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26th September 2013

Biomass: a sensible 2020 target?

008565 Mark Coyne and Darragh Lennon discuss biomass’s role in the renewable energy mix.

Within Ireland’s target of 40 per cent of electricity and 12 per cent of heat generated by renewable energy sources by 2020, biomass at 7 per cent of the renewable electricity (RES-E) will play a small but significant role. So does delivery of this challenging target make environmental and economic sense, and if so, are we likely to achieve it?

The economics of biomass is very much location- and case-specific, and is driven by its alternative uses (board mill production plants in the case of Ireland). Biomass generated electricity needs additional economic support over and above non-renewable generation, so we need to ensure that these socialised costs are delivering on their environmental policy targets.

The introduction of the third Renewable Energy Feed-in Tariff (REFIT) scheme to incentivise 310MW of biomass generated electrical capacity, with 150MW of this to be from High Efficiency Combined Heat and Power (HE-CHP) is one of the main policy support tools for biomass.

Considering that the closing date for substantial completion of these plants is the end of September 2016 and allowing for a two-year typical construction period, the lack of confirmed biomass CHP project commencements indicates that REFIT will not be fully allocated.

The problem is due to biomass itself, as the record of slow development in Ireland shows, compared to gas or wind generation development. The biomass market is immature compared to traditional fossil fuels, and despite relatively stable biomass prices in the past, competing demands for wood from the traditional and energy sectors across Europe, driven by renewable incentives leaves uncertain future pricing for biomass.

IMG_6147 This is challenging for schemes such as REFIT where future revenues for biomass plants are linked to the general consumer indices, while the biomass input costs are not so linked and are more influenced by increases in forecast demand against a limited supply. A SEAI/IrBEA report estimates that demand will reach 1.3 million tonnes of dry solid biomass per year by 2020, which is over five times the 2009 consumption, and more than double the Coford-estimated potential 2020 biomass resource.

Another fundamentally necessary but nonetheless challenging aspect in delivering biomass CHP plant is in securing the economically justifiable heat loads required to secure HE-CHP certification. Such sustainable, needs-driven large-scale, low-grade heat consumption needs to be planned at the same time as the biomass plant. Another potential heat use is in processing and drying biomass fuel. However, certainty in the marketplace for this product is not guaranteed.

In terms of biomass availability, one potential action would be to maximise clean recycled wood use as a biomass fuel source by specifically excluding it from the Waste Incineration Directive, while at the same time mandating robust fuel quality assurance.

Policy stimulation of energy crops would also address the anticipated biomass supply side shortage. Secondly, due to the highly complex nature of biomass power plant development, Ireland needs to enhance the available skills within the industry – right through the Department, the regulator, the banks and the skills within the developers themselves.

As an example, Dalkia, a company with experience of developing and operating nearly 500 biomass plants, has placed some of its Irish engineers on secondment at Western Europe’s largest biomass plant in France to develop those skills in an Irish context.

Biomass should only be pursued if it cost-effectively contributes towards national environmental goals, which it can and does in other jurisdictions. Any future revisions to REFIT need to account for this and the challenges that the industry faces in order to unlock the benefits of biomass.

Dalkia-logo Mark Coyne, Dalkia Technical Director
Tel: +353 (0)1 870 1200
Email: info@dalkia.ie
Web: www.dalkia.ie