cormac o'carroll biomass markets and drivers, and … · wood based panels surplus february...

Cormac O'Carroll

BIOMASS MARKETS AND DRIVERS,

AND IMPACT OF RHI ON SUPPLY / DEMAND Wednesday, 4 February 2015

2015 IRBEA NATIONAL BIOENERGY CONFERENCE

COPYRIGHT©PÖYRY FEBRUARY 2015

2015 IRBEA NATIONAL BIOENERGY CONFERENCE 2

CONTENT

1.Pöyry company overview

2.EU incentives and biomass markets

3.Biomass supply potential and demand in Ireland

4.Conclusions

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PÖYRY IN BRIEF

FEBRUARY 2015 2015 IRBEA NATIONAL BIOENERGY CONFERENCE 3

Pöyry is an international consulting and engineering company. We provide services

across the full project lifecycle, solving complex challenges faced by the wold’s

toughest industries.

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SERVICES ACROSS CLIENT’S FULL PROJECT LIFECYCLE


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THE ROLE OF BIOENERGY


Around 60% of the Renewable Energy target in 2020 will be met employing various forms

of biomass.

EU Bioenergy targets

Source: Pöyry

0%

20%

40%

60%

80%

100%

Au

str

ia

Belg

ium

B

ulg

aria

C

yp

rus

Cze

ch

…

Denm

ark

E

sto

nia

F

inla

nd

Fra

nce

G

erm

an

y

Gre

ece

H

un

ga

ry

Ire

lan

d

Ita

ly

La

tvia

L

ith

ua

nia

L

uxe

mb

…

Ma

lta

N

eth

erl…

P

ola

nd

P

ort

ug

al

Ro

ma

nia

S

lovakia

S

love

nia

S

pain

S

we

de

n

UK

E

U 2

7 …

Total renewable target

Transport from biomass

Electricity from biomass

Heating and cooling from biomass



MOST COUNTRIES MAKING REASONABLE PROGRESS BUT

SOME LAGGARDS

Source: European Commission Joint Research Centre (JRC)

Countries Progress on NREAPs Bioenergy targets

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HEAT GENERALLY ON TARGET BUT UK CLEARLY BEHIND


Source: European Commission Joint Research Centre (JRC)

Countries Progress on electricity generated from biomass

Countries Progress on heat&cooling generated from biomass

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IMPACT OF OIL PRICES? – FINANCIAL TIMES SATURDAY 31ST

JAN 2015

17 JANUARY 2012 PÖYRY POWERPOINT 2010 TEMPLATE 8

BIOENERGY INCENTIVES AND POLICIES

Legend:

Low interest loans

Investment support

Other

Price-based schemes

None

Legend:

Feed-in tariff (FiT)

Market premium tariff

Tender

Green certificates (GC)

Net-metering

None

Incentives for renewable electricity from biomass Incentives for renewable heat from biomass

9

FEBRUARY 2015

2015 IRBEA NATIONAL BIOENERGY CONFERENCE

Source: Pöyry

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∆ 110


EU BIOMASS SUPPLY AND DEMAND 2020 / 2030

Views on the EU biomass supply potential going forward vary widely; how much of

the potential can be supplied sustainably from domestic sources, at what price?

140

EU biomass supply & demand (Mtoe)

Combined demand (primary energy)* Agriculture Waste

2030 Demand

2020 2010 Supply NREAP

(2020)

* WBA position paper (5/2014): The future contribution of

Bioenergy to the European Energy System

250211

118

0

100

200

300

400Max

supply

Min

supply

Max

supply

Min

supply

Forestry



Trade flows (Million tonnes)

4.5*

* EU 2 internal trade

Current

WOOD PELLET TRADE FLOWS INTO THE EU

International pellet markets have quickly developed to fill the supply gap.

Total pellet imports

into EU28**

** includes volumes from areas

other than those shown

2009 1.7 million tonnes





Russia EU

million tonnes

2009 0.4

2010 0.4

2011 0.5

2012 0.6

2013 0.7

Canada EU

million tonnes

2009 0.5

2010 1.0

2011 1.2

2012 1.3

2013 2.0

US Southeast EU

million tonnes

2009 0.5

2010 0.8

2011 1.0

2012 1.8

2013 2.8

Source: Pöyry Pellet Report 2014

Emerging

Biomass Sustainability Report COM

2010(11): Non binding recommendations Solid Biomass Sustainability

International bodies voluntary

initiatives

The World Bioenergy Association

Roundtable on Sustainable

Biomaterials

ISO 13065 (Under development)

National and

Regional voluntary

initiatives

Nordic Label

The Green Gold

Label

Laborelec

NTA 8080

Blue Angel

Global Multi-stakeholder voluntary

schemes

Sustainable Biomass

Partnership

ENplus Green

ISCC +

The Global Bioenergy

Partnership

National Criteria

UK

Denmark

Netherlands

Belgium

BIOENERGY INCENTIVES AND POLICIES

2015 IRBEA NATIONAL BIOENERGY CONFERENCE FEBRUARY 2015

Source: Pöyry



FORESTS IN IRELAND

Traditionally the afforestation effort has been concentrated to public land, however,

following new legislation with grants and support, private afforestation has greatly

increased since the 1990’s.

-

100

200

300

400

500

600

700

800 Private Public Total

Historic woodland area in Ireland by ownership in 2011 (‘000 ha)

Source: IFFPA 2012, Forest Service 2012



HARVEST BY LAND OWNERSHIP

Coillte provides a stable wood flow for the industry. However, the bulk of

incremental supply will come from private forests

0.0

0.2

0.4

0.6

0.8

1.0

Coillte Private Forest RoI Forest Service NI Private Forest NI*

Northern Ireland Republic of Ireland

Source: IFFPA 2012, Forest Service 2012

*Northern Ireland Forest Service estimate (DARDNI, 2012)

Harvest by land ownership in 2011 (Modt)

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

Supply Demand Surplus

Waste wood

Harvesting residues

Sawdust

Woodchips

Pulpwood

Import

Bioenergy

Pellets

Wood Based Panels

Surplus


WOODY BIOMASS SUPPLY & DEMAND

There appears to be a surplus of woody biomass in Ireland that could be utilized for

bioenergy but much of this “surplus” comprises waste wood and harvesting

residues where availability and economics are unproven

Biomass supply & demand 2012 (Modt)

Demand

Supply

Source: Pöyry, COFORD

? 44% used

(0.17Modt)



HOW FAR FROM THE TARGETS ARE WE?

Progress on Bioenergy from Solid Biomass in 2012

Source: Irish NRAEP Progress report

0

1000

2000

3000

4000

5000

6000

Energy from biomass for Electricity Energy from biomass for Heating Energy from biomass for Transport

GW

h

2012 Solid Biomass achieved 2012 Proposed target for S. Biomass 2020 Target of Solid Biomass



STRONG GROWTH IN WOOD AVAILABILITY IS FORECAST

Private forest represents almost half of the potential availability in 2030, but will it

be realized?

Potential net realizable volume by ownership (Mm³sob)

0

1

2

3

4

5

6

7

2012 2014 2016 2018 2020 2022 2024 2026 2028

Public (Coillte) Private

Source: COFORD, 2011



SAWMILL DEVELOPMENT WILL ALSO INFLUENCE AVAILABILITY

Sawmilling industry drives forest utilization and capacity development requires

stable wood flows to attract larger investments. We have assumed sawmilling

capacity lags sawlog availability growth.

Potential harvest realization of sawlogs (Modt)

Source: Pöyry (Analysis on COFOR 2011)

0.0

0.4

0.8

1.2

1.6

2.0

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Sawlog availability Sawlog consumption

25% increase,

low investments

Large investments

needed



Biomass supply (Modt)

FUTURE AVAILABILITY OF DOMESTIC BIOMASS

Supply will increase, mainly as a result of the expected growth in private harvesting

Source: Pöyry

0.0

0.4

0.8

1.2

1.6

2.0

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Wastewood - low quality

Wastewood - high quality

Harvesting residues

Sawdust

Woodchips

Pulpwood

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0.0

0.5

1.0

1.5

2.0

2012 2020 2012 2020 2012 2020 2012 2020


Estimated demand and surplus (Modt)

…SO IS THERE ENOUGH WOOD?

Domestic supply could theoretically meet the demand implied by the NREAP target

but it is uncertain how much of this supply will materialize. Furthermore this takes

no account of likely expansions in other wood using industries e.g. wood panels

Woody biomass

2020 NREAP target

Progress

reported

2012 Maximum COFORD

supply potential Sawmill driven supply –

Pöyry analysis



Irish woody biomass imports (kodt)

WHAT ABOUT IMPORTS?

Current import volumes are small but could be an option to supplement the

domestic biomass supply

* Eurostat started publishing European pellet trade data in 2009

0

20

40

60

80

100

120

140

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Wood waste Sawdust Chips and particels Roundwood (exlc. sawlogs) Wood Pellets*

Source: Eurostat

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CONCLUSIONS

Biomass heat is a key component in EU renewable targets

There is theoretically enough domestic wood for Ireland to reach the NREAP

bioenergy targets but significant uncertainty remains regarding what will

ultimately be mobilised and what new industrial capacity will emerge in the rest

of the Irish wood industries.

The proposed RHI can make a major contribution to achieving these targets

Any shortfall in domestic biomass supply can be supplemented by well

developed international pellet markets.

It is critical that the RHI is aligned not only with forecast wood supply but also

the likely development of Ireland’s other strategic wood industries

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