BIOMASS FOR ENERGY. Why coal and gas should be replaced by wood pellets and wood chips

BIOMASS FOR ENERGY Why coal and gas should be replaced by wood pellets and wood chips

WE CANNOT DO WITHOUT THE COMBIMED HEAT AND POWER PLANTS IN A FUTURE ENERGY SYSTEM The amount of electricity from wind and solar power fluctuates widely and is determined by whether the wind is blowing or the sun is shining. The combined heat and power plants are a prerequisite for having power when we switch on the light. At the same time the combined heat and power plants have a substantial role to play in supplying district heating to most Danish households this role cannot presently be taken by wind and solar power. By replacing coal and gas with sustainable wood pellets and wood chips the Danish combined heat and power plants contribute significantly to the green transition and the overall reduction of carbon dioxide in Denmark. Socioeconomically, this is done the most inexpensive and effective way by utilising the existing efficient plants, instead of building new capacity. To guarantee the CO2 reducing effect wood pellets and wood chips must come from sustainable forestry. For us it is not an issue for discussion that the biomass we use today has to be sustainable. This pamphlet provides a factual basis for the reasons why the combined heat and power plants changeover to sustainable biomass is advantageous, it describes where the biomass comes from, and what steps the industry takes to ensure the sustainability of the biomass. We wish you happy reading DANISH ENERGY ASSOCIATION ROSENØRNS ALLÉ 9 DK-970 FREDERIKSBERG DENMARK +45 35 300 400 WWW.DANSKENERGI.DK DE@DANSKENERGI.DK DANISH DISTRICT HEATING ASSOCIATION MERKURVEJ 7 DK-6000 KOLDING DENMARK +45 76 308 000 WWW.DANSKFJERNVARME.DK MAIL@DANSKFJERNVARME.DK

BIOMASS FOR ENERGY 3 BIOMASS IS A NECESSARY SUPPLEMENT TO SOLAR AND WIND POWER ELECTRICITY FROM COMBINED HEAT AND POWER PLANTS HAS TO BE GREEN Coal and natural gas will be replaced by biomass: wood pellets, wood chips, and straw 99,996% OF THE TIME YOU CAN RELY ON THE ELECTRIC POWER AT YOUR HOUSE COMBINED HEAT AND POWER PLANTS WILL BE ABLE TO SUPLY US WITH ELECTRICITY WHEN THE SUN AND WIND CAN T IN FUTURE more electricity will come from solar and wind power SOLAR AND WIND POWER are dependent on weather conditions COMBINED HEAT AND POWER PLANTS provide electric power and heating in our homes when the sun doesn t shine and the wind is not blowing SOURCE: THE ELECTRICITY COMPANIES FAULT AND DISRUPTION STATISTICS.

4 BIOMASS FOR ENERGY BIOMASS MAKES DISTRIC HEATING GREEN 60,000 KM District heating pipes provide heating for.6 million households which is 63% of all Danish households 3.4 million DANISH HOUSE- HOLDS HAVE DISTRIC HEATING 2 IF ELECTRICITY AND HEAT were produced separately, the energy consumption in Denmark would increase by % 3 DISTRICT HEATING IS ENERGY EFFICIENT and can store energy until it s needed 52% OF DISTRIC HEATING IS GREEN TODAY By using biomass we can increase the share substantially 2 SOURCE: DANISH DISTRICT HEATING ASSOCIATION 2 SOURCE: THE DANISH ENERGY AGENCY S ENERGY STATISTICS 202. 3 SOURCE: INTERVIEW WITH MINISTER FOR CLIMATE, ENERGY, AND BUILDINGS IN FJERNVARME SUPPLEMENT TO BØRSEN 23 JANUARY 203.

BIOMASS FOR ENERGY 5 DISTRIC HEATING TODAY AND IN 2035 Breakdown by percentage of green fuels and fossil fuels CHANGES TAKE PLACE ON THE PLANTS 48% FOSSIL FUELS 52% 202 GREEN FUELS 2035 00% GREEN FUELS IN ELECTRICITY AND HEAT CONSUMPTION IN DENMARK Combined heat and power plants replace coal and natural gas with biomass, and the consumer gets green heating and comfort without lifting a finger. SOURCE: THE DANISH ENERGY AGENCY S ENERGY STATISTICS 202 AND ENERGY POLICY GOALS.

6 BIOMASS FOR ENERGY BIOMASS IS CLIMATE-FRIENDLY Cycle of burning and reforestation CO2 As is the case for other kinds of fuels, carbon dioxide is emitted from production and transport of wood pellets and chips. By replacing coal and natural gas with sustainable wood pellets and wood chips carbon dioxide emissions can be reduced by approx. 90%. And this includes emissions from production and transport. WOOD PELLETS By replanting the forest it will absorb the carbon dioxide emitted by burning the wood pellets and wood chips Shipping generates the lowest level of CO2 emission. Denmark has many docks ideally located at the largest CHP plants. Thus, imported biomass can easily be shipped to Denmark. SOURCE: EU-COMMISSION, 200: ACCOMPANYING DOCUMENT TO THE REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT ON SUSTAINABILITY REQUIREMENTS FOR THE USE OF SOLID AND GASEOUS BIOMASS SOURCES IN ELECTRICITY, HEATING AND COOLING.

BIOMASS FOR ENERGY 7 WHAT IS BIOMASS? BIOMASS comprises all sorts of organic material generated in the process of photosynthesis performed by plants. Thus, the term biomass covers products from forestry, energy crops, residual products from agriculture, and biodegradable reuse. Biomass for energy is primarily wood pellets, wood chips, and straw. WOOD PELLETS are made of pressed chipped wood and sawdust. All kinds of wood can be used for wood pellets production, but conifer wood are typically used. WOOD CHIPS are comminuted wood with a length of 5-50 mm. And longer twigs (slivers) and smaller parts (fines). HOW ARE WOOD PELLETS PRODUCED? Wood pellets are standardized, homogeneous biological fuel produced by pressing together small particles of wood. No glue or other additives are used in the production process. The high pressure alone produces the strength and enduring quality of the pellets. This makes wood pellets suitable for long distance transportation. FORESTS ARE ALSO AN INDUSTRY Forestry is not very different from agriculture the crop is just larger and has a longer life. But in forests almost no ancillary materials such as fertilizers and crop protections are used. The wood products of the forest are a combination of timber and wood for energy. The wood used for timber and furniture has the highest value. The wood sold for energy purposes in Denmark is most often tree of a lower quality from the forests the gnarled trunks and trunks thinned out for the purpose of other trees to get light and space to grow and develop top-quality trunks. Firewood collected from the forest as well as by-products from the wood industry are also used for energy purposes. Finally, woodland is used for other purposes than forestry, e.g. nature, outdoor recreation, or groundwater proctection. SOURCE: JOHANNSEN, V. K. (203): INTERVIEW, THE UNIVERSITY OF COPENHAGEN.

8 BIOMASS FOR ENERGY WOOD PELLETS AND WOOD CHIPS COME FROM GROWING FORESTS In 2020 the wood to cover the consumption of wood pellets in Europe is estimated to be 4% of the total global amount of wood cut for industrial production. < 4% WOOD FOR PELLETS CONSUMPTION AND PRODUCTION OF WOOD PELLETS Production and consumption of wood pellets in million ton 2 NORTH AMERICA EUROPE CONSUMPTION 4 202 5 5 20 2020 35 PRODUCTION CONSUMPTION OF WOOD PELLETS IN EUROPE ESTIMATED PRODUCTION ESTIMATED CONSUMPTION OF WOOD PELLETS IN EUROPE 96% INDUSTRIAL WOOD FOR BUILDINGS, HOUSES, AND FURNITURE ETC. EUROPE AND NORTH AMERICA will be main suppliers of wood pellets and wood chips in the future. In these areas forests are growing and national regulation ensures sustainable forestry. SOURCE: FAO GLOBAL FOREST RESOURCES ASSESMENT (200). 2 SOURCE: PÖYRY, 203 THE DYNAMICS OF GLOBAL PELLET MARKETS 203.

BIOMASS FOR ENERGY 9 GROWTH IN DANISH, EUROPEAN AND NORTH AMERICAN FORESTS FROM 090 TO 200 The volume of wood in the forests increases even the demand for wood is rising.stigende efterspørgsel efter træ 2 +28% +% SUSTAINABLE FORESTRY Wood pellets and wood chips for the Danish market is sold on commercial terms and comes from forests run as businesses. A growing demand generates an increased supply and ensures replanting due to the fact that the forest owner s business depends on having enough wood available for sale. DENMARK +76% 990 200 990 200 990 200 EUROPE (EXCL RUSSIA) 2 NORTH AMERICA 2 The wood to cover Europes total consumption of wood pellets represents today 2% of the wood cut for industrial consumption globally. In 2020 the consumption will represent less than 4%, if the amount of cut wood remains stable. NORTH AMERICA AND SCANDINAVIA have experienced a steep fall in demand for wood for paper. This wood can now be used for energy. IN NORTH AMERICA ALONE the growth in forests is 400 million m 3 per year. This corresponds to 50 million tons wood pellets per year which is 0 times Europe s total consumption per year today. 3 2 SOURCE: THE UNIVERSITY OF COPENHAGEN, FOREST & LANDSCAPE (203). SOURCE: FAO GLOBAL FOREST RESOURCES ASSESMENT (200). 3 SOURCE: PÖYRY, 203 THE DYNAMICS OF GLOBAL PELLET MARKETS 203.

0 BIOMASS FOR ENERGY WOOD PELLETS AND CHIPS ARE PRIMARILY PRODUCED FROM RESIDUAL PRODUCTS AND THINNED OUT TREES In the future wood pellets will represent most biomass used in the combined heat and power plants. Wood chips will primarily be used in small and medium-sized com bined heat and power plants and will mainly come from Denmark and neighbouring areas. Forestry industry mainly supplies timber for houses and furniture. Timber prices are substantially higher than the price of wood for energy. Wood that cannot be used for timber, furniture or paper can be used for energy production. DID YOU KNOW THAT Plantations, which represent 7% of the world s forest areas, produced just about two thirds of industrial wood for energy purposes among other things. 2 Cost price for conifer wood in 200 prices (per ton) * EXAMPLE: WOOD FROM SOUTH EAST USA Level 4 BIOMASS FOR ENERGY 50 DKK Level 3 WOOD FOR PAPER 60 DKK LEVEL 2 QUALITY TIMBER 00 DKK LEVEL TIMBER 50 DKK SOURCE: TIMBERMARTSOUTH 203 OG DONG ENERGY EMPIRICAL FIGURES. 2 SOURCE: EVANS, J. 2009 (ED.): PLANTED FORESTS. USES, IMPACTS AND SUSTINABILITY. FAO/CABI. * NOTE: ALL PRICES ARE STUMPAGE WHICH IS RIGHT TO HARVEST. THE PRODUCER HAS TO ADD HARVEST AND TRANSPORT BEFORE THE PRODUCT IS READY FOR FURTHER PROCESSING.

BIOMASS FOR ENERGY ENERGY INDUSTRY ENSURES SUSTAINABLE DANISH AND IMPORTED BIOMASS PRINCIPLES FOR SUSTAINABLE FORESTRY AND SOURCING The Danish energy industry only wants to use sustainable biomass and thus purchase and use of wood pellets and chips are based on the following principles: Secure a significant CO2-reduction in relation to use of coal and gas on combined heat and power plants. This includes calculations of the carbon footprint in all parts of the value chain from forest to incineration. Guarantee that the productivity of the forests is preserved by replanting. Guarantee that forestry has minimal impact on the ecological system and assurance of health and vitality in the forests. Forestry must ensure conservation of biodiversity. Companies and suppliers have to respect local and national legislation. DID YOU KNOW THAT A number of European energy companies, including DONG Energy, Vattenfall, and E.ON have formed Sustainable Biomass Partnership (SBP), and have among other things, initiated a certification scheme for production and purchase of wood pellets. The certification scheme Is expected to come into force in 204. DENMARK has used biomass sustainably in generation of electricity and heat for more than 20 years. We will continue to do so, and in future wood pellets and wood chips will represent a larger part of this production.

2 BIOMASS FOR ENERGY DENMARK S C02 REDUCTION GOALS BIOMASS IS AN INEXPENSIVE AND EFFECTIVE WAY TO REDUCE DENMARK S CO2-EMISSION THE ENERGY AGREEMENT, SIGNED IN 202, WILL MAKE SURE THAT DENMARK REDUCES CO2-EMISSIONS WITH 34% IN 2020 IN RELATION TO 990 CO2-EMISSION IN DENMARK MILLION TONS 80 70 60 50 40 69,3 34% 30 20 45,7 0 BIOMASS IN COMBINED HEAT AND POWER PLANTS IS A KEY MEASSURE TO ACHIEVE THE C02 REDUCTION GOALS 0 990 2020 BY 2020 Denmark has to reduce CO2 emissions with 0.5 million tons CO2* to reach the goal of a 34% reduction i 2020. SOURCE: THE DANISH ENERGY AGENCY S ENERGY STATISTICS AND THE ENERGY AGREEMENT 202. * NOTE: THE 0.5 MIO. TONS ARE THE DIFFERENCE BETWEEN DENMARK S CO2 AND THE 34% REDUCTION GOAL IN 2020.

BIOMASS FOR ENERGY 3 INEXPENSIVE GREEN ENERGY PRICE OF ELECTRICITY PRODUCTION 250 PRODUCTION COSTS FOR ONE KWH ELECTRICITY BY TECHNOLOGY ØRE/KWH 200 50 00 50 0 GREEN TECHNOLOGIES ON-SHORE WINDMILLS WOOD PELLETS (CHP) OFF-SHORE WIND MILLS PHOTOVOLTAIC CELLS (LARGE SYSTEMS) COMBINED HEAT AND POWER PLANTS can easily and cost-effectively be converted into biomass-based production as existing plants and infrastructure are utilised. OTHER GREEN SOLUTIONS require investments in new plants. SOURCE: THE DANISH ENERGY AGENCY S CATALOGUE OF TECHNOLOGY DATA AND THE ENERGY AGENCY S SCENARIOS FOR FUEL PRICES.

4 BIOMASS FOR ENERGY BIOMASS FOR ENERGY CREATES GROWTH, JOBS, AND INNOVATION IN DENMARK we have the experience and great competence in using biomass for energy in a sustainable manner: STRAW, WOOD AND RESIDUE are fed into combined heat and power plants, bio refineries, and biogas plants and come out as electricity, heat, 2G-bioethanol, bio fuels for ships, aeroplanes, and advanced biomaterials which can replace oil and chemicals in products such as plastic bottles and textiles. Agriculture and forestry increase profits and supply the biomass. Energy companies use the biomass in the combined heat and power plants for production of electricity and heat and develop advanced technologies. Wood Straw Bio refinery Danish heating plants have used straw, wood chips, and wood pellets for efficient heat production since the 980s. BIO Biogas plant Danish universities are contributory in providing cutting-edge research in the field. Waste Combined heat and power plant Danish world leading biotechnology companies supply process technology, advisory, and enzymes. BIO Electricity / heating 2G-biofuels Transport Bio-material Textiles / Plastic

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QUESTIONS ABOUT BIOMASS FOR ENERGY Why use biomass and not solar and wind power? Solar and wind energy is a good thing but we also need green power when the sun doesn t shine and the wind is still. By using biomass the combined heat and power plants secure the supply and at the same time they produce green district heating for 3.4 million Danish people. Can we reduce CO2 emission by replacing coal and natural gas with biomass? Yes, CO2 emissions are reduced substantially. When new trees are planted the forests will absorb the carbon dioxide emitted from the burning of wood pellets and wood chips. Wood pellets and chips are mainly produced of by-products and timber reuse from sustainable forestry and absorption time can be less than one year. On the contrary, CO2 emissions from fossil fuels are an extra emission to the atmosphere and contribute to climate changes. Will there be enough forests when more combined heat and power plants start to use biomass? Yes, the biomass will be available as long as we use wood pellets and chips from forestry managed in a responsible manner and where new trees are planted. The consumption of wood pellets and chips in Europe is produced in Europe and North America. Here the forests are growing and in 2020 it is estimated that the total consumption of wood pellets will represent less than 4% of the total amount of wood cut for industrial use. How can we make sure that biomass is sustainable? Energy companies have to make demands for responsible forestry to ensure that the forests are replanted and the local environment is not damaged. In areas such as Europe and North America where wood pellets and chips are produced, legislation and tradition for responsible forestry ensures sustainable biomass production. Where does biomass such as wood pellets and chips for Danish power plants come from? Today the greater part of wood pellet consumption in Europe comes from Europe. In future a larger part will be imported from North America. Wood pellets will primarily be used in small and medium-sized district heating plants and will mainly come from Denmark and neighbouring areas. Does it make sense to ship wood pellets all the way from the USA? Yes, the large amounts of sustainable biomass available in the USA and CO2 emissions from production, transport and burning of wood pellets from the USA are significantly lower than CO2 emissions from producing, transporting and burning coal in a power plant. Wood pellets are shipped from the USA, shipping is the means of transport which emits less CO2, and Denmark has many docks ideally located close to the largest combined heat and power plants.