EWB Insight: April 2016

This month: Bioenergy businesses set out their positions ahead of the EU's sustainability consultation closing, English RDF exports rocket, Air Product's EfW business collapses and a major wood pellet producer cuts production.

Bioenergy dominates the agenda

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April saw businesses in the bioenergy sector set out positions on how the sector should develop before the European Commission’s consultation on sustainable bioenergy closes in early May.

Finnish utility Fortum, which has big bioenergy interests, made a strong, and to many surprising, statement, calling for all subsidies for biomass and other mature renewable energy technologies to be phased out.

But Fortum also said that slow progress in creating an EU bioenergy policy was damaging the sector. It called for EU-level sustainability criteria to be agreed for all kinds of biomass.

UK power station Drax (pictured below), which had its annual general meeting in April, set out a completely opposing view to Fortum’s. Its AGM heard how the removal of levy exemption certificates (LEC) support severely hit its finances last year.

The station also has an EU state aid probe hanging over it. This is looking into whether UK government support for the conversion of Drax’s third boiler to biomass, under the contracts for difference (CfD) scheme, went too far.

The picture in the Netherlands is the bleakest for coal conversion currently. Utility company Essent admitted it was surprised after the Dutch government announced in April that it was planning to force the firm’s part-biomass converted coal-fired power plant to shut.

Under threat are units 8 and 9 of the Amer Power Plant in Geertruidenberg (pictured below), in addition to five older coal-fired plants, closure of which had already been announced. The government is due to make a further announcement later this year.

Unit 8 of the Amer plant has been mothballed since January, but unit 9 has been part converted to gasify 100,000 tonnes a year of biomass. The gas is then co-combusted alongside coal. Unit 8 could also be converted in the future. Essent says a 50% biomass-fired scenario would mean Amer 9 could "greatly contribute" to the Netherlands’ target to generate 14% of its energy from renewable sources by 2020.

Dutch policy changed course drastically earlier this year when the country’s parliament effectively blocked the government from offering subsidies to coal-to-biomass conversions.

As the Dutch statistics office noted in April, the country is near the bottom of the EU renewable energy league table. It blamed in particular a lack of biomass energy development and relatively low government support for renewables.

Data Watch

More than 311,000 tonnes of refuse-derived fuel (RDF) left English ports in February, setting a new monthly record, data released by the Environment Agency this month showed.

Total exports in 2016 from England alone could be as high as 3.7Mt, up by 32% from the 2.8Mt exported in 2015.

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Policy insight

The Renewable Energy Association (REA) urged the UK to protect its biomass and biogas sectors. Phased reduction of biomass tariffs under the UK’s policy of degression was too "aggressive" and reform proposals ignored the need for smaller biomass systems in old, inefficient buildings. Degression also hurt the biomethane market, which may cease to be a commercially viable as early as next year, it warned.

The Dutch government created several new Green Deals, many of which will help to promote bioenergy. Green Deal 197 is aimed at promoting the sustainable use of biomass and the production of biogas. Green Deal 199 is aimed at boosting the biobased sector and specifically biofuel production.  

Biofuels produced from conventional crops such as palm and soy should not count towards the EU’s renewable fuel target after 2020, according to NGO Transport & Environment (T&E). The European Biofuels Board dismissed the call saying first generation biofuels are the only alternative to fossil-based rivals. The EU Renewable Energy Directive requires member states to generate 10% of transport fuel from renewable sources by 2020. In 2014, EU countries agreed to cap levels of transport fuel derived from food-based biofuels at 7%.

Six NGOs including Biofuelwatch called on the United Nations Conference on Trade and Development (UNCTAD) to withdraw a report on second-generation, or 2G, biofuels. UNCTAD’s report described 2015 was a milestone year, saying that 2G biofuels "finally took off at commercial scale". The anti-biofuel groups accused UNCTAD of greatly exaggerating the growth and warned of "profound factual inaccuracies" in the report.

The Sustainable Energy Authority of Ireland (SEAI) reported the country is off track on its greenhouse gas emissions reduction target, and a number of non-emission trading sectors are especially at risk, including transport, agriculture, waste and buildings. Use of biomass for electricity generation should increase alongside the development of EfW facilities, reported SEAI.

The potential to use bioenergy to balance out wind and solar generation has been ignored by the German government, according to a joint statement from four associations including Fachverbandes Biogas. The proposals will mean "stagnation and degradation" for the country’s bioenergy sector under the Renewable Energies Act (EEG) in 2017. The groups fear that Germany’s bioenergy capacity could fall by 80% over the next 15 years as subsidies for older facilities end.

The European Biogas Association (EBA) called for EU-wide sustainability rules for bioenergy used for heat and power to support the European biogas market. A lack of pan-European policy is hitting cross-border trade in biomethane, argued the EBA.

Dutch energy research centre (ECN) announced a new European system for certifying the proportion of biomass in bio-based products, which it said would help advance the bioeconomy.

Indirect greenhouse gas emissions associated with crop-based biofuels could be offset by cultivating marshland reed species instead of conventional crops, a study by the International Council on Clean Transportation suggested. It examined a scheme using an invasive giant reed in south western Sardinia. Not only did harvesting help control the reed but biomass production was healthy and indirect land-use change (ILUC) emissions were lower than crop-based biofuels.

Market insight

Development of a Danish EfW plant by Kara Novern turned deficits at the company in 2013 and 2014 into profit last year. Its Energitårnet EfW facility (pictured below), which opened in 2014 was the major factor in generating profits of more than €1.8m (DKK 14m) last year.

Trade association Dansk Affaldsforening said increasing the import of waste to be burnt for heat and energy could be worth almost DKK 220m (€30m) annually until 2040 through consumer benefits, such as cheaper heating and reduced costs for domestic waste management. Danish plants imported about 324,000 tonnes of waste in 2015 and paid about DKK 100m (€13m) in taxes on it as well.

Research carried out for Denmark’s energy agency showed the rising use of imported wood pellets in the country’s energy sector. Of the 2.1 million tonnes of wood pellets used in Denmark during 2014, about 1.4Mt were used in Danish heating and cogeneration plants. About 95% were imported, mainly from Eastern Europe.

The export of Danish-backed biomass power stations experienced a potential high water mark last year, according to a report by Denmark’s state-backed export credit agency EKF. Financing reached DKK 3.1bn (€416m) for four UK-based biomass projects, which accounted for 22% of all funding in 2015. However an EKF statement said: "The biomass adventure [in the UK] culminated in 2015, we do not expect a similar result in 2016."

Finnish-based Vapo said it would reduce logistics and storage costs by temporarily halting wood pellet production. Low domestic consumption and overstocked inventories in export markets are behind the decision. Pellet sales have "barely risen despite high expectations", said the company.

US-based Blue Sphere snapped up a 1MWe biogas plant in Tortona, northern Italy, from Agrilandia Societa Agricola for about €4.2m, roughly 4.5 times the EBITDA the facility generates annually.

The Guernsey government was poised to sign a contract with Geminor to ship most of its waste to a Swedish EfW plant. The contract would last initially for three years and ENDS understands the waste would go to Jönköping Energi’s Torsvik 13MW cogeneration facility. A rival bid from the neighbouring island of Jersey, which would have used a government-owned 10MW EfW plant to process the waste, was turned down.

Facilities Insight

Air Products announced it was abandoning two advanced waste-fired facilities and exiting the UK EfW market altogether after continued technical problems. A union official claimed that tests on the plasma gasification system installed in the Tees Valley 1 (TV1) plant had been "blowing big holes" in the ceramic lining of the gasifier stack and the technology used at the plant, and its sister facility TV2 was flawed from the start.

Veolia’s Cross Green EfW plant (pictured below) in Leeds, England, entered operations early. CNIM built the plant, which will process 214,000 tonnes of per year of municipal waste and have a capacity of 11MWe. Plans for heat distribution are also in place.

Finland’s Helen signed a deal with Valmet to supply its biomass-fired Salmisaari heating plant. The facility is one of three in development, costing a total of €360m. The plant will use 21 tonnes of wood pellets an hour. It is expected to become operational in early 2018.

An £80m (€103m) EfW facility was announced by a joint venture between Verus Energy, Fortum and Carlisle-based Kingmoor Park owner of the land for the proposed facility in the UK. ENDS understands a scoping document has been submitted to the local authority. The plant would process about 225,000 tonnes of waste and have an electrical capacity of about 25MW.

A packed An Bord Pleanála-led hearing (pictured below) heard opening arguments in a planning inquiry to determine whether Indaver will be allowed to build an EfW plant in Ringaskiddy, Ireland. The hearing was due to last until at least 28 April, but more time was likely to be added.

Vantaan Energia’s annual CSR report revealed three options for the company’s Martinlaakso coal-fired power plant in Finland. The 195MWe plant could be converted wholly to woodchips or its older natural gas-fired boiler could be converted instead. Or thirdly the plant could be closed an entirely new woodchip-fired heating plant constructed in either Martinlaakso or Varisto.

Wien Energie’s Spittelau EfW plant’s electricity generation tripled this winter after a major overhaul. From October last year to March the Austrian plant’s generation jumped from 20GWh to 60GWh against the same period 12 months earlier. The plant is also a four star-rated tourist attraction on Tripadvisor.

LuxEnergie is converting its Kirchberg power plant, Luxembourg, from natural gas to biomass, with the project due to finish in June 2017. The gasification plant will process 2.5 tonnes of wood pellets per hour and have a capacity of 2.8MWe and 9.5MWth.

Plzenská Teplárenská’s Chotíkove EfW facility in the Czech Republic regained its permit for the third time in an ongoing row over planning consent. NGO Deti Zeme had challenged the permit through the courts.

Andritz has installed two XR3000 Ripper pre-shredders and two XR3000 Cutter post shredders at an under-construction EfW plant, according to manufacturer Untha. The facility near Varkaus was ordered by utility company Riikinvoima and is planned to be operational this summer in Finland. It should produce around 90GWh of electricity per year and about 180GWh of district heating, processing 145,000 tonnes of municipal solid waste.

Recruitment for Zaklad Unieszkodliwiania’s Szczecin EfW facility in Poland began with more than 50 roles advertised. The plant is due to have capacities of 7.5MWe and 32MWth from the processing of 150,000 tonnes of waste a year.

Gasum’s Kuopio biogas plant in Finland suffered a fertiliser leak with a "small amount" reaching the outside environment. No one was injured.

SWM Magdeburg said it would invest €5m in a hot water storage facility enabling its Rothensee EfW plant in Germany to operate more efficiently. The plant will maximise its electricity production, storing heat output for times when hot water demand is high.

Biogas business Refood’s Dagenham biogas plant in the UK began construction. The facility will process around 160,000 tonnes of food waste and generate more than 2,000m3/hr of biogas. It is due to be operational later this yea

A feasibility study is looking at plans to build a Norwegian manufacturing base for bio-char and biofuel by forestry company Treklyngen. The project has been given the English name Norwegian Wood and aims to develop an industrial pilot plant for the pyrolysis of wood and the production of biofuel. The facility should become operational between 2018 and 2020.

 

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