of biomass gasifiers are in operation with a majority being small-scale plants in Asia and Europe providing heat or electricity to farms and small industries. In the United States, most biomass gasification installations have been small-scale plants, although some large-scale operations have been announced.

The primary source of biomass at Bay Front is expected to be the lower quality, unused materials that are currently left in area forests following traditional harvests, such as treetops, logging slash, damaged trees, underutilized species, and the cull and mortality classed trees. Initial investigations conducted by Xcel Energy show more than ample supplies of this lower quality biomass within the area.

In addition, to ensure future biomass supplies are available on a reliable basis, Xcel Energy is working with the Wisconsin Office of Energy Independence, University of Wisconsin-Madison and local agricultural experts to explore the feasibility of developing biomass plantations and grower cooperatives.

"Tree species such as hybrid poplar and willow could be grown on biomass plantations or multifunctional production systems to produce sustainable short-term crops of trees," said Xcel Energy'sDavid Donovan, manager, Regulatory Policy. "Among other benefits, grower cooperatives could offer centralized locations for the aggregation, processing and storage of biomass, and provide just-in-time delivery to consumers. This effort would ensure a sustainable source of biomass and spur economic development opportunities in northern Wisconsin."

Following all state regulatory approvals, engineering, design and construction work is expected to begin in 2010 and the unit could be operational in late 2012.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in 8 Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.

    Source: Xcel Energy