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TSEC Biosys TSEC Biosys TSEC-BIOSYS: Theme 1.4 Role of International Bioenergy Trade for the UK www.tsec-biosys.ac.uk Miles Perry Centre for Environmental Policy Imperial College, London Biomass role in the UK energy futures The Royal Society, London: 28th & 29th July 2009 1 Introduction Biomass imports in UK energy – 2000-present Biomass imports looking to 2020 – analysis using Biosys-MARKAL TSEC Biosys TSEC Biosys 2000 -> 2007 More renewables (inc. biomass) enter energy system TSEC Biosys TSEC Biosys 6,000 Total Renewable* Primary Energy - ktoe 5,000 4,000 Total Biomass (all)** 3,000 2,000 Total Biomass (plant&animal) Imported Biomass 1,000 0 2000 Sewage and landfill up 38% 2000-07 2001 2002 2003 2004 2005 2006 2007 8.83% 9.97% 7.21% Biomass Imports as Share of Primary RE Domestic Biomass Imports go from 0%-10% of biomass develops more RE in 2 years slowly 3.15% 9.89% **inc. waste and tyres. excl. liquid biofuels. ‘Primary’ wind counted as electricity generated ** Total biomass = plant-&-animal-based + wood, wood waste, landfill methane and sewage sludge Source: DUKES 2000 -> 2007 Growth Driven by Co-firing Market TSEC Biosys TSEC Biosys Advantages of Co-firing: Biomass -> Electricity excl. sewage, landfill gas, MSW Biomass Input - ktoe 1,200 - Low-cost, low-risk & rapid deployment at the margin Relative to other technologies 1,000 800 600 400 - Technological neutrality of Renewables Obligation 200 0 2002 2003 2004 Co-firing (Destination of Plant & animal biomass) - for electricity generation - for co-firing 2005 2006 2007 All conversion routes 2002 2003 2004 2005 2006 2007 44% 11% 51% 20% 57% 30% 70% 52% 68% 51% 63% 41% Source: DUKES. % refers to energy content of biomass input 2000 -> 2007 Co-firing & Imports TSEC Biosys TSEC Biosys Biomass -> Electricity & Imports Biomass Input - ktoe 1,200 1,000 800 600 More domestic biomass co-fired since 2005? Not so sure… 400 200 0 2002 2003 2004 2005 2006 2007 Likely Imports as % of Co-firing feedstock Co-firing All plant&animal (excl. sewage, LFG, MSW) Imported Biomass (all energy uses) Biomass imports crucial in bioenergy growth from 2002-2003 Palm, olive & shea Wood pellet Sunflower pellet Tall Oil Total Source: DUKES & DECC. % of co-firing feedstock refers to mass (tonnes) 2005 52% 12% 1% 9% 74% 2007 47% 14% 10% 5% 76% Bioelectricity & imports 2007 - Imports for co-firing less attractive due to successive RO reforms - ≤12.5% of ROCs can come from co-firing* (=> uncertainty at the margin) - Dedicated biomass plants receive 3 × more ROCs / MWh - 2006-07: Biom assCo fired Ratio falls for the first time Biom assToOtherElectric Includes 50% year-on-year increase in combustion of biomass of animal origin - Imports helpful as bridge towards larger UK biomass exploitation? * - co-firing of energy crops &/or in CHP units is exempt from this cap TSEC Biosys TSEC Biosys Bioelectricity & imports post-2007 TSEC Biosys TSEC Biosys Dedicated Plant Capacity 30/06/09 197 MW of which 2007-08 additions 78 MW Capacity of additional plants proposed 1,975 MW Assume: Load Factor Avg. Efficiency 80% 30% Annual Feedstock Requirement 183 PJ UK Existing Supply (Biomass Strategy, 2007 234-282 PJ excl. mass energy crop planting) Source: Hawkins Wright, Forest Energy Monitor. OFGEM RO Accreditation Statistics Renewable Heat & UK Wood Pellet Market - Renewable Sources account for <1% of UK heat generation - UK imports of pellet for industrial applications represent significant share of European pellet trade ~750,000 tonnes consumed (2008) ~150,000 tonnes used for co-firing (2007) - 600,000 tonnes (~8.5 PJ heat generation) is equivalent to ~1/3 of UK renewable heat consumption in 2007 - UK consumption of high-grade (residential) pellets almost uniquely low in W. Europe Source: DECC (Renewable Energy Strategy Consultation), Pellet@las Project TSEC Biosys TSEC Biosys Biofuels in Transport RTFO year 1 target: 2.5% of road fuel by volume Source: RFA Monthly Reports TSEC Biosys TSEC Biosys Biofuels in Transport TSEC Biosys TSEC Biosys RTFO year 1 target: 2.5% of road fuel by volume Biodiesel [UK feedstock claimed under RTFO 08/09] from UK oilseed rape from UK tallow from UK used cooking oil 26 Ml. 5 Ml. 34 Ml. 65 Ml. [UK production – all feedstocks] (EBB) 2008 212 Ml. Bioethanol [UK feedstock claimed under RTFO 08/09] from sugar beet 37 Ml. [UK production – all feedstocks] Bioethanol 2008 75 Ml. UK Biofuels Sector is Trade-oriented - Imported feedstocks are processed in the UK (vegetable oils, tallow) &/or - UK biofuels not produced exclusively for UK road transport market Source: RFA Monthly Reports, European Biodiesel Board, European Bioethanol Industry Association UK Biomass Resources: a snapshot TSEC Biosys TSEC Biosys Imports account for: 11% - 43% of biomass used in heat & power (depending on how you define ‘biomass’) & the vast majority of biofuel feedstocks in transport Biomass Energy (PJ - HHV) even though UK resources are not fully utilised 300 250 200 150 100 50 0 Used 2007 Unutilised Potential Source: various reports cited in Perry & Rosillio-Calle. UK Country Report for IEA Task 40. www.bioenergytrade.org UK Bioenergy Trade: Summary TSEC Biosys TSEC Biosys Biomass -> electricity & transport pathways Substantial planned capacity – irrespective of feedstock origin - initially dominated by imports - and integration with existing production and distribution infrastructure Electricity: ~2,000 MW dedicated plant planned + co-firing Transport Fuels: 671 Ml. biodiesel production capacity in 2009 820 Ml. bioethanol capacity under construction What does this mean? Imports prevent realisation of UK supply potential? Imports phased-out as UK supply chains develop? Imports increase size and penetration of bioenergy in the UK? What about other renewables? Source: European Biodiesel Board, European Bioethanol Industry Association UK Bioenergy Trade: looking forward with MARKAL Using BIOSYS_MARKAL: - we can examine the competing merits of imported biomass, domestic biomass and other renewables - in a realistic energy policy context The recipe: 1.) Take Biosys_MARKAL (developed by Jablonski et al.) & adjust for short-term analysis (2010-2020) 2.) Create 2 short-term policy scenarios i) business-as-usual ii) Renewable Energy Directive 3.) Examine role of imported biomass TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys BIOSYS_MARKAL recap: Objective: Minimise discounted total system cost of UK energy provision subject to: • Satisfaction of energy service demands (GJ of heat, km of travel etc.) • Compliance with technical constraints and policy constraints UK biomass resource & technology detail from TSEC_Biosys Biomass import costs & quantities from literature review and consultation with industry experts UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys 2 Resource Scenarios: - Domestic Pessimism: UK Biomass available to energy system cannot exceed 2007-09 levels (DUKES, RFA) - Domestic Optimism: Potential 2020 resource fully available as per TSEC analysis and latest literature 2 Policy Scenarios: - Business-as-usual: Renewables encouraged by RO and RTFO - Renewable Energy Directive: 15% renewables in final energy consumption (electricity, heat and transport collectively) 10% renewables in transport UK Bioenergy Trade: looking forward with MARKAL 2 Policy Scenarios ctd. - Business-as-usual: RO as per RO Order 2009 but only partially banded (by technology but not by biomass crop type) RTFO fully flexible between biofuels ≥ 5% liquid biofuel or biogas per litre of road transport fuel - Renewable Energy Directive (RED): RED requirements applied literally 15% renewables in final energy consumption (electricity, heat and transport collectively) 10% renewables in transport in addition to BAU policies TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL BAU Policies, Domestic Pessimism Imported Domestic 150 150 PJ – primary feedstock equivalent 125 125 100 100 75 75 50 25 50 0 25 0 2020 demand Unutilised Potential Wood and wood Slurry Straw waste and sewage Poultry Landfill sludge litter MSW methane - organic Other fraction residuesLC Energy Crops 2020 Imports Unutilised Potential TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive, Domestic Pessimism 225 Domestic 225 Imported 200 PJ – primary feedstock equivalent 200 175 175 150 150 125 100 125 75 100 50 75 25 0 50 25 0 2020 demand Unutilised Potential Wood and wood Slurry Straw waste and sewage Poultry sludge Landfill litter MSW methane - organic Other fraction residuesLC Energy Crops 2020 Imports Unutilised Potential TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Renewable Energy Directive – UK Biomass Supply 2020 PJ – primary feedstock equivalent 150 Domestic - Pessimism 150 125 125 100 100 75 75 50 50 25 25 0 0 Domestic - Optimism Wood and wood Slurry Straw waste and sewage Poultry sludge Landfill litter MSW methane - organic Other fraction residues LC Energy Crops 2020 demand Unutilised Potential 2020 demand Unutilised Potential UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Renewable Energy Directive – Biomass Imports 2020 250 Imported - Domestic Pessimism Imported - Domestic Optimism 225 225 PJ – primary feedstock equivalent 250 200 200 175 175 150 150 125 125 100 100 75 75 50 50 25 25 0 0 Agri. Wood chip Residues Wood pellet 2020 Imports 2020 Imports Unutilised Potential Bioethanol Biodiesel FT liquids Unutilised Potential UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Renewable Energy Directive: Transport Markets 2020 Renewable Electricity, 37 Biodiesel, 64 Biogas, 11 Total Renewable Transport Energy Domestic Pessimism: 207 PJ FT Kerosene, 57 Renewable Electricity, 7 Ethanol, 14 FT Diesel, 25 Biogas, 22 Biodiesel, 61 Total Renewable Transport Energy Domestic Optimism: 193 PJ FT Kerosene, 62 Ethanol, 14 FT Diesel, 28 UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Renewable Energy Directive: Electricity Markets Domestic Optimism: 400 400 350 350 300 300 250 250 TWh TWh Domestic Pessimism: 200 200 150 150 100 100 50 50 0 0 2010 Non-renewable 2015 Other Renewable 2020 Wind Biomass 2010 Non-renewable 2015 Other Renewable 2020 Wind Biomass - RED scenarios have very little biomass -> electricity (only landfill gas in 2020) - Presence of imports + full domestic supply -> less pressure on electricity market to meet RED target UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Renewable Energy Directive: Biomass Destination (Primary Energy – feedstock equivalent) Domestic Pessimism: Domestic Optimism: Electricity (inc CHP) 12% Electricity (inc CHP) 11% Heat 39% Transport 31% Heat 57% Transport 50% Total: 509 PJ Total: 924 PJ UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive: How much biomass is that? PJ (feedstock) Pessimism Optimism Domestic 145 596 Imported 364 328 Total 509 924 Compared to UK potential: DEFRA Biomass Strategy 346 Compared to present-day use (UK & Imported): Heat & Power (DUKES 2007) Transport (RTFO year 1) 127 64 191 TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL Can we really import >300 PJ of biomass? - Biosys_MARKAL upper bounds based on literature review. Assuming either: - UK able to maintain global import share (biodiesel, bioethanol) OR - A ‘fair share’ of a global product is available to the UK (based on UK share of Global Primary Energy Supply or global of an equivalent fossil product) - But will this supply actually be realised? valid question for both UK and import markets TSEC Biosys TSEC Biosys UK Bioenergy Trade: looking forward with MARKAL TSEC Biosys TSEC Biosys Can we really import >300 PJ of biomass? - Biosys_MARKAL has a number of upper bounds for biomass imports. Which of them are binding constraints in RED 2020? Dom. Pessimism Palm & Olive Ethanol (cane, starch & cellulosic) Biodiesel FT liquids Wood-derived Biomass (higher level constraint) Wood pellet Dom. Optimism In both scenarios, imports are dominated by biodiesel & wood (chip, pellet) - Potential biodiesel imports are not fully taken-up - Potential wood imports fully taken-up only when domestic wood is scarce Conclusions TSEC Biosys TSEC Biosys - Imported biomass has been crucial to the development of bioenergy in the UK (by volume at least) - Imported biomass must be viewed in an energy-wide context (it’s linked to the UK biomass sector but capable of developing on its own) - UK biomass if exploited would be competitive with imports at current prices. (cellulosic -> heat: waste -> AD) - Even if UK biomass exploited, imports can be complementary - Imports can reduce reliance on other renewables for RED - Biodiesel imports dominate regardless - But how sustainable can imports be at this scale? Thank you for your attention! TSEC Biosys TSEC Biosys TSEC Biosys TSEC Biosys www.tsec-biosys.ac.uk [email protected] 28