Supply Chain Opportunities in the Bioenergy Sector Workshop - Hilary Kinney

1. Opportunities in the Bioenergy Sector
Hilary Kinney, Kappa Consulting
5thDecember 2014

2. Agenda
•What is Bioenergy?
•Key Technologies
•Market Growth
•The Supply Chain Opportunity
•Market Entry

3. What is Bioenergy?
•What do we mean by ‘bioenergy’
•It is a critical part of the renewable energy mix and the only renewable source that can be used to generate electricity, heat and biofuels
•It is a broad and varied industry, covering a wide range of feedstock and technologies, at different stages of development.
Renewable energy (heat, electricity and biofuels) generated from materials derived from biological sources
The key definer is the feedstock –organic biomass e.g. Wood, wood waste, manure, sewage sludge, grass and energy crops…..

4. What is Bioenergy? -Key Technologies
Feedstock/Fuel
Technology
% Bioenergy Capacity
% Growth 2011- 2012
Wood and agri crops (eg straw)
Thermal – combustion; gasification; pyrolysis
39%
+5%
Landfill Gas
CHP
33%
-1%
Waste (municipal RDF; wood)
Thermal – combustion; gasification; pyrolysis
19%
+9%
Food and agri waste and agri crops
AD
3%
+67%
Municipal sewage sludge
AD
6%
-

5. Bioenergy –a rapidly growing industry
•Bioenergy will be key to the UK achieving its renewable energy and carbon reduction targets –by 2020 projected to account for 50% of renewable energy production.
•Bioenergy expected to be one of fastest growing renewable energy sectors …… particularly heat generation
-to account for 10% of NI’s heat consumption by 2020 vs 1.7% currently (and as much as 1.7% of industrial heat demand!!)
•Government incentives and targets accelerating growth

6. Bioenergy –key growth sectors
Renewable Heat Technologies
-driven by roll out of RHI
-CfD not for dedicated power only biomass
Anaerobic Digestion
(excl water industry –44 new plants over last couple of years; further 189 through planning permission)

7. An Opportunity –on our door step
Project Status
AD
Dedicated Biomass
Municipal
NI
UK
NI
UK
NI
UK
Operational
11
118
7
60
Under Construction
2
37
1
13
Application Approved –awaiting construction
86
189
2
67
3
Application Submitted -pending
4
33
2
9
1
Application refused
2
22
13
2
Application withdrawn
1
15
16
Abandoned
1
12
37
1
No application made
1
3
9
Total number of projects
108
429
12
224
7
200
Total Installed capacity (MW)
58
523
56
9792
69
3497
Capacity Banding
NI
NI
NI
0 -1 MW
104
6
0
1 -5 MW
4
4
2
5+ MW
0
2
5

8. Bioenergy –on our door step
•In ROI, annualised spend on bioenergy plants projected to increase by 60% to 2020
-€200mn/year to 2020 (biomass CHP, AD)
-€310mn/year (renewable heat technologies –biomass boilers, solar thermal and heat pumps)
(80% on capex; 20% O&M)
•SEAI estimates that Irish companies should be able to capture 70% of this expenditure (>€350mn pa)
•The local market provides a strong springboard for export to wider markets

9. Supply Chain Opportunities Across The Bioenergy Sector
•If bioenergy targets are to be achieved, local supply chains need to expand
•Opportunities for wide range of products and services
Project Planning
Eg. feasibility studies, permitting, financial services
Design, ManufactureInstallation
Eg. design & project mgt; component supply; civil and electrical engineering
Operations & Maintenance
Eg. QA, technicians,

10. Anaerobic Digestion

11. Anaerobic Digestion

12. Anaerobic Digestion -Main Supplies
Planning, Permitting and Design
-Professional advisers (environmental. Engineering, legal, financial)
-Mechanical/electrical/civil engineering
Plant Manufacture
-Feedstock storage/receiving tank
-Feedstock mixers, pumps, hoppers, augers and mechanical handling equipment
-Main Digester/Fermenter tank
-Storage tank for digestate/residue
-CHP Unit/Heat exchanger
-Process control equipmentand pipework
Installation/Commissioning
-Groundworksand civil engineering
-M&E Engineering
-Control Engineering
O&M
-M&E Engineering
-Residue Disposal
-Operators

13. Anaerobic Digestion – Indicative Capital Costs
Building and Infrastructure £ Machinery Capital £
AD Digester 900,000 CHP Generator 450,000
Separater 25,000 Cables and Pipes
Feedstock Storage 67,000 Heat Exchanger
Digestate Storage 65,000 Biogas Scrubber
Grid Connection 50,000 Fencing
Start/Backup boiler 20,000 Depackaging
Water Connection Cleaning Technology
Goundworks 75,000 Degritter
Reception building Odour management
Siliage clamp 8,000 Front end loader
Weighbridge Pumps
Grease Trap Shredder
Wheel Wash Pasteuriser
Roadways 5,000
District Heating System Total CHP Costs £450,000
Mixing Pit
Noise reduction 5,000
Project Development 35,000 Setup Capital Expenditure Summary
Professional costs 15,000 Total AD & Connection 1,270,000
Total CHP Costs 450,000
Total AD & Connection £1,270,000
Total £1,720,000
AD plant of 3,200m3 capacity with output of c500kW
Source: The AD Economic assessment tool (NNFCC 2013)

14. Anaerobic Digestion –ROI Indicative Spend
Average annual spend 2013-2020
Average annual spend 2013-2020
Feasibility, planning, permitting and design
€2mn
Project mgt
€0.5mn
AD Vessels
€2mn
Groundworks and civils
€0.7mn
Generator
€0.5mn
M&E and controls engineering
€0.2mn
Mechanical Handling
€0.75mn
Assembly
€0.35mn
Other plant (Pipes. Pumps etc
€0.3mn
O&M –M&E engineering
€3.52mn
Process control equip
€0.3mn
0&M -Operatives
€4mn
Source: SEAI

15. Thermal -Biomass boiler (large scale)

16. Thermal biomass boiler –Main Supplies
Planning, Permitting and Design
-Professional advisers (environmental. Engineering, legal, financial)
-Mechanical/electrical/civil engineering
Plant Manufacture
-Boilers
-Generator (if CHP); Accumulator
-Feed storage, hoppers and mechanical handling
-Air pollution control equip/flue
-Plant rooms and process control equipt
Installation/Commissioning
-Groundworksand civil engineering
-M&E Engineering
-Control Engineering
O&M
-M&E Engineering
-Residue Disposal
-Operators

17. Commercial Thermal Biomass, Heat –ROI Indicative Spend
Average annual spend 2013-2020
Average annual spend 2013-2020
Planning and permitting
€11mn
Flue system
<€1mn
Boiler
€5mn
Boiler installers
€3mn
Fuel feeding system
<€1mn
Boiler house and Controls
€3mn
Fuels storage
€1.5mn
General installers, civils and project mgt
€40mn
Accumulator
<€1mn
O&M -maintenance
€20mn
Pipes and Fittings
<€1mn
Source: SEAI

18. Thermal Biomass, CHP –ROI Indicative Spend
Average annual spend 2013-2020
Average annual spend 2013-2020
Planning and permitting
€12mn
Pother plant (pipes, pumps etc)
€2mn
Boiler
€11mn
Groundworks and civils
€7mn
Generator
€3mn
M&E and control engineering
€2mn
Mechanical Handling
€3mn
Device assembly
€3mn
Air pollution control
€2mn
O&M –M&E
€8mn
Process control equip
€2mn
O&M -Operatives
€3mn
Source: SEAI

19. A Significant Market –Where to Start?
•Be clear on your sales channels?
•Where is your best skills fit?
•What will you compete on?
•How to build some track record?
•Partnerships to gain entry?

20. Sources of Information
•Invest NI –GB Bioenergy Market
http://www.investni.com/bioenergy_market_report_march_2013.pdf
•RESTATShttps://restats.decc.gov.uk/cms/welcome-to-the-restats-web-site/
•REPD https://restats.decc.gov.uk/cms/planning-database/
•REPD Interactive Map
http://restats.decc.gov.uk/app/pub/map/map
•Biogas –Info Interactive Maphttp://biogas-info.co.uk/maps/index2.htm
•Irish Bioenergy Association
•Biomass Energy Centrehttp://www.renewables-map.co.uk/biomass.asp