Challenges in trading solid biofuel

Transcription

1 Challenges in trading solid biofuel EUbionet, Barriers and opportunities for bioenergy trade and increased utilisation 2. July 29 Max Nitschke, DONG Energy Power

2 DONG Energy a North European energy company Frederikshavn Thermal production Central 5,372 MW Decentral 216 MW waste/bio 94 MW Thermal under development Renewables energy Vind commisioned Vind under development Hydro power Narvik 131 MW Storrun onshore 31 MW SKS** 92 MW Narvik 3 MW Indalsälven 26 MW Måbjerg Grenaa Mongstad 26 MW Esbjergværket Herning Studstrupværket DTU Svanemølleværket Horsens Kyndbyværket H.C. Ørsted Asnæsværket Avedøreværket Værket Skærbækværket Vejen Køge Odense Slagelse Ringsted Haslev Haderslev Stigsnæsværket Barrow offshore 45 MW Severn 8 MW Walney offshore 151MW Burbo offshore 9 MW HR II offshore 29 MW GFS I+II offshore 172 MW Enecogen London Array 8 MW 315 MW Dansk on- og offshore 428 MW Greifswald 1,5 MW Karnice onshore 3 MW Lake Ostrowo 31 MW Karcino onshore 5 MW Enstedværket Production TWh Market share * El, Twh % Varme, PJ % Masnedø Maribo-Sakskøbing Ploudalmezeau 9 MW Production MW Market share** Offshore % Onshore 239 N/A Hydro 43 1 % * Market share in Denmark ** Market share in countries with DONG Energy capacity 2

3 Current biomass capacity is a result of past technological development DONG Energy biomass capacity, 28 straw wood pellets wood chips Total (t)

4 Developed market for global trading of industrial forrest and agricultural products energy products still very immature global production and percentage international trade, 24 forest products agro products Higher share of international trade for value added products Raw materials are processed close to source Energy products almost no international trade Appr. 4% of coal prodution is exported source: task 4 4

5 Use of pellets and wood chips for power production expected to increase but markets are immature and use depends on regional availability Fuel price delivered in Denmark (nominal) Biomass prices generally higher than coal and subsidies are required Pellet price followed increasing fossil fuel prices Availability of Danish wood chips varies and is limited Future prices from overseas imported pellets and wood chips will depend on freight costs source: Danske Bank, McKlosky, Dansk Fjernvarme 5

6 Competition between pellets and chips dependent on freight and regional price differences Product Wood pellets - Pulp wood chips, US Pulp wood chips, Germany Resource cost 25 /t Freight Price in ARA, CIF Other 2 /t (handy size) 65 //t (handy size) 54 /t /t* Standard product and quality 9 //t Extra investments for storage and grinding Drying before freight due to phytosanitary risks Handling of larger volumes Drying at power plant or before freight Oversea wood chips are more expensive than wood pellets when raw materials, production and freight are taken into account. Further necessary extra investments at power plant increases costs by use of chips. Wood chip prices differ globally due to limited global trade of wood chips (31 mt in 27) caused by phyto-sanitary issues and high transport costs between different global climate regions Phyto-sanitary issues to be solved Notes: Resource costs are based on prices for 28 (WRI) and Endex biomass price index Calculation of freight is based on fundamental costs for freight from USA to external storage in ARA. with handysize vessels respectively. Wood pellets: Energy content = 17,2 GJ/ton; Volume = 62 kg/m 3; Moisture content 8% Wood Chips: Energy content = 1,43 GJ/ton; Volume = 33 kg/m 3 ; Moisture content 4% 6 Calculations are based on an exchange rate of 1,32 USD/Euro

7 Conclusions Cost assesment Chips Pellets Investment production Low High Logistics High Medium Freight High Low Investment consumption High Medium Price Medium High 7

8 Carbon foot prints of wood pellets from cradle to grave preliminary results Transport of raw materials to pellet mill Pellet production Transportation of woodpellets to harbour Freight to Denmark (depends on vessel type) 96 Kg CO2 emission per GJ Power Production Freight to Fredericia Production of fuel 95-96% Coal - South Africa Pellets - Baltics Pellets - Canada East Pellets - Brazil Pellets - US southeast Wood chips - US The Carbon foot print of wood pellets are still attractive compared to coal, however the positive effect varies a great deal depending on the origin due to CO2 emission from freight CO2 emission from freight of coal to Denmark is minor as this is done by capesize compared to handymax for wood pellets Wood chip 4 carbon footprint is only illustrative as it is not based on specialized wood chip freighters 1Wood pellet production consumes 8 KWh of electricity. Production of 1 KWh electricity causes a CO2 emission of 35 g. 1ton wood pellets=17,2 GJ. Freight to Pellet mill is not included. 2Amount of fuel oil for freight is calculated using DONG Energy's freight model. Calculations are based on single trips with a handymax vessel. Use of1 ton fuel oil emits 3.17 kg CO2 to the atmosphere. 3CO2 emission from Coal production is unknown, and hence not included 8 4Moisture content of wood chips used is 4%