Bioenergy in Denmark. Hans Peter Slente, DI Energy on behalf of Michael Persson Danish Bioenergy Association

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1 Bioenergy in Denmark 15 Mar. 16 Bioenergy in Denmark Hans Peter, DI Energy on behalf of Michael Persson Danish Bioenergy Association Danish-German Bioenergy Meeting 15 March 2016, Kolding, Denmark Photo: DONG Energy

2 Agenda 1. DI Bioenergy Danish Bioenergy Association 2. Danish bioenergy market 3. Ambitious Danish energy and climate policy 4. Energy scenarios Danish industry agreement on biomass sustainability 6. Biofuels and biorefining 7. Conclusion 2

3 Danish Bioenergy Association The voice and forum of the Danish bioenergy industry, working for: an optimal regulatory environment for bioenergy, strengthening the business of its members, and cohesion and visibility for bioenergy and the bioenergy industry Members include technology producers and suppliers, consulting engineers, utilities and developers Members activities include combustion as well as other uses such as biofuels, biogas and biorefining DI Bioenergy is an industry association within the Confederation of Danish Industry 3

4 Production of Renewable Energy Bioenergy is biggest PJ '95 '00 '05 '10 '14 Vindkraft Windpower Straw Wood Biogas Waste, biodegradable part Other Træ Source: Danish Energy Agency Halm Biogas 4

5 Consumption of Renewable Energy PJ '95 '00 '05 '10 '14 Wind Vind Biomasse Biogas Other Andet Source: Danish Energy Agency 5

6 Growing Imports of Renewable Energy PJ Production Windpower of Renewable Straw Wood Energy Net Import Waste, of biodegradeable Renewable Energy Other Source: Danish Energy Agency (note: table only updated to 2013) 6

7 Denmark is a large importer of wood pellets DK production est. at 100,000 tons Consumption by large scale users will grow heavily due to conversion of central CHP plant from coal and gas to biomass Small and mid-scale users estimated to grow by 3-5% p.a. Temporary plans of including biomass in energy tax scheme increased sales in 2013 temporarily Pellet market in Denmark (mill.tons) Import 2,0 2,3 2,1 Production 0,1 0,1 0,1 Available 2,1 2,4 2,2 Large scale 1,3 1,3 1,4 Mid-scale 0,1 0,1 0,1 Small scale 0,7 1,0 0,6 Tot. consumption 2,1 2,4 2,1 Source: Biobrændselsforeningen and Intrastat Min. import to be included in stat: 2013: 3.9 m DKK Min. import to be included in stat: 2014: 5 m DKK 7

8 Ambitious Danish energy and climate policy Ambitious climate and energy policy, starting 1985 with a decision not to use nuclear energy and later adding incentives for biomass and wind Based on energy agreements in parliament adopted by vast parliamentary majority, lasting usually two terms Instruments are a mix of non-financial regulation and taxes and subsidies Latest agreement from 2012 includes a vision of an energy system independent from fossil fuels by

9 Denmark s Climate Targets Reduction in energy consumption (2010) Reduction in CO 2 emissions (1990) 7,6% 34% CO 2 35% 50% Share of renewable energy Share of wind in electricity supply Independence from fossil fuels

10 Taxes and subsidies for power production - DKK 0.01/KWh Hans Peter Taxes and subsidies in power production and co-generated heat Biomass Gas Bio Coal --Windpower-- Taxes Subsidies Energy tax CO2 tax Source: Danish Energy Agency SO2 tax NOx tax CO2 quota price Subsidy Total 10

11 Five scenarios 2035 / 2050 Source: Danish Energy Agency 11

12 Fossil-free scenarios only marginally more expensive Fossil-free scenarios cost 5-20% more (EUR 0.8-4bn) per year Biomass scenario is the cheapest scenario But the difference is only marginal and uncertainty substantial Hydrogen Fuel Oper & maint Source: Danish Energy Agency Savings 12

13 Findings from scenario analysis It is technically possible to design different energy systems meeting the vision of fossil fuel independence Biomass is a limited resource. With small biomass resources, Denmark has a choice between a fuel-based system with large biomass imports or an electricity-based system with limited bioenergy use A wind-based system will have good fuel supply security, but will have problems ensuring a reliable electricity supply A bioenergy-based system will have problems ensuring a reliable fuel supply 13

14 Industry agreement to ensure sustainable biomass CHP plants recognise sustainability Preference for EU-wide criteria Industry agreement adopted to ensure sustainability of wood pellets and chips Inspired by similar regulation or voluntary agreements in Belgium, the Netherlands and particularly the UK Valid for all plants above 20MW capacity Plants oblige themselves to document sustainability with implementation from 40% in 2016 to 100% in 2019 Industry agreement presented to the Danish climate and energy minister by heads of Danish Energy Association and District Heating Association in December

15 New development: Cellulosic Ethanol / Biorefinery Plans for a biorefinery based on DONG Energy / Inbicon technology Local utility companies with Novozymes & DONG Energy Integrated with local CHP and biogas plant Received NER300 grant of 39m Investment decision subject to blending requirement for cellulosic ethanol Input: 300,000 t wheat straw Output: 80 mill. liter ethanol 70,000 t lignin 90,000 t vinasse 15

16 Side benefit of Danish Policy: Massive export of energy technology DKK 1,000 millions '00 '05 '10 '14 20,0% 15,0% 10,0% 5,0% 0,0% Source: Danish Energy Agency Eksport Export of af energy energiteknologi technology and og -udstyr equipment Andel Share of af total Danmarks Danish samlede export (right eksport axis) (højre akse) 16

17 Danish German Trade in Energy Technology Note: Green energy technology are goods used in the production of renewable energy or for energy savings Source: Eurostat and calculations by The Confederation of Danish Industry

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20 Conclusion Fossil-independence in 2050 is the political goal for Denmark. It is technically and economically feasible Bioenergy will accounts for most of Denmark s renewable energy many years ahead Ambitious energy and climate policy has laid the ground for strong energy industry and export of energy technology Photo: DONG Energy 20