1. www.aebiom.org info@aebiom.org Biomass resources and bioenergy technologies – from potentials to investment Heinz Kopetz, European Biomass Association AEBIOM Budapest, 17 November 2008 Eufores

2. www.aebiom.org info@aebiom.org Structure Resources Efficiency Technologies Investment opportunities Conclusions and recommondations

3. www.aebiom.org info@aebiom.org Basic criteria for EU energy policy –Environment, reduction GHG –Security of supply –Competitiveness Additional criteria for bioenergy policy –Food security –Sufficient supply of wood industry Main criteria for energy policy

4. www.aebiom.org info@aebiom.org Biomass ist the most important of RES, covering 2/3 of all RES. The role of biomass Source: Eurostat, EREC, AEBIOM. Final energy from all renewables and from biomass

5. www.aebiom.org info@aebiom.org Government policy is decisive for the quantity of final energy you get from a given quantity of primary energy. 220 Mtoe biomass are necessary to reach in the 20% target of the Directive in the year 2020: The importance of government policy A policy focused on biofuels and electricity might deliver 145 Mtoe final energy, whereas a policy concentrated on efficient conversion and heat might provide 195 Mtoe final energy., Source: AEBIOM. Primary energy Final energy losses

6. www.aebiom.org info@aebiom.org Primary biomass 89 025 ktoe Input to electricity and CHP 27 312 ktoe Input to DH 3 538 ktoe Biomass for households and services 35 005 ktoe Biomass for industry 17 298 ktoe Biofuels 5 375 ktoe Bioelectricity 7 731 ktoe 89 908 GWh Derived heat 7 686 ktoe Electric efficiency : 28,3% Global efficiency : 50% Balance sheets 2006 Eurostat Statistics Defining the target as a percentage of the final energy favours the heat market very much !

7. www.aebiom.org info@aebiom.org 20052020 Total primary biomass82220 Final heat57,5147,5 electricity 6,917,2 biofuels 3,130,0 total final energy from biomass 67,5194,7 The efficient use of biomass in 2020 AEBIOM targets (Mtoe) Source: AEBIOM.

8. www.aebiom.org info@aebiom.org in 2005 and 2020 25 Mt pellets 1% of RES 50 Mt pellets 7% of RES Strong government policies are necessary to develop bioenergy in an efficient way! Pellets will play a significant role! 8,5% 20% Final energy from Renewables in EU 27 Source: AEBIOM, Eurostat.

9. www.aebiom.org info@aebiom.org Biomass from forests Additional demand for wood (material use and energy) until 2020: 380 Mm³ wood! Where can these 380 Mm³ wood come from until 2020? –from existing forests by better mobilization? –from new short rotation coppices? –from imports from abroad? Is there enough biomass to reach these targets?

10. www.aebiom.org info@aebiom.org Biomass from agriculture Utilized agric. Land (UAA) in EU 27: 160 Mha –100 Mh arable land – 50 Mha permanent grassland – 10 Mha permanent crops (wine, apple, olive etc.) Necessary arable land per capita for sufficient food supply: 0,16 ha for 495 M population: 80 Mha –therefore about 20 Mha arable land can be used for energy and industry: The demand for grassland is declining: –-20% of cattle heads in 20 years, at least 10 Mha grassland could be used for energy and industry supply! Summary: at least 25 Mha land are available for dedicated energy crops, in addition byproducts from agriculture such as straw or manure! Is there enough biomass to reach these targets?

11. www.aebiom.org info@aebiom.org Scenario by AEBIOM; Oct.2008: 8 Mha for solid biomass as short rotation forests, miscanthus, new energy crops for heat and electricity and maybe second generation fuels. 14 Mha land for biofuels first generation and 3 Mha for biogas. The 8 Mha short rotation forests could produce 250 Mm³ wood annually, the 14 Mha agricultural crops could deliver raw material for 21 Mtoe biofuels first generation, additional 5Mtoe biofuels as biomethan and electricity and heat! How to use this land to optimize bioenergy production?

12. www.aebiom.org info@aebiom.org

14. Scenario by AEBIOM; Oct. 2008: useMha%Energy Mtoe% biogas31216,020 short rotation83241,653 biofuels145621,027 Total2510078,6100 How to use this land to optimize bioenergy production? Source: AEBIOM.

15. www.aebiom.org info@aebiom.org 100.000ha arable land for biofuels in Europe delivers: In the case of ethanol: –>240.000m³ ethanol = 130.000 t gasoline and –>180.000 t protein feed (DDGS) = 60.000ha soja In the case of biodiesel: –> 120.000t biodiesel = 100.000 t diesel and –> 170.000t rape cake as protein feed = 60.000 ha soja beans abroad! Conclusion: if we use unused land (set aside, fallowed land) we produce energy and improve the food supply! The double harvest producing first generation fuels

16. www.aebiom.org info@aebiom.org The utilization of the European harvest of cereals Source: ebio. Average harvest: 285 Mt for food:50 Mt for energy (2007):4,2 Mt

17. www.aebiom.org info@aebiom.org Big variations in the cereal harvest: 60 Mt from year to year. An example: biofuels and the cereal market Average demand for food: 50 Mt In the past 10% set aside and yet surplus production of 12% and annual export between 10 and 30 Mt cereals. Use for ethanol production in 2007: 4,2 Mt cereal = 0,5 Mha Source: Eurostat.

18. www.aebiom.org info@aebiom.org Big variations in the cereal harvest: 60 Mt from year to year. An example: biofuels and the cereal market Source: Eurostat. 3 4,55 Average demand for food: 50 Mt In the past 10% set aside and yet surplus production of 12% and annual export between 10 and 30 Mt cereals. Use for ethanol production in 2007: 4,2 Mt cereal = 0,5 Mha Conclusion: the high food prices in 2007/08 were not caused by the European ethanol production but by the declining harvest from 2004 to 2007. The important question: How to combine biofuel production with the variations of the harvest on a European and a global scale? Because the alternative to biofuels is overproductiven or set aside land!

19. www.aebiom.org info@aebiom.org 1. Where can these 380 Mm³ wood come from until 2020 ? –from existing forests by better mobilization?....100Mm³ –From new short rotation coppices?..................240Mm³ –From imports from abroad?............................. 40Mm³ 2. Do we have enough potential to provide 220Mtoe biomass for 2020? Yes, about 200 Mtoe from the EU27 and 20 Mtoe from abroad (pellets, biofuels) Yet - the abandoned land has to be used, - no obstacles to use parts of the permanent grassland for bioenergy - incentives to plant short rotation forests - incentives for biogas plants - priority for biofuels from Europe First answers

20. www.aebiom.org info@aebiom.org AEBIOM targets for bioenergy, Mtoe 2004: EU25; Scenario 2020 EU27 Source: AEBIOM.

21. www.aebiom.org info@aebiom.org Structure Resources Efficiency Technologies Investment opportunities Conclusions: targets, directive, political framework, opportunities

22. www.aebiom.org info@aebiom.org Europe needs to develop an efficient energy system to cope with the future problems. Efficiency concerns the conversion process and the end-use. The biggest losses in efficiency occur in the conversion from primary energy to electricity without using the heat. These losses are higher as all contributions of RES. The target setting in final energy and not in primary energy will draw the attention to this issue, especially in setting up the national action plans, where you have to decide where to use the available biomass. An example: The need for a better efficiency

23. www.aebiom.org info@aebiom.org Contribution of biomass to final energy Primary energyFinal energy Source: AEBIOM. Example: Given 100.000 m³ wood (=719 TJ)

24. www.aebiom.org info@aebiom.org Contribution of biomass to final energy Biomass 2006: primary energy – losses – final energy, EU27, in Mtoe. Efficiency: electricity 27,7%; heat 18,0%; total 45,7%. Source: Eurostat.

25. www.aebiom.org info@aebiom.org In the directive there is an efficiency for combustion from 70% for industry and 85% residential heating proposed. There also should be a minimum of 60% for electricity from biomass for new plants. Why not using the same threshhold for fossil fuels? If we really want to improve the efficiency of the energy system, all new electricity plants – be the energy carrier fossil or biomass –should be cogeneration plants with a minimum efficiency of 60%, also in the case of cofiring! Further conclusions

26. www.aebiom.org info@aebiom.org Structure Resources Efficiency Technologies Investment opportunities Conclusions: targets, directive, political framework, opportunities

27. www.aebiom.org info@aebiom.org Technologies for efficient combustion of biomass are available for all sizes from 20 kW up to 100 MW: pellets boilers, pellet stoves, log wood boilers, chip boilers, wood waste boilers. The raw material can be: fire wood, saw mill chips, wood chips, pellets, bark, straw, other by-products from the forest and wood industry. Technologies I: biomass to heat

28. www.aebiom.org info@aebiom.org Technologies II: biomass to electricity Biomass for electricity should only be used in cogeneration units New technologies coming to the market: Stirling engine combined with pellet boiler for familiy houses Wood gasification in small scale for small district heating Well proven technologies: The ORC process starting from 400 kW el upwards Small steam turbines starting from 1 MW el Traditional bigger solutions using the steam process Biogas in combination with a gas engine

29. www.aebiom.org info@aebiom.org Ethanol by fermentation Biodiesel by esterification Biomethan by cleaning the biogas 2nd generation fuels using different technologies (cellulose to sugar, wood to gas and to liquids – Fischer Tropsch, pyrolisis) 2nd generation fuels would have a low efficiency, if the produced heat cannot be used, therefore biorefieneries, that produce fuels, heat and electricity, pellets or pulp would be the best place to produce these fuels. Technologies III: biofuels, biogas

30. www.aebiom.org info@aebiom.org Structure Resources Efficiency Technologies Investment opportunities Conclusions: targets, directive, political framework, opportunities

31. www.aebiom.org info@aebiom.org Individual heating: an important sector, main interest pellets, main obstacle: lack of capital. A Change from oil or gas heating systems to pellets costs 12.000 to 16.000 €. Given a region with a population of 10 M people and the target to change 20.000 units per year you need 300 M€ capital. That can come partly from private households partly from government support. Experience shows you need financial support programs for private househoulds: in this example 100 M€ per year! Investment opportunities: Individual heating With such a program you create investment opportunities in the production of pellets boilers, of pellets and 1000s new jobs to install the new systems, you reduce 150.000t C0² every year cumulative and save around 40MEuro for certificates, 35M Euro consumer expenditures as compared to using oil or gas!

32. www.aebiom.org info@aebiom.org Biomass for heat in industry plays already an important role and offers new interesting opportunities given the high priced of gas and oil District heating (DH) is a necessity to get to efficient combined heat and power solutions. It is a pity that these systems are dismantled partly in Central Europe. In the future, DH with biomass will be much cheaper than natural gas or oil, therefore a strong push for DH heating with biomass is necessary! You need financial programs –for the modernization of existing DH plants and for new ones, –for the switch from fossil fuels to biomass –also a financial support of private houses to connect to DH grids proved to be very succesful. –The advantages concerning C0² reduction, improved security, savings for consumers are the same as mentioned for individual heating. Investment opportunities: Heat for Industry and district heating

33. www.aebiom.org info@aebiom.org Example: District heating with biomass in Austria

34. www.aebiom.org info@aebiom.org Size: 420 KW heat (for 20 family houses) Sold heat/year: 610.000 kWh Combustible: 1080 m³ wood chips Investment: 280.000 Euro Financed by: –1 customer fee for connection grid:70 000€ –Support rural development prog.:85 000€ –Own capital and bank credit:125 000€ Total280 000€ Economic effects of rural district heating: An example of an Austrian Village

35. www.aebiom.org info@aebiom.org Village heated with heating oil

36. www.aebiom.org info@aebiom.org Village heated with local district heating plant based on biomass

37. www.aebiom.org info@aebiom.org Electricity comes –from wood, byproducts of the wood and forest industry, straw and –from biogas. Two preconditions –Satisfying feed in tariffs –Concept to use the heat to reach an efficieny of at least 60%. In many cases heat driven CHP-plants. Many countries offer good opportunities! Investment opportunities cogeneration: Electricity & heat

38. www.aebiom.org info@aebiom.org Biogas offers the chance to use feedstock for energy like waste, manure, that are without competition and offer a additional raw material base; on the basis of energy crops it uses the whole plant for energy and delivers high yields per hectar. It is a typical decentralised technology for rather smaller units 0,2 – 2MW Investment opportunities: Biogas The use can be –electricity and heat –feed in gas pipelines after cleaning –After cleaning and compressing as biomethan in cars, buses.. The development of biogas depends upon the government policies such as –feed in tariffs – access to gas grid – programs for biomethan as fuels for cars

39. www.aebiom.org info@aebiom.org Ethanol Biodiesel 2nd generation fuels Biogas In the future: biodiesel from algae Investment opportunities: Liquid fuels

40. www.aebiom.org info@aebiom.org Structure Resources Efficiency Technologies Investment opportunities Conclusions: targets, directive, political framework, opportunities

41. www.aebiom.org info@aebiom.org The political framework conditions are decisive for the rapid development of bioenergy: feed in-tariffs, financial support programs, no obstacles by the administration. 1)Sufficient biomass potential in Europe, but is has to be developed mobilization of wood, incentives for new SRF, use of permanent grassland for energy production, training 2) The dilemma of food versus fuel can be solved yet more attention to the questions: a)How can we better take into account the annual variations of the harvest? b)How can we avoid that biofuels consumption in Europe based on imported biofuels causes food shortage in the producing countries? 3) More attention to biogas as efficient energy chain using a technology offered by nature – the most efficient 2nd generation fuel feed in tariffs, grid access, investment support, policy for biomethan as transport fuel Conclusions and summary

42. www.aebiom.org info@aebiom.org Conclusions and summary 4) The transformation of the heating sector from fossil to renewable (biomass, solar thermal) offers huge opportunities. Needed are financial support programs for individuals, for construction, modernisation of District Heating (DH) for the switch from fossil to biomass in DH. 5) Electricity from biomass in combination with the use of the produced heat in industry, buildings or via district heating, support by feed in tariffs, minimum efficient rule of 60%, only CHP units be they small or big.

43. www.aebiom.org info@aebiom.org Huge reduction of GHG emissions Reduction of fossil imports by 150 to 200 Mtoe Savings by less demand for C0² certificates Considerable savings for consumer using biomass as heat New jobs in many parts of the economy Improved rural development Improved security of supply The positive effects of bioenergy

44. www.aebiom.org info@aebiom.org Thank you for your attention Heinz Kopetz info@aebiom.org