Austrian bioenergy group Cycleenergy acquired controlling interest in Greenpower Projektentwicklungs GmbH, expanding its biomass operational portfolio by 16 MW to a total of 22 MW. In the transaction Cycleenergy took over 51% of the company and thereby formed a joint venture with Porr Infrastruktur GmbH, a subsidiary of Austrian construction company Porr AG. Greenpower operates two wood chip CHP facilities in Upper and Lower Austria, each with an electric capacity of 2 MW. The plants have been in operation since the middle of last year and consume more than 30,000 tonnes of wood chips and are expected to generate over €5 million in additional revenue.
Analysts predict coal prices to double - would open the gate for biomass
A surge in global demand for coal, a persisting power crisis in South Africa, ever lower inventories in China and supply constraints in key producing areas (Australia, Indonesia) have ignited prices, with some analysts now predicting coal prices to double over the coming two years. If that happens, biomass - which in some cases is already competitive with thermal coal today - would gradually shift from being an opportunity fuel to a young competitor.
The coal sector was shocked on rumours that an Asian steel company had recently paid US$275 a tonne for hard coking coal, almost triple last year's price. But record prices for thermal coal were observed too, with some European importers paying more than US$130 on the spot market. Last week, the Asian thermal coal price index broke the psychological barrier of US$100 for the first time ever.
energy :: sustainability :: biomass :: bioenergy :: biofuels :: energy crops :: residues :: commodities :: coal :: co-firing :: trade :: South Africa :: Australia :: China ::
Nonetheless, with a new benchmark for thermal coal prices ranging between $125 and $150, that could change relatively quickly with investors waiting to enter the sector receiving a clear signal that the time to do so has come.
Good opportunities exist in several areas that already have an established biomass resource that can be brought to market readily. One example would be found in Namibia, where a huge amount of biomass comes in the form of invader bush. Researchers from the VTT have estimated that the overgrowth of bush greatly affects an area of about 10 million hectares in northern parts of central and eastern Namibia, of which a total of 125 million tonnes can be harvested commercially and sustainably.
This equates to around 500 TWh worth of energy. Total consumption of energy in Namibia is less than one twentieth of that, much of it derived from imported coal. The researchers found that local use of this densified biomass, replacing coal in a medium sized power plant (in Windhoek) , was competitive with 2006/2007 coal prices.
A thermal coal price twice as high would probably make it possible to export this biomass in a densified form. The invador bush would be harvested and densified in a decentralised manner, then brought to the railway that transects this region and brings it to port (Swakopmund) (map, click to enlarge; map shows density of bush per zone).
Over the medium term, dedicated biomass plantations could be established with high yielding tropical crops like eucalyptus and acacia, or short rotation crops. Recent analyses by a EU project into green steel production, show that there is vast potential for the creation of such plantations to generate wood that can replace coking coal (after pyrolysis). An estimate suggests that some 46 million hectares of land are suitable in Central Africa alone. In Brazil, another 46 million hectares are suitable. The land in question can sustain eucalyptus plantations without any major negative environmental footprint (previous post).
Besides dedicated biomass plantations, a more likely form of trade is to emerge from relationships established directly between power producers in the North and biomass producers in the South. One example comes from the Netherlands, where Essent Energie recently agreed to purchase several thousand tonnes of coffee husks from Brazilian coffee producers, to co-fire the biofuel in one of its large coal power plants in the Netherlands and to sell the electricity under a green label (previous post). However, it is not clear which factor was more important for Essent: the creation of a 'green' corporate image or the fact that biomass has become competitive with costly coal?
Making supply chains more efficient, creating market instruments for biomass trade and establishing sustainability criteria remain major stumbling blocks to the emergence of a global biomass market.
References:
ABC Rural: Coal price set to double - February 7, 2008.
Reuters: Goldman, Citigroup raise coal price forecasts - February 5, 2008.
Daily Reckoning: New Bull Market for Coal - February 7, 2008.
Reuters: JP Morgan raises 2008 coal price forecast - January 29, 2008.
Bloomberg: UBS Raises Coal Price Forecasts on Shortages in China - February 1, 2008.
Forbes: Asia coal price index jumps to record above $100/T - January 29, 2008.
Biopact: Coal's deep trouble makes biomass highly attractive - January 25, 2008
Biopact: Green steel made from tropical biomass - European project - February 08, 2007
Biopact: World first: fair trade founders team up with Brazilian farmers to sell coffee husk pellets to Dutch energy company - October 26, 2007
Article continues
The coal sector was shocked on rumours that an Asian steel company had recently paid US$275 a tonne for hard coking coal, almost triple last year's price. But record prices for thermal coal were observed too, with some European importers paying more than US$130 on the spot market. Last week, the Asian thermal coal price index broke the psychological barrier of US$100 for the first time ever.
Spot thermal coal prices have soared in the past few weeks in response to severe coal production and transportation constraints in Australia, China and South Africa at a time when power utilities are holding critically low inventories of coal. [...] We believe that the factors that have driven thermal coal prices higher in recent weeks will have a profound impact on 2008/09 contract negotiations. - Malcolm Southwood, Goldman Sachs JBWere's resource analyst
Our analysis points to a continued tightness in seaborne thermal markets extending to 2010. - Alan Heap, lead author, coal price outlook, CitigroupLeading analysts now predict a 50% increase up to a doubling of prices, for the coming years. Note that coal markets are complex and prices reflect regional realities, so the following are mere indicators of a trend, mainly focused on the Asian market:
- Most conservative is UBS AG, Europe's biggest bank by assets, which issued a report in which it increased its price forecasts for coal used in power plants in 2008 and 2009 as China's demand rises and supplies from Australia face disruptions. Thermal coal will average $100 a metric ton this year, and $130 a ton in 2009, up from previous estimates of $90 and $110.
- JP Morgan has forecast 2008 thermal coal contract prices between Australian miners and Japanese utilities will jump by over 60 percent, citing Indian coal demand and global infrastructure constraints. It raised its contract price forecast to $90 a tonne, a 61.7 percent increase from last year's agreed price of $55.65 and a 28.5 percent increase from its earlier forecast of $70.
- Citigroup also revised its outlook upwards to $100 a tonne and said strong demand from India, which will depend on coal-fired power generation to power its economic growth, will soak up supplies from Indonesia.
- Goldman Sachs raised its contract price forecast for thermal coal to $110 a tonne, a 98 percent increase from last year's agreed price of $55.65 and up 22 percent from its earlier prediction of $90.
- Barlow Jonker, a leading international coal market analysis company, went further and predicts a doubling of the price of Australian coal. Analyst Marion Hookham says that price rises across the board should drive more expansion in the coal industry and a big increase in government royalties, currently worth one and a half billion dollars.
- Finally, a spokesman at Indonesia's largest coal miner, PT Bumi Resources Tbk, said record high coal prices could still rise almost 50 percent to as much as $150 a tonne due to a global supply squeeze. Indonesia is the world's largest thermal coal exporter.
energy :: sustainability :: biomass :: bioenergy :: biofuels :: energy crops :: residues :: commodities :: coal :: co-firing :: trade :: South Africa :: Australia :: China :: Nonetheless, with a new benchmark for thermal coal prices ranging between $125 and $150, that could change relatively quickly with investors waiting to enter the sector receiving a clear signal that the time to do so has come.
Good opportunities exist in several areas that already have an established biomass resource that can be brought to market readily. One example would be found in Namibia, where a huge amount of biomass comes in the form of invader bush. Researchers from the VTT have estimated that the overgrowth of bush greatly affects an area of about 10 million hectares in northern parts of central and eastern Namibia, of which a total of 125 million tonnes can be harvested commercially and sustainably.This equates to around 500 TWh worth of energy. Total consumption of energy in Namibia is less than one twentieth of that, much of it derived from imported coal. The researchers found that local use of this densified biomass, replacing coal in a medium sized power plant (in Windhoek) , was competitive with 2006/2007 coal prices.
A thermal coal price twice as high would probably make it possible to export this biomass in a densified form. The invador bush would be harvested and densified in a decentralised manner, then brought to the railway that transects this region and brings it to port (Swakopmund) (map, click to enlarge; map shows density of bush per zone).
Over the medium term, dedicated biomass plantations could be established with high yielding tropical crops like eucalyptus and acacia, or short rotation crops. Recent analyses by a EU project into green steel production, show that there is vast potential for the creation of such plantations to generate wood that can replace coking coal (after pyrolysis). An estimate suggests that some 46 million hectares of land are suitable in Central Africa alone. In Brazil, another 46 million hectares are suitable. The land in question can sustain eucalyptus plantations without any major negative environmental footprint (previous post).
Besides dedicated biomass plantations, a more likely form of trade is to emerge from relationships established directly between power producers in the North and biomass producers in the South. One example comes from the Netherlands, where Essent Energie recently agreed to purchase several thousand tonnes of coffee husks from Brazilian coffee producers, to co-fire the biofuel in one of its large coal power plants in the Netherlands and to sell the electricity under a green label (previous post). However, it is not clear which factor was more important for Essent: the creation of a 'green' corporate image or the fact that biomass has become competitive with costly coal?
Making supply chains more efficient, creating market instruments for biomass trade and establishing sustainability criteria remain major stumbling blocks to the emergence of a global biomass market.
References:
ABC Rural: Coal price set to double - February 7, 2008.
Reuters: Goldman, Citigroup raise coal price forecasts - February 5, 2008.
Daily Reckoning: New Bull Market for Coal - February 7, 2008.
Reuters: JP Morgan raises 2008 coal price forecast - January 29, 2008.
Bloomberg: UBS Raises Coal Price Forecasts on Shortages in China - February 1, 2008.
Forbes: Asia coal price index jumps to record above $100/T - January 29, 2008.
Biopact: Coal's deep trouble makes biomass highly attractive - January 25, 2008
Biopact: Green steel made from tropical biomass - European project - February 08, 2007
Biopact: World first: fair trade founders team up with Brazilian farmers to sell coffee husk pellets to Dutch energy company - October 26, 2007
Article continues
posted by Biopact team at 2:03 PM
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Sunday, February 10, 2008
Second International Biochar Conference announced, to explore carbon-negative bioenergy and biofuels
Biochar or agrichar is a fine-grained charcoal substance made from biomass that has been heated in the absence of air. When used as a soil amendment in combination with sustainable production of the biomass feedstock, biochar effectively removes net carbon dioxide from the atmosphere while providing energy. It is thus a carbon-negative energy system. Nuclear power and renewables like solar, non-biochar based bioenergy, wind or hydropower are at best carbon-neutral, resulting in small to no net changes to atmospheric carbon dioxide.
Biochar can remain in the soil for several hundreds to thousands of years, creating virtually permanent soil sinks. Biochar and bioenergy co-production from urban, agricultural and forestry biomass can help combat global climate change by displacing fossil fuel use, by sequestering carbon in stable soil carbon pools, and by dramatically reducing emissions of other greenhouse gases from soils, such as N2O (Nobel Laureate Paul Crutzen recently hinted at the possibility that N2O emissions from agriculture and biofuel production may have been underestimated; biochar based bioenergy systems would radically slash these emissions).
Biochar in soils has been shown to:
- Improve soil health
- Increase crop yields and productivity (by up to 800% when combined with mineral fertilizer in highly weathered acidic tropical soils; by 200 and 300% in advanced agricultural systems that are already at the limit of intensification)
- Reduce soil acidity; acid soils make up about half of the world's potential arable land
- Reduce N2O emissions from soils
- Improve water quality
- Reduce nutrient and chemical leaching and run-off, and
- Reduce the need for chemical and fertilizer inputs
Biochar production systems can be developed as mobile or stationary units. Smallscale systems can be used on farm or by small industries, and are commercially available for biomass inputs of 50 to 4000kg/hr (dry basis feed input). The bioenergy produced from these biochar production systems, which can be in the form of a synthetic gas, or syngas, or bio-oils, can be used to produce heat, power or combined heat and power.Smart synergetic systems based on biochar production can slow down deforestation dramatically by limiting slash-and-burn expansion, enhance food production amongst poor communities in the tropics and subtropics, provide access to rural energy thus solving one of the great problems of our time, and mitigate climate change by establishing stable and manageable carbon sinks:
The Second Annual International Meeting will be useful for scientists and researchers in the fields of soils, agronomy, climate change, and bioenergy, and for policymakers, agricultural producers, commercial interests, and anyone interested in learning about this carbon negative method to combat global warming, described as "revolutionary" by the IBI.
The conference will present the latest updates on biochar production and application methodologies, and highlight how biochar production processes can benefit industrialised and developing country situations.
Keynote speakers at the conference include Tim Flannery, author of The Weathermakers:
How Man is Changing the Climate, and What it Means for Life on Earth, and Ron Oxburgh, Department of Earth Sciences, Cambridge, Chairman of D1 Oils and formerly Chairman of Shell Transport and Trading
Registration will be limited so registering in advance is advised.
The International Biochar Initiative (IBI) was formed in July 2006 at a side meeting held at the World Soil Science Congress (WSSC) in Philadelphia, PA. At the 2006 meeting, individuals and representatives from academic institutions, commercial ventures, investment bankers, non-governmental organizations, federal agency representatives, and the policy arena from around the world acknowledged a common interest in promoting the research, development, demonstration, deployment (RDD&D) and commercialization of the promising technology of biochar production.
An international conference was organized and held in New South Wales, Australia, in April/May 2007, and attracted the participation of 107 participants from 13 countries, also representing a spectrum of backgrounds. By unanimous consent at the 2007 Conference, the International Biochar Initiative is being established as a non-profit in the US, and will focus on information sharing, coordination, and seek fundraising opportunities to advance the RDD&D and commercialization of this compelling technology.
References:
International Biochar Initiative: Announcing the 2nd Annual International Meeting
of the International Biochar Initiative (IBI) [*.pdf].
Biopact: Biochar and carbon-negative bioenergy: boosts crop yields, fights climate change and reduces deforestation - January 28, 2008
Article continues
posted by Biopact team at 6:09 PM 0 comments links to this post
