Biomass CHP in Latvia: Now and in the Future Ginta Cimdiņa, Fortum HESS division, Country Manager Latvia Nordic Baltic Bioenergy 2015 Riga, April 14 th -16 th, 2015
Content Current situation in numbers Biomass CHP Latvia statistics Why CHP? Switch from gas to biomass CHP in district heating: case Jelgava, Latvia Future solutions: CHP+ concept, Pyrolysis 2
Renewable energy sources: today and tomorrow Directive 2009/28/EC on the promotion of the use of energy from renewable sources 40% RES share in gross final energy consumption. Latvia is going towards this goal by reaching 37.1 % in 2013 National Energy Strategy of Latvia 2030 50% 50% < 100 kwh/m2 RES share in gross final energy consumption Energy import Annual heat consumption. Energy efficiency of building stock 3
Biomass share in district heating in Latvia 100% 90% 80% 70% 60% 50% 40% 2014 forecasts estimates increase to ~30% 25% 30% 20% 10% 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Biomass CHP`s Biomass boiler houses Natural gas, other fosile fuels 15% 10% 4 Source: LR Ministry of Economy, Central Statistical Bureau
District heating market in Latvia / Top 9 cities Territorial unit Heat production (GWh) Market share LATVIA 6 944 Rīga 3 484 50% Daugavpils 467 7% 217 106 Jelgava 213 3% Jēkabpils 89 1% 164 3 484 Jūrmala 164 2% 288 213 89 163 Liepāja 288 4% Rēzekne 163 2% Valmiera 106 2% 467 Ventspils 217 3% Total share in large cities 75% 5 Source: Central Statistical Bureau
Biomass CHP`s versus total 60 50 40 30 20 10 0 Number / MW 54 21 18 12 3 4 3 5 2 3 5 2 4 4 2007 2008 2009 2010 2011 2012 2013 Number of biomass CHP`s Installed electrical capacity, MW Including: Fuel type Number of CHP`s Installed electrical capacity, MW Number of CHP`s % Installed electrical capacity, % Jelgava Bio CHP Installed capacity, MW Natural gas 95 1 142 57% 91% Biogas 50 53 30% 4% Biomass 21 54 12% 4% Coal, oil 1 3 0.6% 0.2% Total 167 1 252 1 23 6 Source: Central Statistical Bureau, year 2013
New power generation capacity needed for increasing demand and retiring capacity replacements Growing global energy demand will be increasingly fulfilled by electricity in the future Substantial demand growth in the emerging markets Retirements and moderate demand growth in the EU Globally, ~7,000 GW of new capacity needed by 2040 250% 200% 150% 100% 50% Capacity changes, 2014-2040 (GW) Retiring capacity 0% Growth, 2012-2040 479 Primary energy demand Electricity generation 19% 632 41% 172 114% 281 225% US Europe Russia China India Other areas 91 787 World total 2,442 Capacity increase 257 354 72 1435 814 1,833 4,765 New capacity, total (1 736 986 244 1716 905 2,620 7,207 Source: IEA WEO 2014 (New polices scenario) 1) Total new capacity needed for increasing demand and replacements of retiring capacity 7
The heat load determines the business Open district heating Peak load Middle load Cooling load Condensing mode and new products i.e. cooling, bio-oils Gas/oils Biomass/coal/gas Biomass/coal/gas DH system specific priority order Base load Waste/biomass/coal/gas Figure. Annual production curve of a DHC system CHP+ (Open DH and Pyrolysis) Potential load curve 8
Why we believe in CHP for now and for the future? We believe that renewable and energy efficient production is going to be the most cost effective solution in the long term Therefore delivers both economical and sustainable benefits By reducing environmental impact CHP meets climate change challenges Biomass and waste-to-energy more attractive as cost of CO 2 increases CHP is a driving force away from fossil fuels Enables use of local renewable fuels Creates new business opportunities and jobs for local people and farmers 9
Conference study tour April 16th: Fortum s biomass CHP plant in Jelgava Technical indicators: Fuel power 77 MW fuel District heat capacity 45 MW heat Electricity capacity 23 MWe Estimated DH produced 220 GWh Generated backpressure electricity 110 GWh Boiler type bubbling fluidized bed boiler technology that allows to utilize lower quality wood chips Type of wood chips - wood residues and clearings of agricultural lands Fuel consumption per year 380 000 MWh wood chips Fuel supply - around 6 thousand trucks per year See video about Jelgava Bio CHP at: http://youtu.be/j35wiec3dy0 10
Jelgava Bio-CHP and turn-around in Jelgava district heating system Earlier production was 100% natural gas based, using boiler houses from 1970`s Fortum s investment during 2008 2013 totals to ~ 90 M, including: Network renovation and interconnection of two district heating systems under the river Lielupe, Replacement of all heat production units, Bio cogeneration plant based on wood chips First large-scale bio-chp plant project in Latvia 250 200 CO 2 emissions from heat production (g CO 2 /kwh) 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 2013 2015 2018 2020 11
Heat energy production in Jelgava city Until 2012 Since 2014 100% natural gas 85% woodchips Heat price ~ 75.50 EUR/MWh (VAT excluded) Heat price ~ 58.57 EUR/MWh (VAT excluded) 12
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Bio-oil CHP+ concept: renewable energy and flexibility Globally first CHP-integrated pyrolysis plant in commercial size was inaugurated on November 29 th, 2013 in Joensuu Plant produces Fortum Otso bio-oil, which can now replace heavy fuel oil and in the future target is to produce higher value traffic bio-fuels and green chemicals Integrated bio-oil production increases flexibility and operation hours of CHP-plant In addition several other resource efficient benefits: Synergies in operation and maintenance as well as in raw material and fuel supply Charcoal and the non-condensed gases that are created as a result of bio-oil production can be used as fuel for the plant, so all raw materials can be utilized Fortum is actively carrying out R&D for new sustainable CHP+ concepts to maintain and increase CHP and district heating flexibility and competitiveness 14
Innovative ideas for the future CHP-integrated pyrolysis oil production in Jelgava Pyrolysis oil production integrated at Jelgava BioCHP. Fortum Jelgava has been allocated 3.9 M from NER300 EU financing. Total investment ~35 M. Pyrolysis oil a domestic alternative for fossil oils Bio oil is produced from biomass like forest residues and other forest industry by-products Energy density of bio oil is high compared to unprocessed biomass Bio oil can be economically transported longer distances to be utilised in heat and steam production Bio oil can be used for replacing heavy fuel oil and it s heating value is about half compared to fossil oils In the future bio oil can be a raw material for carbon lean chemicals and traffic fuels 15
Which road for the EU and national energy policies to go forward? It s really a question of choosing the least costly alternative Lost in translation No clear vision (survival/adaptation) Conflicting policies, retroactive changes National policies for RES to continue to grow. Various capacity market designs to keep national generation adequacy Costly CO2 reduction driven by subsidized RES investments Non-competitive energy prices European, market-based policy based on: EU approach on climate, RES, market design Cost efficiency Regional generation adequacy assessment. Flexibility has a value Cost-efficient CO2 reduction based on market based ETS Competitive energy prices 16
The future will need more energy. Let s make it sustainable! Thank you!