Bioenergy Demonstration Projects in Canada: Lessons Learned, Key Factors for Success, Knowledge and Technology Gaps

Transcription

1 1 Bioenergy Demonstration Projects in Canada: Lessons Learned, Key Factors for Success, Knowledge and Technology Gaps Jawad Jeaidi, Marzouk Benali and Eric Soucy Bioenergy Australia Conference November 14-16, 2016 Brisbane, Queensland

2 2 Outline CanmetENERGY: Who we are? Overview of the role of biomass and bioenergy in the world Analysis of Canadian bioenergy demonstration projects Screening and assessment approach Key results Key lessons learned Key factors of success Knowledge and technology gaps Concluding remarks

3 CanmetENERGY: Three Scientific Laboratories Across Canada 3 Oil sands & heavy oil Devon Buildings Industrial processes Integration of renewable & distributed energy resources RETScreen International Varennes Buildings & communities Industrial processes Clean electricity Bioenergy Renewables Transportation Ottawa

4 4 CanmetENERGY: Who we are? CanmetENERGY is the largest Canadian energy R&D organization Over 400 scientists, engineers and technicians 109 years of experience Budget of $62 million 3 Labs in Varennes (QC), Ottawa (ON) and Devon (AB) CanmetENERGY s Industrial Systems Optimization Group develops knowledge and tools necessary to demonstrate and deploy process optimization methodologies in Canadian industries to achieve efficient use of key elements related to sustainability

5 Biomass The Role of Biomass to Fight Climate Change 5 Biomass (forestry, agricultural, etc.) is the only renewable resource that can replace petroleum-based fuels and chemicals, while substantially reducing GHG emissions Advanced biofuels are expected to exhibit lower lifecycle intensities and to reduce by 70 to 80% the GHG emissions Bioproducts have lower energy intensity as compared to petrochemical-based products Canada: National Inventory Report Source: IPCC (2014)

6 The Role of Biomass in Replacing Petrochemicalbased Products 6 Opportunities for replacement/substitution markets: Increasing the renewable fraction of blends via new policies to reduce the consumption of fossil derived gasoline by up to 25% Gasoline makes up 43% of products from a barrel Expanding product portfolio beyond cellulosic ethanol to hydrocarbon fuels Replacing at least 25 to 30% of the other products i.e. lubricants, wax, tar, BTX About 15% of a crude oil barrel end up as the other products Source: Energy Information Administration, Oil: Crude Oil and Petroleum Products Explained and AEO2009, Updated February 2010.

7 Data Source: IEA Statistics, 2014 Bioenergy: Place of Canada in the World 7 Combustible renewables and waste (% of total energy use) Combustible renewables and waste (% of total energy use) 0% 0% 5% 10% 15% 20% 25% 5% 10% 15% 20% 25% Her Majesty the Queen in Right of Canada, as represented by the Minister of Natural Resources, 2016 Her Majesty the Queen in Right of Canada, as represented by the Minister of Natural Resources, % 30%

8 8 Overview of Demonstration Projects Funded by the Government of Canada (GoC) 8 funding programs of GoC have been reviewed (e.g. Clean Energy Fund; Investments for Forest Industry Transformation, etc.) From 2009 to 2015, the GoC invested ~$ 4 billion to support innovative technologies leading to: Prove technical feasibility and economic viability of the targeted technologies to potential private investors Advance Canadian leadership in clean energy technologies Contribute to reducing Canada's total GHG emissions by 17% from 2005 levels (by 2020) Considering bioenergy as the largest renewable energy source, GoC invested ~ $ 800 million in demonstration projects across Canada to catalyze the development of the Canadian bioenergy sector, by increasing its bioenergy production capacity.

9 Approach for Data Collection and Analysis 9 Built an Excel-based database that considers all demonstration projects funded by the GoC 1795 projects 220 projects 116 projects Screening by key words (bioenergy, biomass, solid waste, cogeneration, CHP, combined cycle, renewable, solid fuel, solid combustible) Screening by technology readiness level Projects relevant to forest industry 86 projects Normalized the project classification approach Screening by technology maturity and relevancy to the forest industry Status of the project: completed, under construction, active or inactive Maturity level using TRL scale Conversion pathway: from feedstock to product(s) towards a series of unit operations platforms and technologies

10 10 Location and Number of Projects per Canadian Province

11 Brief Description of the 86 Bioenergy Demonstration Projects Relevant to Forest Industry Lignin 8 projects Biogas 8 projects Sugars 11 projects Electricity and Heat 39 projects Syngas 15 projects Pyrolytic liquid 5 projects SDTC 28 projects Agri Residues 5 projects Platforms PPGT 26 projects MSW 6 projects TEAM 16 projects Wood Chips 11 projects Feedstock category 86 bioenergy projects partially funded by Government of Canada Funding programs IFIT 4 projects Forest Residues 43 projects CEF 7 projects Other Pulp mill Residues 21 projects Inactive Status of the projects Completed ecoeii- Demo 2 projects Active ecoeii- R&D 2 projects 10 inactive projects 12 active projects 64 completed projects ecoenergy for Ren. Power 1 project Liquid biofuels Electricity & heat 7 37 Biogas Solid biofuel Commercial (TRL 9) Precommercial (TRL 8) Demonstration (TRL 7) Pilot (TRL 5-6)

12 Number of projects Number of projects Total Value of Projects Total Project Value (M$) GoC Monetary Contribution, %

13 Number of projects 13 Performance of Funding Program: Leverage Ratio Private $ leveraged for every 1$ invested from the GoC The average financing leverage ratio is $2.44 per $ of GoC (Leverage ratio ranges from 0.2 to 7.5)

14 Breakdown of the Number of Projects by Technology Platform and Funding Program 14 Six well-known platforms: biogas, sugars, combined heat and power, lignin, pyrolytic liquid, and syngas Eight well-known technologies: combustion, gasification, pyrolysis, biochemical, chemical, pelletizing, physical, digestion

15 Number of projects 15 Performance of Funding Program: Targeted Bioenergy Production >200 GJ/y/k$ of federal funding The average bioenergy production ratio is 19.6 GJ/year/k$

16 Number of projects Number of projects Performance of Funding Program: Reduction of GHG Emissions <1 kt 1 kt-10 kt 10 kt -25 kt 25 kt-100 kt > 100 kt t CO2e per year The average environmental performance of funding programs is in the order of 4 tonnes of CO 2-eq avoided per year per $k from the GoC Avoided tonnes CO2eq per year / k$ from GoC 1 1 5

17 17 Key Factors of Success and the Associated Metrics Technology category (6 metrics) Capital intensity; scale of technology; representative operational period, etc. Resources category (2 metrics) Availability and accessibility of low-cost biomass; cost of biomass resource delivered at plant gate. Socio-economics category (4 metrics) Direct job creation; indirect job creation; support to job retention; return-to-work. Health, safety, and environment category (4 metrics) Level of GHG emissions reduction; funding performance based on GHG mitigation; social acceptability; severe incidents Business acumen and project execution category (7 metrics) Effective mix of public and private financing; level of partnership and its diversity; multidisciplinary nature of the team; regular communications; understanding and acceptability of process uncertainties; early-stage planning for approval and permits; predetermined success criteria

18 18 Industry Interests Mix of funding for de-risking. Partnership for maximizing the likelihood of success in ongoing intellectual property, design and engineering, marketing, and business support. Use of leftover biomass. Further use and develop cogeneration systems: Use of alternative fuel such as waste gases (e.g. hydrogen-rich refinery gas and coke oven gas), and leftover biomass; With operational flexibility to easily optimize the cogeneration facilities leading to overall useful power-to-heat input ratios higher than 90%.

19 19 Lessons Learned: Possible Pitfalls Incorrect assessment of the level of operational and technical difficulties; Assuming that the demonstration project is less risky than the pilot one; Making overly optimistic assumptions for cost and schedule estimates; Making overly optimistic performance assumptions and projected revenues;

20 20 Lessons Learned: Best Practices A multidisciplinary team with appropriate skills and well balanced resource mix needs to be adjusted for each stage of the project. Typically, the engineers skilled in engineering design and construction should not be assigned to conduct the demonstration project that often requires further development and operational fine-tuning. Regular communications, site visits, and face-to-face meetings between project staff and funding program managers enhance the scope of the short and intermediate outcomes. Annual comprehensive project reviews facilitates better project execution to completion. An effective mix of public and private financing ensures lowering down the risks associated with bioenergy technologies. The use of Government of Canada grants has been necessary to moderate project capital investment, and has provided project credibility that has attracted private investment.

21 21 Lessons Learned: Best Practices (cont d) Integrating all unit operations (based on systems approach), including all recycling streams and heat integration strategies, ensures validation of process design that will be used at commercial scale, and further confirms and refines the techno-economic model and cost estimate for the commercial plant. Understanding and admitting higher levels of project and process uncertainties is essential. Over 2000 hours of continuous operational data is necessary to validate the robustness and stability of the bioenergy technology being demonstrated. The success criteria of demonstration projects should be defined, and the related metrics should be stated at an early stage of the project. Additionally, a range of total success to total failure should be addressed. Easy access to biomass, including mix of biomass (agriculture and forest residues as well as municipal wastes).

22 Knowledge and Technology Gaps: R&D Opportunities 22 Non-optimal operability of bioenergy systems due to changes in operating conditions (e.g. mix of feedstock, energy content of biomass, preprocessing of biomass, etc.): Better understanding of technologies; Leveraging and assessing technology flexibility to address at large scale the potential impacts of process operating changes; Reducing the usage of biomass per unit of power and useful heat; Optimizing the use of existing cogeneration assets to generate power and heat at a lower cost, by leveraging flexibilities in processes. Key performance indicators (KPIs) are not systematically considered to maximize the renewable energy production and minimize resources utilization: Further developing online tools to understand variability and proactively detect and diagnose process performance degradation problems (e.g. excess energy consumption, non-optimal operation, and off-spec production, etc.). Scaling-up proven bioenergy technologies at pilot-scale and scaling-down commercial equipment to match the processing capacity and the minimum energy requirements of these technologies prove to be challenging. Lack of established framework and metrics to assess the performance of funding programs.

23 23 Concluding Remarks GoC funding programs support innovative technologies leading to increased bioenergy production across Canada. GoC funding programs that have been examined: CEF, ecoeii-demo, ecoenergy for Renewable Power, IFIT, PPGT, SDTC, and TEAM. The total value of the demonstration projects varies from $0.5M to $120M; The average contribution ratio of the GoC is 30-40%; Among the 1795 projects that were partly financed by the GoC, 220 projects were associated with bioenergy. More specifically, 86 projects are relevant to the forest industry; The average financing leverage ratio is $2.44 (private leveraged $ per $ of GoC), with an average payback period of 3 to 6 years; Average environmental performance of funding programs is 1,150 kilo-tonnes of CO 2 -eq avoided per year.

24 24 Acknowledgments Financial support Program on Energy Research and Development (PERD) of Natural Resources Canada Forest Innovation Program (FIB) of the Canadian Forest Service

25 25 Thank you for your attention For further information, please contact: Eric Soucy, Director, Industry Group Telephone: +1 (450) Questions? Comments?

26 26 Extra Slides

27 Renewable Power Generating Projects Relevant to Forest Industry installed plants since 2005, corresponding to combined cycle, cogeneration, and wastefuelled electricity plants with a total capacity of 8,993 MW: 56% of these systems are generating bioenergy, i.e. renewable power (corresponding to 109 facilities) 165 MW 129 MW 30 MW 0.2 MW 186 MW 141 MW 0.4 MW NB NS 63 MW Facilities are mainly located in Alberta (15%), British Columbia (24%), Ontario (26%), and Quebec (21%). 34 of 109 power generation systems can be relevant to the forest industry with installed capacity of about 715 MW.

28 Typical Turbines Involved in 34 of 39 installed systems since 2005 for producing renewable electricity 28 PPGT

29 Tonnes per year Wood Pellets-Based Bioenergy: Canadian Context 29? 1,9 M k k Canadian Domestic demand 254 k 349 k 13 k Canadian demand is about 200 k tonnes/y Current production capacity is about 3,1 M tonnes/y k 204 k Main Canadian Export, tonnes in , , , ,000 62,000 17,000 Installed Capacity, tonnes per year 2, M Source: Canadian Biomass, 2015 UK USA Italy South Korea Japan Denmark