Tag Archives: energy
Biomass: Wood Pellets Muscle In On Old Role Of Coal
http://www.ft.com/cms/s/0/b83d5050-c3a3-11e2-aa5b-00144feab7de.html#ixzz2VGGRqFHl By Guy Chazan Drax, the UK power supplier, is pushing ahead with what is shaping up to be a huge bet on biomass. The company, which has a big coal-fired power plant in Yorkshire, has launched a £750m investment programme to convert three of its six units to wood pellets, a renewable source of energy. It started commissioning the first converted unit in April. For Dorothy Thompson, chief executive, the attraction of biomass is obvious. “It’s a lot cheaper than offshore wind, there is security of supply and it’s more flexible,” she says. The pellets burnt in biomass boilers are made from the “cheapest part of the forestry industry product – harvested residues and thinnings” – and a “supply chain is developing”. Drax’s interest in biomass is part of a wider industry trend. New EU emissions regulations have put pressure on many of the continent’s old coal-fired power stations but some operators have realised they can keep the plants alive by converting their boilers from coal to wood pellets. The discovery of biomass has given a new lease of life to ageing coal assets that would otherwise have been shuttered. Bloomberg New Energy Finance (BNEF) says between 3.6 and 6.8 gigawatts of biomass generating capacity could be commissioned between 2012 and 2016, though it warned that slow governmental decisions on future subsidies “risks unnerving manufacturers and investors”. Interest has been driven by EU laws that stipulate member states must source 20 per cent of their energy from renewables by 2020. That will not present much of a problem for Germany, with its massive investments in wind and solar power. But the UK and others may struggle, hence the embracing of coal-to-biomass conversion. “It’s an easy, quick and capital-lite way to meet the renewables targets,” says Harry Boyle, an analyst at BNEF. “Coal plants are already connected to the grid and what’s required are relatively minor modifications to an existing asset.” Biomass is also a consistent source of supply, in contrast to the intermittency of wind and solar. Such considerations have pushed the UK to create a generous subsidy regime for the fuel. Previously, developers were awarded half a renewables obligation certificate (ROC) for co-firing coal with biomass. Now, the government is offering operators a whole ROC if they fully convert their boilers to biomass from coal. It was this decision that underpinned Drax’s big investment programme. As a result of this and other subsidies, generating capacity is expected to grow quickly across Europe. BNEF says European pellet demand will rise to 25m-30m tonnes by 2020, up from about 12m tonnes now. Most of that will be imported from outside the EU. Yet biomass remains much more controversial than wind and solar. This is partly because when wood is burnt, it releases carbon dioxide into the atmosphere – just like fossil fuels such as oil, gas and coal. Advocates like Ms Thompson stress that these emissions are neutralised by regrowth in the forest from which the wood was harvested. “You’re not using trapped carbon.” Partly because of that, she says, the carbon footprint of biomass is “70-80 per cent smaller than that of coal”. Environmentalists are unconvinced. A recent study put out by the Royal Society for the Protection of Birds together with Greenpeace and Friends of the Earth says it may take “many years for the end-of-pipe emissions to be neutralised” by regrowth of forests. It disputes the industry’s assertion that pellets used in power generation are made of residues from timber production, saying there is evidence that whole trees are often used. The study claims that the UK government’s proposed sustainability standards for biomass will not prevent wood being used that comes from forests “where management regimes cause problems for biodiversity”. The report’s authors say there is a risk the UK will be “locked into financially supporting an industry that results in increasing greenhouse gas emissions and other serious sustainability issues”. Biomass developers face other difficulties, aside from the objections of green groups. A big challenge is finding enough pellets to supply their hungry biomass boilers. “It takes time to build up the supply chain,” says Ms Thompson. “Each [converted] unit requires 2.3m tonnes of biomass a year – and the total global cross-sea trade is only about 7m tonnes.” So a chunk of Drax’s £750m investment will go on building a wood pellet factory in the southeast of the US to fill Drax boilers. Some people worry about the carbon emissions involved in transporting pellets from the US to Europe. BNEF’s Harry Boyle says the problem is not necessarily the emissions released by tankers bringing huge cargoes of pellets across the Atlantic, but those of trucks transporting the wood from pellet factories hundreds of miles to ports in the US. Continue reading
BYO Biomass – Bioenergy Production In The Agribusiness Sector
Corrs Chambers Westgarth Jeremy King and Lucas Bediaga Australia May 28 2013 World demand for energy could triple this century and the pressure on governments to find new energy sources is intense. While biomass accounts for just one percent of Australia’s electricity generation now, it may become a more valuable source of renewable energy in the future. If that happens, Australia’s agribusiness sector, with its vast biomass resources derived from agricultural by-products, could benefit from a new suite of opportunities. Several companies in Australia have already proven that converting agricultural waste to energy can be used to offset soaring fossil fuel costs. And while bioenergy projects have particular hurdles, there is potential for other agribusiness operators to find similar savings in operational costs. How can biomass be used in the agribusiness sector? Biomass is any organic matter, including wood, agricultural residues and organic waste, that can produce bioenergy – a carbon neutral and renewable energy form. Biomass can be converted into a variety of bioenergies including electricity, heat and fuel. Australian agribusiness offers a rich source of biomass production. Biomass materials include agricultural by-products such as stalks, husks, nut shells, logging and mill residues, marc (the residue of grapes that have been pressed for winemaking) and bagasse (the residue of sugar cane left after the extraction of juice). [1] This can ascribe a value to materials which may otherwise go to waste. If the biomass [2] is used to produce electricity, a farmer may be eligible to participate in the Renewable Energy Target scheme. Under the scheme, a farmer creates a Large-scale Generation Certificate (LGC) for each MWh produced at the power station. These LGCs can then be sold to entities which have an obligation to surrender them under the Renewable Energy Target scheme. A farmer may also obtain funding under trade programs such as the Clean Technology Food and Foundries Investment Program. [3] Grants range from $25,000 to $10 million and are offered on a co-investment basis. Another program is the Emerging Renewables Program [4] which has provided financial support to conduct studies into biomass feasibility. [5] Other funding and grants may also be available from State governments. [6] There are several Australian examples where individual companies have successfully implemented a biomass solution to increasing energy costs. Australian Tartaric Products (ATP) is constructing a 0.6MWe biomass boiler. It will use 90,000 tonnes of grape marc and other onsite waste streams as the feedstock. ATP decided to install the biomass boiler due to large and increasing power bills and increased competition from China. It is estimated ATP’s annual energy costs will drop by $1.52m. ATP also received funding from Regional Development Victoria ($1.8m), Clean Technology Food and Foundries Investment Program ($1.71m) and Australian Industry Group ($40,000). [7] Morton Seed and Grain (MSG) is constructing two biomass boilers. The boilers will use oat husks to generate both steam and electricity to run oatmill operations. The project is estimated to save MSG $900,000 per year in energy costs. MSG received funding from Clean Technology Food and Foundries Investment Program ($917,500). [8] Sucrogen currently has seven cogeneration plants which have a total capacity of 198MW . The largest two plants are located in the Burdekin region and provide 68MW and 49MW of electricity. The plants use bagasse as feedstock. Excess electricity of around 123MW is exported back to the grid, which can meet the annual power needs of almost 30,000 homes. [9] Reid Bros Sawmill (RBS) constructed a 1MWt bioenergy plant at their sawmill. The plant burns 70-80 tonnes of wood milling waste each week. This has saved RBS $300,000 per year compared to the LPG they previously used. They have also now installed an organic rankin cycle system to convert waste heat into electricity. [10] If bioenergy production is not viable for an individual farm, plantation or vineyard, it may be that an agricultural cooperative could invest in the technology for the benefit of members’ surrounding landholdings. Those members of the cooperative could receive the additional benefit of being able to sell their biomass to the power plant as feedstock. What’s hampering bioenergy expansion? Bioenergy in Australia is facing several challenges that are additional to the usual issues associated with greenfield power projects. High capital and maintenance costs. A basic bioenergy plant which produces 8MWt and 0.6MWe can cost $7.5m. There are also material costs involved in operating and maintaining a bioenergy plant. If a bioenergy plant is going to be co-located on a farm, plantation or vineyard, it is unlikely to have a huge installed capacity yet there will need to be substantial savings on energy costs and waste disposal costs in order to offset the capital and maintenance costs. Production of feedstock may be seasonal. Biomass from agricultural by-products will logically be collected during the harvesting period, and is impacted by issues of agricultural yield. Therefore, biomass from agricultural by-products will not be a year-round source of feedstock. This may require farms, plantations or vineyards to have dual sources of energy in place; one from biomass production and the other through more traditional means. The seasonality of feedstock production could be mitigated by storing excess feedstock for use throughout non-harvesting periods. [11] Transportation costs. Biomass is typically dispersed over various locations and there is a need to transport the biomass to the power station efficiently. This can be expensive – especially for larger power plants. However, high transportation costs can be mitigated by optimising the logistics surrounding crop harvest and also waste management practices. Further, to date, it hasn’t been possible to produce utility scale electricity from biomass. The required spot price for a 500kWe biomass plant to be commercially viable is around $310/MWh. [12] This is compared to the wholesale electrical cost which, for the purposes of discussion, is around $60/MWh. Expanding a biomass plant to utility scale (20MWe) would only bring down the required spot price to about $160/MWh. [13] However, there are examples in Queensland where large cogeneration plants running on residue biomass produce enough electricity to power 30,000 homes for a year. [14] What is clear is that biomass can be used to generate energy in the right circumstances: where the regulatory environment is stable and supportive of the technology; where feedstock is cheaply and readily available; where transmission distances are relatively low; and where the cost of alternative sources of power are high. While there is a great deal of negativity around Australia’s green energy sector, and the difficulties facing Australia’s agricultural sector (in terms of raising finance, international competitiveness and productivity), bioenergy offers new opportunities that could produce positive outcomes for energy security without compromising on food security. Continue reading
