Electricity and heat generation by combustion and gasification of wood residues and straw a strategic assessment

Transcription

1 Electricity and heat generation by combustion and gasification of and straw a strategic assessment S. Kälber, L. Leible, G. Kappler, S. Lange, E. Nieke, D. Wintzer, and B. Fürniss Institute for Technology Assessment and Systems Analysis (ITAS), Forschungszentrum Karlsruhe, Karlsruhe, Germany Postfach 3640 ABSTRACT: From the economic point of view, the use of and straw seems to be rather attractive, as they are available at moderate costs. Nevertheless, an economic analysis reveals that current electricity generation based on straw or wood residues is not yet competitive with fossil alternatives, even if premium prices guaranteed by the German Renewable Energy Sources Act (EEG) are taken into account. Biomass CHP plants and power plants only achieve competitiveness by using a cheaper biomass fuel mix. In comparison, co-combustion or co-gasification in pulverised coal-fired power plants represent interesting options of power generation at lower cost. The effects on employment especially in rural areas are closely related to the conditioning and supply of and straw. They may be considered positive side effects. However, main advantages of biogenic energy resources and one reason for supporting them are their contributions to reducing emissions of greenhouse gases. This study indicates that combustion processes offer particular advantages in small heating facilities and in co-generation plants that mainly produce heat. The strategic advantages of technologies with integrated gasification, on the other hand, seem to lie in co-generation plants that are used mainly for electricity generation above a few MW e and in power plants ranging up to 50 or 100 MW e. Furthermore, the production of renewable transportation fuels by biomass gasification represents a promising option. INTRODUCTION On both the national and the EU level, current political objectives and requirements aim at significantly raising the share of renewable energy sources in energy supply. High expectations are placed in the use of biomass and in particular of and straw. To generate heat and power, the combustion of and straw is widely practised commercially. In contrast to this, only exceptional gasification technologies, including gas cleaning and gas utilisation, have reached the state of technical demonstration in continuous operation. Therefore, the database and the evaluation of gasification technologies are still uncertain.

2 Against this background, a systems analysis was conducted by the Institute for Technology Assessment and Systems Analysis (ITAS) funded by the German Federal Ministry of Consumer Protection, Food, and Agriculture (BMVEL) with the objective of analysing and assessing the chances of combustion and gasification of and straw for heat and power generation [1]. In addition to the economic analysis and the assessment of the attainable CO 2 reduction, possible effects on employment in rural areas were examined. In the systems analytical approach, detailed analyses of volumes and compositions of biogenic residues and waste available in Germany are performed. Straw and wood residues from forestry and wood industry make up about 53% of the total volume of 70 million Mg of dry organic matter and represent the highest quantitative potential for thermal utilisation. The complete logistics chains for and straw (this includes collection, conditioning, storage, and transport) are analysed under technical, economic, and environmental aspects. Additionally, the supply of and straw was combined with conversion technologies for heat and power production, namely, combustion and gasification, including co-combustion and co-gasification. Net generating capacities from 1 to 60 MW e are taken into account. An outlook is given with respect to the production of liquid biofuels by biomass gasification. VOLUMES OF WOOD RESIDUES AND STRAW IN GERMANY Initially, to assess the strategic significance of and straw in Germany, volumes and compositions of these biogenic residues were estimated. The relative importance of and straw available in Germany and suitable for energy purposes is shown in Table 1 by an overall comparison of the volumes of dry organic matter (DOM). Table 1 Relative importance of and straw as shares of the total volumes of biogenic residues and waste in Germany. Biogenic residues and waste Total volume 75 million Mg DOM 70 million Mg DOM Shares of - from forestry - from wood industry 21% 10% 22% 10% demolition wood 8% 9% straw of cereals (surplus) 23% 21% liquid manure 15% 15% others (e.g. municipal solid waste, etc.) 23% 23% Total 100% 100% Table 1 shows that in 2002, agriculture and forestry contributed about 58% to the total volume listed of 70 million Mg DOM in the form of from forestry,

3 (surplus) straw, and liquid manure from cattle and pigs. Industrial wood waste and demolition wood had a share of 19% in the volume listed. According to estimates made by the authors, use of additional biogenic residues and waste not shown in Table 1 could increase the volume of 70 million Mg DOM by another approx million Mg DOM. Based on a simplified estimation of the lower heating value for the DOM of 18 GJ/Mg, the volume of 70 million Mg DOM is equivalent to 1260 PJ of energy. This corresponds to approx. 9% of the German primary energy requirement [2]. Taking the above-mentioned additional biogenic residues and waste with a volume of 5-15 million Mg DOM into account, this share could be increased above 11%. Comparing the volumes of biogenic residues and waste in the year 2002 with 1999, a moderate decrease is found. Nevertheless, the analyses reveal that the potential of and straw suitable for energy production in Germany is considerable. PREPARATION AND SUPPLY OF WOOD RESIDUES AND STRAW In addition to combustion and gasification technologies for biomass, the complete logistics chains for and straw were analysed. This includes collection, conditioning, storage, and transport. Fig. 1 shows the range of costs for preparation and supply of and straw depending on the type and conditioning steps, based on dry matter (DM). Possible reasons for high supply and preparation costs are revealed. As a matter of principle, the costs of making biogenic residues and waste accessible are affected negatively by a high water content and original small batches. As a rule, a high water content leads to a sophisticated process chain and high transport costs. Small batches are very labour-intensive to collect and collection conditions are rather complicated. Costs of preparation and supply ( /Mg DM) Other Transport Conditioning Collecting Collection Gathering Standard transport distance of 30 km; transport by truck; for liquid manure transport by tractor 0 (chips, 50% DM) (chips, 65% DM) (chips, 90% DM) straw (bales, 86% DM) industrial (chips, 75% DM) industrial (pellets, 92% DM) demolition wood (shredded, 85% DM) Fig. 1 Costs of preparation and supply of and straw.

4 Considering the residues with the highest quantitative potential for thermal utilisation, namely, straw and from forestry, the costs of preparation and supply are about equal in both cases. At a transport distance of 30 km, the supply costs of are in the range of 75 to 120 /Mg DM for thermally dried wood. Assuming the same transport distance, straw can be delivered to conversion plants at 85 /Mg DM. When it comes to transport costs, straw bales even show slightly higher values because of their low density. In case of, storage or additional efforts for thermal drying (see Fig. 1, conditioning ) may add greatly to a higher cost level. Efficient gasification technologies, for example, require a DM content in the range of 85 to 90%. The supply costs result from a full-cost calculation. In practice, the prices of biogenic residues and wastes could differ in a wide range due to specific framework conditions (see Table 3). COMBUSTION AND GASIFICATION OF WOOD RESIDUES AND STRAW As mentioned above, a large number of very heterogeneous technologies of heat and electricity generation from and straw were studied within the framework of this study. Some basic findings regarding combustion and gasification technologies shall be outlined below. HEAT PRODUCTION FROM WOOD RESIDUES AND STRAW In principle, heat can be generated either from or from straw by using combustion or gasification technologies. In the following sections, however, only results regarding the combustion of solid biomass fuels shall be presented. As a matter of fact, the obvious advantage of gasification technologies is their high electrical efficiency in combined heat and power (CHP) or power production plants. Considering heat production, gasification technologies seem to have no principle advantage compared to combustion technologies. A broad variety of combustion technologies producing heat at different capacities are considered. Fig. 2 summarises the current heat production costs of these technologies in Germany on the basis of a full-cost calculation. For exclusive heat production, the specific heat production costs result from the total costs of heat production divided by the heat quantity available at the end user. The costs of heat distribution and the specific energy losses of heat distribution systems are considered. Regarding combined heat and power production, the revenues from electricity sales are determined by means of the German Renewable Energy Sources Act (EEG) depending on net generating capacities [3]. As evident from the evaluation of the different systems, capital costs, the costs of biomass feedstock, and the fixed operation costs in particular personnel costs are the key factors in the range of heating capacities considered. In addition to the absolute values of heat production costs, Fig. 2 therefore shows the percentages of capital costs, fixed operation costs, and feedstock costs, including the significance of revenues from electricity sales to cover total costs. Fig. 2 reveals the following basic trend: By increasing thermal capacity, the percentage of feedstock costs rises up to 50% of total costs. Due to this high dependency on feedstock costs, long-term delivery contracts for cheap biomass are

5 essential for competitive operation in large plants. On the other hand, capital costs caused by lower specific investments and personnel costs become less significant. capital costs fixed operating costs biomass feedstock costs other costs revenues from electricity * heat production costs in /MWh 80 % 60 % 40 % 20 % 0 % -20 % heat combined heat and power (CHP) heat controlled power controlled 279 * 95 * 99 * 68 * 68 * 70 * 88 * 93 * 90 * 71 * 74 * 72 * 100 % -40 % tiled stove, 8 kw logwood small furnace, 30 kw wood pellets heating plant, 500 kw CHP plant 1, 10 MW CHP plant 1, 10 MW straw CHP plant 2, 10 MW CHP plant 1, 30 MW CHP plant 1, 30 MW straw CHP plant 2, 30 MW CHP plant 1, 67 MW CHP plant 1, 67 MW straw CHP plant 2, 67 MW 1 grate-fired boiler; 2 fluidized bed boiler Reference: Heat production costs of a local heating system, 30 kw, based on heating oil are 78 /MWh. Fig. 2 Heat production costs for the combustion of and straw. As shown in Fig. 2, heat production costs can be reduced in general by increasing heat capacity: from about 95 /MWh in small furnaces (30 kw, wood pellets) to about 70 /MWh in heat-controlled CHP plants (10 MW). Compared to heat production costs in local heating systems operated with fossil heating oil, which are about 78 /MWh, heat-controlled CHP plants using or straw as feedstock can operate in a competitive way. In contrast to this, direct comparison of small local heating systems having the same nominal thermal capacity of 30 kw and operated with wood pellets or fossil heating oil demonstrates that heat production costs for are about 20% higher. This economic disadvantage can be compensated by national investment subsidies that may be granted in Germany. Consequently, a future increase in the installed heating capacity can be expected in the area of small local heating systems especially if it is taken into account that use of local heating systems automatically operated with wood pellets is relatively comfortable. Wood- or straw-based CHP processes show an increase in heat production costs when switching from heat- to power-controlled operation in spite of an increasing thermal capacity. This is caused by a lower load factor when switching to powercontrolled operation: For heat-controlled operation, a load factor of 6000 hours per year is assumed, for power-controlled operation only 4000 hours per year. In both cases, electricity production over 7000 hours per year is assumed. In power-controlled

6 operation, an increase of heat capacity from 30 to 67 MW leads to the expected decreasing heat production costs, caused by lower specific investments in larger plants. Hence, for competitive operation of CHP processes, a high load factor is absolutely essential. This means a high demand for heat or steam over a long period of the year. The use of either or straw as feedstock has no strong impact on heat production costs in CHP processes. Heat production in district heating systems Considering installations operated with biogenic fuels solely for heat production, district heating systems seem to be a promising option in Germany. Future potentials of these systems are considered to be high in general. District heating systems at a thermal capacity of 500 kw have been assessed so far only in reference to local heating systems operated with fossil heating oil at a nominal thermal capacity of 30 kw. Due to the different capacities, comparison of these two systems is not satisfactory. Therefore, district heating systems at a thermal capacity of 500 kw operated with fossil heating oil or natural gas were analysed and compared to heating systems operated with wood chips (50% DM). In Table 2, the characteristic data of heating systems operated with the different types of fuel are summarised. These data provide a comprehensive survey of the considered technologies in terms of heat production costs, net employment effects, attainable CO 2 reduction, and CO 2 mitigation costs. In general, combustion of solid biomass fuels in district heating systems is widely practised. Combustion technologies in this sector, in particular those operated with wood chips, correspond to the state of the art. In contrast to this, the economic situation of biomass district heating systems is less satisfying in most cases. Calculations within the framework of the study for a district heating system with a small distribution area, a relatively high heat demand, and a load factor of 2200 hours per year produce the following findings: heat production costs in heating plants operated with wood chips are about 25% and 40% higher than in heating plants operated with heating oil and natural gas, respectively. This may mainly be attributed to the very high specific investments for biomass heating plants, leading to relatively high capital costs. Considering heat distribution, identical heat distribution networks and heat losses in the networks of 12% are assumed in all three cases. As far as attainable employment effects are concerned, use of biogenic fuels for heat production has a positive impact. Especially rural areas may benefit from these technologies over the complete range of capacity. Regarding exclusive heat production and heat-controlled CHP processes, the plants being installed, as a rule, in rural areas or close to smaller cities, the employment effects are based on investments, personnel for plant operation and maintenance, and on the preparation and supply with biomass fuels. For large-scale combustion technologies, employment is predominantly influenced by biomass preparation and supply. Positive employment effects in particular result for district heating systems. The specific demand for labour forces to operate biomass heating plants, including biomass preparation and supply, amounts to approx jobs/twh heat produced. Compared to the fossil heating oil and natural gas, this is significantly higher. Hence, the specific

7 employment associated with natural gas systems is slightly higher than that of systems operated with heating oil. Table 2 District heating systems operated with wood chips, fossil heating oil, and natural gas. Heating plant, 500 kw Parameters Units Wood chips Heating oil Natural gas Investment - heating plant - heat distribution 354, , , , , ,000 Total costs, incl. fuels - of these, fuel costs /a /a 108,000 20,000 79,100 26,100 86,700 23,400 Heat production costs /MWh Employment, in total - of this, for fuels - of this, direct effects (for operation) - of this, indirect effects Jobs Jobs Jobs Jobs (for investment and operation) Specific employment Jobs/TWh 1, CO 2 emissions p.a. a - of these, for fuels Mg CO 2 eq. Mg CO 2 eq CO 2 mitigation - compared to heating oil - compared to natural gas Mg CO 2 eq./a Mg CO 2 eq./a CO 2 emissions per MWh a Mg CO 2 eq Specific CO 2 mitigation - compared to heating oil - compared to natural gas Mg CO 2 eq./mwh Mg CO 2 eq./mwh CO 2 reduction costs - compared to heating oil - compared to natural gas a /Mg CO 2 eq. /Mg CO 2 eq Heating plant operated with wood chips: CO 2 emissions due to supply with biomass fuels, natural gas for peak load, and external electrical power supply The potential of and straw for heat production is rather interesting because of its contribution to the reduction of CO 2 emissions. In this way, combustion technologies for heat production could make an important contribution to reaching the goals of reducing CO 2 emissions as established by the German federal government. Especially local heat production and combined heat and power production processes are favourable alternatives. Comparing CO 2 emissions of district heating systems operated with biomass, fossil heating oil or natural gas, wood chips provide for the lowest CO 2 emissions. But even these systems produce CO 2 emissions of 112 Mg CO 2 eq. per year, which is caused by the required co-firing of natural gas for peak load and external electrical power supply. Nevertheless, biomass district heating systems can make a great contribution to reducing CO 2 emissions. In comparison to natural gas, CO 2 reduction is 0.19 Mg CO 2 equivalent (eq.)/mwh heat produced, compared to fossil heating oil it amounts to

8 about 0.28 Mg CO 2 eq./mwh. As a result, the CO 2 mitigation costs for substituting natural gas are slightly higher than for substituting fossil heating oil. ELECTRICITY PRODUCTION FROM WOOD RESIDUES AND STRAW In addition to heat production, the study focuses on technologies to generate electricity from solid biomass. Fig. 3 shows the electricity production costs for combustion and gasification of and straw as a function of the net generating capacity. Comparison is based on the current electricity production costs in a power plant fired with imported hard coal, which are around 45 /MWh e, and the range of bonuses paid under the Renewable Energy Sources Act for feeding into the grid electricity generated from biogenic residues and waste that are acknowledged as biomass under the Biomass Ordinance. Moreover, it must be mentioned that power production costs in a power plant fired with German domestic hard coal amount to approx. 80 /MWh e, disregarding government subsidies. On the other hand, electricity can be produced in power plants operated with imported hard coal at costs of 25 /MWh e, if the investments are fully depreciated. Power production costs ( /MWh e ) combustion ( and straw) Range for the feed-in tariffs guaranteed by German law (EEG) gasification 1) ( and straw) Reference: Coal-fired power plant 0 CHP plant (1.5 MW e ) CHP plant ( MW e ) Power plant (20 MW e ) e ) Fluidised bed ( MW e ) Fluidised bed ( ( MW MW e ) Co- Co-gasification (approx. 4% of 500 MW e ) e ) Co-combustion (10% of 500 MW e ) Fixed bed ( kw e ) 1) Perspective 2020 for the considered gasification technologies Fig. 3 Electricity production costs of combustion and gasification of and straw. Economic analysis of combustion and gasification for electricity generation produces the following findings: despite bonus payments under the Renewable Energy Sources Act, power production costs of combined heat and power (CHP) plants and power plants using and straw as feedstock must be considered uneconomic. Under the present framework conditions, economic operation of these

9 biomass facilities can be achieved only by using cheaper biomass fuels, such as used or demolition wood. In this respect, larger power plants seem to be preferable. Co-combustion of and straw in a hard-coal-fired power plant is a comparatively inexpensive alternative to partly substitute hard coal as a fossil fuel. As is shown by the results in Fig. 3, co-combustion of and straw in a hardcoal-fired power plant allows electricity to be produced at approx. 90 /MWh e and 95 /MWh e, respectively, which is considerably cheaper than in biomass power plants. True, this is much more expensive than generating electricity from hard coal only. However, compared to a biomass power plant of 20 MW e, an electricity feeding bonus of approx. 90 /MWh e would be necessary to compensate existing drawbacks in competition. Although the database and evaluation of gasification technologies are still uncertain, some tentative conclusions may be drawn already. No positive economic perspectives exist for economically generating electricity by fixed-bed gasification of at plant capacities below 500 kw e. For larger gasification plants above approx. 5 MW e, the potential of attaining advantages in power production costs over those arising from combustion technologies can be seen for technologies using fluidised beds. Maximum biomass fuel costs for cost-covering operation As mentioned above, economic operation of biomass facilities under the present framework conditions can be achieved only by using cheaper biomass fuels, such as used or demolition wood. Hence, the maximum prices for biomass fuels to achieve cost-covering operation, current market prices, and the prices for biomass fuels based on a full-cost assessment were calculated and compared in the study. The results are summarised in Table 3. Cost-covering prices mean the maximum prices a plant owner can afford for biomass fuels to achieve cost-covering operation. In this context, it has to be emphasised that the results in the study represent typical values for the combustion technologies considered. Due to specific conditions, the economic situation in individual cases may vary widely. In the study, the costs of preparation and supply of and straw were calculated based on full costs. These results are also presented in Table 3. The calculated fuel costs are in the ranges of current market prices. Consequently, the results of the economic evaluation of biomass systems represent the current market situation in Germany quite well. Another source of uncertainties are different and sometimes fast changing market conditions which may have a deep impact on market prices. Hence, before realising biomass projects, it is strongly recommended to investigate the availability of biomass fuels at a designated location. In addition, the influence of increasing biomass prices due to a higher demand and limited availability in a special area on the economy of biomass facilities has to be taken into account. The presented ranges of biomass market prices (see Table 3) are based on the experience of the authors and on the evaluation of literature [4].

10 Table 3 Comparison of maximum biomass fuel costs for cost-covering operation, fuel costs based on a full-cost calculation, and current market prices. Biogenic residues Wood residues - chips, fresh (50% DM) - chips, 3-6 months stored (65% DM) Industrial Cost-covering prices 20 MW e Co-firing in Power plant a hard coal power plant Fuel costs (full costs) b Market prices, carriage paid c ( /Mg FM) ( /Mg FM) ( /Mg FM) ( /Mg FM) 40 to chips (75% DM) Demolition wood - shredded (85% DM) Straw - bales (86% DM) FM = fresh matter a Electricity revenues according to EEG (2002): 86 /MWh e b at a transport distance of 100 km c with no further details on DM content and transport distance 10 to to to 100 The economic situation of the combustion of and straw for electricity production was outlined above in a comprehensive manner. Power production in combined heat and power (CHP) plants and power plants using wood residues from forestry and straw as feedstock must be considered uneconomic in Germany for the time being. Power plants working at a net generating capacity of 20 MW e benefit from the fixed range of bonuses paid under the German Renewable Energy Sources Act for feeding electricity into the grid. In contrast to this, co-firing in a hard-coal-fired power plant is currently not subsidised by German law. For this reason, the difference of costcovering biomass prices between these two options is immense. Taking the fixed bonuses paid under the Renewable Energy Sources Act into account, electricity production in biomass power plants may be considered economic for prices of wood residues (50% to 65% of dry matter) in the range of 20 to 30 /Mg fresh matter (FM). In case of straw (86% DM content), the fuel prices for economic operation are in the range of 40 to 50 /Mg FM. The current economic situation of electricity-producing plants of 20 MW e capacity operated with industrial or demolition wood as feedstock looks more promising. Economic operation in such power plants can be achieved, especially if they are operated with cheap biomass fuels at the low end of the range of market prices presented for industrial and demolition wood. Co-firing in hard-coal-fired power plants without any additional subsidising currently may only be considered economic, if the plant owner creates income by taking over industrial or demolition wood. But this is only the case, if the plant is operated with contaminated industrial or demolition wood, for which revenues up to 20 /Mg FM may be achieved.

11 CO 2 mitigation and CO 2 mitigation costs for electricity production Another main point covered in the study was the analysis and comparison of CO 2 mitigation and the costs of CO 2 mitigation associated with the technologies studied for electricity generation. Table 4 shows the ranges of CO 2 reduction and CO 2 mitigation costs for the combustion and gasification of and straw. For combustion technologies, a net CO 2 reduction in the range of 0.91 to 2.06 Mg CO 2 eq./mwh e is possible. In case of gasification technologies, net CO 2 reduction varies in a range of 0.92 to 1.14 Mg CO 2 eq./mwh e. Table 4 Net CO 2 reduction and CO 2 mitigation costs for the combustion and gasification of and straw for electricity production. Technology Net generating capacity Range of net CO 2 mitigation (Mg CO 2 eq./mwh e ) CO 2 mitigation costs ( /Mg CO 2 eq.) Combustion CHP plant 1.5 MW e CHP plants MW e Power plant 20 MW e Co-combustion in hardcoal-fired power plant 10% of 500 MW e Gasification Fixed bed kw e Fluidised bed MW e Fluidised bed MW e Co-gasification in hard-coal-fired power plant 4% of 500 MW e For a comparative evaluation, costs of CO 2 mitigation were extracted from studies [5] with CO 2 mitigation scenarios seeking to meet the reduction goals established by the German federal government. Other authors found that for a goal of reducing CO 2 emissions by 25% or even 40%, costs of CO 2 mitigation between 50 and 100 per Mg of CO 2 eq. would be quite acceptable in view of more expensive alternatives. Against this background, the attainable costs of CO 2 mitigation associated with the combustion and gasification of and straw turn out to be rather attractive. PRODUCTION OF RENEWABLE TRANSPORTATION FUELS BY BIOMASS GASIFICATION In contrast to combustion technologies, gasification technologies offer the possibility of producing liquid transportation fuels via the synthesis of syngas. When developing new technology concepts for this purpose, special attention has to be paid to the composition and properties of biomass feedstocks, such as or straw

12 from cereals. Straw, e.g., has a higher ash, potassium, and chlorine content and a lower ash softening point than wood and therefore is more difficult to handle technically. In this context, the Karlsruhe Research Centre is developing a two-step pyrolysis/gasification process especially suited for dry lignocellulose biomass [6]. In Fig. 4 the principles of the concept are outlined. Local (number: 10-20) pyrolysis plants (30 to 50 MW e ) Production of pyrolysis slurry * Conditioning Transport Biomass supply Biomass (straw, ) from the local area of pyrolysis plants Transport Large central gasification plant 500 to 1000 MW e Tar-free raw syngas Gas cleaning conditioning Synthesis FT products, H 2, methanol for material use for energy use SUBSTITUTION of fossil energy and raw materials * Slurry: Suspension of pyrolysis condensate and char Fig. 4 Two-step pyrolysis/gasification for synfuel production from biomass. The first process step is a fast pyrolysis which produces liquid condensate, char, and gas. Then, pyrolysis condensate and pulverised pyrolysis char are mixed to a slurry, containing up to 90% of the initial biomass energy. In contrast to the original biomass, the slurry can be pumped easily and stored in tanks. The energy density of the slurry is higher than the original energy density of straw in the form of bales by about a factor of 10. From a number of regional pyrolysis plants, the slurry can be transported in an economic manner by railway to a large central gasification facility. Thus, an efficient, but more complex gasification and syngas utilisation technology results and products with high values are obtained. In the large central gasification, plant the slurry is converted into syngas by entrained flow gasification at high operating temperatures and pressures. High gasification temperatures and pressures help to produce a tar-free syngas, simplify downstream gas cleaning steps, and obviate gas compression prior to synthesis to liquid transportation fuels. The last step is the synthesis to liquid transportation fuels via Fischer-Tropsch or other alternatives. Several chemical, engineering, and economic aspects regarding the two-step process are being investigated at the Karlsruhe Research Centre in an interdisciplinary working team. For liquefaction of dry lignocellulose biomass, a pilot plant for fast pyrolysis with a special twin-screw reactor was engineered and installed. The

13 throughput of the pilot plant is 10 kg/h of chopped straw. First tests to verify the principle feasibility of the pyrolysis step are being conducted at the moment. The production and handling of slurry from pyrolysis condensate and char are investigated and physical properties determined. In two test series, slurries have been prepared by mixing charcoal powder into pyrolysis oil from commercial beechwood pyrolysis. Technical feasibility of slurry gasification was confirmed by tests in a 5 MW th pilot gasifier at Freiberg, Germany, at 26 bar and a throughput of 0.5 Mg/h. Complete conversion into a practically tar-free syngas has been achieved. Regarding the economy of the two-step concept, first estimates indicate costs for producing liquid transportation synfuels in a range of 0.8 to 1.0 /litre depending on plant capacity. Production costs of about 0.8 /litre may be achieved in large plants at a capacity of 1 million Mg synfuel per year. More optimistic production costs are presented in literature: Rudloff and Schulze., e.g., estimate production costs of about 0.7 /litre at a plant capacity of million Mg synfuel per year [7]. Consequently, production of renewable transportation fuels by biomass gasification represents a promising option. SUMMARY AND CONCLUSIONS From the economic point of view, use of and straw seems to be attractive, as they are available at moderate costs. In both cases, the costs of conditioning and supply are in the range of 75 to 120 /Mg dry matter. Nevertheless, the economic analysis reveals that current electricity generation based on straw or is not yet competitive with fossil alternatives, even if the premium prices guaranteed by the German Renewable Energy Sources Act (EEG) are taken into account. CHP plants, for instance, only are competitive when using cheaper biomass fuels, such as used or demolition wood which is available in Germany at costs from 10 to 40 /Mg. In comparison, co-combustion or co-gasification in a pulverised coal-fired power plant represent interesting alternatives of power generation at lower cost. The achievable effects on employment in rural areas are closely related to the conditioning and supply of and straw. They may be considered a positive side effect. However, it cannot be assumed in principle that the employment effects associated with the preparation and supply of the energy resources considered will lead to additional personnel being hired in agriculture and forestry. Instead, it is more likely that existing jobs in rural areas will be protected to that extent. The advantages of biogenic energy resources and one reason for supporting them mainly lie in the contributions they can make to reducing emissions of greenhouse gases. As is indicated by the findings of the study, the achievable CO 2 mitigation costs in the range from 50 to 100 /Mg eq. CO 2 or below of biomass combustion or gasification are very attractive in comparison to other instruments of CO 2 reduction. The study reveals that combustion processes offer special advantages in small heating facilities and in co-generation plants that mainly produce heat. The strategic advantages of technologies with integrated gasification seem to lie in co-generation plants that are mainly used for electricity generation above a few MW e, and in power plants ranging up to 50 or 100 MW e. Furthermore, the production of renewable transportation fuels by biomass gasification represents a promising option.

14 ACKNOWLEDGEMENTS The project and work underlying this paper was funded by the German Federal Ministry of Consumer Protection, Food, and Agriculture (BMVEL) and by the Ministry of Nutrition and Rural Affairs (MLR) of the federal state of Baden-Württemberg (Germany). We thank for financial support. REFERENCES 1. Leible, L., A. Arlt, B. Fürniß, S. Kälber, G. Kappler, S. Lange, E. Nieke, Chr. Rösch, and D. Wintzer (2003) Energy from biogenic residues and waste. Karlsruhe Research Centre (Ed.), Scientific Report FZKA 6882, 278 pp. [in German] 2. BMWi (2001) Sustainable energy policy for future energy systems energy report. Federal Ministry of Economics and Technology of Germany (BMWi), Bonn, 114 pp. 3. Act on Granting Priority to Renewable Energy Sources (Renewable Energy Sources Act, EEG) (2000). BGBI 13, [in German] 4. Heinrich, P., and B. Jahraus (2002) Market and cost development of electricity production from biomass. Fichtner (Eds.), Stuttgart, 77 pp. [in German] 5. BMWi (Ed.) (2001) Energy policy and macroeconomic evaluation of a 40% reduction scenario. Final report by Prognos, EWI and BEI, July Study on behalf of the Federal Ministry of Economics and Technology of Germany (BMWi), Documentation No. 492, Berlin, 79 pp. [in German] 6. Henrich, E., E. Dinjus, D. Meier (2004) Syngas from liquefied biomass. Proceedings DGMK Conference 2004, Velen, [in German] 7. Rudloff, M., and O. Schulze (2004) Carbo-V -Process transportation fuels from biomass. Proceedings Expert Meeting 2004, Freiberg, [in German]