SUPPORT SCHEME FOR BIOPOWER IN BELGIUM MaxGreen case in Flanders. Yves Ryckmans AEBIOM Conference May 13 th 2014

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2 SUPPORT SCHEME FOR BIOPOWER IN BELGIUM MaxGreen case in Flanders Yves Ryckmans AEBIOM Conference May 13 th 2014

3 2 WORLD PREMIERE OF LARGE SCALE BIOMASS POWER PLANTS IN BELGIUM LES AWIRS UNIT4 (Liège) 1967: 125 MW oil+gas 1982: 125 MW coal 2005: 80 MW full biomass 1st full coal to bio conversion MAXGREEN RODENHUIZE UNIT4 (Gent) 1979: 262 MWe Fuels : hardcoal, blast furnace gas, fuel-oil A 2005: 55 MW= 30% wood pellets 2008: 110 MW= 60% wood pellets 2011: 200 MW = 100% wood pellets Lowest emissions ever O 2 15 mg/nm 3 dust and 90 mg/nm 3 No x Project investment of 125 M, combined with 800 M worth of biomass contracts for

4 Principles of Belgian green certification systems 1 GC per net green MWh produced, with different prices per technology Systems are based on a cap on power sales: in ,5% in Flanders, 23,1% in Wallonia Penalty has been decreased from 125 /MWh to 100 /MWh today Price GC guaranteed 90 /MWh in Flanders and 65 /MWh in the rest of Belgium MARKET PRICE TODAY Price guaranteed for PV up to 450 /MWh and/or up to 5 GC granted per MWh Flanders: from 2013 banding above 20 MW co-firing reduced to 50% yearly revised per plant according to -cash flow -accepted remuneration of CAPEX Wallonia from 2007: -limit of 20 MWe for bio-energy, hydro and CHP - biomass must be sustainable 4

5 Bio-energy: # GC are reduced twice Green Certificates are granted: to the net green electricity production, proportional reduction wrt the energy or GHG balance of the supply chain (use of fossil fuel and electricity reduces the # of GC) additional banding introduced from 2011 on: 0,89 for MaxGreen 5

6 Cost of GC support scheme in Flanders: 950 M in 2012 Large scale biomass is cost efficient Market circumstances - declining power prices & GC 6 prices

7 Flanders: unstable regulatory framework for renewable power 2009: Investment decision based on legislation that foresees stable, long term support for converted coal fired powerplants (100% GC) September 2010 > April 2011: Conversion Rodenhuize 4 April 2011: start 100% biomass in Rodenhuize 6/5/2011: new GC banding: only 89% GC for Max Green Reduction of penalty to 100 /GC in 2 years : lower GC granting due to introduction of standard values for energy balance 1/1/2012: implementation of Transmission Grid Injection Tariffs (=1,5mioEUR/year additional OPEX) 13/7/2012: -Support period limited to 10years -Adaptive banding for new projects above 20 MW 7

8 Cascading issues in Flanders Flemish law imposes the principle of cascaded use of materials and waste streams (so called ladder of Lansink) Flemish law states no GC is granted to biomass that is an industrial resource gives priority to material use without any concern to economic value no GC support is to be given to biomass that can be used for material (housing, paper, particle board, even compost!) The regulator considers that only technical criteria can be used: No market criteria (availability, price) No distance criteria to avoid discrimination between EU and outside EU Only wood dust < 0.2 mm, pieces of wood with a diameter less than 4cm, bark, stumps up to 30 cm aboveground and plantation wood are automatically accepted Between 2011 and 2013, GC were granted because the wood industry federation declared in letters to the regulator that MaxGreen was not using their resources As approval cannot be based on distance only, this approval is no longer possible and GC for MaxGreen have been cancelled with retroactive effect on 1/1/2014 This situation puts all existing and planned wood-pellet based biomass projects in Flanders at risk 8

9 Conclusion bio-energy support Belgium Market prices of GC and power are declining, rendering projects unprofitable Biomass will be essential if Belgium wants to reach its 2020 targets More than 90% of the Max Green biomass volume is coming from North America, so competition with wood usage in Europe is almost inexistent but grant of GC is cancelled on that basis Due to the lack of EU sustainability criteria on solid biomass, GDF SUEZ and Max Green participate in several voluntary initiatives. Since years, all biomass suppliers of GDF SUEZ are audited by an independent auditor (SGS), with a scheme developed with Laborelec GDF SUEZ is active in the Sustainable Biomass Partnership and collaborates with Green Gold Label For a stable investment climate, stable regulatory framework is a key 9

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