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The BIG picture Matthew Rivers 1 | © UPMU Wednesday, 24 May 2017 1. EU Regulation on climate change 2. Demand for biomass 3. Supply in UK 4. What can this mean ? 2 | © UPMU Wednesday, 24 May 2017 R.E.D. is not a colour, or an instruction to stop – but it is a challenge ! The Renewable Energy Directive (2009) defines the ambition of the EU to tackle climate change. • Global political lead in tackling climate change • Secure 20% of final energy consumption across EU 27 from renewables by 2020 • Plus 20% reduction in energy use – efficiency hence 20-20-20 • Use all forms of renewables - solar, wind, hydro and biomass. • Delivery of national targets is matter for Member States 4 | © UPMU To meet EU targets : biomass sources dominate ~1,600 TWh heat and power estimated to come from biomass plus ~ 328 TWh of biomass based biofuels demand TWh 2020 Final Energy Consumption (FEC) from different renewables Total FEC from RED 2,985 Biofuels mandates 328 Heat and power 2,657 341 Power from hydro Power from wind 70 Solar power 40 Solar heat 40 Geothermal power and heat Heat and power from biomass 5 | © UPMU 555 13 1,642 SOURCE: European Commission; Europower and heat 2010 all Member States published National Renewable Energy Action Plans. UK starts from low base 3% and targets 15% by 2020 – x3 electricity generation. Increase in demand for electricity (installed, gross generation) from solid biomass only Germany Sweden UK Netherlands Italy Austria Finland Spain Denmark Portugal Lithuania Greece Luxumberg Ireland Bulgaria 0.0 5.0 10.0 2010 Generation 6 | © UPMU 15.0 TWh Addition 2020 20.0 25.0 30.0 Responding to this expectation are a number of large, planned biomass boilers for electricity. There are many more smaller scale boilers being installed and operating Can be 2 Million tonnes per annum demand 7 | © UPMU Wednesday, 24 May 2017 UK technology intentions – for heating and cooling (Ktoe) • Scale of increase for solid biomass is even more dramatic • A proportion of biomass is described as ‘’in households’’ which is shown to increase from 10% in 2010 to 25% of total biomass used in 2020. • District heating is expected to increase from 42 to 230 Ktoe Estimated final energy consumption for heat + cool (Ktoe) Biomass gas Biomass solid 2020 2010 Heat pumps = substantial growing demand for wood for heating • Likely to be fragmented, local and small scale units 8 | © UPMU Source: Table 11 of UK NREAP Solar 0 1000 2000 3000 4000 Then there is the biofuels mandate ….. • Where to now? The Economist, 30th October 2010. | © UPMU The biofuels agenda requires 10% of liquid fuels to be from renewables by 2020 There are several different concepts – just moving to pre-commercial phase with 2G which can also use wood as feedstock Feed Stock Processes 1G: Sugar & Starch 1G 1G Fermentation Sugar cane Sugar beet Corn Wheat Transesterification 1G: Oleic Acid 1.5/2G Hydro treatment Rapeseed Palm Products Soya 2G Fuel ethanol 10% gasoline blend E85 for FFV cars 30% less energy 0 .. 90% less CO2 Methyl ester diesel 7% diesel blend 10% less energy 30 .. 60% less CO2 2G 2G: Cellulose Enzymatic/acid hydrolysis Grass 10 Bagasse Sludge | © UPMU Wood Gasification Fischer-Tropsch Synthetic gasoline • 90% less CO2 Synthetic biodiesel high performance 50 .. 90% less CO2 What about supply ? EU 20-20-20 impact on Europe wide woody biomass demand-supply balance in ‘conventional’ forest industry - Supply Demand Estimated gap 200 – 260 720–800 340–420 ? 160–170 515–540 ~380 355–370 Current forest • Mobilization Estimated • Net imports supply biomass • Recovered supply wood Estimated demand Non-traditional Traditional demand demand • Paper (energy) • Wood products Demand exceeds supply – there is only one way for price An opportunity for new businesses | © UPMU In UK all biomass domestic production is remarkably stable. As our living standards increase we import more – mainly food - most/all can be re-used for energy at some point. UK domestic biomass production and imports 1970 - 2008 Data from Office for National Statistics 12 | © UPMU Wednesday, 24 May 2017 UK wood flow (M m³) in 2009-10 – rough numbers can sustain 12 M tonnes of forest harvest and 5 M recycled wood : when demand can be easily double that amount Exported SRW 2.87 MT Sawn timber Drop to 416 km3 2009 Forest biomass Logs 6.27 for wood products Total removal 10.81 Sawn timber Recycled wood 5.4 to 5.52 6.27 MT By products 3.76 Pulpwood Wood based panels Fencing 7.75 *Forestry Commission 13 | © UPMU By products 0.144 Forest energy potential ~2.75 * Firewood/Wood 780 k Fuel 780k Forest residues Small wood 456k Stumps Branches Arb Arisings SRC 456k 1.072 Energy wood biomass Heat 1.072 Electricity 2.444 Pellets 0.188 Pulpwood Wood based 3.76 panels Fencing 0.46 Annual felling potential till 2011 11.53 roundwood 10.03 2.7 10.03 Industrial RCP 3.99 million –UK 4.85 million Export 1.81million potential Of course outcomes are uncertain - but a clear opportunity is to use national resources to better effect : which also contributes to energy security. POLITICS EU 20 20 20 Subsidies to change the operational environment Increasing competition for wood and higher prices Globalization of energy wood biomass market Increase in wood supply in EU Estimation of EU-27 woody biomass gap 2020 200 Mm³ Competition with the traditional forest industry will intensify Role of waste and agriculture as energy source will increase 14 | © UPMU Role of waste and other Political target burnadjustment (= able material failure ?) as energy source will increase The element that I am spending my time on Key flows in shipped wood chips and biomass – recent history Total Pacific basin chip 18 M bdmt p.a. 0.9 [0.5] Vietnam,Thailand + Indonesia 3.9 [ 2.0] 0.7 [0.5] Total Europe chip 2 M bdmt p.a. | © UPMU Wood pellets (M tonne, 2010 [2009] ) Pulp chips to Japan (BDMT) Pulp chips to China (BDMT, 2010 [2009] ) Chips to Europe (BDMT) What does this mean to us all ? • Higher personal energy bills ! – because generators are steered to deliver Government obligations + recover all costs from the consumer 16 | © UPMU Wednesday, May 24, 2017 Summary Climate change • Sceptic or not -> doesn’t matter because Regulatory action - mandatory • Is in place : UK implementing via Green Bank, ROC, FiT, RHI Threat or opportunity ? Of course both • • • • 17 | © UPM Energy use and emissions costs – vehicles ? By-product use and value Understand and support your clients Do the right thing for Homo Sapiens.