Bioenergy in Denmark, the country of windmills Michael Persson DI Bioenergy / Danish Bioenergy Association Austrian Marktsondierungsreise to Denmark, 19. April 2016 Photo: DONG Energy
Agenda Danish Bioenergy Association Bioenergy market Energy and climate policy Scenarios 2035 2050 Biomass sustainability Biofuels and biorefining Technology exports Conclusion 2
DI Bioenergy - Danish Bioenergy Association The voice and forum of the Danish bioenergy industry, working for: an optimal regulatory environment for bioenergy, strengthening the business of its members, and cohesion and visibility for bioenergy and the bioenergy industry Members include technology producers and suppliers, consulting engineers, utilities and developers Members activities include combustion as well as other uses such as biofuels, biogas and biorefining DI Bioenergy is an industry association within the Confederation of Danish Industry 3
Production of Renewable Energy - Wind is growing, but Bio biggest PJ 160 140 120 100 80 60 40 20 0 1990 '95 '00 '05 '10 '14 Vindkraft Windpower Straw Wood Biogas Waste, biodegradable part Other Træ Source: Danish Energy Agency Halm Biogas 4
Consumption of Renewable Energy PJ 140 120 100 80 60 40 20 0 1990 '95 '00 '05 '10 '14 Wind Vind Biomasse Biogas Andet Other Source: Danish Energy Agency 5
Growing Imports of Renewable Energy PJ Production Windpower of Renewable Straw Wood Energy Net Import Waste, of biodegradeable Renewable Energy Other Source: Danish Energy Agency (note: table only updated to 2013) 6
Denmark is a large importer of wood pellets DK production est. at 100,000 tons Consumption by large scale users will grow heavily due to conversion of central CHP plant from coal and gas to biomass Small and mid-scale users estimated to grow by 3-5% p.a. Temporary plans of including biomass in energy tax scheme increased sales in 2013 temporarily Pellet market in Denmark (mill.tons) 2012 2013 2014 Import 2,0 2,3 2,1 Production 0,1 0,1 0,1 Available 2,1 2,4 2,2 Large scale 1,3 1,3 1,4 Mid-scale 0,1 0,1 0,1 Small scale 0,7 1,0 0,6 Tot. consumption 2,1 2,4 2,1 Source: Biobrændselsforeningen and Intrastat Min. import to be included in stat: 2013: 3.9 m DKK Min. import to be included in stat: 2014: 5 m DKK 7
Taxes and subsidies for power production - DKK 0.01/KWh Michael Persson Taxes and subsidies in power production and co-generated heat --------- Bio ---------- Gas Bio Coal ----- Wind ----- Taxes Subsidies Energy tax CO2 tax Source: Danish Energy Agency SO2 tax NOx tax CO2 quota price Subsidy Total 8
Denmark s climate targets Reduction in energy consumption (2010) Reduction in CO 2 emissions (1990) 7,6% 34% CO 2 35% 50% Share of renewable energy Share of wind in electricity supply Independence from fossil fuels 2020 2050 9
Fossil-independence in 2050: Key questions and Five scenarios Electrification and energy efficiency are obvious Energy system based on biomass (incl. import) or wind/solar/import? Biofuel plants? Upgrading biogas? Transportation and industry, when? 10
Fossil-free scenarios only marginally more expensive Fossil-free scenarios cost 5-20% more (EUR 0.8-4bn) per year Biomass scenario is the cheapest scenario But the difference is only marginal and uncertainty substantial Hydrogen Fuel Oper & maint Source: Danish Energy Agency Savings 11
Industry agreement to ensure sustainable biomass CHP plants recognise sustainability Preference for EU-wide criteria Industry agreement adopted to ensure sustainability of wood pellets and chips Inspired by similar regulation or voluntary agreements in Belgium, the Netherlands and particularly the UK Valid for all plants above 20MW capacity Plants oblige themselves to document sustainability with implementation from 40% in 2016 to 100% in 2019 Industry agreement presented to the Danish climate and energy minister by heads of Danish Energy Association and District Heating Association in December 2014 12
New development: Cellulosic Ethanol / Biorefinery Plans for a biorefinery based on DONG Energy / Inbicon technology Local utility companies with Novozymes & DONG Energy Integrated with local CHP and biogas plant Received NER300 grant of 39m Investment decision subject to blending requirement for cellulosic ethanol Input: 300,000 t wheat straw Output: 80 mill. liter ethanol 70,000 t lignin 90,000 t vinasse 13
Side benefit of Danish Policy: Massive export of energy technology DKK 1,000 millions 80 70 60 50 40 30 20 10 0 1996 '00 '05 '10 '14 20,0% 15,0% 10,0% 5,0% 0,0% Source: Danish Energy Agency Eksport Export of af energy energiteknologi technology and og -udstyr equipment Andel Share of af total Danmarks Danish samlede export (right eksport axis) (højre akse) 14
Conclusion Even in the country of windmills, bioenergy accounts for the bulk of renewable energy for many years to come Fossil-independence in 2050 is technically and economically possible, with moderate additional cost Ambitious energy and climate policy has laid the ground for a strong energy industry and export of energy technology Photo: DONG Energy 15