Bioenergy is the only renewable energy feedstock that cuts across the thermal, electrical and transportation sectors. However most experts agree that its vast potential has only just begun to be tapped.
To say that the bioenergy industry is multi-faceted would be a huge
understatement. The catchall term “bioenergy” can be used to describe
biomass for power; biomass for heat; biogas — derived from agricultural
or animal waste — for power; and biofuel for transportation — which
encompasses everything from biodiesel to corn ethanol to
second-generation ethanol. Each facet of this enormous industry has its
own trade associations, its own set of opportunities and challenges and
its own job offerings. It’s often surprising to learn that a forester,
an electrical engineer and a chemical biologist can each claim to be
part of the bioenergy industry.
Overall, the bioenergy industry continues to chug along, making
important strides on the policy front to ensure that governments
recognize the renewable and carbon-neutral aspects of this feedstock
across the world. The International Renewable Energy Association (IRENA)
released a Global Bioenergy Report in September of 2014 that showed
steady growth of bioenergy in all of its forms for the past 20 years.
See chart below.
The 50-MW Woodville Renewable Power Project, a wood
fueled biomass power plant, that began commercial operation in September
2014. Credit: Gemma Power Systems.
Growth is projected to continue in most bioenergy forms,
however the rate of growth for each sector will differ widely by region
and technology. On the whole, however, policy challenges may be the
single most important obstacle facing bioenergy today.
Biomass for Power — Standing Still
In the west large-scale biomass power plants are not
experiencing growth. In 2014, despite some notable plants coming online —
the Drax Power Facility in the UK, the Ontario Power Generation
Atikokan Generating Station and the Woodville Power Plant in Texas —
growth in the industry has slowed. “Frankly, I think you are going to
see less growth this year because to develop biomass facilities is a
long-term undertaking,” explained Bob Cleaves, President of the Biomass
Power Association. Cleaves said that since projects generally take about
4-6 years, those that were completed in 2014 were the result of
previous tax incentives that simply don’t exist anymore.
The low stack out conveyor (part of the plant fuel
handling system) that delivers wood chips from the truck tippers to the
wood yard at the Woodville Power Plant. Credit: Gemma Power Systems.
Cleaves said that without those tax incentives, financing for biomass power plants is very hard to come by. Dan Martin, President of EPC company Gemma Power, the
company that constructed the 50-MW Woodville biomass power plant in
Texas, echoed Cleaves. He said Gemma is aware of a few biomass power
projects in the works in the U.S. and he’s hopeful “at least one of them
would get off the ground [in 2015].”
However Martin explained, “the economics of wood as a
power fuel are pretty thin.” He said that without the tax credits and in
light of the low gas prices, we will not see much in the way of growth
for biomass power plants in 2015.
For 2015, the Biomass Power Association, which is
primarily focused on the United States, is working on policy tweaks that
will allow existing biomass power plants to continue to function
economically, said Cleaves. He is cautiously optimistic that EPA’s Clean
Power Plan (111d) will recognize the environmental benefits of
sustainably sourced biomass. “2015 is going to be working with the
agency [to educate it] about why biomass that is currently being used in
the U.S. is sustainably sourced,” he explained.
Traditional biomass refers to solid biomass that is
combusted in inefficient, and usually polluting, open fires, stoves, or
furnaces to provide heat energy for cooking, comfort, and small-scale
agricultural and industrial processing, typically in rural areas of
developing countries. It may or may not be harvested in a sustainable
manner. Traditional biomass currently plays a critical role in meeting
rural energy demand in much of the developing world. Modern biomass
energy is defined in this chart as energy derived efficiently from
solid, liquid, and gaseous biomass fuels for modern applications.
Credit: IRENA’s Renewables 2014 Global Status Report.
In addition, the organization is working with EPA to gain
clarity on a non-hazardous secondary waste rule, also called urban
waste. This rule would allow urban wood waste to be classified as a fuel
source instead of a waste and a favorable outcome of this clarification
would also help the biomass power industry in the U.S.
Cleaves was also positive about the growing trend of
allowing thermal renewable energy to meet state renewable portfolio
standards (RPS’). “A healthy biomass thermal industry is good for us
because it promotes more investment in infrastructure and forest
products and that is generally a favorable thing,” he said.
Biofuel Companies Thriving
Scott Chabina, a director with Carl Marks Advisors, is
extremely bullish on the biofuels industry and is excited about what’s
to come in 2015. Chabina — who said he hasn’t “had a single day where I
am not in the cornfield either physically or mentally since 2008” —
explained that for the past year ethanol companies have been
diversifying their offerings and now almost every single one of them
produces ethanol and “high value co-products.” Chabina said that one
reason they were able to make these investments is that Q32013 and the
first three quarters of 2014 were “some of the best, if not the best,
time to be in the ethanol market. Ever.”
The reasons for their good fortune are manifold he said
but suffice it to say that ethanol producers for the first time began to
realize profits that they could re-invest in new ventures such as
high-value co-products or cellulosic (aka second generation) ethanol
plants. Chabina said that the running joke in the industry has been that
second-generation ethanol plants have been “five years away forever,”
but said that Poet’s Project Liberty, the first second-generation
ethanol plant that began operation in 2014 is a sign of things to come.
“There are also a number of interesting facilities – the Abengoa
facility in Hugoton [Kansas], the Dupont Facility in Nevada, Iowa, [and]
Quad County Corn Processors added a cellulosic facility to their
ethanol plant,” he said. Chabina continued: “So people are putting in
the technologies and spending the capital” to make second-generation
ethanol a reality.
Chabina isn’t worried that low oil prices will have any
effect on the ethanol industry and actually sees no looming threats in
the years ahead. “The ethanol industry has lived a couple business
cycles in the course of 5 or 6 years. There is an incredible flexibility
with these guys,” he said. A viable export market, however, would let
the industry overcome the blend wall problem, he acknowledged.
It’s important to realize that advanced biofuels companies
are not just about making fuel. Instead they are focusing on “higher
margin specialty chemical and specialty co-products that have the
potential to displace a lot of traditional fossil fuel markets,” said
Chabina. “It’s an exciting time and I know some people have been
saying that for a while but it’s an exciting time and it feels a bit
more tangible,” he said.
Biomass for Heat Gaining Recognition from Policymakers
In 2014, some northeastern states in the U.S. broadened
their RPS’ to mandate the use of thermal renewable energy. Massachusetts
for example, now awards alternative energy credits (AECs) to renewable
heating and cooling technologies such as biomass. Massachusetts
utilities need those AECs to meet their alternative portfolio standards
(APS).
Further, said Charlie Niebling of the Biomass Thermal
Energy Coalition (BTEC), biomass is finally getting some recognition in
the U.S. at the federal level. Niebling explained that in 2014 the USDA
awarded more than $2.5 million in grants to develop statewide wood
energy teams (SWETs) in 11 states and an additional $1.25 million for
nine wood energy projects. “And there is a pending RFP now to fund
additional states so probably by sometime this spring there will be 20
or so states that have been actively supported by USDA with these SWET
grants,” he said.
Niebling believes this is a very important move and a
positive sign for the biomass industry in the U.S. “The USDA is finally
after years and years realizing that heat is 1/3 of our nation’s energy
consumption and maybe [they] should be paying attention to it,” he said.
Low Oil Prices Threaten Growth of Biomass Thermal Industry
Nevertheless, there is trepidation in the biomass thermal
industry over the price of oil, Niebling also pointed out. He said that
biomass thermal energy is cost competitive when the price of a barrel of
oil is in $80-100 range. “Oil prices have the effect of dampening the
momentum in the last few years,” said Neibling who added that up until
the price of oil started to drop, sales of modern wood-heating
appliances were definitely on the rise. “So there’s been a lot of
momentum but there is also a lot of trepidation right now,” he said.
Momentum is also the result of more biomass thermal
systems in commercial operation today. “Installations are getting better
and more competent. People are learning more about what works and what
doesn’t,” Niebling said. With more performance data available, potential
bioenergy adopters can ask other customers about cost savings and see
actual proof that the systems work, rather than having to take a
manufacturer’s word for it.
The Opportunity for Biomass
On the technology side, Europe is way out ahead of the
U.S. when it comes to improving the efficiency of biomass thermal energy
and Niebling believes that soon more of that technology may be
available in the U.S. “We’re seeing more and more of the leading-edge,
state-of-the-art European technology working its way into the [U.S.]
market,” he said. So far, the bigger U.S. manufacturers such as Hurst
Boiler and Messersmith have stuck to woodchips, according to Neibling
who added that they probably feel there isn’t enough interest in “more
sophisticated or more refined pellet engineering.” According to
Niebling, “the American boiler manufacturers are really in a slumber
when it comes to wood heat. They haven’t awoken to the opportunity.”
Niebling said that the European market for biomass thermal
is extremely well established and leading manufacturers such as
Froling, Viessemann, Okofen and Windhager may be interested in expanding
into other parts of the world. “The heavily heating-oil dependent
northeast has been a real target for the Germans, the Austrians and the
Scandinavians,” said Niebling.
Biomass for Combined Heat and Power
The best technology according to Niebling, however, would
be a ‘cookie cutter,’ reliable and affordable combined heat and power
(CHP) plant that would run on biomass and could work at a community
scale. “That’s a real frontier of opportunity,” he said. “We need
systems that are engineered to meet heat load and that produce
electricity as a byproduct of heat generation, not the other way around.
Because that’s how you get the really high efficiencies,” he explained.
Niebling said that Turboden, an Italian company that was
acquired by Pratt and Whitney Power Systems in 2009, which was then
acquired by Mitsubishi in 2012 has a “fantastic” organic rankine cycle
(ORC) power plant that runs on biomass and uses waste heat to produce
electricity. The company announced in January that it was chosen by
Maine Woods Pellet Company to supply the world’s largest biomass-based
ORC power unit for its plant in Athens, Maine, United States. Neibling
said the technology is “very sophisticated and very expensive,” but
addresses a market need that all renewable energy technologies are
addressing: distributed generation. “I would love to see the market open
up to what Turboden has got and by their leadership persuade others to
enter that space. Because I think distributed generation — and you guys have written gobs on this — is coming.”
http://www.renewableenergyworld.com/rea/news/article/2015/02/outlook-for-bioenergy-2015-whats-in-store-for-this-versatile-renewable-energy-feedstock
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