Bioenergy Insight January/February 2018

JANUARY/FEBRUARY 2018 Volume 9 • Issue 1

What will the New Year bring?

Looking ahead to 2018 for biogas and biomass

Crisis solution How AD is helping communities in India

Regional focus: Bioenergy in Europe

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contents Bioenergy

Contents Issue 1 • Volume 9 January/February 2018 Woodcote Media Limited Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.bioenergy-news.com MANAGING DIRECTOR Peter Patterson Tel: +44 (0)208 648 7082 peter@woodcotemedia.com EDITOR Daryl Worthington Tel: +44 (0)20 8687 4146 daryl@woodcotemedia.com ASSISTANT EDITOR Luke Acton Tel: +44 (0)20 8687 4183 luke@woodcotemedia.com INTERNATIONAL SALES MANAGER George Doyle Tel: +44 (0) 203 551 5752 george@bioenergy-news.com NORTH AMERICA SALES REPRESENTATIVE Matt Weidner +1 610 486 6525 mtw@weidcom.com PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com SUBSCRIPTION RATES £170/$270/€225 for 6 issues per year.

Contact: Lisa Lee Tel: +44 (0)20 8687 4160 Fax: +44 (0)20 8687 4130 marketing@woodcotemedia.com

2

Guest comment

3 News 10 Plant update 12 Incident report 13 2018 Outlook 23 The best of times, the worst of times

An interview with the American Biogas Council’s executive director

25 Empowering rural communities through green energy

How anaerobic digestion is helping alleviate a growing crisis in India

29 Do global standards really cut the mustard?

Jonathan Smith from Balmoral Tanks asks: Where is the stamp for world-class customer service?

32 Optimal organic soup

Separating organic waste from packaging on an industrial scale

33 ILUC, REDII and Brexit – as clouded as ever

Policy certainty remains Europe’s main bioenergy goal

36 Avoiding ash issues from unconventional biomass

Factors impacting biomass inorganic fraction: how predictive analytics can help for the fuels’ operational characterisation

39 Building a biomass-fired power plant in Spain

Sener is building a 40MWe power plant for a broad range of biomass wastes

Follow us on Twitter: @BioenergyInfo Join the discussion on the Bioenergy Insight LinkedIn page

No part of this publication may be reproduced or stored in any form by any mechanical, electronic, photocopying, recording or other means without the prior written consent of the publisher. Whilst the information and articles in Bioenergy Insight are published in good faith and every effort is made to check accuracy, readers should verify facts and statements direct with official sources before acting on them as the publisher can accept no responsibility in this respect.

Any opinions expressed in this magazine should not be construed as those of the publisher.

ISSN 2046-2476

Bioenergy Insight

JANUARY/FEBRUARY 2018 Volume 9 • Issue 1

What will the New Year bring?

Looking ahead to 2018 for biogas and biomass

Crisis solution How AD is helping communities in India

Regional focus: Bioenergy in Europe

Front cover image courtesy of Balmoral Tanks

January/February 2018 • 1

Bioenergy guest comment

2018 – A year to make bioenergy great!

T

Bharadwaj Kummamuru, executive director, World Bioenergy Association, Stockholm

World Bioenergy Association (WBA) WBA is the leading voice for the global bioenergy community. With more than 240 members from more than 60 countries, the organisation promotes sustainable bioenergy development.

Visit: www. worldbioenergy.org

he 23rd Conference of Parties or COP23 held in Bonn, Germany had positive developments in the energy sector.

Barring the US, every other country signed up for the Paris Agreement including war torn Syria and Nicaragua.

More important was the news in recent weeks that the US is considering re-joining/ cancelling their pullout from the Paris Agreement. When all the 197 countries in the world agree that the environment is under threat and we need to do something about it, it is a heartening note to start the New Year. However, 2018 started with devastating news about forest fires and flood alerts which will only increase in intensity and frequency due to climate change and global warming. 2018 is the year of saving the planet!

Where does it leave biomass and bioenergy? Bioenergy — one of the most versatile energy sources — covers the needs in heating, electricity and transport sectors. The most complex energy system is well positioned to meet the targets of the Paris Agreement along with other renewable energy sources.

There are three key issues for bioenergy to overcome so as to position itself as the champion of renewable energy technologies: Tackle misinformation Bioenergy is still sometimes perceived as a traditional and old technology which has to be phased out for fancy and flashy technologies like electrical vehicles, heat pumps etc. The question is not this or that technology. At a time when still about 80% of the consumption is by fossil fuels, we need all low carbon and efficient

2 • January/February 2018

technologies to develop. For bioenergy, the crucial step is tackling misinformation in topics related to sustainability, land use and debates about food and fuel. Efficient and sustainable bioenergy is critically important to meet any national or international energy and climate goals.

Pivot towards heat and transport sectors The world has achieved considerable progress in decarbonising the electricity sector. A quarter of the electricity sector is renewable with wind and solar making great progress. The heat sector has 27% renewables while the transport sector is critically lagging at 3%. Electrification of heat and transport sectors has a long way to go. The world needs non-electrified renewable sources in heating and transport.

Biomass contributes to more than 90% of renewable heating and transport needs. It is important for the sector to refocus attention towards these end use sectors.

In the heating sector, the use of pellets and woodchips is one of the most efficient ways of reducing dependence on heating oil while increasing the use of all types of sustainably produced liquid biofuels — bioethanol, biodiesel, renewable diesel, HVO etc. offers the quickest and most convenient way to replace oil use in the transport sector.

Foothold in developing countries The focus of development of biomass should now be towards the developing countries.

Countries with impressive growth rates and ambitious renewable targets are key sectors for the development of biomass resources

and technologies. These include Eastern Europe, Eastern and Southern Asia, Sub Saharan Africa and South and Central America. The technology exists in developed regions like Europe and North America. The resources exist in these developing nations — vast tracts of unused lands, enormous production of agricultural residues, increasing municipal solid waste production etc. which can fuel the countries and their development.

One of the key requirements for fast development of bioenergy is the presence of strong local stakeholders. The World Bioenergy Association (WBA) pushes for such local presence by guiding the setting up of local bioenergy associations and/or setting up regional branch offices of the global office. We already have our first office in China while we are pushing for more in Indonesia, Canada, Brazil, Mexico, Japan etc.

Finally, a strong political tool for bioenergy development is carbon tax. Sweden has the world’s highest carbon tax at 140 USD/tCO2e and the country has one of the highest bioenergy (36%) and renewable energy (53%) contributions in its energy mix among developed nations. More countries should start implementing carbon taxes — at a lower rate initially, while countries with carbon taxes already should increase the rate progressively so as to ensure favorable market conditions for bioenergy and renewable energy development.

As we welcome 2018, let us all acknowledge the crucial role of bioenergy in our lives and aim to realise its full potential for a sustainable society.

Bharadwaj Kummamuru, executive director, World Bioenergy Association, Stockholm

Bioenergy Insight

biomass news

Biomass industry responds to ‘morbid mathematics’ of FERN study Two major associations for the biomass industry have responded to a study claiming the burning of biomass prematurely kills tens of thousands of people each year.

The study was commissioned

by FERN, an NGO created in 1995 “to keep track of the European Union’s involvement in forests and coordinate NGO activities at the European level”. The research itself was carried out by Dr. Mike Holland, an independent expert with more than twenty years’ experience of quantifying the impacts of air pollution, according to FERN. Dr. Holland’s results suggest tens of thousands of EU citizens could be dying prematurely every year as a result of exposure to air pollution from burning solid biomass. The study also points to other health impacts, including cancers, cardiac and respiratory complaints, asthma attacks and working days lost to ill health.

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FERN states that it decided to publish the report as the EU prepares to finalise revisions of the Renewable Energy Directive (commonly dubbed REDII) for the period after 2020. The NGO argues that if agreed in its current form, REDII would “inevitably lead to the continuation of high levels of biomass burning and thus exposure to the dangerous health impacts of biomass emissions”.

Bioenergy Insight spoke to two major associations connected to the biomass industry to get their reactions to the controversial study.

“We will need time to analyse the whole study and especially the numerous assumptions taken by Dr. Holland which according to our understanding haven’t been peer reviewed (so far),” said Jean-Marc Jossart, secretary of general of AEBIOM, the European Biomass Association.

Jossart also questioned the timing of the study’s publication. “This is not a coincidence if this so called study is released just a week ahead of the plenary vote on REDII, but we are shocked

by the instrumentalisation of morbid mathematics to draw catchy headlines aiming at undermining Europe’s first sources of RES (Renewable Energy Sources).”

The US Industrial Pellet Association (USIPA) meanwhile, defended the credentials of biomass energy.

“Sustainably-sourced woody biomass has been proven time and time again to be a lowcarbon replacement for coal and fossil fuels that is both good for the environment and beneficial for forest health,” USPIA executive director Seth Ginther told Bioenergy Insight.

“This type of fearmongering from FERN and other extreme activist groups does not move us any closer towards decarbonising European energy systems, but instead these campaigns waste time and money while offering no real solutions to climate change. The biomass industry on the other hand has for the last decade been providing a renewable substitute for coal-fired power that balances the grid and keeps the lights on, while also reducing carbon emissions across Europe and supporting sustainable forestry and small landowners.” l

January/February 2018 • 3

biomass news

Germany: biomass second most common source of renewable energy Renewable energy sources are expected to have accounted for more than 36% of the gross amount of electricity consumed in Germany in 2017, according to research.

The Centre for Solar Energy and Hydrogen Research BadenWürttemberg (ZSW) and the German Federal Association of Energy and Water Management (BDEW) reported the numbers after an initial assessment.

Biomass came in second, with close to 24% of green energy production, with

nearly 3% of waste being biogenic. Growth in the area is expected at 1% in 2017.

Power output from wind turbines at sea is the biggest growth area, with output expected to increase by 49% to 18.3 billion kWh, up from 12.3 billion kWh in 2016. However, onshore

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wind energy remains by far the strongest source, accounting for more than 40% of the electricity generated by renewables.

“Renewables have already surpassed the federal government’s target for 2020, which calls for their share of gross electricity consumption to arrive at 35%. That is good news for climate protection.

However, to ensure electrical power from renewables can be widely used, we must forge on, full steam ahead, to extend north-south power lines. The gears of grid and renewables expansion have to be closely meshed,” explains Stefan Kapferer, Chairman of BDEW’s General Executive Management Board.

“The share of green power in electricity consumption has increased by almost 13 percentage points over the past 5 years. And over the past 15 years, the increase has been even greater at 28 percentage points.

This is indeed a success story,” says Prof. Frithjof Staiß, Managing Director of ZSW. “What’s more, the dynamic development currently underway has not led to an increase in the EEG levy — it may even be reduced somewhat for 2018. Now policymakers need to establish the framework conditions so that the next expansion goals can also be achieved.” Staiß added that this applies particularly to the other two sectors, heating and mobility, where the share of renewables has for years been stagnating at 6% (transportation) and 13% (heating). l

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4 • January/February 2018

Bioenergy Insight

biogas news 100% biogas powered brewery developed by Carlsberg Beer maker Carlsberg’s brewery in Falkenberg, Sweden, is now powered 100% by biogas and green electricity. The move has reduced the brewery’s carbon emissions from thermal energy and electricity to zero.

Earlier in 2017, the Carlsberg Group launched a new sustainability programme: Together Towards Zero. One of the four ambitions stated in the programme is to achieve zero carbon footprint by eliminating emissions from all breweries, as well as achieving a 30% reduction in the beer-in-hand carbon footprint by 2030.

To achieve these targets, Carlsberg Group breweries will use 100% renewable electricity and eliminate coal as a source of energy by 2022.

The Carlsberg Sverige brewery in Falkenberg has been using green electricity for several years, with 26% of the thermal energy coming from biogas generated from the brewery’s own wastewater.

The remaining 74% had come from natural gas, but this has now been converted to biogas in cooperation with energy supplier Orsted. Certificates ensure that the biogas supplied to the grid has replaced an equivalent amount of natural gas.

Through the Science-Based Targets initiative, Carlsberg Group has set a 1.5 degree ambition compared to the Paris agreement’s base level 2 degree goal. The Carbon Trust has highlighted Carlsberg among only three major companies to have set and approved targets with this level of ambition.

“Our work with Carlsberg has explored the range of options they will need to adopt in the coming years to evolve to a zero carbon brewer,” said Tom Delay, chief executive, the Carbon Trust.

“This will include adoption of innovative energy efficiency technology... as well as sourcing of renewable energy, such as biogas. Seeing this first Carlsberg brewery make this transition so soon is very encouraging and should be seen as a demonstration of how industries can embrace new technologies to mitigate climate change.” l

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January/February 2018 • 5

biogas news

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ADBA launches AD certification scheme The UK’s Anaerobic Digestion and Bioresources Association has launched an innovative new industry led scheme to support operators of AD plants in improving their operational, environmental, and health and safety performance, in particular in terms of energy generation and digestate quality.

ADBA, the trade association for the UK AD sector, developed the scheme in close collaboration with figures from industry including insurance broker Jelf and Aardvark Communication, as well as other trade bodies and stakeholders related to the sector. It has already been trialled at three AD facilities in the UK, including major food waste recycling company Agrivert.

“As the owners and operators of five AD plants recycling over a quarter of a

million tonnes of food waste across the UK, we found our involvement in the pilot phase of the AD Certification Scheme to be very useful in providing a check and reassurance that our plants were meeting consistent, high operational standards across the board,” said Agrivert’s Compliance director Susan Relf, in a statement.

“The fact that the scheme reflects existing ISO standards also allows straightforward integration with existing standards and schemes.”

Meanwhile, Carl Gurney, Renewable Energy director at insurance brokers Jelf, described the scheme as having ‘tangible insurance benefits.’ He said, in a statement released by ADBA: “Having a standard to reach truly benefits the wider industry, which will only assist in giving confidence to regulators and investors. This in turn will hopefully lead to a more hands-off approach, continuity in regulator assessments and continued investment which, finally, means sector growth. This is a hugely positive move for the AD sector and I urge those interested to get involved.” l

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ADBA’s Environment & Regulation manager Jess Allan launching the scheme

Bioenergy Insight

xxxxxx Bioenergy

wood pellet news New Drax wood pellet facility starts production Production has started at Drax Biomass’ (DBI) newest sustainable compressed wood pellet facility, LaSalle BioEnergy in Urania, Louisiana.

“This is a very exciting moment, we have a dedicated and motivated workforce that after months of upgrades, retrofits, and training is ready to produce,” said Pete Madden, president and chief executive officer of Drax Biomass.

“We knew this was a strong facility, in an ideal location and we are eager for it to come online.”

LaSalle BioEnergy will employ approximately 78

people. Situated roughly 160 miles northwest of Baton Rouge, the facility has the capacity to produce approximately 450,000 metric tonnes of wood pellets per year.

It is the third pellet plant in DBI’s portfolio, joining Morehouse BioEnergy in Bastrop, Louisiana and Amite BioEnergy in Gloster, Mississippi.

Since DBI’s acquisition of the plant in April 2017 a series of upgrades and repairs have been ongoing, supporting a further investment of more than $20 million for the region.

“The asset was a strategic investment considering LaSalle BioEnergy’s proximity to an abundant wood basket

and its production capacity that supports DBI’s strategy of increasing self-supply,” states a DBI press release.

Drax Biomass is a manufacturer of compressed

wood pellets produced from ‘sustainably managed working forests’. The company is headquartered in Atlanta, Georgia, and has operations across the southeastern US. l

UK’s coal phase-out plan helps Canada bump up its wood pellet exports Canada has been able to boost the amount of wood pellets it exports because countries like the UK are shifting away from coal and turning to biomass, according to new research from the National Energy Board.

The federal agency stated that exports of wood pellets in 2016 increased by 46% to 2.4 billion kg in 2016, compared to the same period the previous year.

Overall, annual wood pellet exports increased by 73% in the last five years, growing from 1.4 billion kg in 2012

Bioenergy Insight

to 2.4 billion kg in 2016.

Canada is the secondlargest exporter by weight after the US. About 70% was shipped to the UK, 11% to Japan and 7% to the US. The remaining 12% was exported to 11 other countries.

Increasing wood pellet exports to the UK were partially explained by the UK’s planned initiative to phase-out coal generation by 2025.

British Columbia is the largest wood pellet manufacturer in Canada, accounting for 65% of total capacity and production (as of 2012). Alberta, Quebec, New Brunswick, Nova Scotia, and Newfoundland accounted for the remaining 35%. l

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January/February 2018 • 7

2016-02-15 15:1

xx Bioenergy

technology news

All-Gas enters next phase of biogas from algae project

Miguel Arias Cañete, the European Union Commissioner for Energy and Climate Action, has inaugurated the new phase in the All-Gas project in the El Torno treatment plant in Chiclana, Cadiz.

Co-financed by the European Commission with the Seventh Framework Programme, the All-Gas Project aims to demonstrate the large scale production of biofuels and biogas based on the cultivation of low cost algae.

The All-Gas Project has now started its demonstration phase, successfully exceeding all the objectives and stages set from the start, producing quality biogas that is being tested in various vehicles to check their function.

According to a statement, the results of all the project’s phases so far have demonstrated that All-Gas is a clear example of circular economy since waste (dirty water) is converted sustainably into raw materials with added value, thus providing an innovative and environment-friendly process.

Speaking at the event, Cañete discussed the importance of looking into alternative fuels with lower greenhouse gas emissions.

“We are aware that they are complex projects because they involve various companies but once the process has started, decarbonisation in the European Union is now unstoppable.”

“The transport sector is key to this process,” he continued, pointing out that emissions from transport had increased by 33% between 1990 and 2016.

As well as Cañete, the event was attended by Councillor for the Environment and Land Planning of the Government of Andalusia, José Fiscal, the Deputy Central Government Representative in Cadiz, Agustín Muñoz, and the Mayor of Chiclana, José María Román, together with other representatives of the authorities. Aqualia was represented

by Félix Parra, general director, and Frank Rogalla, R&D director. l

Study suggests biochar could significantly improve anaerobic digester performance In a paper by Texas A&M scientists, biochar shows potential for increasing efficiency of the anaerobic digestion of animal manure.

Biochar is a charcoal material composed of agricultural byproducts, including manure, crop residues and grasses. The substance can be used as a fertiliser and as a filter to remove contaminants from water and wastewater, including antibiotics, pesticides and hormones; in the process, biochar captures CO2 and ammonia.

“There are good indications that biochar will make anaerobic digestion a viable solution for more efficient management of animal manure with easier operations than conventional anaerobic digestions,” said Dr. Eunsung Kan, co-author of the study in a statement. “When we optimise conditions and move to the test phase on a dairy then we will know what capital investment and footprint would be necessary to build sustainable digesters that can meet the disposal needs and then apply that to other operations based on their capacity.”

In the study, digesters that are enhanced with the biochar saw a methane production increase of about 40%, with a reduction in production time of 50-70%.

Kan said that these savings could lower initial investment costs, water consumption, utility costs, operating costs and land requirements. But he added that more research is needed into how microbial communities behave in the presence of biochar and what the optimum conditions are for biogas production.

“There are good indications that biochar will make anaerobic digestion a viable solution for more efficient management of animal manure with easier operations than conventional anaerobic digestions,” he said. “When we optimise conditions and move to the test phase on a dairy [farm] then we will know what capital investment and footprint would be necessary to build sustainable digesters that can meet the disposal needs and then apply that to other operations based on their capacity.” l

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www.bioenergy-news.com/conference January/February 2018 • 9

Bioenergy plant update

Plant update – EUROPE Walloon government Location

Wallonia, Belgium

Alternative fuel

Biomass power

Capacity

200MW

Construction / The Walloon government has decided expansion / acquisition to cancel its call for tenders for a biomass power plant in Wallonia, Belgium Designer/builder

Undecided

Project start date

May 2016

Completion date

Cancellation announced October 2013

Investment

€1.3bn for 20 years (proposed)

Comment

“We are stopping a project that was committing us to more than 20 years of … costly conditions,” said Jean-Luc Crucke, MR, Minister of Energy.

According to Belgian newspaper L’Echo, the government saw the project as a risk in terms of biomass supply because it was “unaccompanied by cogeneration”.

Crucke said: “Supply contracts do not reach 20 years, so there is no guarantee on prices over 20 years”

ENCE Location

Huelva, Spain

Alternative fuel

Biomass electricity

Capacity

40MW gross nominal output

Feedstock

A variety of different types of biomass

Construction / Sener is set to design, supply, build expansion / acquisition and commission a new, low emission biomass electricity plant. The company has signed a turnkey agreement with ENCE that will see Sener operate and maintain the facility during the first years of its operation.

Designer/builder

Sener

Project start date

28 November 2017

Completion date

The plant is projected to go into operation in the third quarter 2019

Investment Undisclosed

Inver House Distillers Location

Speyside, Scotland

Alternative fuel

Biomethane and renewable heat

Capacity 2000m3 per day of biogas will be fed to a CHP engine, supplying 200kW of power and 230kW of heat for use at the distillery Feedstock

Whisky residues

Designer/builder

Clearfleau has started construction on a new AD facility at the Inver House Distillery. It joins a wood pellet biomass boiler already installed at the site, as part of a bid to lower the distillery’s carbon footprint.

Project start date

8 December 2017

Investment

Part of a £3 million (€3.4 million) investment at the distillery

Orsted (Formally Dong Energy) Location

Fredericia, Denmark

Alternative fuel

Combined heat and power plant

Capacity

Enough district heating to meet the district heating consumption of 60,000 Danish households

Feedstock

Wood chips

The city of Baranovichi Location

Baranovichi, Belarus

Alternative fuel Biogas Capacity

4,380MWh of electricity and 3,880 Gcal of heat per annum

Feedstock

Wastewater sludge

Construction / Orsted launched its new CHP plant, expansion / acquisition called the Skærbæk Power Station.

It was inaugurated by HRH the Crown Princess of Denmark on 25 October.

The power station is now able to supply electricity without using fossil fuels

Construction / A biogas plant in the city of expansion / acquisition Baranovichi, Belarus, which was funded by the European Bank of Reconstruction Development and the government of Belarus, has started operation.

Completion date

19 December, 2017

Comment

Investment

EBRD provided a €2.9 million sovereign loan for the construction of the facility.

This investment was complemented by an additional €1.4 million grant for capital expenditure and €0.8 million for project implementation consultancy work from the Swedish International Development Cooperation Agency (Sida)

“By switching to sustainable wood chips, we’re reducing Skærbæk Power Station’s annual carbon emissions by about 250,000 tonnes. This is equivalent to the annual carbon emissions from more than 125,000 cars,” said Thomas Dalsgaard, executive VP and CEO of Bioenergy & Thermal Power at Orsted

10 • January/February 2018

Bioenergy Insight

plant update Bioenergy Station Works AD Location Essex, UK Alternative fuel Anaerobic digestion Capacity 1MW Feedstock Maize, sugar, sugar beet and whole crops Construction / Station Works AD, a 1MW on-farm AD expansion / acquisition facility in Thaxted, Essex, UK, was purchased by AD funders Privilege Finance and its business partner BioWatt, who have taken over the operation of the AD plant with immediate effect Completion date December 2017 Comment According to BioWatt CEO James Lloyd, the new operators of the plant should see an improvement in its performance. “Although it has been running successfully since 2012, the current performance level is at between 70% to 80% efficiency,” he explained. “Our aim would be to significantly improve this by finetuning the operation, investing in the infrastructure, and analysing the biology within the process.” It is hoped that by securing its future, there will be benefits beyond the plant itself, particularly in terms of employment in the local community

Bioenergy Insight

Energy Works Location Hull, UK Alternative fuel Waste-to-energy Capacity 25MW Feedstock Municipal waste Construction / The research and control centre for expansion / acquisition the Energy Works plant in Hull has been completed Designer/builder Spencer Group Completion date The waste-to-energy facility is due to being operation in 2018 Investment £200 million Comment “Energy Works will be at the forefront of waste to energy technology in the UK and pave the way for further innovation in this field. The Energy Academy and the partnership with the University of Hull will play a key part in maximising the research and development opportunities Energy Works offers,” said Richard Burgess, deputy managing director of Spencer Group

*This list is based on information made available to Bioenergy Insight at the time of printing. If you would like to update the list with additional plants for future issues, email daryl@woodcotemedia.com

January/February 2018 • 11

Bioenergy incident report A summary of the recent major explosions, fires and leaks in the bioenergy industry Date

Location

Company

Incident information

08/12/17

Benson, MN, US

Benson Power

A man fell into a biomass hopper and later died in hospital.

The Occupational Safety and Health Administration is investigating the incident. The company has previously been fined for workplace safety violations.

30/11/17

New Hampshire, US

Springfield Power

A man was killed at a wood-burning power plant just two weeks after starting to work there. The Occupational Safety and Health Administration has not yet concluded its investigation into whether workplace safety standards had been applied appropriately.

The plant is owned by Korea East-West Power Corporation.

02/10/17

North east England

WSP

A worker was injured by falling cladding during construction.

The plant will run on waste wood chips and plans to begin operation in 2018 to supply 75,000 homes.

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2018 outlook Bioenergy

LOOKING AHEAD Andrea Horbelt, Fachverband Biogas (The German Biogas Association)

The biogas market in Germany The situation of the German biogas industry is somewhat ambivalent.

On the one side, the installation of new biogas plants is close to negligible. (In 2017 we expect to see about 12MW on new installed capacity, mostly manure based small biogas plants). The main market is the so called “Flexibilisierung” (transition to flexible production), and the future role of biogas will be compensating the fluctuating power of wind and sun. As a result, the biggest demand is for new block heating stations and gas storage to boost a plant’s capacity and produce electricity when it’s needed. In sunny and windy times gas will be stored and electricity

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Bioenergy 2018 outlook generation stopped. When demand increases, the biogas plant will double or triple its output.

In addition to that the efficiency of biogas production is still gradable.

Many firms and biogas plant owners invest a lot of time and money into researching higher gas yields from the same input, for instance with enzymes, disintegrationmachines or better mixers.

The amount of substrate can’t be boosted but nevertheless, biogas plant owners want to get more gas.

A third issue facing the biogas sector will be the marketing of biogas products other than electricity, such as heat. As Fachverband Biogas determined in a study last year, the price per kilowatt hour of biogas heat is much too low. The

consumer pays 1 to 9 cents per kWh, but 9 cents is rare and most biogas heat is sold for one or two cents. There is no real market, but a big capacity. If the price for biogas heat becomes more realistic, which is absolutely necessary in Germany to start the Energiewende (energy transition) in the heating as well as electricity sector, it will create a new outlet market for plant operators which can compensate the smaller income for kWh electricity.

Among the two channels of distribution — electricity and heat — the market for digestates is getting more and more interesting.

The final product of the fermentation in a biogas plant is a high quality organic fertiliser which can be sold to farmers, to hobby-

gardeners or building centres.

In Germany, like elsewhere, we have a problem with too much manure coming from too many animals. The fermented manure can be transformed into pellets, the water is separated and the volume is reduced to a minimum which makes it much more comfortable to transport and use.

Another market for biogas can and hopefully will be transport. Biomethane could be a growing opportunity for biogas plants — especially because the EU is trying to support renewable transport fuel.

There are a lot of ways and possibilities for biogas.

In contrast to the stagnating German biogas market the international market is growing. The demand from other countries for German

biogas knowledge is still big; most of the big producers have departments in different countries like France, Italy or UK but also in India or the US. This is currently a very important second foothold for German firms — particularly because it’s not clear what the government’s intentions are concerning biogas power…

Fiona Matthews, research manager Biomass at Hawkins Wright

A view on the Asian wood pellets market 2017 was a year of change in the global wood pellet markets, heralding the start of a shift in fortunes for many market participants following the overcapacity and rockbottom prices which characterised 2016. The next twelve months look set to be more dynamic still, with rapidly

14 • January/February 2018

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2018 outlook Bioenergy increasing demand in Asia drawing ever-more attention from both wood pellet suppliers and end users. However, there remain significant unanswered questions about the trajectory for the Asian biomass market, and it is still unclear what impact this trend of rising Asian demand will have on existing European consumers and North American suppliers.

Research from Hawkins Wright’s Outlook for Pellets report shows that global wood pellet demand (for both industrial and heating purposes) increased by 3.7 million tonnes in 2017.

This +13% year-on-year growth compares to the +6% rise in demand seen in 2016 and illustrates the foundation on which fortunes in the market have begun to turn around. The bulk of this increase is attributable to industrial users in the UK and Asian power sectors, which together accounted for 2.9 million tonnes of extra demand in 2017, an increase of +23%. Such figures dwarf the rise in demand for heating pellets, which grew by a comparatively modest +5% in 2017.

The delayed commissioning of new sources of industrial demand in Europe

— namely EPH’s Lynemouth conversion and RWE’s Amer co-firing unit — slightly dampened demand growth in Europe towards the end of 2017. The same cannot be said for the Asian market, where consumption in South Korea and Japan rose by 1.3 million tonnes in 2017. As we observed in our market outlook commentary this time last year, the commissioning of KOEN’s Yeongdong conversion was a gamechanger for the Asian market, creating the largest single source of wood pellet demand in the region. The company’s conversion of unit #1 means that the station now consumes almost 600,000 tonnes of wood pellets each year. This will potentially rise to 1.4 million tonnes from 2021 if the planned conversion of unit #2 from coal to pellets goes ahead.

This trend of rapidly increasing industrial demand in Asia may turn out to be the defining feature of the market from 2018 onwards. This will be supported by a pipeline of new biomass power projects in Japan which is even larger than that in Korea, suggesting that industrial demand in Asia could rival that in Europe by the mid-2020s.

This highlights an important question — where will the biomass come from?

Until now, almost all of Korea’s demand has been satisfied by spot volumes purchased through short term tenders.

However, as demand rises, the ability of the market to supply such tonnages without investing in new supply capacity will become increasing difficult. The challenge posed to Korean buyers using this procurement model is well illustrated by KOEN’s hugely ambitious tenders for 1.5 million tonnes of wood pellets to be delivered over two years to its Yeongdong plant — the largest volumes ever requested by a Korean genco. The stipulated delivery terms are more challenging still, with the first tender asking for 600,000 tonnes per year of wood pellets to be delivered in 20ft containers (equivalent to over 2000 containers every month). The scale of this logistical and economic challenge helps to explain why the gencos’ tenders are increasingly going unfulfilled. Have we reached the limit of the market’s ability to supply such large spot volumes?

Meanwhile, many Japanese

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Bioenergy 2018 outlook biomass power projects are in the process of finalising their fuel supply strategies. Some are still weighing up the choice between wood pellets, chips, PKS and other forms of biomass. Sustainability, security of supply, and affordability are the key factors affecting this decision. The outcome of these choices will determine where and to what extent new investments in wood pellet production capacity are made. The question of what proportion of Japanese demand can be satisfied by local resources will be key to the scale of the impact this new market will have on existing players in Europe and North America.

With wood pellet availability in the spot market already extremely tight at the start of 2018 it will be interesting to see how biomass procurement trends in Asia will affect traditional European-North American trade flows over the coming months/years.

Geraint Evans, Bioenergy programme manager at The Energy Technologies Institute (ETI)

What’s next for bioenergy in the UK? Bringing its ‘gamechanging’ potential to market Bioenergy has a significant role to play in the wider decarbonisation of the UK’s energy system. Because of its flexibility the UK has a real opportunity to maximise the potential of bioenergy, helping to secure future energy supplies, mitigate climate change and create significant green growth opportunities.

Our scenario planning has demonstrated that no single technology is the answer to decarbonisation, but that a blended mix of technologies is the most effective way to reduce emissions.

As part of this whole energy system analysis, we see bioenergy as one of the most scalable and flexible

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2018 outlook Bioenergy sources of renewable energy that can reduce the cost of meeting the UK’s 2050 carbon targets by more than 1% of GDP. The most valuable emission reducing technology available is bioenergy combined with carbon capture storage (BECCS). Our Energy Systems Modeling Environment demonstrates that BECCS is a credible, scalable and efficient technology that can deliver negative emissions (removing CO2 from the atmosphere) and offset carbon emissions elsewhere. Though we are pleased to see CSS play a role in the government’s vision for clean growth, we strongly believe that BECCS should also be an integral part of this strategy.

Of course, decarbonisation can be achieved without widespread bioenergy deployment but it is likely to cost a lot more. Including CCS and bioenergy in a low carbon energy system halves the cost of meeting UK climate change targets.

Therefore, we believe it is critical to now demonstrate the commercial deployment of BECCS technology, and the wider biomass and CO2 storage supply chain, if the UK is to cost

“Of course, decarbonisation can be achieved without widespread bioenergy deployment but it is likely to cost a lot more.”

effectively meet its 2050 greenhouse gas emissions reduction targets.

Post-Brexit, we are aware that there is a lot of uncertainty surrounding the UK’s agricultural sector. However, the ETI has been able to highlight the benefits of an increased investment in the growth of UK bioenergy crops by demonstrating a twin benefit — greenhouse gas emission savings and the economic benefit of the

Jukka Metsälä, vice president, Biogas Business Unit, Gasum

Finland: Circular economy as a competitive advantage The competition for natural resources is intensifying, the amount of waste increasing, and the price of raw materials rising. The message from all over the world is clear: Countries with the highest material recovery rates also fare the best financially. Companies, too, must respond to this challenge if they want to succeed in the future.

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extension and creation of agricultural jobs. Going forward, we would encourage decision makers to view the full level of benefits that can be gained from an increased planting of second generation crops from both an environmental and economic perspective.

In the immediate future, we have invested £8m to build a 1.5MWe gasification plant incorporating syngas cleaning and tar removal in the West Midlands. As a key technology for delivering low carbon energy, gasification can use a variety of feedstocks to produce any of electricity, heat, power, chemicals and materials. Support for this technology continues to grow but we also know that the commercial risks of gasification are currently too high for typical investors and developers. We hope the lessons learnt from our plant will accelerate this technology and help to build confidence and bring it to market earlier than it otherwise would.

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Bioenergy 2018 outlook According to the European Commission’s Circular Economy Package, by 2030, 65% of municipal and 75% of packaging waste must be recycled, as well as concrete measures set to promote re-use and stimulate industrial symbiosis. In addition, simplified and improved definitions and harmonised calculation methods for recycling rates are presented in the Package. From the Finnish standpoint, the 2030 target is a real challenge. At Gasum, it is a challenge that we warmly welcome.

Ambitious targets make technological advances possible and encourage new innovation — two of Finland’s noted strengths. Compared to other EU countries, Finland ranks well above the average, and is almost a leader in terms of technological innovation in cleantech. In addition, Finland places high among countries which provide the best conditions for establishing environmental technologies.

In the circular economy, there is a growth potential of several billion euros in Finland. To reach this potential by 2030, systematic efforts must be made.

In industry, raw material use and

product design must be planned in a way that enables the recycling of product and process side streams. Different industrial symbiosis and co-operation models enable further refinement of surplus and waste material streams from manufacturing, services and municipalities to maximise the value of these side streams. The population, in turn, is tasked with learning to use products and services that have been produced from recycled materials, avoiding the use of disposable products, and sorting and recycling their waste more efficiently.

Gasum is a pioneer in creating a circular economy value chain integrating different actors together, where the waste generated by companies and municipalities is utilised locally as energy. Earlier this year, the environmental management expert Eerola-Yhtiöt became the first company in Finland to fuel its vehicles with 100% renewable biogas produced from its own waste. The company is using Gasum’s waste management service by delivering the fat, oil and grease sludge collected by it to biogas production.

Eerola-Yhtiöt has switched to biogas in its heavy-duty and light vehicle fleet.

Biogas production is an excellent example of a functional circular economy. Gasum places emission-free biogas at the centre of its strategy, alongside liquefied natural gas (LNG) and natural gas. The vision is to build a gas ecosystem, with the aim of establishing a carbon-neutral society.

According to some expert estimates, 17TWh of environmentally friendly biogas could be produced from waste and the side streams of agriculture and the forest industry in Finland.

The potential is enormous and corresponds to one third of the energy used by Finnish road transport.

The transition to a circular economy might very well help Finland become one of the most competitive countries in the world. To achieve this, a common vision is needed for the public sector, business life, and citizens alike.

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2018 outlook Bioenergy Nathalie Hemeleers, policy directior AEBIOM (European Biomass Association)

Bioenergy in the Clean Energy Package: On the way to gaining clarity

The Directive also sees that sustainability criteria — previously limited to biofuels and bioliquids -are extended to all biomass fuels. This resulted in an uproar, especially as the EP’s Environment Committee obtained exclusive competence over the sustainability chapter. The latter eventually proposed less stringent legislation than many had anticipated, as political negotiations and compromises led to the gradual harmonisation of even the most extreme outliers, thanks to a proportionate and pragmatic approach.

As a final verdict from both co-legislators has not yet been cast at the time of writing, only cautious assessments can be made at this stage: the sustainability chapter so far presents some new challenges and requirements for the industry, but without critically undermining its existence and function.

There is hope that this approach may be confirmed in 2018.

In other files, the Energy Efficiency Directive made surprising progress by receiving the EP’s approval with a staggering binding target of 40%. Interestingly, the Rapporteur for the file resigned as a sign of protest. This preliminary result confirms an inversion of trend when compared to the previous decade: the strategic focus has shifted from the proliferation of renewables to a preference for enhanced efficiency measures. AEBIOM holds the view that a beneficial synergy exists between energy efficiency measures and the development of renewables — and that these need to be tackled together. Both deserve ambitious targets, otherwise one may erode the progress of the other in absolute terms.

Another noteworthy and often disregarded file is the one on Governance, which sets the rules for the practical implementation of the aforementioned targets, both binding and non-binding, as well as the rules for Member States’ reporting on their respective progress.

Despite being frequently contested at EU level, bioenergy continues to play an essential role in the EU’s energy landscape.

In 2017, bioenergy alone generated enough energy to theoretically cover the entire energy needs of the EU-28 for 41 entire days — more than any other renewable energy source.

Bioenergy has been a central topic at EU-level the past year as stakeholders and institutions joined hands (and occasionally shook fists) to set the framework for the EU’s energy policy until 2030.

Since the publication of the ‘Clean Energy for All Europeans’ package in late 2016, the debates and negotiations have been incessant. As some of the key files for the sector finally reach maturity, they will progress to the next stage of interinstitutional negotiation, also known as trialogues, which will likely keep policymakers busy for the better part of 2018.

The recast of the Renewable Energy Directive has certainly received the biggest share of media attention, especially the articles concerning its general framework. Discussions on the targets for 2030 remain unresolved as the schism between the ambitions of the European Parliament’s (EP) initial 35% renewable energy target clashes with the more conservative Member States’ proposal of 27%. However, to the general public, the binding EU-level target remains visibly weaker than that of the previous decade, which was binding at Member State level and, as such, far easier to enforce. In unison with other Renewable Energy Sources (RES) Associations, AEBIOM calls for a target of at least 35%.

The Renewable Energy Directive also includes the first-ever provision setting targets for Renewable Heating and Cooling (RES-H&C), opening a debate on a previously neglected topic. Despite that, AEBIOM regrets the lack of ambition shown by EU Institutions: the European Commission’s original proposal of increasing the share of RES-H&C by 1 percentage point per year falls short. Proposals to Looking for a safe and time-saving method for the dry storage of increase this figure have been biomass? Blommaert retractable roofs with sliding hatches keeps biomass completely dry, while still allowing it to be topped up efficiently. tabled, but without any suggestion that such measures may ever Advantages: Possible to add insulation or become binding. This could become Custom made to any size coatings Proven life span of more than 40 a missed opportunity, considering Manually or electrically driven years!

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Bioenergy 2018 outlook

Thomas Dalsgaard, executive vice president Ørsted

Sustainable bioenergy will continue to play an essential role Over the past decade, Ørsted (formerly DONG Energy) has been on a massive journey to transform the company from a Danish energy conglomerate based on fossil fuels to a global leader in renewable energy. We have significantly expanded our offshore wind business, converted our power stations from coal-fired to biomass-fired, and divested our upstream oil and gas business.

Our transformation means that our old name, DONG

20 • January/February 2018

Energy, originally short for Danish Oil and Natural Gas, no longer told the true story about our company.

Therefore, we have recently changed our name to Ørsted, after the Danish scientist Hans Christian Ørsted.

In 2017, we took the strategic decision to entirely phase out the use of coal. By 2023, the use of coal as fuel at Ørsted’s power stations will have stopped completely. The power stations will be replacing coal with sustainable biomass. The decision is in line with our vision to create a world that runs entirely on green energy.

Biomass is playing an important role in the transition of the European energy system from black to green.

This will continue in the coming years as more and more countries are setting a date for phasing out coal.

However, biomass should not compete with other renewables but rather go hand in hand with, for example, wind, solar and hydropower, to replace fossil fuels.

At Ørsted we have installed 26% of the global capacity of offshore wind, which makes us the market leader.

At the same time, we have converted five of our seven large combined heat and power plants from coal- and gas-fired to biomass-fired. With the combination of electricity from our offshore wind farms and green district heating as well as flexible green power from our biomass-fired combined heat and power stations, we are well on our way towards demonstrating in practice and large scale how to build an energy system that is green, independent and economically sustainable.

Sustainable or nothing Biomass will continue to play an important role in the energy transformation in the coming years, but so will the sustainability debate. Some people find it controversial to burn wood to produce power and heat.

As an industry, we therefore have an important task to continuously demonstrate and adhere to strict sustainability criteria for the biomass we use and to ensure that heat and power is produced from waste and residues from the forest and wood working industry. It is important that our customers, and society at large, can be confident that the biomass-based heat and power which we supply is sustainable and makes a real and significant contribution to reducing the carbon footprint.

Together with other European energy companies, Ørsted is part of the Sustainable Biomass Programme (SBP), which has developed a robust and independent scheme for the certification of sustainable biomass. This means that our suppliers must provide documentation that the biomass they supply comes from sustainable forestry operations.

Building on robust sustainability criteria and credible and adequate certification schemes, such as SBP, there continues to be a key role to play for biomass in the green transformation of our energy systems — not least to act as a back-up to intermittent power from wind and solar and for providing green heat into district heating systems.

Bioenergy Insight

2018 outlook Bioenergy

Richard Peberdy, vice president Sustainability, Drax Biomass

Forests, carbon, energy – and people We are often asked, as a forest products company, “What are you doing for the forest?” This is a good question — especially since the forest provides more than just the raw material for our wood pellets; it cleans our air through capture and storage of atmospheric carbon (a greenhouse gas), filters and protects our water supply, and provides vital habitat for wildlife and much, much more. That’s why it is critical to our business to sustain the forests we source our biomass from, and help them to prosper and grow. In 2018 we plan to continue our focus on the forest, striving to expand our positive influence on forest growth and sharing with the public our views on how the practice of sustainable forest management can lead

Bioenergy Insight

to healthy forests and a reduction in atmospheric greenhouse gases (GHGs).

So, how does using the forest’s natural resources help the forest?

Forests of the Southern US have increased in productivity and abundance over the last six decades. They have done so while meeting ever-increasing demands for the valuable wood products they provide. In our supply areas and the wider US South, private forest owners, who own about 80% of the forests, have been the driving force for the doubling of productivity and inventory between the 1950’s and today, all on about the same number of acres.

I look at these private forest owners as great allies in advancing better forests and a lower carbon future.

Drax Biomass ­— and the pellet industry at large ­— are well positioned to help these forest owners continue their achievements by providing a market for low-grade fibre that might otherwise be under-utilised, left in the woods or burned on site. In the working forests that surround our facilities, removal and sale of this material not only provides additional revenue for the landowner, it has a very real biological effect on the forest stand, increasing resources (water, light, and nutrients) available to remaining trees and accelerating their growth.

Thinning effectively shortens the time it takes for crop trees to reach sawtimber size, and enables each acre to carry more valuable sawlog material.

This management of the forest ensures a better return on investment incentivising landowners to keep forests as forests and sustaining the forest’s increasing abundance and productivity.

So, how does this reduce carbon?

This intricate mix of markets, people, and forests is exactly what makes biomass (in the form of wood pellets) such a viable low-carbon alternative

to fossil fuels. Biomass can deliver significant carbon savings relative to fossil fuels even after taking into account energy consumed in harvesting, processing, and transporting. Indeed, we know that wood from the US South used in Drax Power Station in the UK delivers carbon savings of more than 80% compared to when the generating units used coal. Burning wood only releases the carbon that the forest absorbs from the atmosphere as it grows. Where our activity helps maintain or increase forest inventory and growth rates, helping forests do better than if our market was not there, the carbon emitted during combustion is sequestered by those forests. Managed, vigorously growing forests can also absorb more carbon than trees that have reached maturity and are declining in growth rate.

The presence of diverse markets for all wood products (including the market for wood pellets) encourages active forest management, which results in strongly growing forests that are highly effective at capturing and storing atmospheric carbon. Many carbon models fail to capture this symbiosis and so do not reflect that an increase in demand sustains an increase in forest productivity and abundance, and therefore carbon sequestration.

In 2018 and beyond, the wood pellet industry will continue to play its part in the dynamic forest products market, in forest renewal, and in advocacy for bioenergy as a low-carbon energy solution. At Drax, we want to continue to engage with people, so they understand what we are doing to help forests prosper.

January/February 2018 • 21

Bioenergy 2018 outlook François Troussier, communications officer, European Biogas Association

would allow digestate to be sold across Europe for the first time.

Alongside the mature biogas technology and industry, the quantity of biomethane produced in Europe has been increasing considerably since 2016. This positive trend will continue in the coming years, with the development of biomethane as a fuel for CNG cars, thanks to its ease of use with current technologies and a great environmental performance. Several countries having both large advanced feedstock available and dedicated targets for biomethane production should therefore experience a rise of their biomethane sector. This should be the case in France, Italy and the Scandinavian region, amongst others.

Innovative technological pathways are also emerging, such as power-to-biomethane and biomass gasification, which are environmentally friendly and cost-efficient at industrial scale.

Power-to-methane can provide low-carbon energy and energy According to the European Commission, 2018 will be the year storage at affordable prices while balancing the variations in of ‘engagement’: the Energy Union Strategy should become renewable electricity production from solar and wind sources. a reality, with the adoption of several policies. First of all, Biomass gasification can use a variety of substrates such as wood the revised Renewable Energy Directive (REDII) will establish chips and pellets and may even convert waste. Numerous projects a new framework for renewables for the next decade, with have been developed in different countries. For example, energy higher renewable energy targets for Member States, as well as service provider ENGIE inaugurated recently the Gaya platform transport and heat targets. Important additions were made to in France. Its goal is to enable the production of biomethane define and trade renewable gases, as well as to set common EU from dry biomass to gas. This type of experimental platform sustainability criteria. The new electricity market design will could be a model for future generations of biomethane plants. also revise existing rules with the aim to give a bigger place Biogas and especially the biomethane sector will thus continue to renewables, and to reward flexible power producers. to grow in 2018, potentially boosted by a new regulatory Thanks to the upcoming adoption of the waste package, more framework at European level. The emergence of state-of-the-art waste will be available for digestion. Mandatory separate collection technologies will also bring even more environmental-friendly of biowaste will be introduced, and new recycling targets for 2030 solutions. In this context, renewable gas should have a key role will be set. Last but not least, the fertilisers regulation will include in accelerating the energy transition, by providing society with organic fertilisers in EU legislation, setting up common rules that green solutions in terms of transport, heat, and agriculture.

The year of engagement for European biogas

Seth Ginther, executive director, US Industrial Pellet Association

Priorities for US Pellet Producers in 2018 As we move into 2018, we remain focused on maintaining current markets and developing new ones for wood pellets exported from the US South. In Europe, the EU Parliament, EU Council, and European Commission are entering the final policy development stages for the Renewable Energy Directive for 20212030. The Renewable Energy Directive (RED) will set energy efficiency and emissions goals for the EU and will also introduce a harmonised set of sustainability criteria for bioenergy.

Harmonising sustainability criteria across EU Member States will remove regulatory uncertainty, increasing investor confidence and spurring investments in new projects and more efficient supply chains. Trade will also become easier, making wood pellets a true commodity. This harmonisation is something the industry has advocated for many years.

At the US Industrial Pellet Association (USIPA), we have been actively engaged in the RED process since the initial

22 • January/February 2018

proposal was released by the European Commission in late 2016. The EU Council finalised their opinion on the proposed RED in December 2017 and the EU Parliament is set to vote on amendments to the proposal in midJanuary. These two bodies will then come together with the European Commission to negotiate the final legislation.

Ensuring that the bioenergy sustainability criteria in the final RED supports the import of sustainable wood pellets from the US is critical to maintaining the investments made over the last decade. The EU’s Paris Agreement commitments provide incredible opportunity to continue to grow the biomass market and provide secure, sustainable power to Europe. Some estimates anticipate European biomass demand will double by 2021. To have access to this renewable power supply from the US, the EU must get the RED right. This will be our top priority over the course of 2018 as the legislative process is completed.

Across the Pacific, there is real opportunity to develop markets in Japan and South Korea. Renewable energy policies and climate change commitments in both countries support an increase of biomass co-firing which will require an increase of biomass imports. Japan and South Korea are expected to dominate biomass industry growth post-2020 with a combined 17 million metric tonnes of demand estimated by 2025.

The US Southeast is in prime position to supply these markets given the continued surplus of lower-grade wood fibre, the abundance of deep water ports, and the sophisticated supply chains developed by the industry over the last decade. There is no question that 2018 will be a busy, globe-trotting year as we further develop our supply chains and grow our industry to secure future participation in these and other markets around the world.

Bioenergy Insight

biogas markets Bioenergy A look at the past, present and future of the US biogas market

The best of times, the worst of times

A

We’re feeling a lot of industry growth in terms of project development and interest from individuals and companies who want to engage in the biogas industry.

However, while project development pipelines are very full for many companies, we haven’t yet seen the related explosion of new projects breaking ground yet. We expect to see that coming, hopefully this year.

Since project developers are busy we’re also seeing an uptick in activity from equipment and service providers as they respond to a growing number of projects in various stages of predevelopment. They need to figure out how they’re going to be able to deliver higher volume, assuming the projects in development get built.

How was 2017 for the US biogas market?

In 2017 the biggest shift in the industry was away from electricity biogas projects — projects that generate electricity from biogas and don’t have a lot of attention on how to generate revenue from their digestate — to projects that are mainly focused on upgrading their biogas to pipeline quality (renewable natural gas — RNG), mostly for vehicle fuel. There’s also been a heightened focus on how to generate revenue from the digestate stream from biogas systems.

2017 was definitely a stronger year than 2016.

What’s behind this shift from electricity generation to RNG and vehicle fuel?

Mostly the much higher revenues that you can generate from the renewable fuel standard (RFS) compared to what most electric utilities will pay for renewable electricity from biogas. The RFS is a federal programme designed to increase the amount of renewable fuel of all kinds produced in the US, to offset fossil fuel use in the transportation sector.

With it, you can sell your fuel and some credits that the programme generates.

It’s those credits, called Renewable Identification Numbers (RINs) that generate the additional revenue.

Patrick Serfass, Executive Director of the American Biogas Council

s 2017 drew to a close, Bioenergy Insight spoke with the American Biogas Council’s executive director Patrick Serfass about the direction of the US biogas market.

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The RFS was originally created as a corn ethanol programme and then was expanded to cover non-corn biofuels, but mostly liquid non-corn biofuels. Since 2014, the biogas sector has become a key component of the non-corn biofuels section of the RFS. As a part of that, the prices for the RFS credits have been rising, which creates a significant business opportunity across the industry.

Overall in the RFS, liquid biofuels are still producing the vast majority of the renewable fuel volume, so biogas is still a minority across the entire programme, but it’s the fastest growing sector.

Other than policies like the RFS, are there any other factors that affect the US biogas market?

At a national level, there’s increased attention on managing the nutrients we put on our land because more and more are getting to our waterways and polluting them or creating harmful algae blooms. Biogas systems are a part of the solution that can be put in place to help address that and policymakers are starting to discover that. We’re also hoping that interest in digestate-derived products will create new opportunities.

There’s a lot of attention on biogas products and we need to get more attention on digestate products.

Beyond that, nearly all the other significant market factors are at the state and local level. All around the

US, you can find favourable policies and market conditions that help biogas projects to be developed. California, for example, has a lot of favourable biogas policy that has been passed in the last two years. Vermont has a programme that will pay more for electricity from biogas than nearly any other state. And Florida recently passed regulations to allow RNG into their natural gas pipelines, just to name a few.

Were there any sectors of the industry that particularly struggled in 2017?

One area where we continue to struggle as an industry is breaking through to gas utilities that are resistant to allowing renewable natural gas or RNG into the natural gas pipeline system. Because of the focus on creating RNG and using it for vehicle fuel, predictably, we also have an increased interest in putting our RNG into the pipeline to get it from the biogas system to vehicles. Some utilities are interested and helpful. Some are not. And the unfortunate truth is that an unhelpful gas utility can kill a project. It shouldn’t be this way. The RNG is high quality, often higher quality than the fossil-derived gas already in the pipeline when it’s actually measured, but there’s a perception by some gas utilities that the gas might not be high quality. It’s mostly a fear of the unknown, so we have an education problem. Therefore, we have a heightened focus

January/February 2018 • 23

Bioenergy biogas markets on identifying both the gas utilities who are interested in working with the biogas industry, and the utilities that are resistant. That way we can help companies navigate these challenges and try to address some of the challenges we’re currently facing with resistant gas utilities.

So a version of Dickens’ line is appropriate here: It’s either the best of times or the worst of times. Either you find a utility willing to work with you and things go generally smoothly, or you develop a great project and then discover your utility is resistant and it kills your project. It’s usually one or the other, we’re not seeing much of a grey area in between.

The sector that is struggling the most is the electricity generation sector. That’s for two reasons. There’s a heightened interest in upgrading biogas to pipeline quality, which you generally don’t do much of if you’re generating electricity on site. And most utilities won’t pay you much for any kind of renewable electricity thanks to the abundance of incredibly cheap fossil natural gas in the US. This could change though if the Environmental Protection Agency (EPA) activated the renewable electricity pathway of the RFS. There is an existing, approved pathway to allow biogas projects that produce electricity and use that electricity to ‘fuel’ electric vehicles, whether they’re battery- or fuel cell-electric vehicles, to participate in the RFS. It’s the EPA’s job to allow industry to use this already approved pathway.

Once the EPA follows through, existing projects whose PPAs are nearing expiration will be strengthened, a greater diversity of new biogas projects will be built across the country creating jobs and investment, and the agriculture industry

24 • January/February 2018

ABC Digester Operator Training UW-Oshkosh Day 3, image courtesy of the American Biogas Council

in particular will be strengthened. Of the 14,000 potential systems that could be built in the US, more than 8,000 of them are on farms. And these are the same farms that are coming under increasing scrutiny about the nutrients they’re applying to their land because of the nutrient issues mentioned earlier. It would be a win for many sectors.

Why hasn’t that pathway been activated yet?

EPA says there are technical issues with administering the pathway which still need to be addressed. The biogas industry believes that those technical issues have already been solved, as several solutions have already been sent to EPA, a year ago via public comments. As a result, we believe there’s a lack of political will. Since the current administration is resistant to putting out new rules from the EPA, even though a new rule isn’t required to activate the pathway, that is being used as an excuse not to take action. But the Administration will benefit if

they act because they would secure jobs (especially in the agriculture sector), create new jobs, catalyse investment, support their rural political base and even support environmental interests.

We need them to recognise the upsides and act now.

What do you anticipate for the US biogas market in 2018?

I think we’re going to see a lot more interest in RNG. I’m also hoping we’re going to see more and more interest in creating products from digestate, and the use of our new national Digestate Certification Program. I think we’ll see more interest in training biogas operators, to make sure every biogas system is operated optimally.

And then I hope we’re going to see the EPA activate the renewable electricity pathway, so we don’t only have project developers interested in working with RNG, but electricity as well.

This would mean developers could make a decision based on the needs at a specific site, and not just try to capture the incentives that are available.

Are there any exciting developments happening in terms of using digestate in the US? Yes. Biogas developers are motivated because you can’t develop a project if your digestate management is going to cost the project money.

Digestate should be making money — it’s so valuable for our soils! So industry companies are developing different digestate-derived products and testing them in different markets. And the American Biogas Council is trying to help potential digestate customers get as comfortable buying digestate as they are buying compost or even synthetic fertilisers.

One way we’re doing this is with the Digestate Certification Program. It helps to show digestate customers that the material that they’re buying has met health and safety requirements, and they can trust the information on the product’s label. l For more information:

Patrick Serfass is executive director of the American Biogas Council Visit: www.americanbiogascouncil.org

Bioenergy Insight

anaerobic digestion Bioenergy How anaerobic digestion is helping alleviate a growing crisis in India

Empowering rural communities through green energy

T

hroughout history, man has been drawn by the lure of the city and the expectation of a better life. However, never before have cities been under such strain as they cope with record levels of migration. This trend is no greater than in India, where it is estimated that 30 people move from a rural to an urban area every minute. Andhra Pradesh, one of India’s most forward-thinking states, is now seeking to reverse this trend with the help of some of the world’ biggest corporations combined with breakthrough technology that can significantly improve the lives of millions in rural communities.

One major project aim is to provide a source of sustainable, cheap and clean energy that is localised and can be easily implemented in the thousands of villages across the state. UK-based SEaB Energy became the obvious partner through its award-winning small-scale AD plants housed in standard shipping containers.

“In the developed world, we take for granted that we have access to electricity at the press of a button and fresh water at a turn of a tap,” says SEaB Energy CEO Sandra Sassow. “For millions of people in rural communities across the globe this has been a distant dream. Our vision is to empower villages with the technology that not only provides them with these two basic necessities but also, potentially, a recurring revenue stream from the surplus energy sold back to the grid”.

In 1900, 80% of Americans lived on farms; with only 20% living in cities. By 2000, just 2% still lived on farms while 98% were living in towns and cities. This scenario took just 200 years but the fear is that it could happen much quicker in India, which would have devastating effects on the economy. India, once

Bioenergy Insight

described as a ‘land of villages’, is urbanising rapidly as more than 15 million young people flock from the countryside to cities every year in search of jobs and economic opportunities.

Who can blame them when villages often suffer from a lack of access to education, health facilities, drinking water, power or future prospects.

Meanwhile, after decades of neglect, Indian cities are struggling to cope. They are plagued with problems including choking air pollution, snarling traffic, and shortages of everything from water and affordable homes to schools, public transport and open spaces. Since urban areas are heavily dependent on the rural community for raw materials and food supply, increased city migration not only increases the demands on food supply but also reduces the people available to work the land.

A number of projects across India are now taking shape in order to reverse this worrying trend. By improving the quality of life and the economic prospects of villagers, it is hoped that the rate of migration to cities will significantly decrease to the benefit of the entire country. One ground-breaking project has already started in the state of Andhra Pradesh; located in the east of the country and India’s tenth most populous state. Recognising that the challenge would be financially and logistically almost impossible without external help, the state government has partnered with the University of California Berkeley and together the ‘Berkeley ­— Andhra Smart Village Project’ has been created.

According to Professor Solomon Darwin, executive director UC Berkeley and executive board member of the Smart Village project, “The purpose

Shri Nara Chandrababu Naidu

January/February 2018 • 25

Bioenergy anaerobic digestion The digester will provide heat and electricity directly to the villagers, as well as nutrient-rich pasteurised liquid fertiliser for local agricultural use of the project is to elevate off-grid rural villages by forming partnerships with corporates and start-ups to promote self-sustained communities.

It aims to integrate technology with indigenous rural practices in order to generate sustainable revenue for the villagers, thereby improving the overall standard of living and quality of life”.

“Not just Smart Cities, my vision is to make Smart Villages and Smart Towns too”, says Shri Nara Chandrababu Naidu, the Honourable Chief Minister of Andhra Pradesh. “We have identified the ways to improve the income sources of the rural people by using technology to improve connectivity and selfsufficiency and by redoubling our efforts to create marketing opportunities for the products produced in the villages”.

By working towards overall community prosperity, by providing villagers with the tools to empower themselves through access to resources, knowledge, and global-connectivity, people will have far fewer reasons to relocate to the city.

In fact, we hope to engineer reverse migration by encouraging people to return to their original communities”.

The project officially started in 2016, although Professor Darwin had been refining his concept for Smart Villages as far back as 2013 while at the Garwood Center for Corporate Innovation at UC Berkeley. Split into three distinct phases, the evaluation stage of the project was completed at the end of 2016 when two fundamental tests were performed to determine if there would be traction and readiness from rural villages to accept new technology and if there would be sufficient interest from global brands to scale their technologies in rural India? Answers to both questions came back as a resounding ‘Yes’.

The cashew exporting village of Mori in East Godavari district of Andhra Pradesh, was used as the basis to test out these assumptions. It has provided corporates and innovators an opportunity to create a blueprint for the other 36,000 villages in

26 • January/February 2018

Sandra Sassow AP Smart Village

the state and the further 650,000 villages throughout all of India. By improving the quality of life within the rural community, and typically those at the bottom of the wealth pyramid, corporates will be able reach an untapped source of revenue that could transform the fortunes of the poorest members of society within developing nations.

Phase two of the project rapidly took shape during 2017 when more than 50 partners were recruited, including corporates, local Indian businesses and technology innovators. These include global giants such as Google, NASA, IBM, Cisco, Tata Steel and PayPal as well as SEaB Energy; the only UK-headquartered company involved in the project.

Throughout the past year, a vast amount of on-the-ground research was conducted at Mori by the 1,200 UV Berkeley trained interns to understand the villagers’ key pain points that impact their ability to improve their standard of living, and to then formulise potential solutions.

Along with communication channels and connectivity, practical education, tools and technology, villagers said that dependable and affordable energy resources for their homes, schools and businesses were seen as vital factor in

the ability to better themselves. This, on the face of it, looked like a major challenge as the vast majority of villages, such as Mori, are not connected to the grid and the cost of doing so would be extremely prohibitive. What was required, therefore, were localised energy generators that did not rely on expensive fossil-based fuels, and could supply a stable source of energy.

As the ‘father of Smart Villages’, Professor Solomon Darwin was already familiar with the work SEaB Energy had been doing with Smart Cities and remote communities, and understood the potential the company’s products had for his Smart Villages project.

SEaB Energy’s award-winning micro AD systems, the Flexibuster designed for urban environments and Muckbuster for the agricultural sector, turn food and organic waste into energy, water and fertiliser directly on the site where the waste is produced. This eliminates the costly, and harmful, movement of waste and provides the waste producer with a continuous revenue stream that will achieve payback in less than two years.

Housed in standardised shipping containers, the systems are easily transported and can be up and running within hours of siting. They are also more

Bioenergy Insight

anaerobic digestion Bioenergy reliable than other forms of renewable energy because, unlike sunshine or wind, where there are humans there is always organic or sewage waste available.

In 2018, as part of the trial phase of the Smart Villages project, four villages will each receive a Flexibuster digester that will process on-site sewage waste into biogas, a CHP unit to convert the gas to electricity and a feed mechanism to connect the system to the existing external sceptic tanks. The digester will provide heat and electricity directly to the villagers, as well as nutrient-rich pasteurised liquid fertiliser for local agricultural use. The systems also have the ability to de-water the fertiliser which results in a grey water stream that can be reprocessed for either drinking water or use for growing crops.

While the system is fully automated and allows remote monitoring, SEaB Energy will be able to scale up quickly by providing a team of local installers and technicians, as well as localised assembly / production. The company is also committed to training up a ‘Village Champion’ whose role to would be to monitor the system and educate other members of the village.

“The impact to village life could be enormous, says CEO Sandra Sassow. “Our systems can capture the energy and fertiliser values in the sludge, while also reducing the health risks attributable to untreated sewage. The availability of grey water will minimise the need for

Heroes of Mori

well water and fertiliser costs can be greatly reduced. And, combined with either battery or gas storage, the units can provide available a regular and reliable power, directly at village level”.

“The beauty about this project is that the villagers themselves will decide which technologies will be finally adopted, based on the value that they bring”, says Professor Solomon Darwin.

“However, I foresee that energy supply and the hygienic treatment of sewage waste would rank very highly and so we expect to see considerable demand for SEaB Energy’s products going forward”. l

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January/February 2018 • 27

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42 • January/February 2018

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