Wood Burns : An Urban Myth?International BIOMASS ConferencePortland 29 April 2009 Neil Harrison Living Energy, New Zealand
Overview Part 1 : Setting the Scene • Energy Production & Use in the UK • The UK Forest Resource • The UK Forest Industry Part 2 : Wood Burns You Say? • The Policy Glacier • The Wrong Path • New Generation • Emerging Wood Energy Models • Impact on the Industry Part 3 : Below the Radar • The UK Woodfuel “Industry” in 2002 • Behind the Curve • Green Entrepreneurs • The Effect on the Ground • The Penny Drops • A Typical Scheme
Energy Production & Use in the UK - 2007 Total indigenous production of energy 6% lower in 2007 than 2006 Year on year decline each year since 2000 Coal production 7% lower in 2007 than 2006 Nuclear output fell by 17% on 2006 levels Natural gas production fell by 10% on 2006 levels Crude oil production 5.6% lower than 2006 levels Coal imports down on 2006 levels, but show long-term upward trend UK became a net importer of crude oil in about 2005 UK imports of natural gas accelerating rapidly, with gas use for electricity generation hitting new record levels each year
The UK Forest Resource Average forest/woodland cover of just 12% Concentration, composition & ownership vary considerably across UK Well established commercial forestry plantations & associated enterprises Large areas of inappropriate planting in the past – now being cleared or restructured Large numbers of small parcels of mixed & broadleaved parcels “the traditional English woodland” Much of the “traditional English woodland” is either unmanaged or undermanaged due to economic & ownership issues – the “accidental woodland owner”
The UK Forest Industry Generally at macro-scale – saw, panel and pulp mills Long, drawn-out decline of traditional small scale processors & users Buyer is king, often with little or no margin for grower or contractor Large proportion of UK timber is imported, and recycled material has displaced a proportion of virgin material in many markets (esp. pulp & panel production) As processing capacity has concentrated into ever-larger operations, prices have been driven down and harvesting has become increasingly mechanised
The UK Forest Industry – The Stats Annual wood product consumption in UK is around 1.8 billion cu ft and rising Annual timber cut in UK is around 320 million cu ft, and has been rising year on year A deficit of 1.48 billion cu ft (mainly coming from Baltic states) Industry employs 160,000 people (forestry, sawmilling, panels, pulp & allied industries) Direct forestry employment has fallen by 22% (c. 3,000) since 2002 (14,000 to 11,000) Overall contraction in number of primary processors in 10 years to 2008, including : 38% reduction in sawmills, 50% reduction in paper mills and 28% reduction in panel mills
The Policy Glacier June 2000 May 2004 October 2005 April 2006 March 2007 March 2007 May 2007 September 2007 June 2000
The Wrong Path? In 2002, with a target-driven political climate and a historic focus on electricity, heat from biomass was seen as a sideline when renewables made it onto the agenda… Policy and grants regime, coupled with availability of cheap capital for large projects favoured large-scale electricity generation from biomass Co-firing biomass with coal also became eligible for support via ROCs scheme, leading to Uptake of biomass at existing stations, e.g. 4,000MW Drax taking in 30 million cu ft + Created a potential demand in excess of 70 million cu ft almost overnight Government support to biomass for heat was just a fraction of that for electricity production & perversely, it was easier to get a £1m grant than £10,000
New Generation Steven’s Croft, Lockerbie 44MWe Commissioned 2007 480,000 tonnes of biomass SembCorp, Teesside 40 direct jobs & support for 300 30MWe & 10MWth Commissioned 2007 300,000 tonnes of biomass 15 direct jobs & 400 during construction Drax Power, Yorkshire 4,000MWe coal + direct injection biomass 1m+ tonnes per year Western Wood, Port Talbot 14MWe Commissioning 2009 160,000 tonnes of biomass 350MWe planned for same site Fuel to come from North America Plans for at least 10 more in 10MWe to 200MWe range
Remember The Stats? A deficit of 1.48 billion cu ft and rising Direct forestry employment falling (22% between 2002 and 2008) Overall contraction in number of primary processors in 10 years to 2008, including : 38% reduction in sawmills, 50% reduction in paper mills and 28% reduction in panel mills Where was 70 million extra cu ft a year going to come from?!
Dominant Forestry Processing Model in UK• High processing efficiency & technology• High transport costs due to distances• More efficient forest technology & logistics• Lower wood supply prices
Emerging Biomass-to-Energy Model Power Station• High electrical efficiency• Low total efficiency if no district heating – 30-40% absolute max• Higher transport costs due to distances• More efficient forest tech & logistics• Lower wood supply prices
Impact on the Industry UK Forest Products Association - timber processors - lobbied hard against biomass energy Confor - mainly timber growers - lobbied hard for biomass energy Why?! Processors saw that they would be paying more – growers that there would be competition Proved right by the first meaningful lift in timber prices in over a decade – even before any of the new generation capacity came online However, the forest industry was unable to provide the volume of extra material, leading to further increases in imports
The UK Woodfuel “Industry” in 2002 Virtually no automated woodfuel systems installed anywhere - probably less than 20 4 companies working in the sector - Econergy, 3G Energi, Wood Energy & Talbotts < 4,000 tonnes chip used per year (2,500 at one site), and < 100 tonnes of pellets (imported) In a target-driven political climate, with a historic focus on electricity, heat from biomass was seen as a sideline when renewables made it onto the agenda Ease of monitoring production of electricity when compared to heat was a factor This is all perhaps surprising given that energy consumed for heating accounts for just under half of the UK’s total energy consumption!
Behind the Curve - Europe in 2002 Austria installed 2,392 automatic chip and 4,492 automatic pellet boilers in 2002 (<100kW) And at the time was burning around 100 million solid cu ft of chips and bark for heating Austria also had 22 biomass CHP plants – 78MWe and 520MWth Total wood demand for energy production in Austria was around 400 million cu ft The Swedes meanwhile, were burning close to 1m tonnes of wood pellets And by 2005 were meeting close to 60% of the heating needs of Sweden with bioenergy “Behind the curve” does not even begin to describe the situation in the UK..
Continental Biomass-to-Energy Model • High total efficiency with district heating • Higher specific investment costs • Lower transport costs due to distances • Less efficient forest technology & logistics • Higher wood supply prices • Greater returns to supply chain
Green Entrepreneurs Three companies made an early impact on the UK woodfuel ‘scene’ in the early nineties, all 3 of them owned and managed by ‘green entrepreneurs’ All 3 sourced Austrian (5) or Finnish (1) wood-fired boilers They now hold the #1 and #2 positions in UK market by a huge margin, and now have 300+ installations between them They received early moral and (limited) financial support, principally in the form of environmental grants linked to woodland management, from government
The Effect on the Ground - South West England 2002 2004
The Penny Drops… Woodfuel was finally identified as the ‘holy grail’ of rural development : Boiler = Fuel Requirement + Servicing = Sustained Rural Jobs The rural/job creation agenda is now the principal driver behind almost all public-sector interventions stimulating uptake of woodfuel : c. US$11,000,000 in 2008 (pre-recession) Finnish research indicates that a quarter of the $ associated with a large project will remain in local economies, and that this figure rises to around a half with smaller scale schemes UK government research indicates that around 6 jobs per MW of biomass boiler are created, and most importantly, sustained Slightly more ambitious figure than the Austrians, working on around 3.5 jobs per MW
Woodfuel in the UK Today Wood-fired boilers have gone from the preserve of whacko greenies to mainstream technology There are now well over 300 commercial and industrial installations across the UK, and the number is rising week on week The woodfuel sector is growing at a rapid, but sustainable rate – not “an extra 70m cu ft on Monday morning please” New jobs are being created in the forestry sector at an unprecedented rate Wood-fired boilers are heating a huge range of buildings : hospitals, hotels, a high- voltage testing laboratory, visitor centres, the Welsh Assembly building and the home of the UK nuclear submarine fleet Using wood for electricity generation at a macro scale is no longer incentivised by government Small is beautiful - 90% + efficient & significantly more jobs per MW when compared to biomass electricity generation There’s been a recognition that, hey, wood burns!