biomass opportunities in korea ministry of jobs, tourism ... pellets... · biomass opportunities in...

Biomass Opportunities in Korea

Ministry of Jobs, Tourism and Innovation

Sookyung Ahn

Senior Manager 1

RPS Development Process

•Dec. 2003, the 2nd Renewable Energy Plan- RPS proposed

•Sep. 2008, RPS clarified - Green Energy Strategy

•Dec. 2008, RPS adopted- The 3rd Renewable Energy Plan

•Mar. 2010, Korean National Assembly passed the RPS bill

•Jan. 2012 RPS takes effect

2

RPS Madatory Suppliers

Above 5,000MW (Group I)– 95% Kepco SubsidiariesKorea Hydro & Newclear Power Co., LTD (KHNP)Korea South East Power Co. Ltd. (KOSEP)Korea Midland Power Co., Ltd. (KOMIPO)Korea Western Power Co., Ltd. (KWP)Korea Southern Power Co. Ltd. (KOSPO)Korea East West Power Co. Ltd. (KEWP)

3

RPS Mandatory Suppliers

Below 5,000 MW (Group II)– 5% IPPs

Korea District Heating Corp (KDHC)Korea Water Corporation (K-Water)K-PowerGS EPSGS PowerPosco PowerMPC (Ulchon)

4

Mandatory Annual RPS Ratio

5

Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2022

% 2.0 2.5 3.0 3.5 4.0 5.0 6.0 7.0 8.0 9.0 10.0

RPS Mandatory Volume= mandatory supplier fossil fuel power generation volume

X yearly RPS mandatory ratio

REC Weight RPS Power Generation Volume=New renewable energy

source power generation volume X REC

6

0.25 IGCC, Gas

0.5 Waste, landfill gas

1.0 Hydro Power, land wind power, bio energy, RDF power generation, waste gasification power generation, tidal power (Tide embankment)

1.5 Biomass (wood), Ocean wind power (distance less than 5Km)

2.0 Ocean wind power (distance more than 5Km), tidal power (no tide embankment), fuel cell

RPS Calculation

7

•RPS Mandatory Volume = Mandatory supplier fossil fuel power generation volume X yearly RPS mandatory ratio

•RPS Power Generation Volume = New renewable energy source power generation volume X REC

•RPS Penalty = (RPS Mandatory Volume – RPS Power Generation) X 40 (Korean Won) (=3.4 cents)/kWh X 150%

8

Biomass New Renewable Energy Power Generation

New renewable energy source applied for RPS

Classification RPS applied source RPS not applicable

Power plant usage available

Wood pellets, wood chips, RDF, RPF, TDF

Bituminous coal, anthracite coal

Power plant usage not available

PKS, EFB, rice husks Natural waste

9


Dual fuel available source upon the type of boiler

Classification Pulverized boiler Circulating fluidized bed combustion

Dual fuel available Wood pellet, DFB, Rice husks pellet

Wood pellet, EFB, rice husks pellet, PKS, wood chip

Dual fuel not available PKS, wood chip

10


Projection on wood pellet usage (pulverized boiler: 3% dual fueling assumption) :

Coal consumption volume 90M ton x dual fueling ration 3% x (bituminous coal 6,000/pellet 4,500) = 3.6M / year

Woodpellet 1ton = 2,000 kWh in power generation

Co-firing: 2,000 kWh/ton x 1.0 = 2,000 kWh/ton in RPS

Full firing: 2,000kWh/ton x 1.5 = 3,000 kWh/ton in RPS

(co-firint biomass:1.0/ full firing biomass:1.5)

11

Portfolio & Focused Fields for RPS

Field of energy

Offshore wind

Tidal Energy

Fuel Cell

Onshore wind

Solar Hydraulic

Biomass

IGCC Biogas

LFG Wastes

% 38.8 20 12.1 8.1 7.5 6.8 2.1 3.1 0.8 0.4 0.4

Kepco Overview

12

•Kepco (Asset: 99.6 trillion won, Sales: 39.4 trillion won

Company name

KHNP KOSEP KOMIPO WP KESPO WESPO

Core Biz Nuclear & Hydro

Thermal Thermal Thermal Thermal Thermal

Market Share

32% 13% 12% 11% 13% 12%

Asset 30 t won 5.5 t won 5.1 t won 4.5 t won 5.0 t won 4.5 t won

Sales 5.8 t won 4.2 t won 4.8t won 4.7 t won 5.2 t won 4.6 t won

Focuse Fields by Genco

13

Field Genco A Genco B Genco C Genco D Genco E Genco F

Tidal energy

√ √ √ √

Fuel cell √ √ √ √ √ √

Onshore wind

√ √ √ √ √ √

Solar √ √ √ √ √ √

Biomass √ √ √ √ √

IGCC √

Wastes √ √

14

Preparation of Biomass by GencoGenco A

Plan to co-firing in fluidizing bed boiler (200MW x2) as of 2012: 10% wood chip or /and pellet, 150,000 ton/year

Construction of full biomass powr plant (30MW x 2) is in progress: wood chip, 180,000ton/year

Genco B

Construction of fluidizing bed boiler (500MW x2) for co-firing with pellet will be completed:

5% pellet, 400,000ton/year

Genco C

Commission of fluidizing bed boiler (340MW x1) for co-firing with pellet is in progress:

5-10% pellet, 300,000ton/year

15

Preparation of Biomass by GencoGenco A, B, C, D, E

Review of co-firing with pellet in pulverized coal boiler

Capacity: each of 500MWx8 units, 5 companies

Usage of coal by Genco in 2010: 80 million ton/year

Expected rate of co-firing with biomass: 3-5%

Combined Heat & Power Plant (CHP)

Usage of wood chip by CHP boiler: 600,000ton/year

CHPs are used in paper mills, dye houses & chemical plant with heat

If price terms are satisfactory, CHPs are to use biomass

16

Types of Biomass by GencoWood Chip

Source country: Korea metropolis, forest & development

Price: 20-100USD/ton

Heat Value: 2,500-3,500 kcal/kg

Storage: inside+outside

Barrier: limited quantity in the country

Wood Pellet

Source country: Canada, Indonesia, Malaysia, Russia, Australia, South Africa, Brasil



Storage: inside (silo, dome, shed)

Barrier: storage, moisture , shipping

17

Types of Biomass by GencoPKS

Source country: Indonesia, Malaysia



Storage: inside+outside

Barrier: limited quantity in the world

EFB Pellet (Empty Fruit Bunch)




Storage: inside

Barrier: waste, storage, moisture , shipping

18

Types of Biomass by GencoCorn Pellet




Storage: inside

Barrier: waste, storage, moisture, shipping

Rice Husk Pellet)

Source country: Vietnam



Storage: inside


19

Types of Biomass by GencoBio Coal

Source country: Canada, Indonesia, Malaysia



Storage: inside + outside

Barrier: shipping, limited production

Rice Husk Pellet

Source country: Vietnam



Storage: inside


20

Genco’s consideration on BiomassRelative competitiveness of biomass• Cost on production & transportation

• Long-term supply capability

• Legal consideration:

biomass is usable in power plant, but PKS,. EFB, rice husk are not allowed for power plant because they are categorized as wastes

July 2012, Min. Env. Will review the current categorization

• Technological concerns: tube corrosion, slagging, effect of boiler combustion should be reviewed

• Handling issues: facility of unloading, storage, conveyor systems

21

Thank you

Sookyung Ahn

(604) 375-8774

[email protected]

HAWKINS WRIGHT

HAWKINS WRIGHT

HAWKINS WRIGHTHAWKINS WRIGHT

What do the changes to the UK’s Renewables Obligation mean for pellets?

Vancouver

27 October 2011

Residual Wood Conference

HAWKINS WRIGHT

Hawkins Wright’s woody biomass services

• Forest Energy Monitor> Published six times a year covering

developments in international woody biomass and pellet markets

• Consulting> Strategic advice

> Feasibility studies

> Market due diligence

> Feedstock demand and supply

> Price forecasting

• Multi-client studies> ‘A strategic assessment of UK

investments in biomass power’

> ‘Energy from Forests’

> ‘Supply Chain Economics of Biomass Torrefaction’ (Autumn 2011)

HAWKINS WRIGHT

Agenda

• UK policy background • Proposed changes to the Renewables Obligation• What they mean for wood pellet suppliers

HAWKINS WRIGHT

The UK’s 2020 renewable energy target

TWh 2008 2020 % pa growth of renewables

2008-20All

EnergyRenewable

Energy%

renewable All Energy Renewable Energy

% renewable

Electricity 387 22 5.7% 386 117 30% 15%

Heat 711 7 1.0% 599 72 12% 21%

Transport 598 9 1.5% 605 49 8% 15%

Total Final Energy Consumption

1,695 39 2.3% 1,590 239 15% 16%

Meeting the UK’s 15% Renewable Energy Target...

Source: DECC

• The burden of meeting the UK’s 15% renewable energy target will fall most heavily on electricity.

• By 2020, about 30% of UK electricity generation will need to come from renewable sources, up from 5.7% in 2008 and 8.5% in the first half of 2009

HAWKINS WRIGHT

0

100

200

300

400

500

600

700

800

900

1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

mill

ion

t CO

2e

Kyoto target (2008-2012) : 682 million tCO2e/year

UK greenhouse gas emissions 1990-2010

2050 target : 159 million tCO2e/year

1st Budget : 2008-12

NEW 4th Budget : 2023-27

3rd Budget : 2018-22

2nd Budget : 2013-17

The UK’s Carbon Budget

Meeting greenhouse gas emission targets in the UK...

• Under the Climate Change Act, emissions in 2050 must be <159 million tCO2e, 80% less than in 1990

Source: Hawkins Wright research

• Likely that first Carbon Budget (2008-2012) will be met purely by the effects of the recession.

• Second, third budgets will be more challenging if an economic recovery causes emissions to rise again.

• Fourth budget requires a step change in the pace of emission reductions.

• Requires emissions to in 2018-2022 to be 50% less than in 1990

HAWKINS WRIGHT

Carbon intensity of electricity generation

0

100

200

300

400

500

600

700

800

Carb

on in

tens

ity (

kgCO

2e/M

Wh)

Actual

Indicative trajectory

To meet the UK’s long term GHG emission target (-80% by 2050), electricity generation must be almost completely decarbonised by the 2030s

HAWKINS WRIGHT

Electricity generation fuel mix

0

10

20

30

40

50

60

70

80

90

100

mill

ion

tonn

es o

il eq

uiva

lent

Other

Biomass

Wind

Hydro

Nuclear

Natural gas

Oil

Coal

Achieving these objectives means replacing virtually all coal-fired generating capacity over the next 25 years, unless equipped with CCS

HAWKINS WRIGHT

An emerging energy gap…

0

10

20

30

40

50

60

70

80

90

GW

Other

Natural gas

Nuclear

Coal/oil

-20.6 GW

Existing capacity, 2010 A quarter of the UK’s generating capacity is due to close by 2025

21GW of new generating capacity will be required by just to maintain capacity at current levels

Electricity generating capacity from existing UK plants

HAWKINS WRIGHT

The Renewables ObligationHow it works…

• The RO obliges electricity suppliers (companies that sell electricity to businesses and households) to source a set percentage of their electricity from a renewable source> In 2011/12 this percentage is 12.4%, next year 15.8%

• Electricity generators are awarded Renewable Obligation Certificates (ROCs) for every megawatt of renewable electricity generated. These have a market value, currently ~£45/MWh

• The generators sell the ROCs to the suppliers who then submit them to the regulator to demonstrate that they have met their obligation (or not, in which case they pay a penalty)

• The supplier adds the cost of the purchased ROCs to the electricity price; i.e the customer pays in the end

• The number of ROCs that a generator receives is ‘banded’ according to the renewable technology. (Bands are reviewed every five years, but once a plant is ‘accredited’ to the RO, its entitlement to ROCs is ‘grandfathered’ for 20 years.)

HAWKINS WRIGHT

Levelised costs of renewable electricity in 2015

Source: Arup, for DECC

-33

59

78 88 93102

133141 147

190 190

228237

-50

0

50

100

150

200

250

UK

Poun

ds/M

Wh

UK£ 55/MWh - the current price of baseload power in the UK ( Sep 2011)

Co-firing and converting coal plants to 100% biomass are amongst the cheapest renewable energy technologies

HAWKINS WRIGHT

The ROC banding review…The government’s proposals…

• There are currently two main bands that are of interest to pellet suppliers: co-firing and dedicated biomass

• The review has added two new bands: enhanced co-firing at >15% and biomass conversion of existing coal-fired plants

• Enhanced co-firing is seen as a stepping stone to full conversion, enabling multi-unit coal power stations to convert individual units one at a time.

• The dedicated biomass band is set at a level that will encourage smaller, cheaper (<50MW) projects to go ahead. But it might discourage some larger ones.

• Scotland is proposing to put a cap (not yet specified) on the size of dedicated electricity-only dedicated plant eligible for ROCs

DECC’s proposed ROC bands from April 2013ROCs per MWh

Current band From April 2013

Co-firing (standard, <15%) 0.5 0.5

Enhanced co-firing (>15%) … 1.0

Biomass conversion … 1.0

Dedicated biomass 1.5 1.5 (1.4 from 2016)

HAWKINS WRIGHT

Coal to biomass conversion opportunity

• There is currently 28 GW of coal-fired electricity capacity in the UK

• Six plants are due to close by 2015, but this still leaves about 21GW

• Conversion to biomass can be achieved at much lower capex than a new-build large-scale dedicated power plant: about £0.6 million/MW v £2.8-3.9 million/MW respectively*

• As well as RWE npower, it is in the public domain that a number of utilities are looking at the conversion opportunities: Drax Power, Scottish & Southern, E.ON, EDF, EggboroughPower, Rio Tinto…

• DECC estimates that up to 2.6GW of biomass power could result from conversions by 2020. Could be more..

*according to DECC data

RWE npower is converting its Tilbury power station (east of London) to 100% biomass, with a generating capacity of 750 MW.

It stopped burning coal in May 2011 and it will start burning pellets in December 2011. Pellets will be sourced from RWE’s 750,000 t/y Georgia Biomass plant in the southern US.

HAWKINS WRIGHT

Conclusions…

• Health Warning… These are the government’s proposed new ROC bands from April 2013. They are not yet set in stone. Consultation will continue until January. The final decision will come in the spring (maybe!)

• The proposals show a focus on value for money – incentivising technologies that deliver renewable electricity quickly at the lowest cost. Cofiring is therefore now back in favour, particularly if it leads to full conversion of coal to biomass

• This is a very positive development for pellet suppliers, and even more so for any suppliers of torrefied biomass. Torrefied fuel would allow coal plants to be converted at minimum capex.

• DECC’s estimate of up to 2.6 GW of biomass conversion capacity – generating 18.5 TWh/y – would require up to the equivalent of 10 million t/y of wood pellet.

• The outlook for the many large dedicated biomass power projects in the UK is less certain. Some will be disappointed that the allocation has not been increased from 1.5 ROCs, and that it will drop to 1.4 from 2016. There is nothing to stop them proceeding if they can live with this level of support, but how many can?

HAWKINS WRIGHT

Thank you…

Contact:

John Bingham

Hawkins Wright Ltd.2A Blake Mews, KewRichmond, Surrey, TW9 3GAUnited Kingdom

Tel: +44 (20) 8747 5840Email: [email protected]: www.hawkinswright.com

www.forestenergymonitor.com

mailto:[email protected]�

http://www.hawkinswright.com/�

http://www.forestenergymonitor.com/�

1

Canadian Clean Power Coalition:Delivering Results for Over a Decade

Presented to

Residual Wood Conference, 27 October, 2011

2

Who Is the CCPC?• An association of Canadian and U.S. coal and coal-fired electricity

producers, government agencies and research organizations• Industry participants include:

– Basin Electric Power Cooperative (incl Lignite Energy Council)– Capital Power Corporation – Electric Power Research Institute (EPRI)– Nova Scotia Power Inc.– Sherritt International Corportation– SaskPower– TransAlta Corporation

• Government Sponsors:– Alberta Innovates – Energy and Environmental Solutions– Saskatchewan Ministry of Energy and Resources– Natural Resources Canada (CanmetENERGY)

3

Our Mandate• The CCPC's mandate is to research technologies

with the goal of developing and advancing commercially viable solutions that lower coal power plant emissions

• Our objective is to demonstrate that coal-fired electricity generation can effectively address environmental issues and move us forward to a cleaner energy future

Co-firing Cases Studied

4

Biomass Fuel case # Plant TypePlant Capacity

(MW)Thermal

InputCapacity Factor

Base Heat Rate

(GJ/MWh)

Fuel Displaced

(GJ/hr)Pelletized Flax 1 Lignite 150 10% 70% 11.5 173Torrefied Willow 2 Bituminous 150 60% 70% 9.6 864Pelletized Wood 3 Sub-Bit 400 60% 70% 10.0 2,400Torrefied Wood 4 Sub-Bit 400 60% 70% 10.0 2,400Wood Chips 5 Retrofit BFB 150 100% 70% 11.5 1,725Wood Chips 6 Sub-Bit 150 20% 70% 10.0 300

Avoided Cost vs Biomass Prices

5

405060708090

100110120130140

0 50 100 150 200 250

Avo

ided

CO

2 Co

st ($

/t )

Biomass Cost ($/t)

1 - 10% FP

2 - 60% TW

3 - 60% WP

4 - 60% TW

5 - 100% WC

6 - 20% WC

Cost of Biomass Power

6

Incremental Power Costs

7

Increase in Power Costs

8

Avoided CO2 Costs

9

Amortization Costs

10

Co-firing and Post. Comb Costs

11

Bio Low Bio High CC Low CC HighBiomass Cost ($/t) 130.0 182.0 Net Fuel Cost ($/GJ) 6.0 8.6 Avoided Cost ($/t) 70.5 97.8 100.0 150.0 Incremental Cost ($/MWh) 42.3 58.7 60.0 90.0

Like to Have For Biomass Co-firing• Government subsidies to offset technology risk and

support technology development• Prefer technologies which require less time to

implement• Prefer low capital cost plant modifications – aging

units• Proven biomass technologies reduce risks• Proven handling and firing technologies reduce risks• Few plant modifications are preferred

12

Like to Have For Biomass Co-firing• Biomass fuel standards would be helpful• Co-firing which reduces other emissions• Flexibility to use low cost opportunistic fuels• Co-feeding of biomass with coal – not separate

systems

13

Must Have for Biomass Co-firing• Regulatory framework mandating GHG reductions• Regulatory approval to co-fire and GHG protocol• High GHG credit prices – encourages physical

solution• Cost of GHG reductions from co-firing lower than

other options• Co-firing yields material decreases in GHG• Minimal impact on heat rate, output, corrosion,

availability, O&M, downtime to install, etc.

14

Must Have for Biomass Co-firing• Long term secure supply of consistent high quality

(dry) fuel• Plant space availability• Understanding fuel - Proximate, ultimate, elemental

and trace analysis, ash fusion temperature, TGA’s, bulk density, dust issues, particle size, odour, biomass degradation issues, corrosion and fouling considerations, flame stability, burnout, other operational impacts, etc.

15

Conclusions• Co-firing CO2 avoided costs may range from $70 to $100/t• This may be lower than carbon capture costs• Plants with short economic lives may benefits from co-

firing rather than carbon capture• Co-firing will increase marginal costs – Dispatch issues• It may not be possible to co-fire enough biomass to meet

new GHG requirements - Reduces amount of capture• Co-firing can reduce sulphur emissions• Largest cost is for biomass feedstock – need to refine

costs

16

9th Biennial Wood Residue ConferenceRichmond, BC

Gordon Murray, Executive Director

October 27, 2011

Canadian Wood Pellet Update

Global Wood Pellet Consumption 2010

Wood Pellet Association of Canada 2

• Europe ~ 10 million tonnes

• All other ~ 2 million tonnes

Global Wood Pellet Production

Source: FAO & UNECE(as of 2009)

Estimating European wood pellet demand


*Some experts forecast more than 100 million tonnes for 2020

Canadian annual pellet production capacityas of June 1, 2011 – tonnes


Plants Average Largest Total %

Western Canada

16 118,000 400,000 1,889,000 64%

Eastern Canada

21 58,000 130,000 1,042,000 36%

All of Canada

37 79,000 400,000 2,931,000 100%

New Capacity 2010-11

Name City ProvinceNew Capacity

(tonne/yr)

1 Northwest Wood Preservers Vanderhoof BC 30,000

2 Pacific BioEnergy Prince George BC 180,000

3 Pinnacle Pellet - Burns Lake Burns Lake BC 400,000

4 Firemaster Kamloops BC 30,000

5 Highland Pellet Manufacturing Merritt BC 29,000

6 Tahtsa Pellet Burns Lake BC 30,000

7 Groupe Savoie St-Quentin NB 55,000

8 Holson Forest Products Roddickton NL 50,000

9 Granulco Sacre-Coeur QC 20,000

10 Granules de la Mauricie Shawinigan-Sud QC 22,000

11 Trebio Portage-du-Fort QC 130,000

976,000

5Wood Pellet Association of Canada

Canadian pellet shipments – tonnes*


2010 2011F

Europe 1,350,000 1,700,000

North America 90,000 190,000

Japan 60,000 60,000

Korea 0 50,000

1,500,000 2,000,000

*estimates only – Statistics Canada does not track wood pellets as a separate product and producers are reluctant to share data

Western Canadian Plants

• Mostly overseas export focussed

• Pellets loaded on rail cars at plant site

• Rail to Vancouver or Prince Rupert

• Unloading and temporary storage at terminal

• Bulk carrier to Europe or Asia


Quebec/Atlantic Canadian Plants• Domestic and NE US focussed

• Small plants and high fibre cost

• 1 million tonnes capacity competing for 100,000 tonnes market – mostly bags

• Just 2 of 21 plants shipping overseas from Halifax and Belledune

• Opportunity for EU utilities


Ontario Situation

• 11 million m3 unused annual cut available

• Province working on tenure reform

• Wood supply competition

• Substantial volumes awarded to proposed pellet operations


Ontario: Timber Awarded for Pellet Manufacturing

Company Annual Timber Award – m3

KD Quality Pellets 90,000

Wagner Forest Management 133,500

White Sand First Nation 149,000

Wawasum Corporation 113,000

Woodville Pellet 56,500

Muskoka Timber Mills 101,200

Atikokan Renewable Fuels 179,000

Abitibi Bowater 219.000

Total 1,041,200


Sources: Working Forest and Ontario MNDMF

European markets for Canadian pellets


• Belgium – power generation

• The Netherlands – power generation

• United Kingdom – power generation

• Denmark – power/district heating

• Italy – residential heating

• Canadian market share in Europe ~ 15%

European Industrial Wood Pellet Buyers Group

12

Wood Pellet Association of Canada

• Buyers: Dong, Drax, Electrabel, EON, RWE, Vattenfall

• Producers: WPAC, USIPA, EPC

• Agenda:– Standard contracts for spot trading

– Universal product standards

– Mandatory sustainability criteria

• Fortum recently withdrew over differences concerning sustainability strategy

South Korean Market Situation

• Committed to 30% GHG by 2020

• RPS for power generation: 2012 – 2%

• Increase ~ ½% annually until 2022 – 10%

• Biomass energy target for 2020: 4,211,000 toe

• Pellet equivalent: 10 million tonnes

Wood Pellet Association of Canada13

New Canadian Coal Power Emissions Regulations

• New coal emission regulations gazetted– Would take effect in 2015

– Cap emissions at 375 tonnes CO2/GWh

– Similar to natural gas combined cycle

– Applies to new units and those aged 45 or higher

– Biomass deemed to have zero emissions

• Biomass can extend the life of coal units!


Impact will be huge and immediate• Canada’s coal power fleet is old• 65% of Canada’s coal power units affected immediately• Canada consumes about 70 million tonnes of coal

annually• Conversion to biomass depends on reaction of coal

power industry. Choices include– Shutting down plants– Carbon capture and storage– Natural gas– Biomass – wood pellets!


Wood Pellet Association of Canada


• Non-profit and member governed

• Industry working collectively for common benefit

• Voice of Canadian industry

• Market development

• Government relations

• Safety certification

• Research and development - UBC

biomass opportunities in korea ministry of jobs, tourism ... pellets... · biomass opportunities in...

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