Download The European pulp and paper industry and forests Safeguarding

The Balance of Power
CEPI workshop, 30 November 2005, Brussels
European Paper Week
The Balance of Power
Introduction
Armando Cafiero - Chairman
Managing Director of Assocarta, Italy
The Balance of Power
The importance of energy
CEPI Directors and Managers
The Balance of Power
Renewable Energy Sources
Bernard de Galembert, CEPI Forest Director
European context on RES
• EU White Paper on renewable energy sources
• RES-Electricity Directive
• « Intelligent Energy for Europe » Programme
• EU policy options on RES-Heat
• Communication on RES
5
European context on RES
• Johannesburg Renewable Energy Coalition (JREC)
« We express our strong commitment to the promotion of
renewable energy and to the increase of the share of
renewable energy sources in the global total primary energy
supply. »
• Communication on “The share of renewable energy in
the EU” (May 2004)
• Forthcoming Biomass Action Plans “with a clear
approach to securing adequate supplies of biomass
through European, national and regional/local action”.
6
Wood availability – RES as a threat
7
Renewable energy
Promote the use of wood as a source of renewable energy
(Green certificates, Feed-in tariffs, Investment subsidies, etc.)
Competing use of wood
Distorted wood market
8
Wood availability
Forecasted industry demand
Shortfall under historical management
Supply of wood under historical management
Shortfall under new management
Supply of wood under new management
million m3 of roundwood
1.000
36 million m3
900
195 million m3
800
700
89 million m3
600
500
27 million m3
400
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060
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Declaration of Intent – RES as an opportunity
10
Declaration of Intent on RES
Declaration of intent
BAU
1,000 TJ
600
56% of TPEC
550
500
49% of TPEC
450
Declaration of
Intent period
400
350
1990
1995
2000
2005
2003: 52.4%
11
2010
Future activities
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Guidance document: « For an effective
implementation of the EU RES policies »
• Better mobilisation of wood
• Support policy to be based on a proper assessment of the
wood market
• Encourage the production and use of energy crops
• Subsidies targeted to improve the efficiency of technologies
• Parallel improvement of mobilisation conditions for wood
and for secondary raw materials
• Subsidiarity should not lead to discrepancies in biomass
definitions
• Encourage R&D in the field of RES
13
The Balance of Power
Climate Change
Esa Hyvärinen, CEPI Environment Director
Energy & Climate Change in the pulp
and paper industry
• Development of certain energy-related parameters
since 1990:
•
Pulp and paper production has increased by 53%.
•
Energy efficiency has improved and specific electricity
consumption per tonne of production has decreased by 13%.
•
Pulp and paper industry has become more self-sufficient in
energy; electricity production has increased by 74%.
•
More than 93% of the electricity generated on-site is done with
the help of CHP.
•
About 52% of the fuels used are biofuels.
•
As a result, specific CO2 emissions have decreased by 25%, but
the absolute emission increased by 9%.
15
Energy & Paper Industry
Energy is a key input for the pulp and paper industry:
• Up to 30-35% of production costs.
• 42% of electricity used is produced on site.
• The industry still purchases 66 TWh of electricity per
year.
Policies affecting on energy have a direct impact on
the pulp and paper industry.
16
Energy & Climate Change in the pulp
and paper industry
• Basically all CO2 emissions from the pulp and paper
industry result from combustion.
• Therefore, if someone says ‘climate change’, a mill
manager would hear ‘energy’.
• The costs pulp and paper mills face as a result of
climate change policies are two-fold:
• Costs from the reduction of own emissions – manageable to
certain extent.
• Costs faced by power producers passed through the
electricity prices – price takers.
17
Climate Change and EU Emissions
Trading Scheme
• The way emissions trading has developed has been
probably a surprise to everyone;
•
•
•
In general the price of allowances was expected to be
around EUR 10 / t CO2;
Low allowance prices at the beginning, followed by a
strong increase during the summer;
Strong increase of electricity prices – up to 40% since the
beginning of 2005.
• Costs were expected to come from;
•
•
Compliance with the quotas each installation has;
Increase of electricity prices due to marginal pricing
mechanism.
• Pricing in the opportunity cost of allowances received
for free exceeded even the worst expectations.
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EUR/MWh
50
45
European Emission Trading Dec 2005, rhs
40
20
35
15
30
10
25
5
19
EUR/t
Climate Change and EU Emissions
Trading Scheme
30
Nord Pool 2006 Base Load, lhs
German EEX 2006 Base Load, lhs
25
Climate Change and EU Emissions
Trading Scheme
• Basic dilemma of the pulp and paper industry:
• Costs raise in the EU but product prices are set on the
global market;
• Cost pass-through is not possible without loosing
market shares.
20
The Balance of Power
Energy efficiency
Danny Croon, CEPI Environment Manager
What is energy efficiency?
• In most cases depends on in which context it is used
• Large number of references with more or less comprehensive
attempts to define the term
• The Commission published its Green Paper on Energy Efficiency
in 2005 (Green Paper on Energy security of supply of 2000 as
background)
•
Does not contain a definition on energy efficiency
•
Initiating a broad discussion on how to curb rising energy use
in EU and arrive at a reduction of 20% by 2020
•
To improve energy efficiency via (amongst others)
•
Use of best technology
•
Promotion of cogeneration
22
What is energy efficiency?
• The draft directive on energy end-use efficiency and energy
services defines energy efficiency as:
‘A ratio between an output of performance, service, goods or
energy, and an input of energy’
• This definition seems to be more or less as « specific energy
consumption » and it does not take into account e.g. the
product grade and the rate of capacity which are of essential
influence on figures of specific energy consumption in our
industry
23
BREF on energy efficiency
• Driving force: European Climate Change Programme (ECCP)
adopted October 2001
•
Promote effective implementation of energy efficiency
provisions in the IPPC Directive
•
Prepare a special horizontal BREF addressing generic
energy efficiency techniques, giving voluntary guidance
• Content (amongst others):
•
Approaches and methodologies for energy use optimisation
and energy efficiency
•
Descriptions of good energy efficiency methods and
techniques applied in several sectors (CHP included)
24
BREF on energy efficiency
• Technical Working Group on energy efficiency in industrial
installations: kick-off meeting in May 2005
• Currently discussing energy efficiency in industrial
installations: how should it be defined?
• Paper production from sulphate pulp may serve as an
example of energy efficiency improvements (e.g. reducing
energy losses or using waste energy for power production)
• To reserve the term energy efficiency for measures that are
taken with the main purpose to use the energy in a better way
• To make agreements on what type of measures that should
be called energy efficiency improvements
• Draft version of BREF on energy efficiency available early
2006 for consultation (finalised 2nd part of 2006)
25
Energy Efficiency in the European
Pulp & Paper industry
• The pulp & paper industry is energy-intensive but is also an
energy efficient industry
• The high cost of energy has always been a major incentive and
continuous driving force to improve energy efficiency
• Improved energy efficiency via co-generation (combined heat
and power)
• CHP: 30–35% energy saving compared to conventional
technology
• In 2004:
• 43% of the electricity used was produced on-site, i.e. nearly 50 TWh
• 93% of this 50 TWh (being 46,5 TWh) is produced via CHP; the
remaining bit (7%) is produced via wind & hydro installations
26
Energy Efficiency in the European
Pulp & Paper industry
• Comparing 2004 with 1990, the specific primary energy
consumption decreased by 11% thanks to an increase in process
technology efficiency and CHP investments
• The European pulp and paper industry naturally continues to
strive for increased energy efficiency, but cost/efficiency has to
be taken into account and recognised
• Furthermore…
•Each unit is unique:
•differences in raw materials: recovered paper, wood, coatings, fillers…
•different processes: de-inking, pulping, coating…
•different products
impossible to compare mills with each other
• Energy efficiency is a mill specific question
27
Energy Efficiency in the European
Pulp & Paper industry
• The efficiency of both paper production and energy production
can be improved by:
• the development of process monitoring
• skilled and motivated personnel
• availability of reliable process information
• Changes in the use and maintenance of mills and power plants
are the most feasible measures
• Heat and fuel consumption can successfully be reduced by :
• closing of water circuits (decrease use of water) and
• efficient heat recovery of secondary energy
• Drying of moist fuels (increase heat value of biofuels) offers a
opportunity for increasing the energy efficiency of power plants
• Efficient usage of biomass based CHP is natural in our industry
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The Balance of Power
The energy challenge
Peter Nygren, SCA
The Balance of Power
Energy market liberalisation
Augustijn Van Haasteren, DG Competition
The Balance of Power
Conclusions
Armando Cafiero - Chairman
Managing Director of Assocarta, Italy