Biomass is not only an excellent source of next generation biofuels and grid-scale electricity, but also industrial/commercial thermal energy and combined heat and power (CHP), sometimes referred to cogeneration. In CHP, a power plant's spent steam is also used for manufacturing processes and/or building heat, boosting the overall efficiency of the system. Onsite biomass power generation is becoming increasingly mainstream. The industrial sector produces thermal output and electricity from CHP facilities in the paper, food-processing, chemical and fuel processing industries. For example, a growing number of ethanol plants in the United States are generating heat and steam from ag residues and wood waste. Likewise, most ethanol plants in Brazil generate thermal energy for electricity and process steam by combusting sugar cane bagasse. The electricity produced by CHP has only a short distance to travel between generator and end use, therefore, utilizing this heat and steam can improve industrial energy efficiencies by more than 35 percent.
More broadly, biomass thermal energy is the use of biomass for commercial and or residential space and/or water heating, process heat, and the thermal portion of combined heat and power. According to the Biomass Thermal Energy Council, the utilization of biomass for thermal heating applications is one of the most efficient means to produce usable energy—thus displacing fossil fuels and reducing GHG emissions. After more than two decades in residential heating, the pellet fuel industry has entered into large-scale commercial applications, providing heat and energy (boilers) to schools, theaters, prisons, manufacturing facilities and farms. According to the Pellet Fuels Institute, it is now possible to use pellet fuel in many public or commercial settings. And the benefits are many: Pellet fuel is cheap to buy, easy to implement and is available in large supply. Pellet fuel can alleviate the fossil fuel cost roller coaster that many commercial facilities experience.