Biomass Electric Power Generation (United States)

North American Industry Classification System (NAICS) 2022 code 221117 — a Histometrics industry primer for public-market and private investors.

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1. Overview

Biomass electric power generation burns organic fuel — wood and mill residue, the biological part of household trash, landfill gas, farm waste, and other plant matter — to make electricity for the grid. It is one of the smallest and most mature niches in the U.S. power system: as a formally defined industry it books under $1 billion in revenue [1], and biomass supplies only about 1.1% of the nation's electricity [3]. Investors should care less because it is growing (it is not) and more because a handful of well-contracted plants throw off steady, infrastructure-grade cash — the reason private capital, not the stock market, owns most of it. There is no clean public "pure play." A public-market investor gets thin, diluted exposure through diversified utilities, waste companies, and paper makers; a private investor gets it the way the industry is actually owned — buying or financing individual plants, waste concessions, and landfill-gas projects backed by long-term contracts.

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2. What it is and how it's structured

Scope. NAICS 221117 covers establishments whose primary business is running a biomass power plant and selling the electricity into transmission or distribution systems [1][2]. Two tests matter: making power must be the main activity, and the power must go to the grid — not just feed the plant next door.

What it excludes (and where those activities are counted instead):

Ownership mix. This is not a set of listed power companies. Using the U.S. Energy Information Administration's (EIA's) broader 2024 fleet as a proxy for who owns the megawatts, industrial sites (mostly pulp/paper mills generating their own power) held 45.4% of capacity, independent power producers (IPPs — merchant generators that sell under contract) 35.3%, commercial owners 11.8%, and regulated electric utilities only 7.6% [5]. On top of that, municipalities, counties, rural cooperatives, and one federal site own biomass plants directly. The result: a mix of private companies, infrastructure funds, manufacturers, and government/public-power owners — with listed pure-play equities almost absent.

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3. How big it is

Two different rulers measure this industry, and they disagree by design.

The Census "business" ruler (NAICS 221117 as legally defined). This counts only firms whose main business is selling biomass power to the grid — and it excludes government-owned utilities entirely [7].

Because the Small Business Administration's (SBA's) cutoff is 550 employees and essentially every firm is smaller, the entire industry qualifies as "small business" for federal purposes [8].

Why this undercounts. The $948 million figure misses three big pools of real biomass electricity: (a) cogeneration at paper/lumber mills (counted in manufacturing), (b) waste-to-energy plants where disposal is primary (counted in 562213), and (c) municipally owned plants, which Census business statistics exclude on principle [7]. Government ownership is common here, so the true economic footprint is several times the Census total.

The EIA "physical" ruler (all biomass electricity, whoever generates it). In 2024 the broader fleet was about 11.4 gigawatts (GW) of capacity and 46.4 terawatt-hours (TWh, billion kilowatt-hours) of generation — roughly 1.1% of U.S. electricity [5][9]. Wood and wood-derived fuel account for about two-thirds; landfill gas, the biogenic share of municipal trash, and farm/digester waste make up the rest [5]. Note that about half of that capacity is industrial cogeneration behind the meter; the narrower "electric-power-sector" slice that sells to the grid is roughly 5 GW [10]. Either way, the trend is down: capacity fell 15.7% and generation fell 27.5% between 2014 and 2024 [5].

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4. The investable universe

There is no U.S.-listed pure-play biomass generator. Every public route is partial — biomass is a small line inside a larger utility, waste, engineering, or paper business. Private ownership is where the actual assets sit.

Public companies with some biomass/biogas exposure (July 2026 snapshots; figures move daily and are illustrative, not biomass comparables):

No dedicated biomass fund exists; broad clean-energy (ICLN) or utility (XLU) exchange-traded funds (ETFs) hold almost no biomass and are not trackers for it [19].

Major private and government owners (where the real assets are):

• Reworld (formerly Covanta) — the largest U.S. waste-to-energy operator; taken private by infrastructure fund EQT for $5.3 billion in 2021 (sovereign fund GIC later took a 25% stake). Most of its incinerators sit in 562213, adjacent to 221117 [20].
• WIN Waste Innovations (formerly Wheelabrator) — second-largest WTE platform, owned by Macquarie infrastructure funds [21].
• Greenleaf Power — four North American biomass plants, ~135 MW (one is Canadian) [22].
• Florida Crystals / New Hope Power — the ~140 MW Okeelanta plant, burning sugarcane residue (bagasse) and supplying steam to sugar mills; a strong vertically integrated example [23].
• Atlantic Power — a contracted generation portfolio (including biomass) taken private by I Squared Capital at ~$961 million enterprise value in 2021 [24].
• Municipal / public power: Austin Energy (105 MW Nacogdoches), Gainesville Regional Utilities (102.5 MW Deerhaven), Burlington Electric (50 MW McNeil, co-owned with Green Mountain Power), and the Solid Waste Authority of Palm Beach County (100 MW, the newest U.S. WTE plant, opened 2015) [25][26].
• Cooperative / federal: Wabash Valley Power (a rural co-op with landfill-gas plants) and the Department of Energy's Savannah River Site (a ~20 MW biomass cogeneration system run by Ameresco under a federal energy-savings contract) [27].

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5. How the money works

Biomass electricity is structurally high-cost, so almost no plant survives on selling power at market prices alone. The money comes from stacking several revenue streams and, crucially, from avoided costs.

Regulated utility plants (the minority). Where a regulated investor-owned utility (IOU) owns a biomass plant, it earns like any other rate-base asset: the state sets a revenue requirement of operating costs plus depreciation and taxes plus an allowed return on equity (ROE) applied to the plant's rate base (prudent invested capital). ROEs are set for the whole utility, not the plant — for example, a 2025 Idaho order gave Avista a 9.60% ROE and a 7.28% overall cost of capital [28]. An authorized ROE is a target, not a guarantee; regulators can disallow imprudent costs.

Merchant / IPP plants (the majority). These live on some combination of:

• Power purchase agreements (PPAs) — long-term fixed or indexed contracts with a utility, municipality, or industrial buyer.
• Merchant energy and capacity — wholesale sales, plus payments for being dependably available in regions with capacity markets. Biomass's edge over wind and solar is that stored fuel makes it dispatchable (schedulable), but that does not make it cheap.
• Renewable energy certificates (RECs) — one certificate per megawatt-hour of qualifying renewable output, sold into state programs.
• Policy-priced contracts that pay well above wholesale. California's BioRAM program, for example, directs the state's big utilities into biomass contracts at roughly $119 per megawatt-hour [29] — multiples of typical wholesale power (~$30–50) — explicitly to burn high-wildfire-risk forest fuel.

The decisive "avoided cost" money. Two revenue sources are what actually make biomass work:

• Waste-to-energy tipping fees. WTE plants are paid to take trash (tens of dollars per ton). That disposal revenue — not the electricity — is the economic backbone, and the long-term municipal waste contracts behind it are what attracted EQT and Macquarie [20][21].
• Avoided fuel and disposal at mills. A paper mill burning black liquor and bark avoids buying boiler fuel and avoids paying to dispose of residue, while getting steam and power. That is why mill cogeneration persists even when a standalone biomass plant would not [15].
• Landfill-gas attributes. OPAL Fuels' 2024 renewable-power revenue was $27.2 million of electricity plus $17.4 million of environmental attributes [12] — showing how much of the value is non-electricity.

Federal tax credits. The legacy production tax credit (PTC, §45) pays open-loop biomass, landfill gas, and trash about 1.5¢ per kilowatt-hour for ten years (closed-loop biomass ~3.0¢) [30]. The newer technology-neutral credits — the §45Y production credit and §48E investment credit (ITC) — require a facility to show lifecycle greenhouse-gas emissions of zero. Biomass combustion is not automatically on the zero-emission list, so many new plants cannot count on these credits without lifecycle modeling and feedstock documentation [31]. The 2025 tax law accelerated phase-outs mainly for wind and solar (not biomass) but added foreign-entity restrictions [32]. Treat credit eligibility as legal diligence, not a given.

Cost position. EIA's 2026 planning inputs for a new 50 MW biomass plant are about $4,843 per kilowatt of capital cost and a relatively inefficient heat rate (13,300 British thermal units per kilowatt-hour) [33] — roughly $242 million before financing. Against sub-$40 solar and wind and cheap gas, unsubsidized new biomass does not compete. That is why nearly every good opportunity is an existing plant with favorable fuel and contracts, not a new build.

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6. What drives demand

1. State renewable mandates. As of late 2025, 28 states plus the District of Columbia had renewable portfolio standards (RPS) [34]. Where biomass qualifies, that creates REC demand and PPA offtake — but eligibility varies sharply by feedstock, plant vintage, and emissions rules, so the specific statute matters.
2. Waste disposal, not electricity. For waste-to-energy, demand tracks how much trash needs disposing where landfill space is scarce (dense urban/coastal areas) — not power demand [4].
3. Firm, dispatchable output. As grids add intermittent wind and solar, a plant that can run 24/7 has growing relative value for reliability and round-the-clock clean-energy buyers.
4. Industrial steam demand. Pulp, paper, wood-products, and sugar plants need continuous process steam; captive residue solves a waste problem and cuts fuel bills at once — the most durable demand case [15][23].
5. Forest and wildfire management. In the West, thinning and wildfire-fuel removal can create subsidized low-cost feedstock — the logic behind California's BioRAM [29].
6. The RNG pull (a demand drain). Landfill and digester gas increasingly earns more as renewable natural gas for transport fuel than as electricity, diverting the resource away from power [12].

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7. Regulation

• Federal Energy Regulatory Commission (FERC): Oversees wholesale power sales and grid-market rules. Its most important lever here is the Public Utility Regulatory Policies Act (PURPA, 1978), which lets small renewable/biomass "qualifying facilities" (QFs, up to 80 MW) compel utilities to buy their output at avoided cost. Much of the older fleet was built under PURPA; FERC's 2020 Order 872 weakened it (e.g., dropping a key threshold to 5 MW), reducing its value for new projects [35].
• State public utility commissions (PUCs): Set allowed ROE and rate-base treatment for utility-owned plants, judge the prudence of PPAs and acquisitions, administer RPS and REC compliance, and often control siting. A state commission's generosity on avoided-cost rates or program prices (California's BioRAM at ~$119/MWh) directly sets project revenue [29][36].
• U.S. Environmental Protection Agency (EPA): Regulates air emissions (particulates, nitrogen and sulfur oxides, mercury, dioxins). A pivotal, plant-specific question is whether a unit is regulated as a boiler (Clean Air Act §112) or a more tightly controlled incinerator (§129) — a classification that turns on whether the fuel counts as a solid waste and can drive major compliance capital spending [37]. Separately, EPA's framework rejects assuming all biomass is "carbon neutral"; lifecycle carbon now carries direct tax and REC consequences, not just reputational ones [38].
• Nuclear Regulatory Commission (NRC): Not applicable. Biomass involves no nuclear licensing; the NRC regulates nuclear power (NAICS 221113), a separate industry. It matters only when comparing biomass with nuclear, never when operating a biomass plant [2].

Net: biomass economics are made by regulation (PURPA, RPS, program prices, tax credits) and taxed by regulation (air-compliance capital, contested carbon accounting). Policy durability matters more than power prices.

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8. Competitive dynamics and consolidation

The national industry is fragmented but locally concentrated. Our federal concentration data show a low Herfindahl-Hirschman Index (HHI) of 638 — well under the 1,500 that U.S. antitrust agencies treat as "unconcentrated" — with the top four firms at 39.9% of revenue, the top eight at 56%, and the top 50 at 98.4% [39]. Yet each plant draws fuel from a limited haul radius, so any one plant may be the only large buyer of forest residue in its region while competing hard with a pulp mill, pellet plant, or RNG developer elsewhere.

Consolidation runs through infrastructure funds, not the stock market. Private capital has bought the contracted, essential-service portfolios: EQT's $5.3 billion Covanta (now Reworld) deal, Macquarie's Wheelabrator (now WIN Waste), and I Squared's Atlantic Power take-private all show the pattern [20][21][24]. Meanwhile no new greenfield U.S. waste-to-energy plant has been built since 2015 [26], western wood plants keep retiring as cheap gas and solar spread, and the wood-fuel supply chain is fragile — paper-mill closures cut both residue supply and mill cogeneration, and Enviva, the world's largest wood-pellet producer, went through Chapter 11 bankruptcy in 2024 [40].

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9. Risks

• Uncompetitive economics. High levelized cost versus gas, solar, and wind; without a policy-priced PPA, merchant biomass loses money [33][40].
• Policy dependence. Revenue rests on PURPA avoided cost, RPS eligibility, program prices, and tax credits — all subject to change; new tech-neutral credits may exclude combustion biomass [31][35].
• Feedstock supply and cost. Low-density, wet fuel makes trucking and moisture disproportionately important; mill closures and pellet-export demand tighten supply [40].
• Carbon-accounting risk. If biomass loses favorable lifecycle-carbon treatment, it can lose RPS and tax eligibility; opposition is persistent [38].
• Environmental capital. Tighter air rules and boiler-vs-incinerator reclassification can make old plants uneconomic [37].
• RNG cannibalization. Landfill/digester gas may be worth more as transport fuel, stranding power assets [12].
• PPA expiry and residual value. A high-priced legacy contract can reset to low wholesale value; a boiler may be nearly worthless after fuel or offtake ends, even if the land and grid connection have value.
• Aging fleet and liquidity. Much capacity is decades old with lumpy maintenance, and for investors the ownership is illiquid — no listed pure play to trade.

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10. How to invest and the outlook

Two ways in.

Public-market investors face imperfect choices, all diluted: (1) biogas developers OPAL Fuels and Montauk Renewables give the most direct renewable-power exposure but increasingly monetize gas as RNG [12][13]; (2) diversified operators — Avista, DTE, Ameresco, Waste Management, Republic Services — offer scale and balance sheets but tiny biomass sensitivity [5][11][14]; (3) industrial self-generators such as International Paper and Packaging Corp. benefit from captive biomass, but the thesis is paper and packaging [15]. On valuation, the diversified names trade on their core businesses (Avista yields ~4.76%, Packaging Corp ~2.5%) [15][18]; the biogas names carry growth multiples and pay no dividend (Montauk ~$229M cap; OPAL ~$412M; Ameresco ~$1.31B) [12][16][17]. The absence of any pure-play comp is itself the signal: the public market will not support a standalone biomass generator.

Private investors have the more direct menu — and this is how the industry is actually owned: buy a plant or project entity, provide project debt or preferred equity, acquire a contracted portfolio, enter a landfill-gas joint venture, retrofit an industrial cogeneration system, fund a municipal public-private partnership or buy the revenue bonds behind a waste facility, or acquire a distressed asset before its PPA renews. What underwrites the returns is long-dated waste-disposal contracts and policy-priced PPAs, not merchant power. The single most important number is usually cash flow after the current PPA expires and after major maintenance — not today's contracted earnings.

Outlook: flat-to-declining, with contracted pockets that still resemble infrastructure. EIA's disclosed 2025–2029 pipeline is roughly flat to slightly negative, capacity and generation have fallen for a decade, and new build is uneconomic [5][33]. The base case is managed decline in wood biopower, stable-but-not-growing waste-to-energy, and continued erosion of biomass's ~1% share as wind and solar scale. Upside optionality exists — higher capacity payments for firm output, premiums for 24/7 clean energy, durable wildfire-residue programs, RNG economics weakening (leaving more gas for power), and bioenergy-with-carbon-capture (BECCS) narratives if carbon-removal buyers and lifecycle rules align. Downside is that tighter carbon or REC rules exclude common woody feedstocks, cheap solar-plus-storage captures the firm-capacity value, and more mill closures shrink both fuel and cogeneration. Net: a defensive, contracted, low-growth niche well suited to infrastructure and municipal owners who value stable waste-and-policy-backed cash flows — and a poor fit for public-equity growth investors, given no listed pure play and a structural cost disadvantage.

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Sources

1. U.S. Census Bureau, 2022 Economic Census (NAICS 221117: revenue $947.855 million; 75 firms; concentration ratios). https://data.census.gov/
2. U.S. Census Bureau, 2022 NAICS Manual and code definitions (221117 definition; cross-reference to 562213; sibling generation codes). https://www.census.gov/naics/
3. U.S. Energy Information Administration, What is U.S. electricity generation by energy source? / Biomass explained (biomass ~1.1% of U.S. electricity). https://www.eia.gov/tools/faqs/faq.php?id=427; https://www.eia.gov/energyexplained/biomass/
4. U.S. Energy Information Administration, Waste-to-energy plants are a small but stable source of electricity in the United States, Today in Energy (~60 WTE plants; ~2,051 MW; tipping-fee economics). https://www.eia.gov/todayinenergy/detail.php?id=55900
5. U.S. Energy Information Administration, Electric Power Annual 2024 — capacity by producer type; net generation; 2014–2024 trend (11,411.7 MW; 46,422 GWh; −15.7% capacity / −27.5% generation; producer-type shares). https://www.eia.gov/electricity/annual/
6. U.S. Census Bureau, County Business Patterns 2023 (NAICS 221117: 116 establishments; 2,268 employees; $273.6 million payroll). https://www.census.gov/programs-surveys/cbp.html
7. U.S. Census Bureau, Economic Census / CBP program coverage and methodology (government-owned utilities excluded from business statistics). https://www.census.gov/programs-surveys/economic-census.html
8. U.S. Small Business Administration, Table of Small Business Size Standards (NAICS 221117 = 550 employees). https://www.sba.gov/document/support-table-size-standards
9. U.S. Energy Information Administration, Electric Power Annual 2024, Tables 1.1–1.2 (total U.S. capacity 1,230.4 GW; generation 4,308.6 TWh; biomass ~0.93% capacity, ~1.08% generation). https://www.eia.gov/electricity/annual/
10. U.S. Energy Information Administration / EIA Short-Term Energy Outlook (electric-power-sector biomass capacity ~5 GW: wood ~2.4 GW + waste ~2.9 GW, end-2023). https://www.eia.gov/outlooks/steo/
11. Ameresco, Inc., 2024 Form 10-K (~731 MW renewable portfolio; energy-services developer and federal contractor). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001488139
12. OPAL Fuels Inc., 2024 Form 10-K (15 renewable-power projects, ~105.8 MW; $27.2M electricity + $17.4M environmental-attribute revenue; RNG conversions). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001842279
13. Montauk Renewables, Inc., 2024 Form 10-K (~29.1 MW renewable-electric; RNG orientation). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001826600
14. Avista Corporation, 2024 Form 10-K (Kettle Falls ~50 MW wood plant). https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000104918
15. Packaging Corporation of America, 2025 Form 10-K and 2026 dividend release (62% of 2025 mill energy from internally generated biogenic fuel; ~2.5% indicated yield); industry peers IP, SW, GPK, CLW, SLVM. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000075677
16. StockAnalysis, Ameresco financial ratios (~$1.31 billion market cap; no dividend), July 2026. https://stockanalysis.com/stocks/amrc/
17. StockAnalysis, Montauk Renewables statistics (~$229 million market cap; no dividend), July 2026. https://stockanalysis.com/stocks/mntk/
18. StockAnalysis, Avista dividend history and yield (~4.76% indicated yield; $1.97 dividend), July 2026. https://stockanalysis.com/stocks/ava/dividend/
19. State Street, Utilities Select Sector SPDR ETF (XLU); iShares, Global Clean Energy ETF (ICLN) — neither is a biomass tracker. https://www.ssga.com/; https://www.ishares.com/
20. EQT / PR Newswire / Waste Dive, EQT Infrastructure to acquire Covanta for $5.3 billion (2021; GIC 25% stake; rebranded Reworld). https://eqtgroup.com/news/
21. PR Newswire / Waste Dive, Macquarie completes acquisition of Wheelabrator (2019; now WIN Waste Innovations). https://www.wastedive.com/news/win-waste-innovations/
22. Greenleaf Power, Facilities and portfolio (four North American plants, ~135 MW, one Canadian). https://greenleaf-power.com/
23. Florida Department of Environmental Protection, Okeelanta Cogeneration Facility (Florida Crystals / New Hope Power, ~140 MW; bagasse + urban wood). https://floridadep.gov/
24. Atlantic Power Corporation / I Squared Capital, Acquisition of Atlantic Power (2021; ~$961 million enterprise value). https://investors.atlanticpower.com/
25. Austin Energy (105 MW Nacogdoches); Burlington Electric Department, McNeil Generating Station (50 MW; co-owned with Green Mountain Power and Vermont Public Power Supply Authority). https://austinenergy.com/; https://www.burlingtonelectric.com/mcneil/
26. Gainesville Regional Utilities, Biomass Generation (102.5 MW Deerhaven); POWER Magazine / Solid Waste Authority of Palm Beach County (100 MW WTE, opened 2015 — newest U.S. WTE plant). https://www.gru.com/; https://www.swa.org/
27. Wabash Valley Power Alliance, Alternative Energy Portfolio (co-op landfill-gas plants); U.S. Department of Energy, Savannah River Site biomass ESPC (Ameresco, ~20 MW federal energy-savings contract). https://www.wvpa.com/; https://www.energy.gov/
28. Idaho Public Utilities Commission, Avista Final Order No. 36871 (2025; 9.60% ROE; 7.28% overall cost of capital). https://puc.idaho.gov/
29. California Public Utilities Commission, Bioenergy Renewable Auction Mechanism (BioRAM) Program (~$119/MWh weighted-average biomass price; forest-fuel sourcing). https://www.cpuc.ca.gov/
30. Internal Revenue Service, Renewable Electricity Production Credit (§45) / EPA Landfill Methane Outreach Program (open-loop biomass, landfill gas, trash ~1.5¢/kWh; closed-loop ~3.0¢/kWh; 10 years). https://www.irs.gov/; https://www.epa.gov/lmop/
31. Treasury Department / Internal Revenue Service, Final §45Y (Clean Electricity Production) and §48E (Clean Electricity Investment) Regulations (zero lifecycle-GHG requirement; biomass combustion not categorically zero-emission). https://www.irs.gov/credits-deductions/clean-electricity-production-credit
32. Internal Revenue Service, Guidance on material assistance from prohibited foreign entities under the 2025 tax law (phase-outs accelerated primarily for wind/solar; foreign-entity restrictions on §45Y/§48E). https://www.irs.gov/
33. U.S. Energy Information Administration, Annual Energy Outlook 2026, Electricity Market Module Assumptions (50 MW biomass: $4,843/kW overnight cost; 13,300 Btu/kWh heat rate; 5-year lead time). https://www.eia.gov/outlooks/aeo/assumptions/
34. U.S. Energy Information Administration, Renewable Portfolio and Clean Energy Standards (28 states + D.C. with RPS as of December 2025). https://www.eia.gov/energyexplained/renewable-sources/portfolio-standards.php
35. Federal Energy Regulatory Commission, Qualifying Facilities / PURPA and Order No. 872 (QF ≤80 MW must-purchase at avoided cost; 2020 reform). https://www.ferc.gov/qf
36. National Association of Regulatory Utility Commissioners, Ratemaking Fundamentals (rate base, revenue requirement, allowed return). https://www.naruc.org/
37. U.S. Environmental Protection Agency, Identification of Non-Hazardous Secondary Materials and Boiler/CISWI standards (Clean Air Act §112 boiler vs. §129 incinerator classification). https://www.epa.gov/rcra/; https://www.epa.gov/stationary-sources-air-pollution/
38. U.S. Environmental Protection Agency, Framework for Assessing Biogenic CO₂ Emissions from Stationary Sources (2016; rejects assuming all biomass is carbon-neutral). https://www.epa.gov/
39. U.S. Census Bureau, 2022 Economic Census — Concentration Ratios (NAICS 221117: HHI 638; CR4 39.9%; CR8 56%; CR20 80.1%; CR50 98.4%). https://data.census.gov/
40. POWER Magazine, U.S. Biomass Power … Fights to Stay Ablaze (paper-mill closures cut residue supply and cogeneration); Biomass Magazine, Enviva files for Chapter 11 (2024). https://www.powermag.com/; https://biomassmagazine.com/

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Reference-year notes: Census business figures are the 2022 Economic Census (revenue, firms, concentration) and 2023 County Business Patterns (establishments, employment, payroll), and exclude government-owned utilities. Physical capacity/generation are EIA Electric Power Annual 2024. Company market caps, yields, and multiples are July 2026 snapshots and move daily. Where our ingested federal statistics and a research report disagreed, the federal figure was used; where a metric was outside our ingested stats, the sourced report figure is cited and labeled.