Welcome to ICN’s emerging markets -
bioenergy seminar
2014 FORMULA 1 ROLEX AUSTRALIAN GRAND PRIX
Thursday 13 March 2014, 9.30am – 11.00am
Don Matthews Executive Director
ICN Victoria
Klaus Baumgartel National Sector Manager –
Clean Energy ICN
Colin Stucley Director – Enecon
Board Member of Bioenergy Australia
Overview of Advanced Biofuels
Presentation at ICN bioenergy meeting, March 2014, by Colin Stucley – Director, Enecon Pty Ltd
Over 40 bioenergy studies, reports & projects since 1998. (Heat, power, liquid fuels, charcoal)
1. Status of biofuels in Australia
2. Advanced biofuels – commercial activities
3. Technology maturity
4. Summary
Structure of this talk
Bioenergy in Australia: Status and Opportunities
Report first issued in 2004 and updated in 2012.
Full report available on BA and Enecon websites.
Australian ethanol production in 2012 From BAA website
World ethanol production statistics, 2011
Country or region Production in 2011 (million litres)
North and central America (excl Canada)
54,508
South America (excl Brazil) 21,843 Brazil 21,094 Europe 4,417 Asia (excl China) 3,368 China 2,100 Canada 1,750 Australia 330 Africa 145 Total 109,562
Australian petrol use: approx. 19,000 Ml/y
Biodiesel: approximate usage in major markets In the United States, diesel consumption in the USA was estimated to be 135 billion litres for the year 2010. Total biodiesel production in 2011 was reported as 4.2 billion litres, or 3% of all diesel used. Total installed capacity for the European Union (EU) was estimated to be 24 billion litres per year in 2010. Actual production was 10 billion litres. EU27 diesel use is approx 250 billion litres/year* suggesting biodiesel is 4% of the total. At the start of 2012 the installed annual biodiesel capacity in Australia was 500 ML. At that time only four of the seven plants were in operation, producing 115 ML of biodiesel from tallow and used cooking oil. Diesel use that year in Australia was approximately 19,000 Ml, suggesting that biodiesel use was 0.6% of the total. * http://www.cmegroup.com/education/files/petromatrix-europe-diesel-market-2013-02-19.pdf
With first gen fuels….we appear to have been left behind
What about advanced generation biofuels?
First generation: Ethanol – sugar and starch
Biodiesel – vegetable oils, animal fats
Advanced generation:
Ethanol from biomass
Hydrocarbons from biomass
Biodiesel from non-food crops
Microalgae
Why make fuels from biomass? • Potentially more profitable than electricity • Low feedstock cost relative to “first gen” fuels
– Palm oil, tallow can cost more than crude oil – Lignocellulosics, minor cost component of finished fuel
• Less competition with food – Residues are widely available (plantations, crops, MSW) – New plantings (e.g. mallees) can complement food
production
Let’s consider the commercial status.....
Ethanol via biomass hydrolysis & fermentation: Beta Renewables
Commercial plant in Italy, began operations in 2012.
50 Ml/year ethanol plus electricity. Straw feed and can also use hardwood.
Ethanol via biomass hydrolysis & fermentation: Abengoa
Commercial plant under construction during 2013, at Hugoton, USA.
1,000 dry tonne per day feed, for 100 Ml/year ethanol plus electricity.
Ethanol via biomass hydrolysis & fermentation: POET
Already active in first gen. fuels. 75 Ml/y commercial plant now under construction in Emmetsburg, USA. Corn stover as feed.
Ethanol via biomass hydrolysis & fermentation: DuPont
80 Ml/y commercial plant now under construction in Iowa, USA. Corn stover as feed.
Ethanol via biomass hydrolysis & fermentation: Granbio
Already active in first gen. fuels. 80 Ml/y commercial plant now under construction in
Brazil. Bagasse as feed.
Ethanol via biomass hydrolysis & fermentation: COFCO
50,000 t/year ethanol, plant under construction in China.
Corn stover planned as feed.
Ethanol via biomass gasification and fermentation: Ineos Bio
Commercial plant, Indian River Fl – began operation in 2012.
Mixed biomass feed for 30 Ml/y of ethanol and 6MW of electricity
Ethanol via biomass gasification and methanol: Enerkem
40 Ml/y commercial plant in Edmonton, Canada. MSW as feed. Commissioning is now underway.
Demonstration facility near Montreal
Gasoline via biomass gasification and methanol
Wood as feed: • Haldor Topsoe • Andritz Carbona • GTI Demo plant commenced operations in Illinois USA, mid 2013.
Natural gas: Commercial process for natural gas to methanol to gasoline since the 1980s.
Fast pyrolysis of biomass then upgrading: KiOR
500 dry ton/day commercial prototype is being operated in USA. Makes “Drop in” hydrocarbons. Feed is southern yellow pine.
Fast pyrolysis & upgrading: Envergent
Ensyn: Commercial-scale pyrolysis plants (up to 100 TPD) operated for more than 20 years. Wood residues as feed.
Envergent: joint venture with UOP: upgrading bio-oil through to “drop in” hydrocarbon
fuels. Building demo plant in Hawaii for operation in 2014.
Fast pyrolysis & upgrading: IFPEN/Axens & Dynamotive
100 TPD 200 TPD
Commercial plants for fast pyrolysis in Canada. Multiple wood feeds
Upgrading to hydrocarbon transport fuels demonstrated in 2009. IFPEn & Axens working in France to commercialise upgrading technology.
Biomass to fuels at commercial scale: Product Pathway Feed Feed scale (dry tonne/year)
Ethanol enzyme hydrolysis straw, wood 150,000 to > 300,000
Ethanol gasification & fermentation wood ~ 150,000
Ethanol gasification & catalysis MSW ~ 100,000
Hydrocarbons pyrolysis & upgrading wood 50,000 – 150,000
Commercial for other feeds but not for biomass yet:
Hydrocarbons gasification & FT or MTG wood up to > 600,000
A growing resource of commercial expertise…
But are they economic? Can we get better at making biofuels?
Competitive fuel costs expected
Organisation A$/litre (petrol equiv.) Feed NREL 0.85 Corn Stover
KiOR 0.68 Southern Pine
IFPEn/Dynamotive 0.47 – 0.85 Various (to US$130/dry ton)
Recent discussions with two other groups with commercial scale plants overseas indicates they can achieve competitive fuel prices now.
Published data
Confidential data
Pursuit of lower costs: “learning by doing”
Novozyme - enzyme costs coming down
Fast pyrolysis - productivity improvements
“In early 2009, yields were in the 17 gallons per ton range, but have improved to 67 at the present time and are targeted to reach the high 80s by 2014 en route to an eventual target of 92 gallons per ton.”
http://www.biofuelsdigest.com/bdigest/2012/08/16/no-eeyores-for-kior/
What does this mean for Australia?
Multiple advanced biofuel technologies are starting commercial operation overseas. Can we utilise them in Australia?
1. Technologies de-risked overseas = lower costs for capital here
2. Technology: pilot, demo, commercial, engineering package
3. Scale important for feedstock supply
4. Significant opportunities for local construction /operation
5. Where to now? Commercial feeds and technologies are available.
Can we secure fuel contracts? Can we secure funds for showcase
commercial projects?
Bioenergy Australia
• National association
• Membership: Industry, government, research
• Focus on knowledge sharing and as an information forum (not a lobby group)
• National conference each year
• Hoping to run breakfast meetings in Melbourne
• Bioenergyaustralia.org.au
Thank you – questions?
Colin Stucley, Director - Enecon Pty Ltd
Suite 5, 651 Canterbury Rd, Surrey Hills, Vic. 3127 Tel. (61 3) 9895 1250 www.enecon.com.au
Klaus Baumgartel National Sector Manager –
Clean Energy ICN
Joshua Smith Engineering Delivery Manager
Parsons Brinckerhoff
Biomass Power Plants – An Introduction ICN Networking Event: Emerging Markets - Bioenergy
13 March 2014
Who We Are…..
• Part of the Balfour Beatty Group (UK based firm) • Active in development, design, construction and management of
infrastructure assets (Power, Water, Mining, Transport, Oil & Gas) • Over 50,000 employees globally • 1,500 employees in Australia • Operations in over 80 countries • Revenue – GBP 11 billion
Biomass Power Plants
• A sustainable power generation solution • Advantages - renewable fuels and carbon neutral production • Disadvantages - large land areas and water volumes • Cogeneration - becoming more prevalent globally • Biomass power supplements ‘conventional’ (11% of global power)
Biomass versus conventional
• Coal and gas fired are well known – Technologies – Controls + operation
• Renewable fuels introduce risks
– Bagasse (sugar cane), grape marc – Wood chip, almond husk
• Fuel inconsistencies (specification) • Fuel supply risks (sustainability) • Stockpiling areas significant • Material selection / compatibility
Business case – does it stack up? • Business case
– Proposed site(s) – Fuel supply/availability and transport costs – Plant construction costs – location, resources – Operational costs (fixed and variable) – Power Purchase Agreements – Infrastructure (construction phase, transmission) – Concept design development – Investors/funding
• Approvals
– Environmental Impact Studies – Local government approvals – Relevant statutory approvals
Contracts • EPC (Engineerng, Procurement & Construction)
– most common in power plant delivery – provides certainty to owner/investors – majority of risk resides with contractor – defined scope, schedule and price
• Delay and performance guarantees – liquidated damages – typically capped at 20% - 30% of contract value – commensurate with lost revenue
Procurement • Vendor Selection Critical
– relevant experience with technology and fuels – demonstrable track record
• Equipment Costs – relatively significant (boiler, STG, fuel handling, condenser) – offshore fabrication is most cost effective – significant potential FX risk, duties, taxes
• Quality risks – production and fabrication (standards, workmanship etc.) – independent inspections offshore
• Vendor accountability – B2B head contract conditions is challenging – risk will be priced!
Construction + Commissioning • Suitably qualified tradespersons – 100+ at peak for 30MW plant
– fitters, electricians, operators, riggers, welders … – specialist trades (HV, rotating machinery, boiler, turbine etc.)
• Significant construction activities (10 storey building stack height) • Remote areas require accommodation during construction • Multiple contractors = Site congestion + safety risks
– Strong safety protocols and management – Contractor training and inductions
• Local and system wide • Performance acceptance testing • Handover to operations and
maintenance
Construction + Commissioning
Boiler house under construction – 44MW Biomass Plant Lockerbie, Scotland – 480kt fuel pa
Construction + Commissioning
Biomass Plant commissioned in 2008 (Scotland)
Operations and Maintenance • Specialist tradespersons required to operate and maintain (ticketed). • Ongoing safety, statutory training – operators are typically highly skilled • Additional skilled and specialised labour to support regular activities
(fuel supply, plant shuts etc.). • O&M typically 24/7 operation (3 shifts – 4 shifts) • Fuel cartage and stockpiling ongoing 24/7
Summary • Brief introduction to delivering biomass power plants • Growing global trends in Biomass Power Generation • EPC contracts are preferred by owners/investors
– Risk profile to owners • A number of significant project delivery risks that require sound
management • Sustainable fuel supply and procurement of compatible kit are
significant risks and should be managed accordingly
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Josh Smith
Engineering Delivery Manager Parsons Brinckerhoff
Klaus Baumgartel National Sector Manager –
Clean Energy ICN
Thank you emerging markets –
bioenergy seminar
2014 FORMULA 1 ROLEX AUSTRALIAN GRAND PRIX
Friday 14 March 2014, 9.30am – 11.00am