implications of global and local environment policies on biomass

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Implications of Global and Local Environment Policies on Biomass Energy Demand: A Long-term Analysis for India

P.R. Shukla

Indian Institute of Management Vastrapur, Ahmedabad 380015, India

Ph: 91 79 407241, Fax: 91 79 6427896 Email: [email protected]

Paper presented at the workshop on Biomass Energy: Data, Analysis and Trends

Organized by International Energy Agency (IEA) Paris, March 23-24, 1998

http://www.e2analytics.com 1

RENEWED INTEREST IN BIOMASS ENERGY Biomass has provided energy since millennia. Till the middle of last century, biomass dominated the global energy consumption. In this century, the rapid increase in fossil fuel use contributed to the decline in the share of biomass in total energy. Biomass still remains an important energy source and contributes 14% of the world energy and 38% of energy in developing countries (Woods and Hall, 1994). Table 1 shows the global biomass energy consumption and growth during past two decades. Table 1: Global Biomass Energy Consumption and Growth

Energy Consumption

Per Capita

Energy Consumption

Peta Joules

1993

% change since 1973

Maga Joules

1993

% change since 1973

Africa 4 815 76 6 991 0

Europe 552 -14 761 -21

North / Central America 1 825 106 4 130 53

South America 2 748 26 8 888 -17

Asia 9 009 47 2 690 1

Oceania 185 16 6 693 -14

World 19 926 47 3 594 4

Source: Based on data from - WRI, 1996.

Wood fuels, including charcoal, are the most prominent biomass energy sources in developing countries, where a substantial use of biomass energy continues in the rural area and among urban poor. Most biomass energy in developing countries is homegrown or collected by the households and is not traded. The incomplete combustion of biomass in the traditional stoves contribute not only to the energy inefficiency, but also to substantial emissions of pollutants which can cause severe health damage (Smith and Thorneloe, 1992). Since long, the biomass energy use has been confined to traditional sectors. Lately however,

several factors have contributed to a renewal of interest in biomass energy globally. The chief


among these are - i) the improvements in biomass energy production and conversion

technologies (Johansson et al, 1993), ii) rising global environmental concerns like climate

change (Shukla, 1996) and acid rain, and iii) the deterioration in air quality due to the use of

fossil fuels. The concerns about sustainable development has also led to a fresh look at

biomass energy as a renewable, sustainable and environmentally benign energy source.

The rural energy crisis, such as in India (Shukla, 1997a), emanating from the low purchasing

power of rural poor and the shortages of commercial fossil fuels have made the policy makers

in developing countries to reconsider the biomass as a long-term and viable energy alternative

for rural areas. Biomass energy has drawn the attention of developing country policy makers

due to its multiple advantages like - i) the accessibility in rural areas where commercial fuels

and centralized electric grid are not available, ii) employment generation in energy plantations

and rural industries, iii) saving of foreign exchange spent on oil imports (Shukla, 1997a) and,

iv) restoration of deforested and degraded lands by energy plantations (Reddy et al, 1997).

Another argument in favor of biomass energy is that it may help to tackle the problem of

surplus agriculture production in industrialized countries (Patterson, 1994). These advantages,

together with more efficient and versatile biomass electricity generation technologies, have

led to the transition of re-emergence of biomass as a competitive and sustainable energy

option for the future.

Commercial Viability of Biomass Another reason for the renewed interest in biomass is the commercial viability of biomass in

niche applications and closing in of the technological and economic gap with the fossil

energy. The cheapest biomass resources, the waste products from wood or agro-processing

units, are available at competitive costs. However, their supply is limited. The plantation

grown fuels are more expensive, but their supply costs are improving. The average cots of

plantation grown biomass in five bio-geoclimatic zones in Brazil is estimated at $1.4 per GJ

(Hall et. al, 1993). Estimates of biomass feedstocks vary from $1 to $3 per GJ (Woods and

Hall, 1994). At $2 per GJ, the biomass cost is equivalent to the oil price at $ 20 per barrel.

Organized production of wood fuels (through commercial or co-operative sector) and

modernized conversion at appropriate scale economies therefore have potential to make


biomass a competitive commercial fuel vis-a-vis fossil fuels (Ahmed, 1993; Ravindranath,

1993).

In some industrialized nations, biomass has already penetrated under competitive dynamics.

USA and Sweden obtain 4% and 13% of their energy respectively from biomass (Hall et al,

1992). Countries like Sweden, who have decided to phase out nuclear plants and reduce fossil

fuel energies in the next century, have plans to dramatically increase the use of biomass

energy.

Wood Fuels and the Environment

Globally, carbon emissions released from combustion of wood fuels is equivalent to 0.5 PgC

(Houghton, 1996). Eighty percent of wood fuel use is in tropics. If sustainably grown, the

wood-fuels are essentially carbon neutral. Annually biomass burning is estimated to emit 22

million tons of methane and 0.2 million tons of nitrous oxides (IPCC (WGII), 1996). These

emissions have significant implications for climate change due to their considerably high

global warming potential compatred to CO2 (IPCC, 1990; Smith et. al., 1993).

Attributing an eighth of global deforestation to wood fuel, the contribution to the global

warming of the direct CO2 emissions from wood fuels use is estimated to be 2 percent.

(Ahuja, 1990). Besides the net carbon emissions from deforestation, the products of

incomplete combustion of wood are a cause of considerable environmental concern. Wood

fuel burning on traditional stoves causes emissions of pollutants such as carbon monoxide,

methane, nitrogen oxides, benzene, formaldehyde, benzo(a)pyrene, aromatics and respirable

particulate matter. Exposure to these pollutants poses severe health risks (Smith, 1987, Patel

and Raiyani, 1997).


SHIFT FROM TRADITIONAL TO MODERN BIOMASS ENERGY

The most vital factor underlying the future trends of biomasss use is the increasing

commercialization of biomass energy. In the rural areas of developing nations, the energy

market is underdeveloped. Most biomass fuels are therefore not traded, nor do they compete

with commercial energy sources. In presence of excess labour, the biomass energy acquires no

resource value so long as it is not scarce. Due to underdeveloped energy market, the

traditional biomass fails to acquire exchange value in substitution. The absence of market thus

far has acted as a barrier to the penetration of efficient and clean biomass energy technologies.

Following the rising incomes in developing nations, the traditional biomass is increasingly

substituted by more efficient and cleaner fuels along the fuel ladder, thereby causing a steady

decline in its share in total primary energy. The shift has a history. The oil crisis two decades

ago prompted the governments of oil poor countries to look for energy alternatives. Brazil

responded with ethanol programme and Philippines promoted the dendrothermal power

programme. It is well recognized that the future of biomass is along the commercial route.

The policies to internalize the externalities of competing fuels shall play vital role in future

penetration trajectory of biomass energy. The modern technology and markets are set to

transform biomass from an inefficient and unclean traditional fuel to an efficient and clean

fuel that is produced and consumed through modern technologies and competes in a market.

The modern biomass technologies are now achieving performance standards (Reddy et al,

1997) which make them competitive vis-à-vis conventional energy forms, especially if the

social and environmental benefits of biomass are internalized.

Technological Advancements

Technological progress in biomass energy is derived from two spheres - biomass energy

production practices and energy conversion technologies. A rich experience of managing

commercial energy plantations in varied climatic conditions has emerged during the last two

decades (Hall et al, 1993). Improvements in soil preparation, planting, cultivation methods,

species matching, bio-genetics and pest, disease and fire control have led to enhanced yields.


Development of improved harvesting and post harvesting technologies have also contributed

to reduction in production cost of biomass energy. Technological advancements in biomass

energy conversion come from three sources - enhanced efficiency of biomass energy

conversion technologies, improved fuel processing technologies and enhanced efficiency of

end-use technologies. Versatility of modern biomass technologies to use variety of biomass

feedstock has enhanced the supply potential. Small economic size and co-firing with other

fuels has also opened up additional application.

Biomass integrated gasifier/ combined cycle (BIG/CC) technology has potential to be

competitive (Reddy et al, 1997; Johansson et al, 1996) since biomass as a feedstock is more

promising than coal for gasification due to its low sulfur content and less reactive character.

The biomass fuels are suitable for the highly efficient power generation cycles based on

gasification and pyrolysis processes. Steady increase in the size of biomass technologies has

contributed to declining fixed unit costs.

For electricity generation, two most competitive technologies are direct combustion and

gasification. Typical plant sizes at present range from 0.1 to 50 MW. Co-generation

applications are very efficient and economical. Fluidized bed combustion (FBC) are efficient

and flexible in accepting varied types of fuels. Gasifiers first convert solid biomass into

gaseous fuels which is then used through a steam cycle or directly through gas turbine/engine.

Gas turbines are commercially available in sizes ranging from 20 to 50 MW. Technology

development indicates that a 40 MW combined cycle gasification plant with efficiency of 42

percent is feasible at a capital cost of 1.7 million US dollars with electricity generation cots of

4 cents/ KWh (Frisch, 1993).

BIOMASS ENERGY IN DEVELOPING COUNTRIES IN ASIA

Biomass use for energy and non-energy purposes has been growing in Asia. As evident from

Figures 1, between 1974 and 1994, the consumption of wood enenrgy in Asia has grown

annually at just below 2 percent rate. The current use of wood in Asia is unsustainable, as is

evident from the deforestation and degradation in tropical regions which has made Asian

forests the net emitters of atmospheric CO2 (Dixon et al, 1994).


Biomass continues to remain a major source of energy in developing countries in Asia. The

importance of biomass energy use in some Asian countries, which are the members of the

Regional Wood Energy Development Programme (RWEDP) of the FAO, is evident from

Table 2. Biomass share in energy in Malaysia and China has declined in past two decades

following a massive substitution of traditional biomass by commercial fuels. In other Asian

nations, biomass share in energy has continued to be substantial. In mountainous nations like

Nepal and Bhutan as well in wood rich countries like Cambodia and Laos, biomass

contributes over 80% of primary energy. In India, biomass contributes a third of primary

energy and over a three quarter of energy in the domestic sector.

In the wake of rapid industrialization, higher penetration of commercial fossil fuels in most

developing nations in Asia have led to a decline in the share of biomass energy. However, the

consumption of biomass energy has risen unabatedly during past two decades (Table 3).

Various factors; such as the increase in population and shortages or unaffordability of

commercial fuels in rural and traditional sectors of the economy; have contributed to growing

biomass use. The increasing pressure on existing forests has already lead to considerable

deforestation. Despite the efforts of many governments, deforestation in tropics has far

exceeded afforestation (by a ratio of 8.5:1) during the 1980’s (Houghton, 1996). A sustained

and enhanced use of biomass in Asia would require supplementing existing resources with

modern plantations. Lately, many Asian countries have initiated programs for afforestation,

modern energy plantation for augmenting the supply and conversion of biomass energy

through modern technologies.


Table 2: Shares of wood and biomass in total energy consumption in Asia

Country Year Share of biomass (%)

Share of wood (%)

Biomass share in domestic energy (%)

Bangladesh 1992 73 13 89

Bhutan 1991 82

Cambodia 1994 86 83 98

China 1992 10 25

India 1992 33 78

Indonesia 1992 39 31 73

Laos 1991 88

Malaysia 1992 7 2 15

Maldives 1994 84

Myanmar 1991 74

Nepal 1992-1993 92 68 97

Pakistan 1993-1994 47 27 83

Philippines 1992 44 26 66

Sri Lanka 1990 77 93

Thailand 1994 26 9 65

Vietnam 1991 50

Source: FAO (1997)


Table 3: Biomass Energy Consumption and Growth in Asian Countries

Country Energy Consumption

Per Capita

Energy Consumption

Petajoules

1993

% change since

1973

Per Capita

1993

% change since

1973

Bangladesh 277 27 2 401 -20

Bhutan 12 79 7 345 21

Cambodia 54 21 5 560 -11

China 2 018 54 1 687 15

India 2 824 58 3 132 4

Indonesia 1 465 54 7 642 4

Lao PDR 39 35 8 366 -15

Malaysia 90 61 4 686 -3

Mongolia 13 0 5 689 -41

Myanmar 193 48 4 324 -4

Nepal 206 88 9 882 12

Pakistan 296 101 2 228 8

Philippines 382 44 5 892 -9

Sri Lanka 89 45 4 996 6

Thailand 526 75 9 141 19

Viet Nam 251 54 3 516 -1

Other 274 - - -

Total 9 009 47 2 690 1

Source: WRI, 1996


BIOMASS ENERGY IN INDIA: STATUS Historically, biomass has been a major source of households energy in India. Biomass meets the cooking energy needs of most rural households and half of the urban households (Shukla, 1996). Despite significant penetration of commercial energy in India during last few decades, biomass continues to dominate energy supply in rural and traditional sectors. Estimates of the share of biomass in total energy in India varies from nearly a third (36%) to a half (46%) of total energy (Ravindranath and Hall, 1995). Biomass energy constitutes wood fuels (including charcoal, wood waste wood), crop residues (such as bagasse, rice husk and crop stalks) and animal dung (including biogas). Wood fuels contribute 56 percent of total biomass energy in India (Sinha et. al, 1994). According to the report of the National Council for Applied Economic Research (NCAER, 1985), biomass fuels contributed 90% energy in the rural areas and over 40% in the cities. According to this report, twigs accounted for 75% of household energy needs. The household energy consumption thus appears scarcely a cause of deforestation. Biomass energy is used by over a two thirds of Indian households. Estimates of Biomass Consumption Estimates of biomass consumption remain highly variable (Ravindranath and Hall, 1995; Joshi et. al., 1992) since most biomass is not transacted on the market. Mean estimates of biomass use (Joshi et. al., 1992) are: fuelwood - 298 million tons, crop residue - 156 million tons and dung cake - 114 million tons. Low to high estimates in this report vary by over sixty percent for fuelwood to five hundred percent for the dung. Supply-side estimates (Ravindranath and Hall, 1995) of biomass energy are reported as: fuelwood for domestic sector- 218.5 million tons (dry), crop residue- 96 million tons (estimate for 1985), and cattle dung cake- 37 million tons. A recent study (Rai and Chakrabarti, 1996) estimates demand in India for fuelwood at 201 million tons (Table 4).


Table 4: Fuelwood Demand in India in 1996

Consumption of Fuelwood Million Tons

1. Household (a) Forested Rural (b) Non Forested Rural (c) Urban Areas Sub Total

78 74 10 162

2. Cottage Industry 25 3. Rituals 4 4. Hotels etc. 10 Total 201

Source: Rai and Chakrabarti, 1996

MODERN BIOMASS ENERGY DEVELOPMENTS IN ASIA

Modernization in biomass energy use in Asia has happened in the last two decades along three

routes - i) improvement of technologies in traditional biomass applications such as for

cooking and rural industries, ii) process development for conversion of raw biomass to

superior fuels (such as liquid fuels, gas and briquettes), and iii) penetration of biomass based

electricity generation technologies. These developments have opened new avenues for

biomass energy in Asia.

Modern Biomass Energy Developments in China

In China, a nationwide programmes to disseminate improved cookstove and biogas

technologies was initiated in early 1980’s. The programme led to raising energy efficiency of

cookstoves to 20 percent, saving nearly a ton of wood fuel per household (Shuhua et al, 1997).

At the end of 1995, there were 5.7 million biogas digesters in existence producing 1.47 billion

m3 gas annually (Baofen and Xiangjun, 1997). Research and development (R&D) were

directed to process development for liquid fuels from a high quality Chinese sorghum breed

and pyrolysis technology. High costs have restricted the the commercialization of liquid fuels

(Baofen and Xiangjun, 1997). Gasification of agriculture residue and wood is another area of

R&D focus in China. Biomass based electricity generation technologies have been attempted.

Power generation using rice husk have followed two routes - gasifier engine together with diesel,


and direct combustion. Largest share of biomass electricity is in the sugar industry, with capacity

in two major sugar cane producing provinces Guandong and Guangxi of 483 MW and 323 MW

respectively (Baofen and Xiangjun, 1997). Biomass electrification programme in China has

received fiscal and administrative policy support, however the share of modern biomass

technologies remains marginal.

Philippines: The Dendrothermal Programme

Philippines was among the first nations to initiate the modern biomass programme. A biomass

power programme was launched in 1979 with aims to reduce the share of imported oil fired

electricity plants to 30% (Durst, 1986a) and to supply electricity to rural areas. Some unique

features of the Filipino initiative were - i) large scale, ii) grid based biomass electricity

generation, iii) dedicated biomass energy plantations, iv) decentralized and co-operative

ownership, v) national co-ordination by the centralized administration, and vi) integration of

social and environmental benefits within the programme design (Durst, 1987a; Durst 1987b).

Biomass supply was planned from the produce of tree farmers on government leased lands. A

typical dendrothermal plant had a 3 MW size, each connected to 1200 hectares plantation

(Durst, 1986b). A total of 217 plants (total capacity - 676 MW) were planned for construction

in 1980’s. Generation cost of electricity was expected to be 4 cents/KWh. The programme

expected to save 260,000 barrels of oil per year (Denton, 1981). Tree Farmers Association

with 10 to 15 families were formed to manage plantations of 100 hectares size. Within first

few years, major efforts were directed towards planting trees and procuring equipments. By

1984, equipments were purchased for 17 power plants and 17,827 hectares of land was

planted (BTG, 1990). During the time, 338 tree-farmers association with 3,800 member

families were registered with the programme (Durst, 1987a).

Since inception, dendrothermal programme was plagued by serious political, economic and

implementation problems. At the time of launching the programme, little experience existed

worldwide on wood plantations for energy. Dendrothermal concept needed decentralized

management, whereas the planning decisions remained centralized. Lack of institutional

mechanisms added to the failures in translating centralized decisions to decentralized

implementation and operation. Many tree farmers association had inadequate cultivation


experience. As a result, growth and survival rates of trees suffered at many locations. Planning

failure is apparent in the decisions of allocating primarily the mountainous sites for plantation

and exclusive use of single tree specie (Leucaena leucocephala or ipil-ipil) which did not suit

the conditions at several sites. While the feasibility studies had projected the annual yields as

high as 75 to 100 m3 per hectare (Bawagan and Semana, 1980), actual yield at some

plantations was only a quarter of that projection (BTG, 1990).

Decline in oil prices after mid-1980’s reduced the comparative advantage of biomass energy.

Planting activity declined after the first two years of the programme, when the government

curtailed the financial support to the plantation programme. The reduced plantation and low

productivity led to fuel shortages. The ipil-ipil plantation was affected at some locations by

insect attacks, and by 1985 only 2 out of 9 operational power plants could receive adequate

wood supply from their planted stocks (Durst, 1987a). Competing needs for wood

compounded the problem by periodic shortages and price increases. The institutional regime

to avert such situations was not in place. The cost of transportation was pushed upwards by

the aerial mono-cable systems imported from Switzerland which needed high investment. The

cable system was inflexible and inappropriate for administrative and physical settings of some

sites (Laarman et al., 1986). At most sites, the cable system was found to be too expensive to

install and maintain and the transport system had to be altered later on to labor intensive

modes (BTG, 1990).

The failure of dendrothermal programme in Philippines offers some valuable lessons. The

primary reason for the failure was the lack of biomass energy market and top-down approach

of the programme which depended primarily on government support for finances,

administration and technology. The institutional structure, co-ordination system and

operational regime which should have been developed side by side with the programme did

not develop. An important lesson for the future would be to develop the biomass market.

Alternatively, the reliable feedstock supply must be ascertained through a strongly planned,

efficiently managed and dedicated biomass plantation system. Unless this happens, the

penetration of biomass based modern energy technologies shall remain limited.


Modern Biomass Technology Developments in India

Since over a decades, modern biomass technologies for thermal, motive power and electricity

generation applications are promoted. Notable achievements are made in biomass gasifier

technology. Recent programmes have tended to focus on the biomass electricity generation

technologies.

Biomass Gasifier Technologies: Biomass gasifier technology for small scale motive power

and electricity generation was promoted in mid-1980’s with an aim to develop and

commercialize 5 horsepower (3.7 KW) engines for irrigation. Gasifiers have found initial

applications in niche market in agro-processing industries due to cheap availability of

processing waste, such as in rice mills and plywood units. Over 1600 gasifier systems are

installed. The 16 MW capacity installed has generated 42 million Kilo Watt hour (KWh) of

electricity and replacing 8.8 million litres of oil annually (CMIE, 1996). Despite moderate

success of gasifier programme, it is a matter of concern that a quarter of the gasifiers installed

are not in use. A main reason for this was the distortionary capital subsidy on pump-sets

which made gasifier-cum-diesel engines chepear than diesel engine (Ramana and Sinha,

1995). The farmers purchased the combined unit, decoupled the gasifier, and used only diesel

engine.

New Thrust on Biomass Technologies: Four government supported gasifier Action Research

Centers (ARCs) located at different national institutions have developed twelve gasifier

models, ranging from 3.5 to 100 KW, for different applications. The new thrust of biomass

power programme is on the grid connected megawatt scale power generation using variety of

biomass materials such as rice straw, rice husk, bagasse, wood waste, wood, wild bushes and

paper mill waste. The focus of modern biomass programme is on the cogeneration, especially

in sugar industry. A cogeneration potential of 17,000 MW power is identified, with 6000 MW

in sugar industry alone (Rajan, 1995). The programme has strengthened the institutional

support and co-ordination among sugar industry, utilities, co-generation equipment

manufacturers and financial institutions. A 42 MW surplus power capacity was installed in

sugar mills from 1994 to 1996. Projects over 250 MW capacity are under implementation and


planning (Gupta, 1997). The programme for biomass combustion based power has a very

recent origin, beganning in late 1994 as a Pilot Programme. This programme aims to utilize

some of the 350 million tons of agricultural and agro-industrial residues produced annually in

India.

Biomass Production Technology: Modern biomass energy applications would require the

supply to be driven by the dynamics of energy market. Guaranteeing biomass supply at

competitive costs would need highly efficient biomass production system. To enhance

biomass productivity, the Ministry of Non-Conventional Energy is supporting nine Biomass

Research Centers (BRCs) in nine (of the fourteen) different agroclimatic zones with an aim to

develop packages of practices of fast growing, high yielding and short rotation (5-6 years)

fuelwood tree species for the degraded waste lands in these zones. Some centers are in

existence for over a decade. Packages of practices for 36 promising species are prepared.

Although the packages of forestry practice are developed, the knowledge is yet limited within

the research circles. As a result, the benefit of the research remains to be realized. The mean

productivity of farm forestry nationally remains very low at 4.2 tons per hectare per year

(Ravindranath and Hall, 1995). The use of cultivable crop land for fuel howver remains

controversial under the "food versus fuel" debate.

BIOMASS ENERGY AND THE ENVIRONMENT

Environmental issues relating to the biomass energy have two sides. One relates to negative

environmental externalities of traditional biomass use such as in developing countries. The

other relates to the positive environmental externalities offered by biomass to mitigate the

carbon emissions by substituting the fossil fules. The transition from traditional to modern

biomass use can make biomass into an environmentally benign energy resource.

Environmental Concerns from Traditinal Biomass Use

The two primary problems with traditional biomass use are the indoor air pollution and the

unsustinable resource use. First causes severe health problems for the exposed population.

The second adds to the carbon flux in the atmosphere. The traditional energy use in India is


characterized suffers from both maladies. Ineffeciant biomass technologies, which are

perpetuated by the informal and non-market economy, not only cause health problems but

contribute to an unsustainable exploitation of resources. The severity of indoor air pollution

from biomass combustion in rural Indian households is evident from Table 5. Constant

exposure to smoke generated from biomass burning leads to myriad health problems (Table 6)

among women and children who are exposed for long durations Idoors. There is strong

evidence that biomass use is becoming unsustainable in several parts of India, though the

degree may vary from region to region (Agarwal 1986; Dwivedi and Kaul 1997; NWDB

1989; Ramana and Joshi, 1997).

The seriousness of the rural energy crisis and associated environmenntl risks was recognized

way back in late 1970’s. Government then launched a number of dissemination programmes

for promoting renewable energy technologies to replace traditional biomass technologies and

mitigate their environmental ill effects (see Tables 7-8). The largest among the programmes

were biogas plants (2.57 million individual units installed by October 1997) and improved

cookstoves (25 million by October 1997), both in the form of national programmes, promoted

as efficiency devices for clean cooking. In addition, a number of large-scale area-


Table 5: Indoor Air Pollution from Biofuel Combustion

Year Measurement Conditions No. of Measurements

SPM Concentration (/m3)

1982 Cooking with wood 22 15800

Cooking with dung 32 18300

Cooking with charcoal 10 5500

1988 Cooking, measured 0.7 meters from ceiling

390 4000-21000

Individual exposure during cooking (2 to 5 hrs each day)

1983 in 4 villages(a) 65 6800

1988 in 5 villages(a) 129 4700

1988 in 2 villages(a) 44 3600

1988 in 8 villages(a) 165 3700

a) Approximately half of the cooks used cook stoves fitted with a small chimney.

Source: Smith, 1987.


Table 6: Impacts of Pollutants Emitted from Incomplete Combustion of Biomass

Pollutants Range of Concentration

Unit Exposure Time

Impacts Ref

SPM 4000-7000 ug/cum 2-5 hrs/day

Increased respiratory symptoms in patients with chronic bronchitis and asthama. Increase in instances of respiratory diseases in children.

a,b

CO 40-120 ppm 2-5 hrs/day

COHb(%) in range of 5.0-7.5.Related impacts are effect on the Central Nervous System,satistically significant diminution of visual perception, manual dexterity or ability to learn, possible changes in myocardial metabolism and impact on psychomotor functions.

a,b

HCHO 40-330 ppb 2-5 hrs/day

Burning of eyes, lacrimation, general irritation of upper respiratory passages, headache, tiredness, nausea, drowsiness, throat irritation and discomfort.

b

NOx as NO2

0.04-0.26 ppm 2-5 hrs/day

(i) Increase in bronchitis in children in the age group of 2-3 yrs at conc. as low as 0.01ppm. (ii) In sensitive human beings, significant increase in specific airway resistance, with effect on bronchoconstriction, enhanced, after expoure.

a,b

Benzo(x)pyrene

2.4-3.7 ug/cum 2-5 hrs/day

A Carcinogen. b

Source: Wark K Warner 1981; Wadden and Scheff ,1983


Table 7: Biogas Plants Year Cumulative installation Functional plants Fuelwood replacement (mt)

1981 21888 13133 0.053

1982 81977 49186 0.197

1983 171329 102797 0.411

1984 343930 206358 0.825

1985 534152 320491 1.282

1986 734985 440991 1.764

1987 908644 545187 2.181

1988 1075597 645358 2.581

1989 1237838 742703 2.971

1990 1403548 842129 3.369

1991 1584121 950472 3.802

1992 1772648 1063589 4.254

1993 1988170 1192902 4.772

1994 2189084 1313450 5.254

1995 2360084 1416050 5.664

1996 2500000 1500000 6.000

Total 2500000 1500000 45.38

Source: MNES internal records. Average size of biogas plant is taken as 2.5 m3 and average fuelwood replacement is 1.6 tonnes/m3, see Ramana (1996). Functionality rate taken as 60%, see TERI (1996).


Table 8: Improved Stoves Year Cumulative installation (m) Functional plants (m) Fuelwood saving (mt)

1983 0.300 0.100 0.040

1984 0.812 0.270 0.108

1985 1.934 0.638 0.255

1986 2.839 0.937 0.375

1987 4.357 1.438 0.575

1988 6.190 2.043 0.817

1989 8.389 2.768 1.107

1990 10.377 3.424 1.370

1991 12.530 4.135 1.654

1992 14.505 4.787 1.915

1993 16.931 5.587 2.235

1994 19.606 6.470 2.588

1995 22.747 7.506 3.002

1996 25.707 8.483 3.393

Total 25.707 8.483 19.434

Source: MNES internal records. Functionality rate is taken as 33% and fuelwood saving 400 kg/stove/year, see TERI (1996)


based integrated programmes were also implemented such as community biogas plants,

urjagrams (energy villages), and IREP (integrated rural energy planning) programmes.

While the numbers and the range of technologies appear impressive in themselves, their total

contribution in comparison to the magnitude of the rural energy requirements remains quite

small. Firstly, it is not clear as to how many of these systems are actually in use; functionality

rates reported for biogas plants range from 40% to 80% (Ramana, 1991; NCAER, 1993a;

MNES, 1996), and for improved stoves less than one-third (Ramana, 1996; NCAER, 1993b).

A main reasons for this low impact seems to be the ‘technology push’ approach through cash

subsidies. No effort has been made to turn these into viable commercial options. Numerous

lacunae in the dissemination approach and direct and indirect subsidies to competing fossil

fuels have limited the spread of efficient and clean biomass technologies.

Biomass energy is carbon neutral, if used sustainably, i.e if PVR 94776its exploitation

matches the natural regeneration capacity. In India, the present consumption of fuelwood is

estimated to be over 200 million tons (Rai and Chakrabarti, 1996; Ramana and Joshi, 1997;

Dwivedi and Kaul, 1997). On the other hand, the sustainable yield from forests and other land

sources (plantations, farmlands, common wastelands, homesteads, etc.) is estimated at only

85-90 million tonnes (Ramana, et al, 1997). This indictaes that the fuelwood use has already

become unsustainable and is contributing over 75 million tons of carbon.

Althogh limited, the spread of clean and efficient biomass technologies clearly demonstrates

their potential to contribute to environmental protection and sustainable development. For

instance, biogas and improved stoves together have replaced or saved 45 million tonnes of

fuelwood (Tables 7 and 8), i.e. 30 million tonnes of carbon. The reduction in health risk is

even more significant since the improved stoves substantailly reduce indoor air pollution.

MODERN BIOMASS: A POSITIVE ENVIRONMENTAL RESOURCE

The modern biomass has potential to overcome the shortcomings of the traditional biomass

use through the efficient and clen combustion technologies and sustained supply of biomass

resources. There are two distinct routes for the penetration of modern biomass energy One is

the conversion to liquid fuels such as in the case of Brazil’s PROALCOOL (Glodemberg et al,


1993; Goldemberg and Macedo, 1994) other is the electricity generation using biomass as a

energy source. In India, the present thrust of the modern biomass program is for the latter

route. Environmental efficiacy of this route indicates the potential for penetration of biomass

power under a level competitive field where the environmental expternalities of coal power

plants are internalized, as suggested by the following analysis.

Environment and Biomass Electricity Biomass power technologies compete in niche applications as well as in direct competition

with conventional electricity sources in centralized electricity supply. In large scale grid based

applications, cost is the primary determinant of competitiveness. Biomass technologies are

considered in three generic sizes - 100 KW, 1 MW and 50 MW. The standard coal power

technology has 500 MW scale. Cost of capital (i.e. annual rate of interest on investment) is

presumed to be 10 percent. In India, coal power is the principal electricity technology. Price of

coal is around $1.5/GJ. . Cost of biomass energy is highly variable, depending upon the

source, location etc. Estmates have varied between $0.5 to over $4 per GJ (Shukla, 1997b). In

this analysis, the base price for biomass energy is assumed at $2/GJ.

Associated with the conventional electric power plants are some negative social and

environmental externalities. Throughout the coal and nuclear fuel cycles, there are significant

environmental and social damages. Biomass combustion also emits pollutants, however

aggregate damage during the fuel cycle is mush less compared to fossil or nuclear fuel cycle

(Sorensen, 1997). Governments in countries like Sweden and Denmark have now

implemented measures to internalize the externalities (Hilring, 1997) from conventional fuel

use.

We analyse the competition of biomass electricity vis-a-vis coal under a regime which

internalizes the social and environmental externalities of CO2 and SO2 emissions. The

typical coal used in the Indian power plants emit 3.2 tons of carbon per tera joule (tC/TJ) and

0.1 tons of sulfur dioxide per TJ. Estimates of carbon tax for stabilizing emissions in 2010 at

1990 level are highly variable. Comparative assessment of different models in the U.S.A. by

Energy Modelling Forum indicates a range of $20 to 150 (EMF, 1993). In developing


countries, lower marginal costs for carbon mitigation are reported (UNEP, 1993; Shukla,

1995; IPCC, 1996b). We consider two tax scenarios - i) high tax scenario with $50 per ton of

carbon tax and $400 per ton of sulfur dioxide tax, and ii) low tax scenario with $25 per ton of

carbon tax and $200 per ton of sulfur dioxide tax. The cost structure of the generated electicity

is shown in Figure 2. The implications of taxes on the electricity generation cost of Coal

Thermal Power Station under different tax scnarios is shown in Figure 3. Even under low

taxes, the biomass electricity can be cost competitive.

The critical assumption in this analysis is that the biomass supply shall be available. A

comparative analysis suggests that if no environmental taxes are imposed, the biomass

electricity can be cheaper than coal electricity only if biomass price is below 1.3$/GJ. Under

low and high taxes respectively, biomass price below $2.6/GJ and 3.7$/GJ respectively render

biomass electricity cost competitive. So long as biomass supply can be made avalable within

these ranges, the biomass electricity has potential to penetrate under fair competition. Thus,

the government policy on environment is vital to provide a “window of opportunity” for the

biomass power. Under strong environmental tax regime, biomass electricity can become a

reality, so long as the sustained supply of biomass is available even at prices subtantially

higher than the coal energy price.

FUTURE OF BIOMASS ENERGY

Biomass use is growing globally. Advanced biomass energy technologies and the growing

awareness and concerns for global climate change and sustainable development are rendering

biomass as a viable renewable energy resource. The potential for penetraton of biomass

eenergy is evident from the analysis of Renewables-Intensive Global Energy Scenario

(RIGES) designed to explore the outlook for renewable energy in the global context

(Johansson et al., 1993b). In RIGES, biomass power emerges as a competitive option vis-à-vis

coal “under a wide range of circumstances” (Johansson et al., 1993b). Most biomass is used

for electricity generation and for fluid fuels and replaces fossil fuels. Biomass electricity

provides 17 percent of power globally in the period 2025 to 2050. Nearly half of biomass

electricity generation in developing countries comes from sugar cane bagasse based co-

generation. Plantations based power systems also have a large share. Even under stringent


assumptions which restricted biomass plantations on excess agriculture lands in industrialized

nations and on deforested and degraded lands in developing countries, primary biomass

energy supply amounts to 145 exajoules in 2025 and 206 exajoules in 2050. For comparison,

the global energy use in 1985 was of 323 exajoules. Another important exercise on future

energy systems carried out by Response Strategy Working Group (RSWG) of the

Intergovernmental Panel on Climate Change (IPCC, 1991) with Accelerated Policy (AP)

scenario also makes similar projections for biomass consumption in future.

The low CO2 energy supply system (LESS), constructed as “thought experiment” to explore

the plausible energy futures with low CO2 emissions also show high penetration of biomass

energy (Johansson et al., 1996; IPCC, 1996a) in such versatile forms as electricity, hydrogen

from derivation by thermochemical process using biomass and liquid fuels (synfuels). Under

the biomass intensive (BI) variant of the LESS scenario, biomass provides a sixth of global

electricity during 2025 to 2050 and a quarter of global electricity during 2075 to 2100 (IPCC,

1996a).

Least costly liquid fuels from renewable sources are ethanol and methanol derived from

biomass which have the potential to be competitive vis-à-vis refined oil products in

transportation sector. In RIGES, biomass derived methanol provides 45 exajoules energy in

2025 and 61 exajoules in 2050 representing 37 and 50 percent of global liquid fuel demand,

respectively (Johansson et al., 1993b). Biomass derived hydrogen is produced at a level of 16

exajoules in 2025 and 25 exajoules in 2050 representing 12 percent and 20 percent of gaseous

fuel demand, respectively (Johansson et al., 1993b). The future energy scenarios thus show

considerable potential for the penetration of modern biomass fuels.

Future of Biomass in India

In India, like in most developing countries, most biomass use at present remains confined to

traditional and rural sectors. Biomass fuels acquire little or no monetary value since these are

collected by family labor which has little or no alternate employment opportunity (Mahadevia

and Shukla, 1996). Exploitation of abundant biomass resources from common lands sustained

the traditional biomass consumption since millennia. This has now become unsustinable. A


key factor that can influence the future of biomass energy is the development of market for

biomass energy resources and services. Growing experience of modern biomass technologies

in India suggests that the push type of policies need to be substituted or augmented by market

pull policies..

A primary policy lacuna hampering the growth of biomass energy is the implicit

environmental subsidy allowed to fossil fuels. Increasing realization among policy makers

about positive externalities of biomass created conditions for biomass to make inroads into

energy market. Biomass has potential to penetrate in three segments - i) process heat

applications in industries generating biomass waste, ii) cooking energy in domestic and

commercial sectors (through charcoal and briquettes), and iii) electricity generation.

Economic reforms have opened the doors for competition in energy and electricity sectors in

India. Long-term penetration of biomass energy in industry and power sectors shall depend on

the cost of delivered energy as well as reliability of technologies. Future of biomass energy

lies in its use with modern technologies.

Following analysis presumes competitive dynamics in energy and electric power markets. The

analysis is performed using the Indian-MARKAL model (Shukla, 1996b; Loulou et al., 1997)

set up for the next forty years (1995-2035). Under a competitive economic environment,

different energy and electric power technologies compete and penetrate in suitable segments.

At present, conventional energy technologies enjoy unfair advantage to the extent their

negative externalities are not internalized. Under a fair competitive regime, these externalities

shall be internalized. We consider five scenarios:

1. Reference Scenario, a business-as-usual type scenario in which externalities are not

internalized,

2. 10 % Mitigation Scenario Policy scenario where externalities of fossils fuels are

internalized by imposing mitigation target of 10 percent on cumulative carbon emissions

from India,

3. 20 % Mitigation Scenario Policy scenario where externalities of fossils fuels are

internalized by imposing mitigation target of 20 percent on cumulative carbon emissions

from India,


4. Low Natural Gas Price Scenario which presumes (after 2005) lower price trajectory than

expected in Reference Scenario by 25 percent,

5. High Natural Gas Price Scenario which presumes (after 2005) higher price trajectory than

expected in Reference Scenario by 25 percent,

6. High Natural Gas Price and 20% Mitigation Scenario which presumes (after 2005) higher

price trajectory than expected in Reference Scenario by 25 percent and mitigation target of

20 percent on cumulative carbon emissions from India.

Penetration of biomass energy under these scenarios is shown in Figure 4. Under reference

scenario, biomass consumption grows moderately by half percent annual rate over next four

decades. Variation in natural gas price shall make little impact on biomass consumption since

natural gas can be substituted by coal. Carbon mitigation targets however have a greater

impact on biomass consumption since marginal cost of mitigation acts to change relative

prices of fossil fuels and makes all fossil fuels less competitive vis-à-vis biomass. During next

four decades, under 20% mitigation target, biomass energy consumption increases by eighty

percent and doubles if gas price is also high.

Biomass energy use in industry and electricity sectors is marginal at present. Biomass

consumption rises significantly under carbon mitigation scenarios and reaches 4 exa joules

under high gas price and 20% carbon mitigation scenario (Figure 5). Biomass electricity

generation capacity, which is negligible in 1995, rises to 12 GW in 2035 under reference

scenario and to 60 GW under high gas price and 20% carbon mitigation scenario (Figure 6).

Wood consumption for energy use, which is 3.8 exa joules at present, is expected to rise at

less than half a percent rate in Reference case during next four decades. Under mitigation

scenarios, wood consumption grows rapidly, most of additional demand arises from industry

and electricity sectors. Under 20% carbon mitigation scenarios with high gas price, wood

consumption increases substantially and reaches 7.8 exa joules in the year 2035 (Figure 7).

This amount of wood energy shall require 80 million hectares of land (6 tons/ha/year

productivity and 16.5 GJ/ton heat value for wood), i.e. nearly a quarter of India’s land mass.


CONCLUSIONS AND DISCUSSION

Myriad reasons such as the rising environmental awareness, technological advances and

inherent benefits as a local and renewable resource has renewed the interest of global

businesses and policy makers in the biomass energy. The modern biomass energy is set to

over come the environmentla shortcomings of traditional biomass use. However, the

transitions process is very gradual and calls for strong policy interventions - both in terms of

local and global policies. Local policies to inflence transition of traditional biomass enery use

to modern uses, especially in developing countries, need to address the issues like conversion

efficiency, indoor air pollution and regeneration of local rsources. The national polices shal

need to focus on providing a level playing field to the biomass energy by internalizing the

negative externalities of competiting fossil fuels. Globally, the climate change mitigation

policies are most likely to affect the future biomass energy penetrations vitally. As suggested

by the long-term techno-economic analysis with the MARKAL model, the local and global

environmental policies such as imposing taxes on local pollutants (SO2) and carbon will

provide significant boost to biomass technologies. A carbon mitigation protocol requiring 20

percent reduction in cumulative emissions of next four decades from India will result into a

penetration of 50,000 MW power capacity (or 14 percent of India's electricity generation) in

2035 (Figure 6) .

Evidently, when the social and the environmental externalities from conventional fuels are

internalized in the electricity cost, the biomass power is cost competitive. Reliability of

biomass power needs improvement. Flexibility to accept a range of biomass fuels and higher

efficiency such as with biomass gasification technologies can further enhance competitiveness

of biomass technologies. Experience of operating the modern biomass plantations and energy

conversion technologies is growing. The learning effects and the shared knowledge from

innovations in conventional technologies are rapidly enhancing the efficiency and reliability of

biomass production systems and conversion technologies. Although present penetrations of

modern biomass energy services is little, technological developments and policy reforms

which propose to eliminate energy subsidies and internalize externalities from fuel cycle is set

to be advantageous to biomass technologies. Realization of biomass potential shall help many


developing countries to make a smooth transition from the present inefficient biomass energy

use in traditional sectors to a competitive, commercial and efficient biomass energy use in the

future. This will reduce their energy import and conserve scarce finances for national

development.

Future of biomass energy depends on providing reliable energy services at competitive cost. In

India, this will happen only if biomass energy services can compete on a fair market. Policy

priorities should be to orient biomass energy services towards market and to reform the

market towards fair competition by internalizing the externalities of competing energy

resources. Most prominent niche where modern biomass can make early entry is for

applications in industries generating biomass waste materials. In India, estimates sugges that

the agro residues and wood processing waste can sustain 10,000 MW power. Beyond this

level, a sustained supply of biomass will be needed via the production of energy crops (e.g.

wood fuel plantations, sugar cane as feedstock for ethanol) and wood plantations. Land

supply, enhanced biomass productivity, economic operations of plantations and logistics

infrastructure are critical areas which shall then determine the future of biomass in India.

A sustainable use of biomass resources would require a large-scale adoption of interventions

aimed at enhancing the supply, improved energy conversion and elimination of harmful

emissions through fuel and technology improvements. The recently concluded Kyoto Protocol

provides fresh opportunities to biomass energy. The climate change mitigation plans and

policies in developing nations are likely to find biomass and other renewable energy

technologies as attractive options which furnish multiple health and social benefits to the

local communities, besides the climate change mitigation benefits. Myriad economic, social,

technological and institutional barriers remain yet to be overcome to rapidly transfrom the

biomass into a viable commercial energy option. Removing these barriers is a key policy issue

deserving the attention of policy akers in coming decades.

Significant social and environmental benefits render biomass a deserving alternative to be

supported by governments committed to sustainability development. Governments in the past

did promote new energy technologies like nuclear power in France (Johansson et al., 1996),

wind power in Denmark (Johansson et al., 1996) and India (Naidu, 1997), and ethanol from


sugarcane in Brazil (Goldemberg et al., 1993). Biomass is a viable energy alternative available

to the national and global environment policy makers. Local and global environment polices

during the next decacde shall open the “window of opportunity” for the biomass energy to

lead the energy transition during the next century towards economically and environmentally

sustainable world order.


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