competition of energy carriers

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© KWA EVIVA GMBH 2010 VOGELSANGER STRASSE 250 I 50825 KÖLN I GERMANY

Wood pellets in competition with other energycarriers to provide heat – a market analysis

Frank Schillig

International Pelletforum 2011, Stuttgart , 5.10.2011

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© KWA EVIVA GMBH 2010 Eviva – nachhaltige Energiedienstleistungen

Content

• Satisfying heat demand today

• Price and price development of different energy carriers

• Excursus heat from biogas plants

• Economics of heat suppy– Investment and O&M costs

– levelized heat costs

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Energy carriers to satisfy German heat demand

2006 2010

…and heat from renewable energy sources?

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Structure of heat supply from renewable energy sources in

Germany 2010

Near-surface

geothermal energy:

3.9 %

Deep geothermal

energy:

0.2 %

Solar thermal energy:

3.8 %

Biogenic share of

waste:

8.7 %

Landfill gas:

0.3 %

Sewage gas:

0.8 %

Biogas:

5.6 % Biogenic liquid fuels:

3.0 %

Biogenic solid fuels (co-

generation power

installations and

heating installations):

5.3 %

Biogenic solid fuels

(industry):

15.0 %

Biogenic solid fuels

(households):

53.4 %

* Solid and liquid biomass, biogas, sewage and landfill gas, biogenic share of waste; Source: BMU-KI III 1 according to Working Group on Renewable Energy-Statistics (AGEE-Stat); 1 TWh = 1 Bill. kWh; deviations in the totals are due to rounding; as at: July 2011; all figures provisional

Total: 136.1 TWh

Share of biomass *: 92 %

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Energy from biomasse – heating values

• LHV wood/straw (absolute dry): ~18 MJ/kg – ~ 65-70% hard coal

– ~40% fuel oil

– ~50% natural gas

• LHV vegetable oils: ~ 35 MJ/kg (~90% diesel)

• LHV biogas: ~ 20-22 MJ/m3 (~55-65% natural gas)

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Price development of different energy carriers

Wood chipsWood pelletsFuel oilNatural gas

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Investment costs of different heating systems

Oil heating gas heating pellet heating wood chip heating

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© KWA EVIVA GMBH 2010 Eviva – nachhaltige Energiedienstleistungen

O&M costs – comparing wood chip with oil heatings

Oil heating Wood chip heating

Annuised Investment

O&M

Fuel

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Excurs biogas heat

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Biogas-

CHP-unit school pool Etc.

biogas pipeline

Heat offtake Heat offtake Heat offtake

Local district heating gridHeat exchanger

Supply boundary

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Biogas heat from CHP

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© KWA EVIVA GMBH 2010 Eviva – nachhaltige Energiedienstleistungen

Why biogas heat? I

• Biogas plants: ~70% of the CHP-unit heat isavailable

• >6000 biogas plants in Germany with >2200 MWel installed capacity � >2300 MWthcapacity

• Heat usage limited: ~50%, often only to heatfarm buildings or neighbouring houses

• EEG 2012: heat usage > 60% !

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Why biogas heat? II

• Improved heat usage results in:– Income from heat sales– Income from CHP-bonus

� improved economics– Relating the heat price to fossile fuel prices �

increased economic stability by hedging pricevariations

– Constant EEG-tariffs + market driven heat sales� hedging the market variations in biogas substrateprices

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Comparison of levelised heat costs for different heating systems

Fuel oilNatural gasWood pelletsWood chipsBiogas heat

Operational years

Leve

lised

hea

t cos

ts (

€/kW

h)

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© KWA EVIVA GMBH 2010 Eviva – nachhaltige Energiedienstleistungen

summary

• Heat supply from biomass more economic in themid- and long-term

• Today wood chips (HHS) and Pellets can becompetitive to oil and gas, depending on the case– Investment costs higher for biomass based

heatings compared to oil or gas heatings– Energy carrier prices of oil and gas higher than

wood chips or pellets• Biogas heat can be very competitve if available

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