NNFCC Market Review Bioenergy issue thirteen april 2013
NNFCC Market Review, April 2013, Page 1 of 8BioenergyHighlightsPage 2 PolicyPage 2 SustainabilityPage 3 BiomassPage 5 BiogasPage 6 BioliquidsPage 7 ResearchPage 7 ROC PricesPage 8 EventsNNFCC Market ReviewIssue Thirteen, April 2013ach month we review the latestannouncements and news fromacross the bioenergy market. Thisservice is exclusively for our members.ForewordWelcome to the April issue of our bioenergymarket review. This month the Economistpublished an article which called EuropeanUnion support for wood fuel „environmentallunacy‟.The article falls into the common trap ofoversimplifying a complex market andhighlighting a worst case scenario. The articlesays that “the EU has created a subsidy whichcosts a packet, probably does not reducecarbon emissions [and] does not encouragenew energy technologies”.The article is wrong on each account. Firstlybiomass is one of the cheapest forms ofrenewable energy. According to anindependent report by ARUP – who workedon behalf of the UK Government to calculatethe cost of different renewable energytechnologies – co-firing biomass (>20MWscale) costs £167,0000/MW and has anoperating cost of £30,000/MW/yr. Making itfar cheaper than alternatives like solar PV,offshore wind and even onshore wind.Bioenergy is also reducing greenhouse gasemissions – not in the distant future – buttoday. A report published this month by theEU Joint Research Centre showed thatburning many forms of wood can reducegreenhouse gas emissions within 10 years. Butdid warn that in the unlikely scenario thatstemwood is used, GHG savings might not bereached for more than 50 years.The Economist is also wrong in saying policiesdo not encourage new technologies.Certainly more can be done but advancedbiomass technologies like gasification alreadybenefit from enhanced subsidies and just thismonth ETI announced its shortlist for a £2.8mgasification demonstration programme.Read on for the latest market news.E
NNFCC Market Review, April 2013, Page 2 of 8PolicyThe Economist: European woodfuelpolicies are ‘environmental lunacy’Source: The EconomistAn article published in The Economist thismonth discusses European support forbioenergy, calling it „environmental lunacy‟.The article says that Drax could be getting£550m a year in subsidies for biomass after2016 and with such incentives, European firmsare scouring the Earth for wood. According tothe article, Europe consumed 13m tonnes ofwood pellets in 2012 and on current trends,European demand will rise to 25m-30m a yearby 2020.At the same time prices are going „throughthe roof‟. Wood-pellet prices rose from anaverage of €116 a tonne in August 2010 to€129 a tonne at the end of 2012 (which forthe record is below the rate of inflation). Thearticle goes on to say this „increase‟ in price isputting pressure on companies that use woodas an input – such as saw mills making particleboard and furniture makers. This ignores thefact that these markets have been in declinefor a number of years, long before a large-scale bioenergy market existed.But if subsidising biomass energy were anefficient way to cut carbon emissions,perhaps this „collateral damage‟ might bewritten off as an unfortunate consequence ofa policy that was beneficial overall. So is itefficient? No, says the article, quoting theresearch of Timothy Searchinger, which statesthat there is no carbon reduction until 100years have passed [from the use of wholetrees to produce energy]. But in contrast, justthis month, the European Commission‟s JointResearch Centre pointed out that most formsof biomass do deliver rapid greenhouse gassavings, while others will take longer.Click here for more information.SustainabilityBurning wood can reduce GHGemissions, says JRC report on carbonaccounting of forest bioenergyQualitative evaluation of the papersreviewed in JRC study, Source: JRCThe Joint Research Centre of the EuropeanCommission has published its report on thecarbon accounting of forest bioenergy. Thestudy reviewed a large number of peerreviewed publications and reports in order tounderstand the consequences of increasedforest bioenergy production on greenhousegas (GHG) emissions.The study found that most of the forestfeedstocks currently used in bioenergyproduction are either industrial residues,waste wood and residual wood, which deliverGHG savings in the short to medium term. Onthe other hand, the study found that in thecase of stemwood harvested for bioenergypurposes only, if all the carbon pools and their
NNFCC Market Review, April 2013, Page 3 of 8development with time are considered inboth the bioenergy and the reference fossilscenario, there is can be an increase in CO2emissions compared to fossil fuels in the short-term (few decades). In the longer termstemwood may also reach the fossil fuel parityand generate GHG savings, if the productivityof the forest is not reduced.Concluding, the study said “from the studiesanalysed it emerges that in order to assess theclimate change mitigation potential of forestbioenergy pathways, the assumption ofbiogenic carbon neutrality is not valid underpolicy relevant time horizons (in particular fordedicated harvest of stemwood forbioenergy only) if carbon stock changes inthe forest are not accounted for”.Click here for more information.BiomassCombustionAssociated British Ports to invest £100million in Drax wood pellet facilitiesImmingham Renewable Fuels Terminal,Source: ABPUK port group Associated British Ports (ABP)has announced that it has signed a 15-yearcontract with Drax Power Limited, which willsee terminal investments of up to £100m tohandle wood pellet shipments at its HumberPorts of Immingham, Hull and Goole tosupport Drax Power‟s conversion to biomass.At Immingham, ABP will create a dedicatedimport facility, the Immingham RenewableFuels Terminal, to handle Panamax-size bulkcarriers which will transport up to three milliontonnes of wood pellets a year. The investmentwill require a new quayside discharge plantwith associated equipment to convey thebiomass from the ships to new silos capableof storing up to 100,000 tonnes. From thesesilos, cargo will be conveyed to a new trainloading facility which will use specialist railwagons to transport the biomass to Drax.At Hull, ABP is investing in dedicated handlingequipment and storage facilities in order tohandle up to one million tonnes of biomasseach year to be supplied to Drax by rail.Further inland at its port of Goole, only sevenmiles from Drax, investment in warehousing isalso being made as a result of increasedimports of biomass through the port.The project will generate around 100 jobs atABP‟s Humber Ports during construction andover 100 permanent positions once thefacilities are fully operational.Click here for more information.Norwegian company invests in newLithuanian pellet facilityNorwegian investment companyByggleverandørene has added a woodpellets plant to its portfolio in Lithuania. TheBiowood Nordic plant cost LTL 4 million (€1.1million) to construct via almost LTL 2 million ofEU and government aid received under thescheme supporting migration of farmingcompanies towards non-farming activities.“It is a new plant, built from scratch inMazeikiai in northern Lithuania, and we havea capacity for 20,000 tonnes per yearalthough it is currently operating at around 70
NNFCC Market Review, April 2013, Page 4 of 8per cent due to some start-up glitches,” saidMorten Kroslid, head of Byggleverandørene.Biowood Nordic is near to three Baltic portsthrough which it ships the pellets, “We wouldlike to export to Scandinavia as much aspossible because prices are much betterthere than in Lithuania but currently theexport level is at 60 per cent, which alsoincludes Italy,” Kroslid added.Click here for more information.SITA delivers waste wood to RWE plantBinn Farm, one of three wood processing sitesset up to service RWE contract, Source: SITA UKWaste management company SITA UK hasstarted delivering waste wood fuel to the UK‟slargest waste wood-burning biomass plant,currently undergoing commissioning atMarkinch in Fife. The £200 million combinedheat and power facility is being developedby energy giant RWE npower to providesteam and electricity to the neighbouringTullis Russell paper mill.Around 90 per cent of the feedstock for thefacility will be made up of recovered wood.The wood will come primarily from SITA UK‟slong-term municipal contracts as well asshorter-term commercial agreements. Thecompany has secured the majority ofmaterial through these routes so that it is notso dependent on the spot market rate,although it will still be sourcing around 20-30,000 tonnes-a-year from the spot market.The three new SITA sites are all woodprocessing operations and feature slow andhigh speed shredders, trommels and ferrousand non-ferrous metal separation.Click here for more information.UK Biomass CHP project edging closerto realisationRenewable energy business Kedco hasrevealed its Enfield, UK-based biomass CHPproject has made more strides towardsrealisation. The project already has fullplanning and environmental permissions togenerate 12MW of electricity and heat from60,000 tonnes of waste wood a year. ButKedco has now appointed N+1 Singer as itsequity advisor and received outlined termsfrom a UK bank to contribute up to 70 percent of the total project cost.Two energy suppliers have agreed in principleto purchase 100 per cent of the electricaloutput from the Enfield facility on a long-termbasis, with discussions with on-going withanother to take the heat output.Click here for more information.GasificationRoyal Dahlman project shortlisted forgasifier pilot fundingOLGA 4MW Gasification DemonstratorMoissanes, Source: Royal DahlmanIn 2012, the ETI launched a £2.8m competitionto find a company to design "the mosteconomically and commercially viable,efficient energy from waste gasificationdemonstrator plant possible". The ETI has now
NNFCC Market Review, April 2013, Page 5 of 8narrowed down its search to threecompanies; Advanced Plasma Power,Broadcrown Ltd and Royal Dahlman.Each company has been commissioned todesign and develop a gasification plant thatcould operate at between 5 and 20megawatt (MWe) scale. One plant from theshortlist will be chosen to be built and isexpected to be fully operational by 2016.NNFCC is helping Royal Dahlman with theirproject by providing supporting technicalconsultancy including site selection, wastesupply and regulatory understanding andrequirements. Royal Dahlman will develop aplant with an electrical output of 7MWe usingpatented MILENA-OLGA technology,developed in cooperation with ECN.Click here for more information.BiogasAD plant and MRF in South Walesgiven green light after appealSource: Barton WillmoreA planning application on behalf of BrynQuarry for both an anaerobic digestion (AD)facility and adjacent materials recyclingfacility at Gelliargwellt Farm were rejected byCaerphily County Borough Council in Dec2011. However, after appeal planninginspector Alwyn Nixon concluded that bothfacilities were fully in accordance with thecouncils development plan and that neithercould be located elsewhere.The AD facility will process 35,000 tonnes offood waste and agricultural by-products ayear and generate up to 1.4 MW ofelectricity, enough to power roughly 3,000homes. The materials recycling plant, whichhas been operating under a series oftemporary consents since 1993, will processup to 75,000 tonnes of waste wood, plastic,soil, metal and paper a year; and 15,000tonnes of green waste.Click here for more information.ENER-G to establish £20-40m Scottishanaerobic digestion subsidiaryUK-based renewable plant operator ENER-Gplans to invest £20-40 million to establish aScottish anaerobic digestion subsidiary thatwill target opportunities in the country‟s whiskyand dairy industries, said the company‟sDirector of Anaerobic Digestion DevelopmentScott Tamplin.The potential for anaerobic digestion projectsin whisky distilleries is vast, given their steadysupply of waste biological by-products suchas draff and pot ales, and requirements foronsite power. The distillery market foranaerobic digestion is still relativelyunchartered, according to Tamplin.The Scottish Whisky Association estimates thatsince 2008 approximately £160 million hasbeen invested in renewable energy projectsat five whisky production sites in Scotland,representing about 3 per cent of the Scottishwhisky industry.ENER-G hopes to set up a company toidentify and target anaerobic digestionprojects in Scotland within the next two tofour years and has already invested in anoperations and maintenance support base inthe city of Elgin, which lies north-east ofInverness.Click here for more information.
NNFCC Market Review, April 2013, Page 6 of 8Defra publish guidance on hub andpod anaerobic digestionWhen an anaerobic digester uses animal by-products there are two key components:pasteurisation and anaerobic digestion. Inconventional plants which use animal by-products, both components, pasteurisationand anaerobic digestion, take place on oneapproved site. With Hub and Pod anaerobicdigestion the two components are ondifferent sites. The hub carries out collectionand de-packaging of the feedstock as wellas pasteurisation and then consigns thepasteurised material to one or more podswhere the digestion component takes place.The new Defra guidelines are designed toensure anaerobic digestion plant operatorsoperating a Hub and Pod system understandand comply with the legal requirementsdesigned to ensure there is no unacceptablerisk for the transmission of disease.Click here for more information.Are we reaching biogas overcapacityin the UK?There are around 200 food waste treatmentanaerobic digesters currently planned oroperational, with a combined capacity totreat 7m tonnes of food waste. Developmentis largely focussed on clusters of anaerobicdigesters around the major towns and cities.These digesters are targeting food wastecontracts from consistent waste streams likeretail and industrial waste. Planneddevelopment of the food waste anaerobicdigestion (AD) sector might suggest we arereaching over capacity.There are approximately 8m tonnes ofbusiness waste suitable for AD and a further8m tonnes of household waste which couldalso be used. Therefore even if all planneddigesters were actually built we would onlyhave capacity to treat and processapproximately half of the waste we generate.In reality it is likely that only 20 to 30 per centof those plants currently going through theplanning process will actually be built, owingto financial and contractual issues. However,the increased number of plants will makeattractive contracts and waste streamsharder to find. There will also be increasedcompetition for waste from in-vesselcomposters, which can handle mixed foodand green waste. Developers will have tostart looking at more variable food wastestreams such as household food waste andwill need to work more closely with localauthorities to promote the source segregationof food waste.Click here for more information.BioliquidsLondons cooking waste to fuel powerstation2OC has signed a 20-year deal worth £200mwith Thames Water to provide renewableheat and power to the UK‟s biggest sewagetreatment works at Beckton in East London.The energy will come from 2OC‟s newCombined Heat and Power (CHP) plant, tobe completed in 2015, which will use fuelmade from fats, oils and greases which wouldotherwise have been tipped down the drainor dumped in landfill. The £70m plant willproduce 130GWh of renewable electricity ayear – enough to run nearly 40,000 homes.75GWh will be purchased by Thames to run itssewage works and desalination plant and therest will be sold on to the national grid.Thames Water, Britain‟s biggest watercompany, says that fats, oils and greases areresponsible for most of the blockages in its109,000 km of sewers and removing themcosts £1m a month.Click here for more information.
NNFCC Market Review, April 2013, Page 7 of 8ResearchBBSRC urges industry to participate insteering UK bioenergy andbiotechnology researchThe Biotechnology and Biological SciencesResearch Council (BBSRC) has issued a call toUK organisations that are commercialisingbiotechnology and bioenergy to become amember of a BBSRC Industrial Biotechnologyand Bioenergy Network.In January, BBSRC launched a call for cross-disciplinary, community building Networks inIndustrial Biotechnology and Bioenergy (NIBB).The Networks will foster collaborative activitiesbetween academic researchers andbusinesses at all levels; helping to identify anddevelop new approaches to tackle majorresearch challenges and deliver benefits inindustrial biotechnology.Membership of a Network is required toaccess the joint BBSRC-TSB £25 millionIndustrial Biotechnology catalyst. Being amember of a Network will allow industryaccess to the activities they will run, meetacademics and help develop collaborativeproposals for a variety of funding sources.BBSRC hopes to fund up to 10 Networksacross a range of scales.Click here for more information.Renewable Obligation Certificate (ROC) PriceThe scheduled e-ROC monthly auction tookplace on Thursday 28th March 2013 and all88,722 ROCs offered for sale were sold. Theaverage price increased to £43.76, which wasa significant increase of £1.42p from theFebruary 2013 auction. The date of the nexte-ROC monthly auction is Wednesday 24thApril 2013.Click here for more information.£30.00£40.00£50.00£60.0025-Dec-01 25-Dec-03 24-Dec-05 25-Dec-07 24-Dec-09 25-Dec-11 24-Dec-13AverageROCPriceAuction Date
NNFCC Market Review, April 2013, Page 8 of 8EventsWorld Waste to Energy City Summit2013, 08-09 May 2013 in London, UKhttp://wastetoenergy.rethinkevents.comThe 2nd World Waste to Energy City Summit willexplore the opportunities and challenges inintegrating waste-to-energy into today‟scities, focusing on advanced conversiontechnologies for municipal and industrialwaste.NNFCC members receive a 20 per centdiscount off the usual delegate rates. Emailenquiries@nnfcc.co.uk to receive the specialpromotional code.World Biomass Power Markets on 15-17 May 2013 in Amsterdam, TheNetherlandswww.greenpowerconferences.com/BP1305NLGreen Power‟s World Biomass Power Marketswill be the world‟s largest conference andexhibition focused exclusively on biomass forthermal power and bioelectricity generation.Dr Geraint Evans, Head of Biofuels andBioenergy at NNFCC, will be speaking at theevent.NNFCC members receive a 10 per centdiscount off the usual delegate rates. Emailenquiries@nnfcc.co.uk to receive the specialpromotional code.Credits and DisclaimerNNFCC Market Review is edited by Dr Matthew Aylott for NNFCC members. Feedback is welcome.The Review has been compiled in good faith and NNFCC does not accept responsibility for anyinaccuracies or the products or services shown.NNFCCThe Bioeconomy ConsultantsNNFCC, Biocentre, Phone: +44 (0)1904 435182York Science Park, Fax: +44 (0)1904 435345Innovation Way, E: email@example.comHeslington, York, Web: www.nnfcc.co.ukYO10 5DG.