1

NextGenBioWaste-conference, Feb 16-17 2010

Biomass in relation to 2020Hans Nordström, Vattenfall Heat Nordic

• SITUATION TODAY & TOMORROW

• POTENTIALS & QUALITIES

• POLITICS –

SUSTAINABILITY ; ECONOMY

Bränsletillförsel ENVIRONMENT ; SECURITY

OF S från 1980 samt produktion av värme och el

Bränsletillförsel Uppsala

Avfall

Spillvärme

Träspån

Övrigt bio

Torv

El

KolOlja

0

500

1 000

1 500

2 000

2 500

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

(GWh)

Värmeproduktion

Elproduktion

2008-01-31 FUPP/JZ

Ex. Fuels

Vattenfall Uppsala

1980

1985

1990

1995

2000

2005

TWh

2,5

2,0

1,5

1,0

0,5

0

OilCoal Peat Heat production

Other

bio

WoodchipsEl.

Heat pumps

WasteEl.generation

-POLITICS EMISSIONS -POTENTIALS TECHNIC-QUALITIES AVAILABILITY/EFFICIENCY-PRICES O&M COSTS;INV./CAP COST

NEEDED R&D

Hans Nordström

3

…….2-3 generations back – sustainability or…?

4

..survival of civilisations….

-

Friendly neighbours or not.-

Environmental destructions

-

Actions against environmental destructions-Deforestation !

-Easter Island-Haiti / Dominican Republic-Iceland-UK-Sweden ca 1900 –

bio not sustainable…! Go for coal !

Forest in perspective EU 27

•Forest in UK –

park

•Forest in Germany

–

for pulp

& paper

• Forest in East Europe –

timber for sawing

•Forst in Southern europe

–

deforestation,fires, landerosion etc

•…and deforestation

a global threat

6

World primary energy sources

1850 1900 1950 2000

100 %

80 %

60 %

40 %

20 %

0 %

CoalOilHydropower

Renewables (except hydro.) Natural gasNuclear

Renewables (exc. hydro)

Coal

OilN. gas

Hydro

Nuclear

Source: Oil & Gas Scienceonal

Technologi

Pierre-René

Bauquis

7

The oil/fossils age

0 2000 4000Year

0

50

100

Yearly production 103 TWh

8

Security of supply is essential....

9

Situation in EuropeFact: High dependence of imported and not sustainable fuels!

Prognosis: Strong increase in use of renewables?

And a long discussion about-

potentials

-

politics-

economy

-

dependence of import-

existing technic

-

new technic-

total sustainabilityetc

What facts?

What actions ?

10

Climate changes affect us all…..

11

COP 15 - ..a picture tells more than 1000 words…

12

The Copenhagen Accord’s main contribution was a blank sheet..

•

No quantitative targets for global emission reductions. The parties were invited to submit Individual 2020 targets by Jan. 31st, 2010.

•

No binding character, merely an indication of the parties’ intents.

•

EU: - 20/30 % to 2020 re 1990U.S.: - 17 % to 2020 rel. 2005Canada: - 17 % to 2020 rel. 2005Australia: - 5-25% to 2020 rel. 2000Japan: - 25 % to 2020 rel. 1990Maldives: - 100 % to 2020etc.

•

All in all, 55 parties submitted their targets to the UN secretariat before the above-mentioned deadline.

13

Current proposals not consistent with 2 °C target

Source: Project catalyst [2009]

14

BUT -

EU have binding targets…

0,0%0,9%

2,2%6,1%

2,9%4,3%

2,4%6,7%7,2%

1,3%9,4%

3,1%5,2%5,8%6,9%

8,7%10,3%

15,0%17,8%18,0%

16,0%17,0%

20,5%23,3%

28,5%34,9%

39,8%

10,0%10,1%

10,8%6,9%

10,1%8,7%

11,6%7,3%

7,8%13,7%

6,6%12,9%

11,8%12,2%11,1%

11,3%12,7%

8,0%6,2%7,0%

9,0%13,0%

10,5%10,7%

9,5%7,1%

9,2%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0% 45,0% 50,0%

Malta

Luxemburg

Belgium

Czech Republic

Cyprus

Hungary

Netherlands

Slovak Republic

Poland

United Kingdom

Bulgaria

Ireland

Italy

Germany

Greece

Spain

France

Lithuania

Romania

Estonia

Slovenia

Denmark

Portugal

Austria

Finland

Latvia

Sweden

20052020

*

***

*

*

*EU-average 11,5%* countries above EU-average

RES targets

16

..new important technical steps…?

Cycles

40-50 years, so far……

Railways

ElectricityCars

Computers

Barin

g c r

isis

The

big

depr

essi

on

Oil

cris

es

Climate

Security of supply

Sustainable energy

Political consensus?

?

Source:lars.ahnland,svd

What next in the technical / economical history…

Inv/ prod. value

What alternatives do we have…

18

What alternatives do we have….

•

Hydro•

Wind

•

Solar •

Wawe

•

Geo

•

Nuclear •

CCS / fossils

•

New technic

•

Bio mass fuels

19

What alternatives do we have….

•

Hydro –

almost done•

Wind –

production balance

•

Solar –

still expensive•

Wawe –

development

•

Geo –

geografically / technically limited

•

Nuclear –

politics / security ?•

CCS / fossils –

development takes time

•

New technic

•

Bio mass fuels

20

What alternatives do we have….

•

Hydro –

almost done•

Wind –

production balance

•

Solar –

still expensive•

Wawe –

development

•

Geo –

geografically / technically limited

•

Nuclear –

politics / security ?•

CCS –

development takes time

•

New technic

-?

•

Bio mass fuels

–

can be produced in most countries-

known “commercial”

technic

for conversion

-

only renewable possible to use in existing coal plants

21

.. So combustion of bio needed for long time…

Largest potential of renewables is bio– but limited ! So far !-

consider competition between energy, pulp and paper, timber and transportation, food etc

Many qualities-

Forest fuels/residues

-

Agricultural fuels/residuesEnergy crops, biooils etc

-

Waste fuels-

Peat (not bio but renewable)

-

Others (algae etc)

- Consider all resources!

- Diversification needed

-Potential= ƒ(price)

-Price= f(market situation)

Global potential – 1400 EJ/år.

Considering limitations 250-500 EJ/år.

Global primary energy demand 360 EJ/year.(..say 100 000 TWh/year)

24

Forestry is the main source of supply for biomass in Europe

85%

10%5%

ForestWasteAgriculture

Composition of biomass as energy carrier in EU 25, 2004

Source: European Biomass Association

25

Electricity from renewables EU 27

Källa: EU Kommissionen

2007

26

Heat from renewables EU 27

Källa: EU Kommissionen

2007

27

Future renewable energy demand in the EU driven by policy instruments can be estimated by quantifying RES target

The EU has set targets for CO2 emissions and renewable energy that will drive demand for biomass

0

5 000

10 000

15 000

20 000TWh

203020252020201520061990

Transport

Heat

Electricity

Final energy consumption in the EU is forecasted to increase somewhat from 2006 to 2020

Final Energy Consumption (EU27)

Renewable Energy Consumption (EU27)

1 100

3 200

1 200

0 500

1 0001 5002 0002 5003 0003 500 2

000

TWh

2020Required increase

2005

Source: IEA –

World energy outlook 2008; Fraunhofer

ISI, ECOFYS –

Progress Economic Analysis of reaching a 20% share of renewable

energy sources in 2020

Non-biomass RES

All RES

From Biomass

We need at least double volume of biomass 2020 !

28

Future

potential of biomass in the EU is largeTotal bio energy potential from agriculture, forestry and waste ~300Mtoe in 2030 (compared with ~72Mtoe in 2004)The biggest potential growth lies in biomass from agriculture, 142 Mtoe of the total 300MtoeObtained from 19 million hectares of agricultural land 12% of the utilised agricultural area in 2030Land reserves are available without harming food supply

189239

316

720

50

100

150

200

250

300

350

BiomassConsumption 2004

Potential 2010 Potential 2020 Potential 2030

Mto

e (239 Mtoe

ca 2500 TWh)

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… Brussels 24.4.2009:…potentials...

Commision staff working document:”

A European Commision funded review, of over 70

studies, found

that total 2020 potentials,estimated

for the EU 27,

differ

to a considerable degree, 76 Mtoe –

480 Mtoe”

…say

800 TWh –

5000 TWh !

…any risks of overuse of forests should be assured……national ”Biomass Action Plans” shall ensure long

term sustainable supply of biomass, increased investor confidence and biomass technologies…

…forest resources…

31

Forestry is the main source of supply for biomass in Europe

85%

10%5%

ForestWasteAgriculture

Composition of biomass as energy carrier in EU 25, 2004

Source: European Biomass Association

32

..more from the tree…

Stump 22%

Round wood 60%

Branches and tops 19%

Each m3 of harvested round wood could generate:

~0.3 m3 branches and tops

~0.35 m3 stump

(based on Swedish conditions)

Source: Gustav Egnell, Swedish University of Agricultural Sciences

Draft Presentation

Each tree consists of trunk, stump and branches & tops, of which

round wood usually refers to the trunk

More can be used as solid fuel,

especially from stumps…

33

Forest fuels

Residues –

in forest: branches & tops(even green), stumps, fines etc

Residues –

from sawmills etcResidues from p&p.: bark etcWood pellets/briquettesEtc.

More dev./demo on supply side needed

Acceptable commercial thermal/technical solutions today –

but improvements still needed !-

Cofiring-

High steam data-

Low quality – high output

34

Forested area

35

Example Poland

Limited use of forest fuels demanded, at least for getting green certificates……l

Dedicated biomass boiler Cofiring with coal> 20 MWe

Non forest fuelsNon forest fuel

Forest fuelsForest fuels

36

3636Source:

Pöyry

HardwoodHardwood

SoftwoodSoftwood

Yieldm3

/ hectare

/ yearRotationyears

710-12

n/an/a

8-1012-1512-15

35-4035-40

1525252545

70-8070-80

9055

BRAZIL IS A WORLD BENCHMARK IN FORESTRY

•

Brazilian eucalyptus has the highest average yield in the world, 41 m3

per hectare per year

•

At Stora Enso’s Veracel plantation, the yield exceeds 53 m3 per hectare per year

•

This leads to a production cost well below USD 10 per m3 of wood (excluding cutting, transport, and capital costs)

37

EUCALYPTUS PLANTATION, BRAZIL

3737Stora

Enso’s

Veracel

plantation, South Bahia, Brazil

38

Production cost ca 15 Euro/MWh

39

A large variety of qualities……

Agricultural biomass fuels

40

Energy crops, SRCs…

Ex Willow

6-8 ton DS/ha,a or 30-40 MWh/ha,a possible – corresponding to 4 tons of oil/ha

MANY ENERGY CROPS CAN BE PRODUCED AT COSTS BELOW

20 EURO/MWh

(Salix viminalis)

41

Fuel Quality –

important parameters

•

Chlorides•

Sodium

•

Potassium•

Nitrogen

•

Heavy metals•

Ash content

•

Variations / not homogeneous•

Bulk density

42

Willow –

harvested in bundles instead of directly chipped

43

Energy crops – R&D&D areas

•

Clones

•

Growing, harvesting,logistics, compacting, storing etc

•

Attitude, culture, businessmodels/contracts, cooperation etc

•

Thermal areas –

availability

/ slagging

/ fouling

/ ashes etc

•

Sustainability –

total GHG bal., incl

land use change, NOx etc

•

Politics –

optimal steering instruments

44

World primary energy sources

1850 1900 1950 2000

100 %

80 %

60 %

40 %

20 %

0 %

CoalOilHydropower

Renewables (except hydro.) Natural gasNuclear

Renewables (exc. hydro)

Coal

OilN. gas

Hydro

Nuclear

Source: Oil & Gas Scienceonal

Technologi

Pierre-René

Bauquis

45

Costs and prices ?

46

Costs -

and prices ?

Production cost, say 10-20 EURO/MWh

47

Biomass is one of the most cost effective renewable technologies

48

Parameters having impact on prices of bio fuelPolitics / steering parameters

•

Emission trading CO2; other gasses

•

Taxes

•

Green certificates etc

•

Conditions for nuclear-power

•

National Kyoto goals

•

Security of supply within EU

Fuels / market

•

Potential/availability/demand of conv. bio fuels

•

Potential/availability/demand of not conv. bio fuels

•

Potential/availability/demand of grown bio fuels

•

Availability/price for -

gas –

global LNG-trade; deregulation etc-

oil –

consequences of peak ; demand outside EU-

coal –

new cond

EU; demand outside EU

•

Classification of waste fuels and peat.

Others

•

Cost for transportation

•

Currencies: Value of Dollar, Euro etc

•

Prices of electricity

•

Need of biomass in industry, both for pulp and paper and as fuel

•

Need of biomass for bio alcohols

•

Radical/sudden climate changes

Prices of bio fuels

Techniques

•CO2-separation/storing

cost, acceptance

•Other large scale techniques

•New small scale techniques

49

Price development ?

Production cost Market price

OilUSD / Barrel

5-20 100 (140—70)

OilEuro / MWh

2-10 50

Forest residuesEuro / MWh

0-15 (excl.trsp)(waste negativ)

………….?

50

Political steering instruments, renewable electricity

Feed-in tariff / premium

Certifikatsystem

Investeringsstöd

/ skatter

Offert

(tender)

Japan

Kina

Indien

Kanada

USA

51

CO2-tax, Sweden, app €/MWhheat

52

Subsidy levels, feed in tariffs etc

20 MWe, 100 % biomass, only el production [€/MWh]

Källa: Vattenfall R&D 2010

020406080

100120140160180200

Italy

Belgium

(Flan

ders)

Spain

United

King

dom

Austria

The N

etherl

ands

Poland

Estonia

Lithu

ania

Japa

nGerm

any

China

Sweden

Denmark

France

The U

nited

Stat

esNorw

ayFinl

and

Canad

a (Onta

rio)

India

Latvi

a

Assumed

el price

(blue): 40 €/MWh

53

Competing alternatives often fuel cost = 0 !

54

Flow chart renewable fuel to ”energy”Fuel value chain

Origin

Analysis

Pre sorting etc

Collection

Methods

Logistics

Storage

Preparation

Technics

-

grinding

-

homog.

Quality securing

Control

Quality-

spec.

Storage

Logistics

Transport

Volume

Classifica-

tion

Delivery cond.

Destination

- Form

- Price

Storage

Preparation

- Crushing

- Grinding

-

Homog.

etc

Conveyin

g

Dosage

Mixing

Incineration

Technical demands

-

instr/control

-

corrosion

Environ.dem.

- air

-

water

Flue gas-

cleaning

Residues/

ashes

Handling

Permissio

n

Additives

Chemicals Measuring

Conversion / Investment. technics, environm.–

cap.cost

Δ

op. cost

Δ

maint.costProduction ”in our plant”

€r/MWh

€//MWh

€/MWh

fuel

Alt fuel supply

€/MWh

fuel

(€/ton)

€/MWh

el

Alt.

€/MWh

€/MWh

el

€/MWh

th €/MWH th

55

Example total production cost bio heat

RDF Demolition wood Forest chips Peat briquette Wood pellets

ETS-costs

Cap. Costs

Maintenance

Operation

Ashes

Chemicals etc

Taxes, fees etc

Fuel price, at plant

WasteWood, chipped Dried, compacted

0

50

Euro/MWh

56

Political support / drivers….

If green certificate, feed in etc gives 100 Euro/MWh el…

Fuel trader view : 30 Euro/MWh fuel

Plant owner view : 30 –

extra op&m –

cap costs etcmeaning far less, if any, more value of the fuel !

57

SCENARIOS for REFERENCE PRICE LEVELS

• Future price of coal and established CCS• Large scale cropping•

Large scale and well established long

distance import of residues from forest and agriculture?

• Enlarged supply from forest residues• Optimization of logistics and transport• Limitations set by pulp&paper?

58

Production cost vs market prices ?

-

If fundamental presumptions only –

reasonable price prognosis possible to do !

-

Speculative businesses and political frameworks

means temporarily variations and too high pricelevels

!

-

BUT -

the power plant owners can integrate backwards in the fuel value chain –

and gain control of

the “price”

!!

59

And never forget

: Total Sustainability

•All traditional CSR questions

•GHG –

prod of biomass –

handling, transports, fertilizer etc

-

Land Use Change –

direct / indirect

-

Efficiency

in conversion

•Of course –

first use residues, but also a large potential for energy crops

•No lack of prod capacity for food –

lack of money to by food

•If a future problem –

change to food again

60

Thanks for listening!