Future of Bioenergy
A Pöyry perspective
Biomass co-combustion in Central and East Europe
May 20th, 2009
Pozna , Poland
Ilkka Pihlainen
20.5.2009
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Content
1. Current and future energy
demand
2. Economics of energy
3. Bioenergy environment and
technologies
4. Key messages
5. Pöyry presentation
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Several factors affect the energy market investments
Energy market
structure
INVESTMENT
CLIMATE
Climate
Global economic
change
crisis
Global economy
Energy demand
Banking crisis
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Global Energy Demand 2006 and 2030 (Mtoe)
E. Europe/ Eurasia
North America
Europe
1 118 1 454
Asia
30 %
1 884 2 005
2 768 3 180
Middle East
+ 6 %
1 106
522
3 227 6 325
+ 15 %
+ 112 %
Africa
Pacific
+ 96 %
857
614
995
Latin America
884
= 2006 + 40 %
862
+ 13%
530
= 2030
+ 63 %
World Energy Demand Growth
+ 45 %
North America: USA, Canada and Mexico
Eurasia: include Russia
Pacific: Australia, New Zealand, Japan and Korea
Source: IEA 2008
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Global Electricity Consumption 2006 and 2030 (TWh)
E. Europe/ Eurasia
North America
1 860
Europe
1 165
Asia
60 %
3 022 3 980
4 413 5 774
+ 32 %
Middle East
1 353
539
+ 31 %
+ 151 %
3 669 10 589
Africa
Pacific
479 997
+ 189 %
2 089
+ 108 % 1 601
= 2006
Latin America
+ 30%
1 498
777
= 2030
+ 93 %
World Electricity Demand Growth
+ 80 %
North America: USA, Canada and Mexico
Eurasia: include Russia
Pacific: Australia, New Zealand, Japan and Korea
Source: IEA 2008
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Total Proved Fossil Fuel Reserves in the World
201
178.1
57
100.1
19
207.8
8.3 64.8
6.5
35.2
0.3
12.515.3
13.813.9
6.3
Proved reserves of fossil fuels are
12.6
generally taken to be those 5.6
quantities that geological and
engineering information indicates
with reasonable certainty can be
recovered in the future from known
Natural gas Oil Coal
reservoirs under existing economic
Thousand million tonnes 2004
and operating conditions
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Economics of Power Generation From Different Fuels
" Based on the current estimates, nuclear
power has clearly lower generation costs
than coal-fired power generation with
carbon capture or carbon tax
" However, there are reasons why nuclear
may not in all cases be a practical
solution:
 Public opposition for long-term
storage of nuclear waste  but public
may oppose carbon storage as well
 Nuclear safety fears, seismic issues
and siting difficulties
 Limitations on equipment supply
market due to limited number of
manufacturers
 Lack of nuclear engineers and know-
how
 More limited uranium reserves
compared to coal
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Investment Needs in Power Infrastructure
Investment by region 2016-2030
" The global energy supply
projections call for
3 206
cumulative infrastructure
3000
investment of $26 trillion
2500
by 2030
1 886
2000
" World overall energy
1 428
1500
demand is expected to
1000
grow by 5 EU* within the
next 25 years
498
478
450
500 352
303
0
" Power sector requires
more than half of total
energy investment ($14
trillion)
Generation (54%) Transmission (14%) Distribution (32%)
" & or roughly three times
the total amount spent by
The largest investment requirements during the next 25 years
governments on financial
will be concentrated in Asia, North America and Europe
crisis packages
Source: IEA 2008
*One EU is the annual energy demand in Europe today
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billion USD (2007)
Asia
Africa
Pacific
Europe
Eurasia
E. Europe /
Middle East
Latin America
North America
Business Environment for the Bioenergy Sector
The EU, the US, Canada and several Asian countries have set mandatory
targets for electricity production from renewables and for biofuels. Biomass will
play an important role in reaching these targets.
Scale of individual biomass investments is constantly increasing (>300 MWe),
requiring very large volumes of biomass (>2.5 million tonnes per year).
High prices for fossil fuels drive process of replacing fossil fuels with biomass.
Innovative technologies for the conversion of cellulose to biofuels are close to
commercial breakthrough, further increasing the global fibre demand.
The biomass market is becoming more and more international, but it is still far
away from being a unified global market comparable to markets for fossil fuels.
Currently there are not many relevant market players who could provide
international biomass sourcing on a very large scale.
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Biomass Consumption
" Biomass currently accounts for about
14% of world s final energy Biomass Consumption for Heat & Power
600
consumption; about 25% of this is in
industrialised countries, while 75% is in
500
developing countries
400
" About 860 TWh of biomass is currently Increase 2015
300
2004
used for heat and power generation,
mostly in Europe and North America 200
100
" Biomass usage for heat and power is
0
expected to double worldwide by 2015;
in Asia, the forecasted increase is
about 300% (source: IEA reference
scenario World Energy outlook 2006)
" Only 1.3% of world s electricity is
generated from biomass at present; the
share of biomass power generation
varies by country from 0 to 10.9%
(Finland).
" The share of biomass power
generation is forecasted to increase to
2.4% of the total by 2030.
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Biomass expected to deliver most of the REN increase in Europe
The European Commission estimates a significant additional potential for biomass to
energy in all of Europe
" Mix of additional energy required to meet
" Pöyry estimates that the emerging
the 2020 target for the 12 new members
European economies need 300 TWh
of additional renewable energy to
meet the 2020 target
Wind
Hydro
" Around 300 TWh of additional primary
biomass
electricity
biomass fuel will be required
biogas/biowaste
other renewable " A minimum of 15 GW of wind will be
electricity
deployed.
biomass heat
" Pöyry estimates that Ź 1,000 bn of
investments will be needed in the
other renewable
heat
EU27 between 2010 and 2020
biofuels for
transport
0 20 40 60 80 100 120
Energy requirement between 2010 and 2020 (TWh)
Source: Pöyry
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Global View on Future Harvesting Potential and Wood Market
On a global level the available potential of biomass resources is high. However
the biomass demand from the bioenergy sector is increasing significantly and
competition with traditional wood consuming industries is becoming stronger. A
secure and sustainable long-term biomass procurement strategy is the key
success factor for bioenergy investments.
Increasing wood supply Only marginal potential to
Stable or slightly decreasing wood supply as Russia holds significant unutilised
based on maturing softwood increase harvest level in Europe.
harvesting quotas in Eastern-Canada are reduced harvest potential. However a
plantations in UK and US Increasing pressure from bio-
to prevent unsustainable harvesting. significant part of unutilized
South. Stable wood supply energy on wood resources
harvest potential is currently
in US East
inaccessible. Export duties are
hampering the trade in logs.
Temporarily
increasing harvest
potential due to pine
beetle infestations in
Asia-Pacific will continue
B.C.. Decreasing
to be the world's largest
harvest potential for
wood deficit area.
softwood in the long
term. Note. Sawmill
Stable or slightly
production now
decreasing
temporarily low
long term wood
Controversial
supply potential.
substitution of natural
forest with plantations.
Latin America holds the world's
largest hardwood stock, however
Controversial harvesting
mostly inaccessible in natural Potential to expand
of high-value sawlogs
Increasing removals
tropical forests. Substantially plantation area is
from natural forests is
based on existing and
very limited.
increasing removals based on fast-
increasing.
new plantations,
growing plantations.
Existing and future hotspots for bioenergy investments
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Maturity of Selected Biomass Power Generation Technologies
Demonstration
Commercially
Pilot phase
In Future
phase
available
Pressurized fluid bed combustion
BFB/CFB
Integrated Gasification Combined Cycle
Cofiring
Current focus
Grate
Gasification
Organic Rankine Cycle
Supercritical CFB
Stirling
Anaerobic digestion + engine
Suspension firing
BFB = Bubbling Fluidised Bed
CFB = Circulating Fluidised Bed
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Capacity Range for Different Boiler Technologies
1000
900
800
Boiler capacity MWth
700
The next scale-up potential
600
Current Scale
500
MW
Generation potential MWe
400
300
200
100
0
GRATE BFB CFB
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Business Environment - Key Messages
Climate change mitigation creates a substantial market for renewable energy
Biomass usage in heat and electricity plants is expected to double by 2015; in
Asia, the increase is forecasted to be about 300%
Rapidly growing bioenergy market is changing the traditional operating
environment of forest industry
Energy efficient concepts and capability to use multifuels is increasing
Economic downturn decreases power prices and short term project viability
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Biomass Procurement  Key Messages
The biomass resources on a global level are sufficient to support significant
growth in the bioenergy sector.
The biomass trade will most likely further internationalise and expand.
Due to increasing competition for biomass resources, highest priority should
be given to a secure and sustainable biomass supply to make a bioenergy
investment successful.
The main wood assortments for the bioenergy industry are small dimension
logs and wood chips. Wood pellets are increasing their market presence,
especially in Europe and North America. Harvesting residues are so far a
mostly unused resource but will be a very important biomass source in the
future
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Technology  Key Messages
Biomass usage in heat and electricity plants is expected to increase
significantly in the next decade causing that availability, logistics and price of
biomass limits the growth
The specific properties of the available biomass must be considered when
selecting the technology and flexibility to fuel quality variations, possibility to
use variety of fuels, emission removal, steam parameters and lifetime costs
are key technological aspects to be considered
Subsidy schemes and surrounded infrastructure have impact on technology
(full condensing, combined heat and power  CHP, fuel sources etc.)
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Technology  Key Messages (2)
Multiple type of biomass and possibility to use fossil fuels to secure fuel
supply
" more complex fuel handling
" challenges in combustion process
" higher maintenance costs
" higher specific investment costs
Scale-up of today s commercial technology has limitations and duplication to
compensate scale-up is more capital intensive. In the short term, no major
changes are expected in large scale biomass power generation technologies
=> Tendency is towards higher efficiency and fuel flexibility
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Company presentation 2009
Group overview
20.5.2009
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Five business groups
Core operations based on five know-how clusters
Energy Forest Industry Transportation Water & Construction
Environment Services
(c) grafikdienst.com
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Pöyry s services and expertise
Services
Areas of expertise
" Assessment of bioenergy
" Forest industry/by-products
resources and potentials
" Forest/Agrofuels -harvesting
" Master plans
" Logistics
" Market studies
" Combustion technologies
" Business strategies
" Flue gas treatment
" Feasibility studies
processes
" Business plans
" Power generation
" JI/CDM projects
" CHP and district heating
" Environmental impact
" Wood pellets
assessment and
" Liquid biofuels for
environmental permitting
transportation
" Engineering
" Landfill Gas and biogas
" Project management
" O & M
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Renewable Energy
" Comprehensive consulting, project
management and engineering services.
" Know-how covers all aspects of feedstock
management and energy conversion schemes.
" Strong development in solar applications with
capabilities assessing irradiation, designing
large solar power schemes combined with sea
water desalination.
" Core areas
 Bioenergy
 Waste-to-Energy and waste treatment
 Solar power
 Wind power
 Geothermal energy
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Hongsa 1,800 MW Lignite-fired Power Project, Laos
Client: Banpu Public Co., Ltd.
Project: 1,800 MW Lignite-Fired Mine
Mouth Power Plant
Services: Owner s Engineer services:
Project Management; including
" overall project review and risk assessment
" review and adjustment of project master
schedule
" support in project and schedule management
" review of the concept and tender documents for
the dams
" assistance in finalisation and negotiation of all
project contracts
" project planning for the construction phase
" support in lenders due diligence process and
other project development work
Duration: 2005 2008
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Elcho 300 MW CHP Plant, Poland
Client: Foster Wheeler Energia Oy
Performance of Power Plant:
Electric power output, max. 2 x 150 MW
District heat output, max. 2 x 180 MW
Fuel: Polish black coal
Boilers: Circulating fluidized bed boilers
with natural circulation and reheating
Steam Turbines:
Three-casing extraction condensing
turbines with district heating supply
Services:
" Engineering management for BOP
" Technical advisory services for turbine island,
water treatment and district heating
" Process engineering
" Plant layout and piping design and procurement
Duration: 2001-2003
" Equipment dimensioning and procurement
" Equipment test witnessing
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Alholmens Kraft 240 MW Condensing Power Plant, Finland
Client: Oy Alholmens Kraft Ab, Pietarsaari
Performance of the plant:
Electric power output, max. 240 MW
Process steam, max. 100 MWth
District heat, max. 60 MWth
Fuels: Coal, bark, sawdust, wood waste,
commercial biofuel, peat (and REF)
Boiler: Circulating fluidized bed boiler with
natural circulation and reheat cycle
Steam Turbine:
Three-casing extraction condensing
turbine with district heating and
process steam supply
Services provided
Services for automation system procurement
Economic studies, conceptual design,
expediting audit of the steam turbine plant delivery
pre-engineering of BOP and procurement
and supervision of steam turbine plant design
services for steam turbine and auxiliary
equipment and systems, plant layout design
Duration: 1999-2001
(3D model), HVAC engineering, general and
process engineering, piping design and
procurement services, services for
automation system procurement
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Conclusion  Wise use of Bioenergy
 The use of biomass raw material must
be on a sustainable level in terms of
adequacy and biodiversity
 Combined heat and power (CHP) is the
most effective way to utilize bioenergy in
large scale
 Heat only boiler (HOB) provides
efficient solution in smaller installations
 Biomass trade possibilities can be
expanded by further upgrading e.g. to
wood pellets or BTL (Biomass To
Liquids)
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Thank you for your attention.
More information from
www.poyry.com
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27 Company Presentation 2009
Contact details
Mr. Wojciech Dygas
Director
Pöyry, Chemical Process Industry
Pöyry Forest Industry Sp. z o.o.
90-626 Lódz, ul. Zeromskiego 52
Office in Gliwice
44-100 Gliwice, ul. Szobiszowicka 1
tel. [phone]
Fax [phone]
Mobile [phone]
[e-mail]
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