Biomass broadly describes renewable fuel resources which cover almost any biologically degradable fuel from farmyard manure through industrial liquid effluents and solid wastes, agro-industrial and forestry wastes, to part of the municipal waste fraction. Biomass use can stretch from large scale embedded power generation to small-scale wood stoves or even open cooking fires. Biomass has been humans' basic fuel since the beginning of time. Today biomass fuels are being revived after having been largely displaced by fossil fuels for energy generation.
At present, biomass contributes approximately 14% of the total global final energy demand – that is for cooking, heating, process and electricity. Various forecasters have anticipated that the use of fossil fuels could reach a plateau by 2020 and, by then, renewable energy will provide 5-10% of the world's electrical energy. In 50 years, it has been forecast that Renewables could increase their share to 30-60% of global energy needs and modern biomass will provide about 40% of this, that is to say 15-25% of the whole. Whatever the actual numbers, bearing in mind the rapid increase in energy demand over the next half century, the growth in demand for biomass deployment is huge.
In the UK alone, the Government's target of 10% of all electricity from Renewables by 2010 will require a contribution of 1000MW from biomass and a rate of plant installation 8 times faster than at present. In developing countries, where electricity demand growths of 10-12% are not uncommon, the rate of plant installation needs to be even greater.
Why invest in new biomass projects?
The biomass sector is largely underdeveloped and has a potential to grow rapidly in the future as demand for clean fuels increases. There are many different types of biomass and as many different reasons for companies to become involved in exploiting it for energy use. Agro-industrial residues such as bagasse from sugar cane mills, palm oil mill residues, rice husks, sawmill residues etc. have inherent waste disposal problems but can often be treated as negative cost fuels for co-generation or power projects. The mills themselves benefit as waste disposal is solved. Electricity and heat produced can be used to reduce internal costs. Often older, inefficient boilers will be taken out and replaced with better equipment thereby helping the energy conversion status of a plant.
Compared with all the other renewable energies, biomass will contribute major socio-economic benefits. Wind, mini-hydro, solar and geothermal produce socio-economic benefits in terms of introducing electrical energy to grid connected as well as off-grid populations, which may not otherwise have the opportunity of receiving it. However they bring no benefit in terms of the fuel source itself. Biomass fuel attracts significant employment in terms of cultivation, husbandry, harvesting, transport and fuel preparation and biomass power and co-generation plants will create more operational and maintenance jobs than any of the other Renewables per MW of installed capacity.
The success of a biomass plant is reliant on issues such as: What is the security and long term availability of the biomass fuel supply? Is there an alternative use for the fuel which may affect its long term cost? Is there a market for electricity and heat? Is it practical to build a plant? Is there a need and can we sell the electricity? Can it compete with fossil fuel generated electricity? Is there a prospect of funding the project and is it commercially viable?
Institutional constraints to biomass electrical generation
Biomass as an energy source has broad commercial, community and environmental benefits but before further investment takes place the biomass project has to be commercially viable.
In most countries, biomass and all other Renewables have to compete in an established energy market dominated by fossil fuel generation, which, until recently, has been run and supported by the public sector and in a large part of the world still is. Privatisation and de-regulation in the electricity sector is a pre-requisite to wholesale integration of biomass into the energy mix. Unless the biomass market can sell its product – electricity – there is no market and no point in even trying to develop biomass projects.
Even when the de-regulation process is under way there are ulterior motives for limiting incursions of alternative generation into the traditional fossil fuel generation mix. Governments, who want to sell their fossil fuel generation assets and gain full value for their taxpayers, want to ensure that those assets continue to have a long term market and don't become 'stranded', so they restrict access to new generators. For example, in the Philippines during President Estrada's term in office, the Department of Energy was only willing to consider allowing the National Power Company to buy a total of 15 MW of electricity from biomass so that the privatisation of NPC was not adversely affected by stranded generating capacity. And this was at a time when the same Department was advocating 'great' commitment to renewable energy and the potential from bagasse alone is 400-500 MW.
Many Governments also operate a subsidised energy market with subsidised fuel, which distorts the pricing structure of electricity, as does the 'written-down' value of capital plant. This means that, where there is current adequate generation capacity, the target price for selling biomass generated electricity is artificially low, often prohibitively low. For example, in 2001 the Malaysian Government is launching a renewable energy programme aiming to generate 5% of the country's electricity from renewable sources by 2005. The main contributor to this target will be biomass in the form of palm oil residues and it has been estimated that the current surplus waste could generate about 1100MW of electricity representing about 12% of the country's current average demand. However, the Government subsidises the fuel cost to existing generators by about 40% so the cost of generated electricity is artificially low at US 2.9c - 4.1c/kWh.
Typically electricity from palm oil residues will require about US 6.5c - 7.0c to be viable, so the Government either has to accept that there will be a different tariff for Renewables or that the only projects which are likely to be implemented are those in say East Malaysia where the competing generation is diesel. East Malaysia produces less than one third of the total palm oil output in Malaysia, so potential electricity generation from surplus waste could be very significantly less than current projections.
These limitations on access to the electricity market can last until there is urgent need for new generation capacity arising from increased demand and replacement of time-expired plant. Some markets may still be constrained for up to 10 years after de-regulation of the market, so deployment of biomass renewable energy will still be slow even up to the initial 5 or 10 year targets for Renewables which Governments are setting.
Without these constraints, biomass which is effectively a zero cost fuel, is already competitive with the fully burdened cost of new diesel. So deployment is commercially possible where countries are dependent on diesel generation, where there is substantial growth in demand for electricity and particularly in rural areas where substantial quantities of biomass are available.
PALM OIL MILL FRESH FRUIT BUNCHES ENTERING THE MILL
AIR POLLUTION EMITTED FROM BURNING PALM OIL MILLING WASTES
What are the physical constraints to selling electricity?
There are also physical constraints to selling electricity especially in isolated rural areas with poor infrastructure. Questions need to be answered such as: Is the plant to be captive or grid connected? Are the grids national or isolated? How far are the transmission lines? Is there enough long-term fuel supply and can the power be sold?
Sugar cane mills and palm oil mills are typically isolated and located far from urban areas without significant infrastructure connections. Traditionally, they have been energy self-sufficient because they have been unable to connect to transmission lines. Even with substantial and rapid expansion of grids, many mills will still be distant from transmission lines so interconnection will be prohibitively expensive. If you can't connect to the grid and cannot sell surplus energy, there will be no reason to improve energy conversion efficiencies and deployment will not be possible. Alternatively, in such conditions it will probably be uneconomic to transport the biomass to a location where connection is possible.
In many situations, often on islands, there is a concentration of one type of agro-industry. As examples, cultivation of sugar cane is concentrated in Hawaii, Cuba, Mauritius, Java and Negros (Philippines). If all the bagasse was converted efficiently to steam and electricity, in some cases the surplus electricity would exceed the demand of the local consumers particularly when existing generation capacity is taken into account.
There is often considerable competition between mills in both domestic and international markets which will tend to force those industries to consolidate. When this happens, the less commercially robust mills, often the smaller ones, may not survive in the long term. This effect will also restrict the deployment of modern biomass technology in concentrated biomass areas.
There is a potential of generating 400 - 500 MW of surplus electricity from the sugar industry in the Philippines. 55% of the sugar milling capacity, and therefore bagasse resource, is located on the island of Negros. However, the total demand on electricity on the island is only 100 – 150 MW and there is already committed generation capacity and an island interconnection grid which has embedded geothermal as part of its generation mix. For the time being, until overall demand on the island grows substantially, the likely penetration of bagasse generated electricity is probably only about 20% of its overall potential.
There is a tendency to want to make biomass projects as big as possible in order to maximise the benefits of scale. This leads to an aggressive approach to the collection and acquisition of biomass, sometimes putting undue stress on the biomass resource and its availability. The result is either failure to financially close and complete the project or sterilisation of biomass catchment areas such that other projects cannot also be completed, or both. This has an adverse effect on replicability of similar projects and on effective deployment.
TIPPING SUGAR CANE
STORED BAGASSE
Funding the biomass projects
Funding the biomass projects has to take into account issues such as the financial and political stability of the countries, security of payments and confidence in the technologies.
The financial and political instability of many developing countries, particularly those which have high biomass potential, is a major impediment to financing commercial projects. In fact a large number of countries are simply off the radar screen for financing institutions, whether they are multi-lateral, bi-lateral or private sector. Unless the G8 and other industrialised countries can come up with a formula which provides financial security for biomass and other renewable projects, no headway at all will be made by the private sector in these countries.
Using biomass technologies to produce electricity is a relatively new concept for financiers of biomass projects. There is a common misconception, particularly in the finance sectors, that biomass technologies are not yet commercially proven. Biomass technologies have been around since the start of the industrial revolution. Every sugar mill and every palm oil mill around the world have had their own biomass boilers fuelled by their own biomass waste from the beginning. Many, particularly those remotely located, also have their own steam turbo-generators and are completely energy self-sufficient and have been reliably operating for more than 100 years. Traditional biomass combustion systems are as proven as can be. Gasification technologies have also been successfully proven, driven by fossil fuel shortages in the two World Wars and wood charcoal is produced by pyrolysis.
So why the finance sector's misconceptions? In the UK, the Government has, through financial constraints and a determination to 'lead' the market, only supported the development of 'new' advanced wood conversion systems such as gasification and pyrolysis. It has not supported the re-introduction of wood biomass power using proven combustion technologies. Furthermore, modern biomass has been asked to compete in an electricity market dominated by large scale, coal, oil, gas and nuclear generators, all of which have received a century or more's worth of public subsidy. Until conventional combustion biomass technologies are allowed to find their place in the market, with the equivalent support fossil fuels have received, then they will be deemed to be 'unproven' by the financiers in the industrialised countries.
In the industrialised countries, wood fuel, whether it comes from forestry residues or is grown as an energy crop, is more expensive than coal when prepared and delivered to the power plant. It is no surprise therefore that wood generated electricity is going to be more expensive than fossil fuelled electricity, especially when wood power plants are small compared with conventional gas, coal or nuclear plants and the benefits of scale are not available. Biomass generated electricity will have a hard time being deployed in the market in industrialised countries until there is full acceptance of the different cost basis from fossil fuels or substantial carbon taxes or equivalent start to penalise the use of fossil fuels.
Conclusion
For biomass to grow within the world energy market, it has to overcome barriers such as competition from fossil fired generation, subsidised energy markets, policy restrictions caused by public sector/government biases, physical constraints and lack of confidence within the financial sector. All the above factors restrict the commercial deployment of biomass to a greater or lesser extent and the effects are different in every country. There is no hard and fast rule which applies everywhere.
However, biomass projects will continue to grow as the benefits of co-generation and the value of a negative cost fuel, which can compete with the fully burdened cost of diesel are recognised. Biomass conversion technologies are also becoming more and more efficient therefore maximising conversion efficiencies. These technologies can be located in remote areas or fitted into urban centres, providing essential electricity for local communities or electricity to add to existing capacity.
Internationally, there is a commitment to generate the increasing demand for electricity from clean, renewable fuels. This support will create a rapid increase in biomass projects coming onto the energy market. Biomass will give the world energy market positive socio- economic and environmental attributes which it has not had before.
Bronzeoak develops and supports renewable energy projects. Its background in development, engineering, project and construction management has focused on energy and environmental work, particularly the production of electricity and heat from biomass and waste fuels.
In association with local partners, Bronzeoak is actively developing and arranging finance for biomass to energy projects overseas. Technologies employed include conventional and fluidised bed combustion, pyrolysis, gasification and anaerobic digestion.
