Energy from biomass and wastes Pöyry perspective. Climbus Petri Väisänen

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1 Energy from biomass and wastes Pöyry perspective Climbus Petri Väisänen

2 Global expert in consulting and engineering We offer our clients in-depth industry expertise, innovative solutions and lifecycle engagement projects annually employees in 49 countries Project experience in more than 100 countries 2

3 Several factors affect the energy market investments Energy market structure Climate change INVESTMENT CLIMATE Global economy Global economic crisis Energy demand Banking crisis 3

4 Current and historic market declines Ground Zero 4 Source: Tenessee Valley Authority

5 Global Electricity Consumption 2006 and 2030 (TWh) E. Europe/ Eurasia North America Europe % Asia = 2006 = % Latin America % % Middle East % Africa % % Pacific % World Electricity Demand Growth + 80 % 5 Source: IEA 2008

6 Total Proved Fossil Fuel Reserves in the World Oil is expected to last for 40, natural gas for 70 and coal for 160 years Proved reserves of fossil fuels are generally taken to be those quantities that geological and engineering information indicates with reasonable certainty can be recovered in the future from known reservoirs under existing economic and operating conditions Natural gas Oil Coal Thousand million tonnes

7 Energy sources, carbon dioxide emissions and melting glaciers 7

8 Business Environment for the Bioenergy and Waste Sector The EU, the US, Canada and several Asian countries have set mandatory targets for electricity production from renewables and biofuels for transportation. Biomass will play an important role in reaching these targets. Carbon footprint, security of supply and future prices for fossil fuels drive process of replacing fossil fuels with biomass and wastes. Since the biomass demand is growing fast, their price trend is upwards as well and therefore the economy is driving to use more wastes and residues. Innovative technologies for the conversion of cellulose to biofuels are close to commercial breakthrough, further increasing the global fibre demand. The biomass market is becoming more and more international, but it is still far away from being a unified global market comparable to markets for fossil fuels. Currently there are not many relevant market players who could provide international biomass sourcing on a very large scale. Biomass and wastes are very much a local resource. 8

9 E nergy production (TW h) An immense challenge ahead The 2020 renewables target requires that Europe trebles its renewables production Pöyry estimates that 1,000bn of investments will be needed in the EU27 between 2010 and 2020 Energy required to meet the 2020 target Mix of renewable energy in ,500 E lectricity - E U 15 E lectricity - N M 12 H eat - E U 15 H eat - N M 12 Transport - E U 15 Transport - N M 12 R E S -T 13% 3,000 2,500 2,000 O ther renew able heat 6% G round S ource H eat P um ps 5% B iofuels for transport 13% O nshore W ind 9% O ffshore W ind 6% B iom ass/gas/waste 9% R E S -E 38% 1,500 1,000 B iom ass heat 38% Hydro 13% O ther renewable electricity 1% 500 R E S -H 49% Source: Pöyry 9 Source: Pöyry

10 Waste to Energy in Europe Source Cewep 10

11 Global View on Future Harvesting Potential and Wood Market On a global level the available potential of biomass resources is high. However the biomass demand from the energy sector is increasing significantly and competition with traditional wood consuming industries is becoming stronger. At present the contracting harvest levels in both EU and NA will decrease biomass availablilty also for energy sector. Stable or slightly decreasing wood supply as harvesting quotas in Eastern-Canada are reduced to prevent unsustainable harvesting. Temporarily increasing harvest potential due to pine beetle infestations in B.C.. Decreasing harvest potential for softwood in the long term. Note. Sawmill production now temporarily low Stable or slightly decreasing long term wood supply potential. Latin America holds the world's largest hardwood stock, however mostly inaccessible in natural tropical forests. Substantially increasing removals based on fastgrowing plantations. Increasing wood supply based on maturing softwood plantations in UK and US South. Stable wood supply in US East Controversial harvesting of high-value sawlogs from natural forests is increasing. Only marginal potential to increase harvest level in Europe. Increasing pressure from bioenergy on wood resources Potential to expand plantation area is very limited. Existing and future hotspots for bioenergy investments Russia holds significant unutilised harvest potential. However a significant part of unutilized harvest potential is currently inaccessible. Export duties are hampering the trade in logs. Asia-Pacific will continue to be the world's largest wood deficit area. Controversial substitution of natural forest with plantations. Increasing removals based on existing and new plantations, 11

12 Maturity of selected biomass and waste to energy technologies Commercially available BFB/CFB Demonstration phase Pilot phase In Future Cofiring Pressurized fluid bed combustion Integrated Gasification Combined Cycle Grate Gasification Organic Rankine Cycle Supercritical CFB Anaerobic digestion + Gas engine, gas turbine Suspension firing Stirling CCS BFB = Bubbling Fluidised Bed CFB = Circulating Fluidised Bed CCS = Carbon Capture and Storage 12

13 Capacity Range for Different Boiler Technologies 1000 MW Boiler capacity MWth The next scale-up potential Current Scale Generation potential MWe GRATE BFB CFB 13

14 Key Messages In the short term, no major changes are expected in large scale biomass power generation technologies => Tendency is towards higher efficiency and fuel flexibility The specific properties of the available biomass must be considered when selecting possibility to use variety of fuels more complex fuel handling, challenges in combustion process, higher maintenance costs and higher specific investment costs Rapidly growing bioenergy market is changing the traditional operating environment of forest industry The biomass and wastes resources on a global level are sufficient to support significant growth of biomass to energy in heat, electricity and liquid biofuels. The biomass trade will most likely further internationalise and expand. Due to increasing competition for biomass resources, highest priority should be given to a secure and sustainable biomass supply to make a bioenergy investment successful. 14

15 Key Messages Climate change mitigation creates a substantial market for renewable energy The EU, the US, Canada and several Asian countries have set mandatory targets for electricity production from renewables and biofuels for transportation. Biomass and wastes will play an important role in reaching these targets. Economic downturn decreases power prices and short term project viability and banking crisis hampers project financing, slows down or puts projects on hold. This is a risk and will slow the development of renewable energy. Real reductions of CO2 and CH4 in the atmosphere are the key targets Energy efficiency in production and end use of energy CCS is needed for coal combustion, potentially also for biomass to energy Nuclear power is very competitive and will increase All sustainable renewable energy sources with low CO 2 footprint will be needed (bio,wind, solar, geothermal etc.) 15