CBP seminar - Session 3 -Oportunities and barriers -Current trade -Co-firing Danish case

CBP seminar - Session 3 -Oportunities and barriers -Current trade -Co-firing Danish case JONAS DAHL Danish Technological Institute CBP Kuala Lumpur, Malaysia

OPPORTUNITIES AND BARRIERS FOR MALAYSIAN BM TO EUROPE

Opportunities biomass Europe - Drivers the 20-20-20 target Miising figure

Source:

Opportunity - Co-firing Biomass co-firing in modern, largescale coal power plants is efficient, costeffective and requires moderate additional investment. In general, combustion efficiency of biomass can be 10 percentage points lower than for coal at the same installation, but co-firing efficiency in large-scale coal plants (35%-45%) is higher than the efficiency of biomass-dedicated plants. In the case of cocombustion of up to 5%-10% of biomass (in energy terms) only minor changes in the handling equipment are needed and the boiler is not noticeably derated. For biomass exceeding 10% or if biomass and coal are burned separately, then changes in mills, burners and dryers are needed. In addition, coal ashes that are used to produce construction materials should not be contaminated with tar and alkali metals-rich ash from biomass.

Oportunity Potential for Co-firing NW Europe Assumption: 5% co-firing in existing coal power plants => 33 mil ton wood pellets / year needed (present global production is 10 mil) Source: Schouwenberg, 2010

Source: Junginger, www.eubionet.net, 2010

Utilities using or planning to use biopellets for co-firing in Europe n GDFSUEZ www.gdfsuez.com (Belgium) n n RWE www.rwe.com EON www.eon.com (Germany) (Germany, UK) n n n n FORTUM www.fortum.com (Sweden) DRAX www.draxgroup.plc.uk (UK) VATTENFALL www.vattenfall.de (Sweden, Denmark, Netherlands) DONG www.dongenergy.com (Denmark)

European Pellet utlization versus production (2008) Source: www.pelletsatlas.info

European pellet utilization versus production (2008) Total imports EU 2009 ~ 3.4 million tonnes; about half intra-eu trade. Total export ~ 2.7 million tonnes, predominantly intra EU trade. Import from outside EU will grow in the future!!!! Source: www.pelletsatlas.info, Junginger, www.eubionet.net

Pellets utilisation in Europe

Source: Junginger, 2011

Potential Barriers

Opportunities export to Europe n Hugh demand in Europe for biomass => Solid biomass the most likely for reaching RE goals n n A large part of this Biomass will have to imported from outside EU Large part by cofiring in power plants Potential Barriers for malaysian biomass (EFB, Rice Husk, PKS n n n n Most EU utlilty co-firing utilisations are based on wood pellets Any biomas with ash-content above 3 % will need case by case attention no standards covering these types of fuels Political aspects of using palmoil residues. Other markets?

Biofuel Pelleting. Current and Future new perspectives worldwide Current Biofuel pelleting regions Potential regions Current main Biofuel pellets markets Source: Pandrup Christensen, Andritz-sprouit Matador, 2010

Pelletprices payed by large power producers (CIF) Price index: FOEX (scandi) ENDEX (ARA) ARGUS (NWE) Source: Junginger, www.eubionet.net, 2011

Wood pellet prices FOB in North American Harbours Source : www.canbio.ca

Enduser prices (~17,5 GJ/ton) ~250 /ton ~150 /ton Source: Winterbäck, www.eubionet.net, 2011

General conclusions wood pellet markets

Enduser prices Europe Source: Winterbäck, www.eubionet.net, 2011

Oportunities- according to C.F. Nielsen (Danish Briquettingmachine manufacture) Conclusions on Indonesian market according to CF Nielsen. Should focus on local market use Eksport to Europa is very difficult due to logitics prices and the Europena market will only by wood based briquettes No power plants are interrested unless price is much lower than other biomass

Investment in Briquetting machinery (C.F. Nielsen) For consumer briquettes Investment: 200.000-300.000 Capacity: 1.000-1.400 kg /h. Direct costs such as electricty, spare parts, service and maintenance ( ~ 15 EUR per ton) For industrial briquettes Investment: 100.000 og 200.000 Capacity: 500 kg - 1.800 kg /h. Direct costs such as electricty, spare parts, service and maintenance ( ~ 10 EUR per ton) Includes briquettingmachinery and silo for raw material. Does not include shipping or milling and not drying. (these could be expensive) CF Nielsen has currently 3 mashines in operation in Malaysia (se photo)

C.F Nielsen machinery in Malaysia

CO-FIRING PELLETS IN DENMARK

Co-firing Three state of the art systems: Direct Co firing systems, combustion of both fuels takes place within the same boiler, thus mixing coal and biomass ashes. Parallel system, biomass and coal are burned in separate boilers with physically independent feeding and ash removal systems. Indirect system, fossil fuel is burned with previously gasified biomass and, hence, coal and biomass ashes are also removed in different parts of the processes. Ash removal is one the most important constraints for increasing the share of biomass in Co firing systems. Ash melting temperatures of many biomass sources are normally lower than coal due to their high alkali metal, calcium or iron content. This feature may cause several problems such as slagging and fouling in the burners, furnace walls or superheaters. Other problems that may arise are related to the different grindability of biomass and coal, or the diverse combustion behavior of both fuels. Direct Co firing is by far the most implemented configuration in European coal fired power plants, accounting (more than 150 plants with total electrical and thermal capacities of 35 GWel and 22 GWth). In Direct systems, the maximum share of biomass in the fuel blend is less than 5 10 wt% (3 6% on energy basis). Higher ratios would imply boilers modification with the inherent increase in capital investment.

Danish Energy The government s long-term vision is that Denmark will become independent of fossil fuels by 2050 while reducing greenhouse gases by 80 95% compared to 1990. This will require a total conversion of the Danish energy system, away from oil, coal, and gas, which today account for more than 80% of energy consumption, to green energy, with wind turbines and bioenergy as the most important elements. The European Union presently has a goal of reducing GHG emissions by 20% by 2020 from the 1990 level. Denmark is urging the EU to adopt an even stricter goal of 30% Danish coal power plants are already remarkably efficient. Any coal plant makes just two things: electricity and heat. Most coal plants use only the electricity, sending the heat up the chimney as waste. Thus, most coal power plants are only about 30% fuel efficient. In Danish power plants, both electricity and heat are used (known as combined heat and power, CHP). The heat is captured and used to heat hot water, which is pumped through a vast network of super-insulated pipes to heat homes throughout the country (called district heating). Denmark s best power plants are more than 90% fuel efficient. Today, more than 70% of Denmark s homes are heated by district heating.

Pellets - Combined Heat and Power in Denmark n Avedøre II CHP (DONG) Combusted 343 600 t wood pellets in 2008 Allowence for up to 500 000 t in 2009 n Amager CHP (Vattenfall) Combusted 50 000 t straw pellets 20 000 t wood pellets Refurbished plant 2009 aims at: 100 000 t straw pellets 250 000 t wood pellets n Herning CHP (DONG) - after 2009 - Capacity of 100 000 t wood pellets/year

Danish consumption of wood pellets 1985-2008 1160 000 + 1,5 mil tonnes Source: Danish Energy Authority, www.ens.dk + Own estimations for 2008

Avedøre Power Station

Danish Power plant Avedøre Dong Energy s Avedøre Power Station near Copenhagen, which provides electricity for 1.3 million homes in northern Europe and district heating for 200,000 homes in Greater Copenhagen. Total electricity production is 825 MW and heat production is 575 MJ (megajoules). The facility has two units. Unit 1 is coal- and oil-fired. Unit 2 uses several types of fuel, including natural gas, oil, and biofuels (straw and wood pellets). It is one of the world s most efficient CHP facilities, using up to 94% of the energy in the fuel. The two 55-MW gas turbines operate as peak load facilities when electricity and heat demand are high. The plant consumes 600,000 tonnes/year of wood pellets. Denmark presently imports 85% of its annual wood pellet consumption. This figure will increase as the country implements it coal reduction plans.

Avedøre Power Station http://www.dongenergy.com/en/business%20activities/generation/electricity%20 generation/primary%20power%20stations/pages/avedore%20power%20station. aspx

Amager Power Station Amager Power Station (Vattenfall) near Copenhagen, which has a total electricity capacity of 438 MW and thermal power capacity of 747 MW, which corresponds to the heating required by about 115,000 households. It has three units. The station burns about 700,000 tonnes/year of coal. Oil is used only for start-up, and consumption is slightly more than 3,000 tonnes/year. The station also burns about 150,000 tonnes/year of biomass in the form of straw pellets.

Properties of straw pellets compared to EFB??