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WP6: Biofuels and lignocellulosic marketsWP6: Biofuels and lignocellulosic markets
Göran BerndesDept of Energy and EnvironmentChalmers University of TechnologyGöteborg SwedenGöteborg, Sweden
Elobio 5th progress meeting 100324
WP6: Biofuels and lignocellulosic markets
Overarching questions for WP6
How may biofuel policies – including their specific instruments such as obligatory targets – influence other (stationary) energy markets for lignocellulosic biomass?
Conversely how can stationary energy development influence in positive andConversely, how can stationary energy development influence – in positive and negative ways – the prospects for 2nd generation biofuels?
Can policymakers improve conditions for capturing and enhancingy g gsynergies between biofuels production and stationary energy?
Can stationary energy sector compete with the food sector in the same way as has been seen for biofuels for transport?the same way as has been seen for biofuels for transport?
WP6: Biofuels and lignocellulosic markets
The quick-and-dirty summary of findingsq y y g
- How large is the stationary sector? - LARGE!
- How much can it pay for the biomass? A LOT!- A LOT!
- Will it outcompete biofuel producers? - IT DEPENDS...IT DEPENDS...
- Can policy influence how things develop?- OH YES!
WP6: Biofuels and lignocellulosic markets
Summary of findings
- Biomass competition may arise between stationary and transport energy uses
modeling indicate that biofuel obligations may distract from the most- modeling indicate that biofuel obligations may distract from the most cost effective biomass use for climate change mitigations
-increasing importance of polygeneration plants that produce a range of products – biofuels, materials, heat and electricity – may place intersectoral biomass competition in a different context (example given later)
- non-bioenergy technology development as well as public acceptance and other non-technical aspects can also influence biomass demand in the two sectors; CCS development may be critical determinant
WP6: Biofuels and lignocellulosic markets
- Stationary energy sector may become a large user of bibiomass
800
Demand growth?
600
700
800
m [G
We]
Investment in new generationcapacity is required for replacing old capacity + meeting demand
400
500
600
m p
rese
nt s
yste
m old capacity + meeting demand growth
200
300
400
ty re
mai
ning
from
0
100
200
Cap
aci
02005 2010 2015 2020 2025 2030 2035 2040 2045 2050
YearHydro Nuclear Lignite Hard coal Natural gas Oil Wind (on- and offshore) Biomass & waste Others
CCS P th f EU 27 ( l N )
WP6: Biofuels and lignocellulosic marketsCCS – Pathway for EU-27 (plus Norway)30% CO2 emission reduction by 2020 and 85% by 2050
5000
4000
4500
5000
3500
4000
[TW
h] New GasHard coal CCS
2500
3000
y ge
nera
tion
Gas
biomass & waste New Hard coal
Lignite CCS
New Nuclear
Wind
1500
2000
Ele
ctric
it
Lignite
Hard coal
New WindNew Biomass & waste
500
1000
Hydro
Nuclear
Hydro replacements
02005 2010 2015 2020 2025 2030 2035 2040 2045 2050Year
Hydro
N CCS P th f EU 27 ( l N )
WP6: Biofuels and lignocellulosic markets
5000
No CCS – Pathway for EU-27 (plus Norway)30% CO2 emission reduction by 2020 and 85% by 2050
4000
4500 New Nuclear
3000
3500
n [T
Wh]
New Hard coal
New Gas
Wind
2500
3000
ty g
ener
atio
n
Gas
biomass & waste New Biomass & waste
New Hard coalWind
1500
2000
Ele
ctric
it
Lignite
Hard coal
New Wind
500
1000
Hydro
Nuclear
Hydro replacements
02005 2010 2015 2020 2025 2030 2035 2040 2045 2050Year
Hydro
WP6: Biofuels and lignocellulosic markets
Magnitude implicationsMagnitude implications…
1000 TWh requires about 9 EJ
4500
5000
New Nuclear
1000 TWh requires about 9 EJ of biomass at 40% conversion efficiency
3000
3500
4000
tion
[TW
h]
New Hard coal
New Gas
Wind
Comparison:- EU25 ind. roundwood: ca. 6 EJ
1500
2000
2500
Ele
ctric
ity g
ener
at
Lignite
Hard coal
Gas
biomass & waste
New Wind
New Biomass & waste- EU 25 cereals: 4-5 EJ- Agri residue pot: 3-4 EJ- 10 ton dm/ha on 60 Mha: 12 EJ
0
500
1000
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050Y
Hydro
Nuclear
Hydro replacements
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050Year
WP6: Biofuels and lignocellulosic markets
Summary of findings
- integration of biofuel production in energy/industry combines can improve overall efficiency and economic performance
- Heat sinks provided by district heating systems can support a largescale establishment of biofuel/heat/power polygeneration plants
- competitiveness against CHP production crucial determinant of prospects for biofuel/heat/power polygeneration plants
restrictions on third party access to district heating networks can- restrictions on third party access to district heating networks can be a barrier against implementation
WP6: Biofuels and lignocellulosic markets
- District heating systems are significant heat sinks in EU- the diagram shows heat sink allocation for making productive use of surplus heat from biofuel production corresponding to 10% of projected transport fuel use in 2020
400
450PJ
petroleum HOB
natural gas HOB
300
350coal HOB
petroleum CHP
Natural gas CHP
coal CHP
150
200
250 CBH
other
0
50
100
0
A B CZ DK EE FIN F D HU I LV LT L NL PL P SK SI S UK
WP6: Biofuels and lignocellulosic markets
- District heating systems are significant heat sinks in EU- an ethanol production plant can also serve the function as heat sink and solid biofuel production plant in energy/industry combines; co-siting with coal power plants suitable for co-firing can be an attractive option
WP6: Biofuels and lignocellulosic markets
Summary of findings
- Stationary energy most important near term market for lignocellulosic biomass
- but may contribute to 2nd gen biofuels development by inducing earlier development of the supply infrastructure for 2nd gen biofuel feedstocks
- biomass co-firing appears to be an attractive early option with longer term prospects depending of C price, CCS availability and attainable biomass share in the fuel mix
- in case biomass co-firing cannot remain competitive, expansion of 2nd gen biofuel production can benefit from an established feedstock supply infrastructure
-many power plants can import their biomass: specific instruments may be required for linking co-firing with domestic biomass production
WP6: Biofuels and lignocellulosic markets
- Co-firing can be a significant market for li ll l i bi i MS
250(PJ/year)
lignocellulosic biomass in many MS
200
250Case 1: ≤40 years Case 2: ≤30 years
46
139
100
15073
39
0
50
A B BU CZ DK EE FIN F D EL HUIRL I NL PL P RO SK SI E S UK
5 14 56
63
20 23 6 66
88
17 63
3431
13 1716 26 0.3
A B BU CZ DK EE FIN F D EL HUIRL I NL PL P RO SK SI E S UK
WP6: Biofuels and lignocellulosic markets
- Co-firing can be a significant market...- co-firing complementary to smaller scale (heat) markets- contrasting business logics: small scale supply vs. large end use
WP6: Biofuels and lignocellulosic markets
- Co-firing can be a significant market...and bridging option- 2nd gen biofuel production can exploit the established supply infrastructure as co-firing is phased out
Case 2Case 2
400
500
600
er y
ear
Other MS
UK
Spain
100
200
300
00
J of
bio
mas
s p
Poland
Germany
0
100
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
P J
WP6: Biofuels and lignocellulosic markets
Summary of findings
- Paying capacity for biomass can become very high
-food prices may increase due to competition for feedstock as well asfood prices may increase due to competition for feedstock as well as for land
-climate/energy policies affecting stationary energy sector can drive food d l d i i th bli t bi f l t t ifand land prices in the same way as obligatory biofuel targets – if
development is slow for non-bioenergy alternatives in stationary energy
WP6: Biofuels and lignocellulosic markets
Paying capacity for biomassCO2 charge rising to 150 Euro/ton
20Sellers price (Euro/GJ of biomass)
2 g g
Dashed lines: ”soaring fossil fuel prices”
14
16
18Dashed lines: soaring fossil fuel pricesSolid lines: ”Baseline”
(E&T Trend to 2030 – update 2007)
8
10
12
(Euro/ton)wheat price
2
4
6 Low ambitions: CO2 charge stay roughly at present level (20 Euro/ton)
160100
( )
0
2
2000 2010 2020 2030 2040 2050
WP6: Biofuels and lignocellulosic markets
For consideration
- Stimulation of domestic biomass production may need linking to early markets, but it is not obvious that imports should be discouraged
international biofuel trade is also an activity where learning and- international biofuel trade is also an activity where learning and connected institutional development need to take place
- Biofuel companies may not be able to make productive use of theirBiofuel companies may not be able to make productive use of their surplus heat unless rules make it possible for 3rd parties to get access to district heating networks.
- Directive on promotion of cogeneration: promotion of CHP based on useful heat demand is not the only option for saving primary energy, reducing GHG emissions and contributing to the security of energy demand
WP6: Biofuels and lignocellulosic markets
For consideration
- An energy tax on bioenergy can be one way to keep down food prices
A carbon tax on meat/dairy production may make more land available- A carbon tax on meat/dairy production may make more land available for energy crops production
WP6: Biofuels and lignocellulosic markets