wp6: biofuels and lignocellulosic marketswp6: biofuels and ... wp6: biofuels and lignocellulosic...

WP6: Biofuels and lignocellulosic marketsWP6: Biofuels and lignocellulosic markets

Göran Berndes Dept of Energy and Environment Chalmers University of Technology Göteborg 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 g synergies 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

W e]

Investment in new generation capacity is required for replacing old capacity + meeting demand

400

500

600

m p

re se

nt s

ys te

m old capacity + meeting demand growth

200

300

400

ty re

m ai

ni ng

fr om

0

100

200

C ap

ac i

0 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year Hydro 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 markets CCS – Pathway for EU-27 (plus Norway) 30% CO2 emission reduction by 2020 and 85% by 2050

5000

4000

4500

5000

3500

4000

[T W

h] New Gas Hard coal CCS

2500

3000

y ge

ne ra

tio n

Gas

biomass & waste New Hard coal

Lignite CCS

New Nuclear

Wind

1500

2000

E le

ct ric

it

Lignite

Hard coal

New Wind New Biomass & waste

500

1000

Hydro

Nuclear

Hydro replacements

0 2005 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

W h]

New Hard coal

New Gas

Wind

2500

3000

ty g

en er

at io

n

Gas

biomass & waste New Biomass & waste

New Hard coalWind

1500

2000

E le

ct ric

it

Lignite

Hard coal

New Wind

500

1000

Hydro

Nuclear

Hydro replacements

0 2005 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

tio n

[T W

h]

New Hard coal

New Gas

Wind

Comparison: - EU25 ind. roundwood: ca. 6 EJ

1500

2000

2500

E le

ct ric

ity g

en er

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 large scale 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

450 PJ

petroleum HOB

natural gas HOB

300

350 coal 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

250 Case 1: ≤40 years Case 2: ≤30 years

46

139

100

150 73

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 6 6

88

17 63

34 31

13 17 16 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

ea r

Other MS

UK

Spain

100

200

300

00

J of

b io

m as

s p

Poland

Germany

0

100

20 06

20 08

20 10

20 12

20 14

20 16

20 18

20 20

20 22

20 24

20 26

20 28

20 30

20 32

20 34

P J

WP6: Biofuels and lignocellulosic markets

Summary of findings

- Paying capacity for biomass can become very high

-food prices may incr