Energy Policy and Pellets

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Transcription:

Energy Policy and Pellets 15 th Annual Conference of the Virginia Loggers Association Henry Quesada August 2017 Blacksburg, VA

Agenda Biomass and Energy Current energy biomass projects in the US Biomass Prices and Costs Cellulosic liquid biofuel Market Wood Pellets Industry Insights and Conclusions

Biomass and Energy Biomass Applications and Processes https://www.e-education.psu.edu/

Biomass and Energy Biomass sources Agricultural residues Forestry crops and residues Industrial residues Biomass sources Animal residues Sewage Municipal solid waste

Current bioenergy projects in the US Wood bioenergy projects http://forisk.com

Current bioenergy projects in the US Estimated used wood Cellulosic ethanol is still under development and it is not commercially operating The US north has the largest share of viable wood energy projects (48%) The US south accounts for 51% of the potential wood for bioenergy http://forisk.com

Biomass Prices and Costs Biomass Prices IRENA. 2012. Renewable Energy Technologies: Cost Analysis Series

Biomass Prices and Costs Moisture and biomass IRENA. 2012. Renewable Energy Technologies: Cost Analysis Series

Biomass Prices and Costs Equipment, feedstock, and installed capacity cost of different technologies IRENA. 2012. Renewable Energy Technologies: Cost Analysis Series

Cellulosic liquid biofuel Cellulosic Bio-butanol Supply chain network Liang, L. 2017. Green Design of a Cellulosic Bio-butanol Supply Chain Network with Life Cycle Assessment. Doctoral Dissertation. Virginia Tech

Cellulosic liquid biofuel Location of production facility: mathematical modeling Liang, L. 2017. Green Design of a Cellulosic Bio-butanol Supply Chain Network with Life Cycle Assessment. Doctoral Dissertation. Virginia Tech

Withers, J. 2016. Sustainability Factors Impacting The United States Advanced Biofuel Projects. MS thesis. Virginia Tech Cellulosic liquid biofuel

Cellulosic liquid biofuel Internal barriers Withers, J. 2016. Sustainability Factors Impacting The United States Advanced Biofuel Projects. MS thesis. Virginia Tech

Cellulosic liquid biofuel External barriers Withers, J. 2016. Sustainability Factors Impacting The United States Advanced Biofuel Projects. MS thesis. Virginia Tech

Wood Pellets Industry 2017 wood pellets installed manufacturing capacity in the US is 13.3 MMT 140 mills in the US 10 mills in VA, 8 in GA 1 MMT under construction Thousands of metric tons 2,500 2,000 1,500 1,000 500 Top Installed capacity of Wood pellets Production in the US 2.3 MMT proposed - GA NC VA MS AL LA FL AR TX WI SC NY PA OR MI ID ME CO TN WV http://biomassmagazine.com/

Wood Pellets Industry Wood pellets in VA 8 out 10 pellet mills within 65 miles from Richmond

Wood Pellets Industry Woody biomass competition Paper industry downturn means less market for lowgrade wood In spite of the renewable energy industry, low fossil fuel costs negatively impact the industry Chipping wood into pellets requires a sizable investment Violo, A. 2015. Loggers feel impact of paper industry downturn. The Lincoln News. December 20.

Wood Pellets Industry Export Policy impacts The EU s renewable energy directive (RED) provides the 20-20-20 20% of GHG reduction, 20% reduction in energy consumption, and 20% of energy to be renewable. EU accounts for 80% of total consumption UK mandates that 15% of total energy consumption should be from renewable sources by 2020 Denmark (NREAP): use of 100% of renewable energy in electricity and heating by 2035. From 0.9 MMT in 2006 to 3 MMT in 2020, requires to import 90% of wood pellets. US wood pellets imports in 2012 was only 0.38 MMT http://www.trade.gov/topmarkets/pdf/renewable_fuels_top_markets_report.pdf http://www.pelletheat.org/legislation-regulations

Wood Pellets Industry 2/3 of US pellet production is exported to EU EU pellet production (14.1 MMT) covered 70% of EU demand in 2015 https://bioenergyinternational.com/markets-finance/eu-pellet-production-covered-70-percent-of-eu-demand-2015

Wood Pellets Industry Internal Policy impacts Oregon passed legislation for a $300 credit for purchasing a pellet stove and $10 tax credit per ton of pellets purchased New Hampshire: 30% or $6,000 (whichever is less) rebate of installation costs of residential high-efficiency for wood-pellet indoor heating boilers and furnaces BTU act: biomass heating appliances for tax credits available for energyefficient building property Others? http://www.pelletheat.org/legislation-regulations

Wood Pellets Industry Environmental impact of pellets Relative SAVINGS in green house gas (GHG) emissions with respect to a unit of electricity derived from fossil fuels in the United Kingdom range between 50% and 68% depending upon the capacity of power plant and rotation age. Dwivedi, P., Khanna, M., Bailis, R. and Ghilardi, A. 2014. Potential greenhouse gas benefits of transatlantic wood pellet trade. Environment Research Letters. 9(2): 1-11.

Insights and conclusions Current installed wood pellet manufacturing capacity in the US is 13.3 MMT, with 140 mills in the US 10 plants in VA (1.09 MMT). Eight within 65 miles from Richmond Consumption of current projects and the ones that have passed viability screening is 77.4 MMT/year Expected of wood for bioenergy projects is 117 MMT per year by 2026 Demand for US pellets in Western Europe economies impacted by renewable energy policy will continue to grow Cost of KW depends on technology to be used and choice of biomass

Insights and conclusions Supply chain costs are critical: Harvesting, chipping, transportation, and storage Wood chipping operations could be prohibited for small logging operations Paper industry downturn reduces the market for low-grade wood Moisture content is an important driver for biomass prices Main competitors for wood residues are: Energy crops and agricultural waste According to recent research, savings in GHG emissions when using US pellets instead of fossil fuel in UK ranges from 40% to 60%

Contact information Henry Quesada Associate Professor Department of Sustainable Biomaterials Virginia Tech Email quesada@vt.edu Phone (540) 231-0978 City of Quesada, Spain