Renewable Energy Technologies Cost Analysis Series - 2011
Renewable Energy Technologies Cost Analysis Series - 2011
Renewable Energy Technologies Cost Analysis Series - 2011
Wind Power
Biomass for
Power Generation
June 2012
Copyright (c) IRENA 2012
Unless otherwise indicated, material in this publication may be used freely, shared or reprinted,
but acknowledgement is requested.
About IRENA
In accordance with its Statute, IRENA's objective is to "promote the widespread and increased
adoption and the sustainable use of all forms of renewable energy". This concerns all forms of
energy produced from renewable sources in a sustainable manner and includes bioenergy,
geothermal energy, hydropower, ocean, solar and wind energy.
As of May 2012, the membership of IRENA comprised 158 States and the European Union (EU), out
of which 94 States and the EU have ratified the Statute.
Acknowledgement
This paper was prepared by the IRENA Secretariat. The paper benefitted from an internal IRENA
review, as well as valuable comments and guidance from Suani Coelho (CENBIO), Margaret Mann
(NREL) and Martin Zeymer (Deutsches Biomasseforschungszentrum gemeinnützige).
For further information or to provide feedback, please contact Michael Taylor, IRENA Innovation
and Technology Centre, Robert-Schuman-Platz 3, 53175 Bonn, Germany; [email protected].
Disclaimer
The designations employed and the presentation of materials herein do not imply the expression
of any opinion whatsoever on the part of the Secretariat of the International Renewable Energy
Agency concerning the legal status of any country, territory, city or area or of its authorities, or con-
cerning the delimitation of its frontiers or boundaries. The term “country” as used in this material
also refers, as appropriate, to territories or areas.
Preface
Renewable power generation can help countries meet their sustainable development goals
through provision of access to clean, secure, reliable and affordable energy.
Renewable energy has gone mainstream, accounting for the majority of capacity additions in
power generation today. Tens of gigawatts of wind, hydropower and solar photovoltaic capacity
are installed worldwide every year in a renewable energy market that is worth more than a
hundred billion USD annually. Other renewable power technology markets are also emerging.
Recent years have seen dramatic reductions in renewable energy technologies’ costs as a result
of R&D and accelerated deployment. Yet policy-makers are often not aware of the latest cost
data.
International Renewable Energy Agency (IRENA) Member Countries have asked for better,
objective cost data for renewable energy technologies. This working paper aims to serve that
need and is part of a set of five reports on biomass, wind, hydropower, concentrating solar
power and solar pholtovoltaics that address the current costs of these key renewable power
technology options. The reports provide valuable insights into the current state of deployment,
types of technologies available and their costs and performance. The analysis is based on
a range of data sources with the objective of developing a uniform dataset that supports
comparison across technologies of different cost indicators – equipment, project and levelised
cost of electricity – and allows for technology and cost trends, as well as their variability to be
assessed.
The papers are not a detailed financial analysis of project economics. However, they do provide
simple, clear metrics based on up-to-date and reliable information which can be used to
evaluate the costs and performance of different renewable power generation technologies.
These reports help to inform the current debate about renewable power generation and assist
governments and key decision makers to make informed decisions on policy and investment.
The dataset used in these papers will be augmented over time with new project cost data
collected from IRENA Member Countries. The combined data will be the basis for forthcoming
IRENA publications and toolkits to assist countries with renewable energy policy development
and planning. Therefore, we welcome your feedback on the data and analysis presented in these
papers, and we hope that they help you in your policy, planning and investment decisions.
Dolf Gielen
Director, Innovation and Technology
Contents
KEY FINDINGS i
1. INTRODUCTION 1
1.1 Different Measures of Cost and Data Limitations
1.2 Levelized Cost of Electricity Generation
3. FEEDSTOCK 17
REFERENCES 45
ACRONYMS 49
Key findings
1. The total installed costs of biomass power generation technologies varies significantly by
technology and country. The total installed costs of stoker boilers was between USD 1 880
and USD 4 260/kW in 2010, while those of circulating fluidised bed boilers were between
USD 2 170 and USD 4 500/kW. Anaerobic digester power systems had capital costs
between USD 2 570 and USD 6 100/kW. Gasification technologies, including fixed bed
and fluidised bed solutions, had total installed capital costs of between USD 2 140 and
USD 5 700/kW. Co-firing biomass at low-levels in existing thermal plants typically requires
additional investments of USD 400 to USD 600/kW. Using landfill gas for power generation
has capital costs of between USD 1 920 and USD 2 440/kW. The cost of CHP plants is
significantly higher than for the electricity-only configuration.
TaB LE 1 : TyPiCaL CaPiTaL COSTS an D TH E LEvELiSED COST OF ELECTriCiTy OF BiOm aSS POWEr TECH nOLOGiES
2. Operations and maintenance (O&M) costs can make a significant contribution to the
levelised cost of electricity (LCOE) and typically account for between 9% and 20% of the
LCOE for biomass power plants. It can be lower than this in the case co-firing and greater
for plants with extensive fuel preparation, handling and conversion needs. Fixed O&M costs
range from 2% of installed costs per year to 7% for most biomass technologies, with variable
O&M costs of around USD 0.005/kWh. Landfill gas systems have much higher fixed O&M
costs, which can be between 10% and 20% of initial capital costs per year.
3. Secure, long-term supplies of low-cost, sustainably sourced feedstocks are critical to the
economics of biomass power plants. Feedstock costs can be zero for wastes which would
otherwise have disposal costs or that are produced onsite at an industrial installation (e.g.
black liquor at pulp and paper mills or bagasse at sugar mills). Feedstock costs may be
modest where agricultural residues can be collected and transported over short distances.
However, feedstock costs can be high where significant transport distances are involved due
to the low energy density of biomass (e.g. the trade in wood chips and pellets). The analysis
in this report examines feedstock costs of between USD 10/tonne for low cost residues to
USD 160/tonne for internationally traded pellets.
i
List of tables
Table 2.1: Biomass feedstocks 4
Table 2.2: Thermo-chemical and bio-chemical conversion processes for biomass feedstocks 5
Table 2.3: Steam turbine types and characteristics 7
Table 2.4: Appropriate anaerobic digesters by waste or crop stream 10
Table 2.5: Operational parameters of a representative anaerobic digester using energy crops 11
Table 2.6: Advantages and disadvantages of fluidised bed gasifiers 15
Table 2.7: Examples of producer gas contaminants 16
Table 3.1: Heat content of various biomass fuels (dry basis) 17
Table 3.2: Biomass power generation technologies and feedstock requirements 20
Table 4.1: Details of fossil-fuel fired power plants co-firing with biomass in the Netherlands 23
Table 5.1: Biomass and pellet market prices, January 2011 27
Table 5.2: Biomass feedstock prices and characteristics in the United States 28
Table 5.3: Biomass feedstock costs including transport for use in Europe 30
Table 5.4: Feedstock costs for agricultural residues in Brazil and India 31
Table 5.5: Estimated equipment costs for biomass power generation technologies by study 32
Table 5.6: Fixed and variable operations and maintenance costs for biomass power 35
Table 5.7: Long-run cost reduction potential opportunities for bioenergy power generation technologies 36
Table 6.1: Assumptions for the LCOE analysis of biomass-fired power generation technologies in Figure 6.4 43
List of figures
Figure 1.1: Renewable power generation costs indicators and boundaries 1
Figure 2.1: Biomass power generation technology maturity status 6
Figure 2.2: An example of efficiency gains from CHP 8
Figure 2.3: Different biomass co-firing configurations 9
Figure 2.4: Schematic of the gasification process 12
Figure 2.5: Gasifier size by type 13
Figure 2.6: Small-scale updraft and downdraft fixed bed gasifiers 14
Figure 3.1: Impact of moisture content on the price of feedstock cost on a net energy basis 18
Figure 4.1: Global grid-connected biomass capacity in 2010 by feedstock and country/region (MW) 21
Figure 4.2: Share of global installed biomass capacity in 2010 by feedstock and country/region 22
Figure 4.3: Biomass power generation projects with secured financing/under construction (GW) 24
Figure 4.4: Projected biomass and waste installed capacity for power generation and annual investment,
2010 to 2030 24
Figure 5.1: Breakdown of biomass and waste availability by cost in the United States, 2012/2017 29
Figure 5.2: Biomass feedstock preparation and handling capital costs as a function of throughput 30
Figure 5.3: Installed capital cost ranges by biomass power generation technology 33
Figure 5.4: Capital cost breakdown for biomass power generation technologies 34
Figure 5.5: Biomass feedstock cost reduction potentiaL to 2020 in Europe 36
Figure 6.1: The LCOE framework for biomass power generation 39
Figure 6.2: LCOE ranges for biomass-fired power generation technologies 40
Figure 6.3: Share of fuel costs in the LCOE of bioenergy power generation for high and low feedstock prices 41
Figure 6.4: Breakdown of the LCOE of selected bioenergy-fired power generation technologies 42
iii
1. introduction
R enewable energy technologies can help countries meet their policy goals for secure, reliable and
affordable energy to expand electricity access and promote development. This paper is part of a series
on the cost and performance of renewable energy technologies produced by IRENA. The goal of these papers
is to assist government decision-making and ensure that governments have access to up-to-date and reliable
information on the costs and performance of renewable energy technologies.
Without access to reliable information on the relative 1.1 DIFFERENT MEASURES OF COST
costs and benefits of renewable energy technologies, AND DATA LIMITATIONS
it is difficult, if not impossible, for governments to
arrive at an accurate assessment of which renewable Cost can be measured in a number of different ways,
energy technologies are the most appropriate for and each way of accounting for the cost of power
their particular circumstances. These papers fill a generation brings its own insights. The costs that
significant gap in information availability because can be examined include equipment costs (e.g. wind
there is a lack of accurate, comparable, reliable turbines, PV modules, solar reflectors), financing
and up-to-date data on the costs and performance costs, total installed cost, fixed and variable operating
of renewable energy technologies. There is also a and maintenance costs (O&M), fuel costs and the
significant amount of perceived knowledge about the levelised cost of energy (LCOE), if any.
cost and performance of renewable power generation
that is not accurate, or, indeed, is even misleading. The analysis of costs can be very detailed, but for
Conventions on how to calculate cost can influence comparison purposes and transparency, the approach
the outcome significantly, and it is imperative that used here is a simplified one. This allows greater
these are well-documented. scrutiny of the underlying data and assumptions,
improved transparency and confidence in the analysis,
The absence of accurate and reliable data on the cost as well as facilitating the comparison of costs by
and performance of renewable power generation country or region for the same technologies in order
technologies is therefore a significant barrier to to identify what are the key drivers in any differences.
the uptake of these technologies. Providing this
information will help governments, policy-makers, The three indicators that have been selected are:
investors and utilities make informed decisions about
the role renewables can play in their power generation » Equipment cost (factory gate FOB and
mix. This paper examines the fixed and variable delivered at site CIF);
cost components of biomass power, by country
and by region, and provides the levelised cost of » Total installed project cost, including fixed
electricity from biomass power given a number of key financing costs 2; and
assumptions. This up-to-date analysis of the costs of
generating electricity from biomass will allow a fair » The levelised cost of electricity LCOE.
comparison of biomass with other power generating
technologies.1 The analysis in this paper focuses on estimating
the cost of biomass power from the perspective of
an investor, whether it is a state-owned electricity
generation utility, an independent power producer or
1 IRENA, through its other work programmes, is also looking at the costs and benefits, as well as the macro-economic impacts, of renewable
power generation technologies. See WWW.IRENA.ORG for further details.
2 Banks or other financial institutions will often charge a fee, usually a percentage of the total funds sought, to arrange the debt financing of a
project. These costs are often reported separately under project development costs.
FiGU rE 1 .1 : rEn EWaB LE POWEr GEn EraTiO n COSTS i n DiCaTOrS an D BOU n DariES
an individual or community looking to invest in small- The data used for the comparisons in this paper come
scale renewables (Figure 1.1). The analysis excludes from a variety of sources, such as business journals,
the impact of government incentives or subsidies, industry associations, consultancies, governments,
system balancing costs associated with variable auctions and tenders. Every effort has been made to
renewables and any system-wide cost-savings from ensure that these data are directly comparable and
the merit order effect. Further, the analysis does not are for the same system boundaries. Where this is not
take into account any CO2 pricing, nor the benefits the case, the data have been corrected to a common
of renewables in reducing other externalities (e.g. basis using the best available data or assumptions.
reduced local air pollution and contamination of It is planned that these data will be complemented
the natural environment). Similarly, the benefits of by detailed surveys of real world project data in
renewables being insulated from volatile fossil fuel forthcoming work by the agency.
prices have not been quantified. These issues are
important but are covered by other programmes of An important point is that although this paper tries
work at IRENA. to examine costs, strictly speaking, the data available
are actually prices, and not even true market average
It is important to include clear definitions of the prices, but price indicators. The difference between
technology categories, where this is relevant, to costs and prices is determined by the amount above,
ensure that cost comparisons are robust and provide or below, the normal profit that would be seen in a
useful insights (e.g. biomass combustion vs. biomass competitive market. The rapid growth of renewables
gasification technologies). Similarly, it is important markets from a small base means that the market for
to differentiate between the functionality and/ renewable power generation technologies is rarely
or qualities of the renewable power generation well-balanced. As a result, prices, particularly for
technologies being investigated (e.g. ability to scale- biomass feedstocks, can rise significantly above costs
up, feedstock requirements). It is important to ensure in the short-term if supply is not expanding as fast as
that system boundaries for costs are clearly set and demand, while in times of excess supply losses can
that the available data are directly comparable. Other occur and prices may be below production costs.
issues can also be important, such as cost allocation This makes analysing the cost of renewable power
rules for combined heat and power plants and grid generation technologies challenging and every effort
connection costs. is made to indicate whether costs are above or below
their long-term trend.
Where:
LCOE = the average lifetime levelised cost of
1.2 LEVELISED COST OF ELECTRICITY electricity generation;
GENERATION It = investment expenditures in the year t;
Mt = operations and maintenance expenditures in
The LCOE of renewable energy technologies the year t;
varies by technology, country and project, based Ft = fuel expenditures in the year t;
on the renewable energy resource, capital and Et = electricity generation in the year t;
operating costs and the efficiency/performance of r= discount rate; and
the technology. The approach used in the analysis n= life of the system.
presented here is based on a discounted cash flow
(DCF) analysis. This method of calculating the All costs presented in this paper are real 2010 USD,
cost of renewable energy technologies is based unless otherwise stated, 3 that is to say after inflation
on discounting financial flows (annual, quarterly or has been taken into account.4 The LCOE is the price
monthly) to a common basis, taking into consideration of electricity required for a project where revenues
the time value of money. The weighted average would equal costs, including making a return on
cost of capital (WACC), often also referred to as the the capital invested equal to the discount rate. An
discount rate, is an important part of the information electricity price above this would yield a greater
required to evaluate biomass power generation return on capital while a price below it would yield a
projects and has an important impact on the LCOE. lower return on capital or even a loss.
There are many potential trade-offs to be considered As already mentioned, although different cost
when developing an LCOE modelling approach. The measures are useful in different situations, the LCOE
approach taken here is relatively simplistic, given of renewable energy technologies is a widely used
the fact that the model needs to be applied to a measure by which renewable energy technologies
wide range of technologies in different countries can be evaluated for modelling or policy development
and regions. However, this has the additional purposes. Similarly, more detailed DCF approaches,
advantage that the analysis is transparent and easy to taking into account taxation, subsidies and other
understand. In addition, more detailed LCOE analysis incentives, are used by renewable energy project
results in a significantly higher overhead in terms of developers to assess the profitability of real world
the granularity of assumptions required. This often
gives the impression of greater accuracy, but when
3 Note that for biomass CHP, a credit is allocated for the steam produced. The methodology used for allocating costs between
electricity and heat production can have an important impact on the estimated LCOE (Coelho, 1997)..
4 The 2010 USD/Euro exchange rate was 1.327 and the USD/GBP exchange rate was 1.546. All data for exchange rates and GDP
deflators were sourced from the International Monetary Fund’s databases or from the World Bank’s “World Economic Outlook”.
5 An analysis based on nominal values with specific inflation assumptions for each of the cost components is beyond the scope of
this analysis. Project developers will develop their own specific cash-flow models to identify the profitability of a project from their
perspective.
Cost Analysis of Biomass for Power Generation 3
2. Biomass power
generation
technologies
T his paper examines biomass power generation technologies but also touches on the technical and economic
characterisation of biomass resources, preparation and storage. There can be many advantages to using
biomass instead of fossil fuels for power generation, including lower greenhouse gas (GHG) emissions, energy
cost savings, improved security of supply, waste management/reduction opportunities and local economic
development opportunities. However, whether these benefits are realised, and to what extent, depends critically
on the source and nature of the biomass feedstock.
In order to analyse the use of biomass for power The source and sustainability of the biomass
generation, it is important to consider three critical feedstock is critical to a biomass power generation
components of the process: project’s economics and success. There are a wide
range of biomass feedstocks and these can be split
» Biomass feedstocks: These come in a variety into whether they are urban or rural (Table 2.1).
of forms and have different properties that
impact their use for power generation. A critical issue for the biomass feedstock is its energy,
ash and moisture content, and homogeneity. These
» Biomass conversion: This is the process by will have an impact on the cost of biomass feedstock
which biomass feedstocks are transformed per unit of energy, transportation, pre-treatment
into the energy form that will be used to and storage costs, as well as the appropriateness of
generate heat and/or electricity. different conversion technologies.
» Power generation technologies: There is a Bioenergy can be converted into power through
wide range of commercially proven power thermal-chemical processes (i.e. combustion,
generation technologies available that can use gasification and pyrolysis) or bio-chemical processes
biomass as a fuel input. like anaerobic digestion. (Table 2.2).
rural Urban
Forest residues and wood waste Urban wood waste (packing crates,
pallets, etc.)
agricultural residues (corn stovers, wheat stalks, etc.) Wastewater and sewage biogas
Energy crops (grasses or trees) Landfill gas
Biogas from livestock effluent municipal solid waste
Food processing residues
Thermo-Chemical Process
Combustion The cycle used is the conventional rankine cycle with biomass being burned (oxidised)
in a high pressure boiler to generate steam. The net power cycle efficiencies that can
be achieved are about 23% to 25%. The exhaust of the steam turbine can either be
fully condensed to produce power or used partly or fully for another useful heating
activity. in addition to the exclusive use of biomass combustion to power a steam
turbine, biomass can be co-fired with coal in a coal-fired power plant.
Direct co-firing is the process of adding a percentage of biomass to the fuel mix in
a coal-fired power plant. it can be co-fired up to 5-10% of biomass (in energy terms)
and 50-80% 6 with extensive pre-treatment of the feedstock (i.e. torrefaction) with only
minor changes in the handling equipment. For percentages above 10% or if biomass
and coal are burning separately in different boilers, known as parallel co-firing, then
changes in mills, burners and dryers are needed.
Gasification Gasification is achieved by the partial combustion of the biomass in a low oxygen
environment, leading to the release of a gaseous product (producer gas or syngas). So-
called “allothermal” or indirect gasification is also possible. The gasifier can either be
of a “fixed bed”, “fluidised bed” or “entrained flow” configuration. The resulting gas is
a mixture of carbon monoxide, water, CO 2, char, tar and hydrogen, and it can be used
in combustion engines, micro-turbines, fuel cells or gas turbines. When used in turbines
and fuel cells, higher electrical efficiencies can be achieved than those achieved in
a steam turbine. it is possible to co-fire a power plant either directly (i.e. biomass and
coal are gasified together) or indirectly (i.e. gasifying coal and biomass separately for
use in gas turbines).
Bio-Chemical Process
Anaerobic Digestion anaerobic digestion is a process which takes place in almost any biological material
that is decomposing and is favored by warm, wet and airless conditions. The resulting
gas consists mainly of methane and carbon dioxide and is referred to as biogas. The
biogas can be used, after clean-up, in internal combustion engines, micro-turbines,
gas turbines, fuel cells and stirling engines or it can be upgraded to biomethane for
distribution.
Power generation from biomass can be achieved with at commercial scale (e.g. gasification). There are
a wide range of feedstocks and power generation other technologies that are at an earlier stage of
technologies that may or may not include an development and are not considered in this analysis
intermediate conversion process (e.g. gasification). (Figure 2.1). In addition, different feedstocks and
In each case, the technologies available range from technologies are limited or more suited to different
commercially proven solutions with a wide range scales of application, further complicating the picture.
of technology suppliers (e.g. solid fuel combustion) The following sections discuss each of the major
through to those that are only just being deployed technology groups and their technical parameters.
Pyrolysis
Hybrid Biomass-Solar/
Geothermal Medium-Rate Cofiring
MSW
Biorefineries Incineration Stoker/FBC
Steam-Electric
Bio-Hydrogen CHP Combustion
Anaerobic Digestion
LFG
Integrated Biomass Low-Rate
Gasification – Fuel Cell Cofiring
Time
FiGU rE 2.1 : BiOm aSS POWEr GEn EraTiO n TECH nOLOGy m aTU riTy STaTUS
Stoker boilers burn fuel on a grate, producing hot circulating-bed units; the fundamental difference
flue gases that are then used to produce steam. between bubbling-bed and circulating-bed boilers
The ash from the combusted fuel is removed is the fluidisation velocity (higher for circulating).
continuously by the fixed or moving grate. There Circulating fluidised bed boilers (CFB) separate
are two general types of stokers. Underfeed and capture fuel solids entrained in the high-
boilers supply both the fuel and the air from under velocity exhaust gas and return them to the bed
the grate. Overfeed boilers supply the fuel from for complete combustion. Pressurised CFB are
above the grate and the air from below. available, although atmospheric-bubbling fluidised
bed boilers are more commonly used when the
Fluidised bed boilers suspend fuels on upward fuel is biomass. They can also be a more effective
blowing jets of air during the combustion process. way to generate electricity from biomass with a
They are categorised as either atmospheric or higher moisture content than typical in a stoker
pressurised units. Atmospheric fluidised bed boiler (UNIDO, 2009).
boilers are further divided into bubbling-bed and
The steam produced in the boilers is injected into generation of electricity. There are three major types
steam turbines. These convert the heat contained in of turbines with each one having its own specific
the steam into mechanical power, which drives the characteristics (Table 2.3).
Combined heat and power (CHP), also known as The viability of biomass CHP plants is usually
a co-generation, is the simultaneous production governed by the price of electricity and the
of electricity and heat from one source of availability and cost of the biomass feedstock.
energy. CHP systems can achieve higher overall Although many sources of biomass are available
efficiencies than the separate production of for co-generation, the greatest potential lies in the
electricity and heat when the heat produced is sugar cane and wood processing industries, as the
used by industry and/or district heating systems feedstock is readily available at low cost and the
(Figure 2.2). Biomass-fired CHP systems can process heat needs are onsite (UNIDO, 2008).
provide heat or steam for use in industry (e.g. the
pulp and paper, steel, or processing industries) or
for use for space and water heating in buildings,
directly or through a district heating network.
Losses (60)
Heat 80 Heat
Boiler fuel (100)
Gas
boiler Losses (20) Losses (40)
T O TA L E F F I C I E n C y 6 0 % T O TA L E F F I C I E n C y 76 , 5 %
The co-firing of biomass with coal in large coal-fired biomass fuel content. The advantage of biomass
power plants is becoming increasingly common. co-firing is that, on average, electric efficiency in
Around 55 GW of coal-fired capacity is now co-fired co-firing plants is higher than in dedicated biomass
with biomass in North America and Europe (IEA combustion plants. The incremental investment costs
Bioenergy, 2012). In Europe, approximately 45 GW of are relatively low although they can increase the cost
thermal power generation capacity is co-fired with of a coal-fired power plant by as much as a third.
biomass with from as little as 3% to as much as 95%
Description Covered lagoon or sludge Complete mix digesters Plug flow digesters are
blanket-type digesters work best with slurry used for solid manure
are used with wastes manure or wastes that or waste (generally
discharged into water. are semi-liquid (generally, when the waste’s solids
The decomposition of when the waste’s solids composition is 11% or
waste in water creates composition is less than greater). Wastes are
a naturally anaerobic 10%). These wastes are deposited in a long,
environment. deposited in a heated heated tank that is
tank and periodically typically situated below
mixed. Biogas that is ground. Biogas remains
produced remains in the in the tank until use or
tank until use or flaring flaring.
Biogas is readily used as a fuel in power or combined MW/year. Landfill gas and digesters are proven
heat and power units and has the potential to be technologies, but they can be limited in scale by
used as a substitute for natural gas after appropriate feedstock availability. Table 2.5 provides an indication
cleaning and upgrading (IEA Bioenergy, 2011). Large- of the quantities of three different crop feeds that
scale plants using municipal solid waste (MSW), would be required to power a 500 kW electrical prime
agricultural waste and industrial organic wastes mover and its electrical and thermal output.
require between 8 000 and 9 000 tonnes of MSW/
per year
input of maize silage (tonnes) 5 940
input of grass silage (tonnes) 2 181
input of clover silage (tonnes) 1 374
Total feedstock (tonnes) 9 495
Biogas production (million m3) 1.88
Electricity produced (mWh) 4 153
Thermal energy produced (mWh) 4 220
Own electricity consumption (mWh) 161
Own thermal energy consumption (mWh) 701
Electricity available for sale (mWh) 3 992
Thermal energy available for sale (mWh) 1 697
In Europe in mid-2011, Germany, with 7 090 digesters, require further R&D include improving fuel flexibility,
was the leading country for both the number and removing particulates, alkali-metals and chlorine; and
installed capacity of AD’s (Linke, 2011). The total the removal of tars and ammonia (Kurkela, 2010).
installed electrical capacity of these plants is From an economic perspective, reducing complexity
2 394 MW. Virtually all of this capacity is located and costs, and improving performance and efficiency
in the agricultural sector where maize sillage, other are required.
crops and animal slurry are used. This important
contribution is driven by a feed-in tariff in Germany There are three main types of gasification technology7:
that supports electricity generation from biogas from
AD. » Fixed bed gasifiers;
Gasifier technologies offer the possibility of However, there are a wide range of possible
converting biomass into a producer gas, which can configurations, and gasifiers can be classified
be burned in simple or combined-cycle gas turbines according to four separate characteristics:
at higher efficiencies than the combustion of biomass
to drive a steam turbine. Although gasification » Oxidation agent: This can be air, oxygen,
technologies are commercially available, more needs steam or a mixture of these gases.
to be done in terms of R&D and demonstration to
promote their widespread commercial use, as only » Heat for the process: This can be either
around 373 MWth of installed large-scale capacity direct (i.e. within the reactor vessel by the
was in use in 2010, with just two additional projects combustion process) or indirect (i.e. provided
totaling 29 MWth planned for the period to 2016 from an external source to the reactor).
(US DOE, 2010). The key technical challenges that
7 One additional option is the use of air as the reactive agent, but this yields a very low energy content gas, albeit suitable for use in boilers
or internal combustion engines.
8 Entrained flow gasifiers are not discussed in detail in this paper, as their main advantage is the possibility to work at large scales (from
100 MW to over 1 000 MW), which aren’t common for biomass-fired power generation projects.
Reactive Biomass
agent
Gas without treatment Co-
Air Low energy gas generation
Step 1: – Producer gas
Pyrolisis Cyclone filters Boilers
~500 °C
Steam Wet scrubber
Power
etc
or oxygen Internal
Combustion
or a mixture Catalytic
engines – ICE
of air, cracking
steam
Medium
and Step 2: Gas turbine
energy gas
oxygen Gasification Thermal – Syngas Stirling motor
Fuel cell
~1000 °C cracking
Alcohol
Conversion Mehanol
Reform of syngas Gasoline
Fischer-Tropsch Methane
Synthsis Ammonia
Sou rce: BaSed on Sadaka, 201 0; BelgIor no, 2003; an d McHale, 201 0.
Fixed bed gasifiers remove the relatively high levels of tar and
Fixed bed gasifiers typically have a grate to support other impurities to allow electricity generation
the gasifying biomass and maintain a stationary or CHP, albeit with increased capital costs.10
reaction bed. They are relatively easy to design and Slagging problems can also arise if high-ash
operate and generally experience minimum erosion of biomass is used.
the reactor body.
» In a downdraft fixed bed gasifier, the biomass
There are three types of fixed bed designs: and the reactive agent are introduced at the
top of the reactor and the tars pass through
» In an updraft fixed bed gasifier, biomass the oxidation and charcoal reduction zones,
enters at the top of the reactor and the meaning levels of tar in the gas are much
reactive agent (i.e. air, steam and/or oxygen) lower than in updraft gasifiers. They tend to
below the grate. The producer gas, together require a homogenous feedstock to achieve
with tars and volatiles, exits from the top the best results.
while chars and ashes fall through the grate
(at the bottom). These gasifiers are often » Cross-draft fixed bed gasifiers are similar to
used for direct heating, but gas clean-up can downdraft gasifiers and are often used to
9 The entrained flow gasifier is based on even higher velocities in the reactor where the material is picked up and carried off in the airflow.
They aren’t considered here, as there principle benefits of larger scale-up make feedstock sourcing problematic. Other options provide the
scale required for biomass power generation
10 See for instance http://www.volund.dk/solutions_references/gasification_solutions
Biomass Biomass
Storage Storage
air
Producer gas
Biomass Biomass
Producer gas
air
ash
ash
advantages Disadvantages
11 In BFB gasifiers, the reactive gases pass through the reactor bed at the minimum velocity required to achieve a bubbling effect where the
“bubbles” flow upwards through the bed material. At the top of the inert material, the bubbles burst and the bed material falls back into the
bed. In CFB gasifiers, the gas velocities are higher than the minimum fluidisation point, resulting in the circulation of the inert bed materials
in the gas stream. The bed particles thus exit the top of the reactor with the producer gas and must then be separated in a cyclone to be re-
circulated to the reactor.
12 This is not always the case, and some gas clean-up may be required even in these circumstances.
13 Tars are the name given to the mostly poly-nuclear hydrocarbons, such as pyrene and anthracene, that form as part of the gasification
process.
14 For a description of the process see http://www.renewableenergy.nl/index.php?pageID=3220&n=545&itemID=351069
35
USD 160 per tonne
30
USD 140 per tonne
25
USD 120 per tonne
2010 USD / GJ
FiGU rE 3.1 : i m PaCT OF m OiSTU rE CO nTEnT O n TH E PriCE OF FEEDSTOCK COST O n a n ET En ErGy BaSiS
15 Although virtually any organic material can be used as a feedstock for anaerobic digestion, the more putrescible (digestible) the
feedstock the higher the potential gas yield.
16 That is to say the remaining energy of the fuel after the energy required to evaporate the water contained in the feedstock.
Slagging and fouling can be minimised by keeping Overview of biomass power generation technologies
the combustion temperature low enough to prevent and biomass feedstock characteristics
the ash from fusing. Alternately, high-temperature Table 3.2 gives an overview of biomass technology,
combustion could be designed to encourage the feedstock and the requirements on particle size and
formation of clinkers (hardened ash), which could moisture content. Co-firing in coal-fired power plants
then be more easily disposed of. has the most stringent requirements for moisture
content and feedstock size if efficiency is not to be
Some types of biomass have problems with the ash degraded.
generated. This is the case for rice husks that need
special combustion systems due to the silica content
of the husks.17
Feedstock size
The size and density of the biomass is also important
because they affect the rate of heating and drying
during the process (Ciolkosz, 2010). Large particles
heat up more slowly than smaller ones, resulting in
larger particles producing more char and less tar
(Sadaka, 2010). In fixed bed gasifiers, fine-grained
and/or fluffy feedstock may cause flow problems
in the bunker section, resulting in an unacceptable
pressure drop in the reduction zone and a high
proportion of dust particles in the gas. In downdraft
gasifiers, the large pressure drop can also reduce the
gas load, resulting in low temperatures and higher tar
production.
20000
18000
16000 woodgas
14000
wood
12000
landfill gas
MW
10000
sewage gas
8000
liquid fuel
6000
biogas
4000
bagasse
2000
0 biomass
Europe
north
america
africa
China
india
rest asia /
Oceania
Brazil
rest South
america
rest world
FiGU rE 4 .1 : GLOBaL GriD -CO n n ECTED BiOm aSS CaPaCiTy i n 201 0 By FEEDSTOCK an D COU nTry/rEGiO n (mW)
rest asia /
Oceania 10%
Producer gas
india 5%
Biomass Biomass
Bagasse 20%
Biogas 3%
FiGU rE 4 . 2: SHarE OF GLOBaL i nSTaLLED BiOm aSS CaPaCiTy i n 201 0 By FEEDSTOCK an D COU nTry/rEGiO n
combustion of bagasse is the dominant source of Table 4.1 presents examples of the co-firing of
electricity from bioenergy in non-OECD countries. biomass in coal-fired power plants in the Netherlands.
In Brazil, the combustion of bagasse from the large The level of co-firing ranges from 5% to 35% and there
sugar cane industry accounted for around 4.4 GW of is a range of technologies and feedstocks being used.
grid-connected capacity in 2010 (Figure 4.1)
Around 84% of total installed biomass power gene- 4.2 FUTURE PROJECTIONS OF BIOMASS
ration today is based on combustion with steam POWER GENERATION GROWTH
turbines for power generation, with around half of Biomass currently accounts for a significant, but
this capacity also producing heat (combined heat declining share of total renewable power generation
and power) for industry or the residential and service capacity installed worldwide, but significant growth is
sectors. expected in the next few years due to support policies
for renewable energy in Europe and North America.
The co-firing of thermal plants with biomass is In addition to the environmental and energy security
becoming increasingly common. By the end of 2011, benefits all renewables share, biomass has the
around 45 GW of thermal capacity was being co- additional advantage that is a schedulable renewable
fired with biomass to some extent in Europe. In North power generation source and can complement the
America, around 10 GW of capacity is co-firing with growth in other variable renewables. Biomass for
biomass (IEA Bioenergy, 2012 and Platts, 2011).18 CHP can also greatly improve the economics of
18 The Platts data identifies power plants with the capacity to co-fire, unfortunately no statistics are available on the amount of biomass
used in co-firing. Another source of data is the co-firing database, created by IEA Bioenergy, which can be found at http://www.ieabcc.nl/
database/cofiring.php.
biomass power generation, particularly when there In the longer term, biomass and waste19 power
are low cost sources (e.g. residues from industry or generation could grow from 62 GW in 2010 to 270
agriculture) located next to industrial heat process GW in 2030 (BNEF, 2011). The expected annual
heat needs. Another important synergy for biomass investment to meet this growth would be between
power generation is with the biofuels industry, as the USD 21 billion and USD 35 billion (Figure 4.4). This
residues from biofuels feedstock (e.g. bagasse, corn would represent around 10% of new renewables’
stover and straw) and biofuels process residues can capacity and investment until 2030. China and Brazil
be used as raw material for co-generation systems. appear to have the largest potential: growth in Brazil
will be based on the continuing development of the
The total capacity of proposed biomass power biofuel industry and the possibilities for using the
generation projects that are either under construction resulting bagasse for electricity generation, while
or have secured financing and will be completed by in China better utilisation of the large quantities of
2013 is 10 GW. The vast majority of these projects agricultural residues and waste produced is possible.
(87%) are for combustion technologies, but plans for In Europe, Germany and the United Kingdom are likely
new biogas capacity in Germany (due to its feed-in to be the largest markets for biomass technologies,
tariff schemes for biogas) and the United States are especially co-firing. The United States and Canada
also in the pipeline (BNEF, 2011). However, when co- will be important sources of biomass feedstock,
firing plans are also considered, projects based on particularly wood chips and pellets (BNEF, 2011).
biomass combustion account for 94% of the projects
that will be built by 2013.
19 Considering biogas combustion from agriculture animal waste and landfill gas; energy from waste in solid municipal waste facilities,
including incineration and gasification; combustion of biomass pellets, either in dedicated facilities or co-firing in coal plants; and combustion
of bagasse in sugar-cane producing plants
6
GW
3
CHP
2
Electricity
1
0 Heat
FiGU rE 4 .3: BiOm aSS POWEr GEn EraTiO n PrOJ ECTS WiTH SECU rED Fi nanCi nG/U n D Er CO nSTrUCTiO n (GW)
300 40
rest of World
35
250
mEna
30
200 Brazil
25
USD billion
150 20
india
15
100 China
10 Canada
50
5 USa
0 0 Europe
FiGU rE 4 .4: PrOJ ECTED BiOm aSS an D WaSTE i nSTaLLED CaPaCiTy FOr POWEr GEn EraTiO n an D
an n UaL i nvESTm EnT, 201 0 TO 2030
notes:
(a) Sawmills, pulp and paper companies (bark, chip, sander dust, sawdust). Moisture content is often low because they have
already been through a manufacturing process. In cases where disposal is required, prices can be zero as the avoided costs
of disposal can make it worthwhile to find a productive use for the feedstock.
(c) Poplar, willow and switchgrass. disadvantages of energy crops are higher overall cost than many fossil fuels, higher-value
alternative land uses that further drive up costs.
(d) for landfill gas the heat value and price is in MJ/m3 uSd/m3.
This analysis for the United States is based on detailed representing the important impact that the best crop,
geographic simulations and includes supply curves for land and climate conditions can have on feedstock
the different biomass feedstocks by region. Detailed costs.
analysis of this nature helps to give policy-makers
confidence in resource availability and costs when Other important cost considerations for biomass
developing support policies for biomass. Significant feedstocks include the preparation the biomass
quantities of bioenergy feedstocks are available from requires before it can be used to fuel the power
forestry arisings and other residues while significant plant. Analysis suggests that there are significant
residues and wastes from corn production are economies of scale in biomass feedstock preparation
available at USD 55/tonne and above. Dedicated and handling (Figure 5.2). 20 The capital costs fall from
energy crop availability is strongly related to cost, around USD 29 100/tonnes/day for systems with 90
20 The fuel preparation systems analysed (receiving, processing, storage and fuel metering conveyors, meters and pneumatic transport)
were based on three separate systems: 100 tons/day, manual handling, 50% moisture content; 450 tons/day and 680 tons/day, automatic
handling, 30% moisture content; which allowed drawing a trend line of the handling costs system based on the quantity of fuel being
prepared per day (ton/day).
140
120
100
Million tonnes
80
60
USD / tonne
40 44
20 55
0 66
Forest arising and
residues
mill residues
Primary – Corn
Secondary residues
and wastes
note: “Secondary residues and wastes” include rice field and husk residues, cotton field residues and gin trash, sugarcane
residue, orchard and vineyard prunings, wheat dust and animal manure. “other energy crops” include woody crops and
annual energy crops. energy crop data are for 2017, all other data for 2012.
FiGU rE 5.1 : B rEaKDOWn OF BiOm aSS an D WaSTE avaiLaBiLiTy By COST i n TH E U niTED STaTES, 2012/2017
Sou rce: uS doe, 2011 .
tonnes/day throughput to USD 8 700/tonnes/day for In Europe, recent analysis of four biomass sources and
systems with 800 tonnes/day. The capital costs for supply chains identified feedstock costs of between
preparation and handling can represent around 6% USD 5.2 and USD 8.2/GJ for European sourced
to 20% of total investment costs of the power plant woodchips (European Climate Foundation et al.,
for systems above 550 tonnes/day. Assuming a heat 2010). Local agricultural residues were estimated to
value of forest residue with 35% moisture content cost USD 4.8 to USD 6.0/GJ. Imported pellets from
to be 11 500 kJ/kg, the handling capital costs could North America are competitive with European wood
therefore range from a low of USD 772/GJ/day to as chips if they must be transported from Scandinavia
high as USD 2 522/GJ/day. to continental Europe. 21 These are representative
examples, and there will be significant variation in
actual feedstock costs, depending on the actual
project details. 22
21 According to the report, at present forest residues and agricultural residues are only utilised to a significant extent in Scandinavia and
Denmark respectively and there are only two pellet mills in the world with a production capacity of 500 000 tons per year or more.
22 For pellets the heat value considered was 16 900 kJ/kg and moisture content of 10%.
25000
20000
15000
10000
5000
0
100 300 500 700 900
FiGU rE 5. 2: BiOm aSS FEEDSTOCK PrEParaTiO n an D Han D Li nG CaPiTaL COSTS aS a FU nCTiO n OF TH rOUGH PUT
TaB LE 5.3: BiOm aSS FEEDSTOCK COSTS i nCLU Di nG TranSPOrT FOr USE i n EU rOPE
Prices for feedstocks in developing countries are power plants with other feedstocks extremely
available but relatively limited. In the case of Brazil, challenging, except where a captive feedstock exists
the price of bagasse23 varies significantly, depending (i.e. in the pulp and paper industry). As a result, most
on the harvest period. It can range from zero to of the other bioenergy power generation projects in
USD 27/tonne 24 with the average price being around Brazil rely on black liquor and woodwaste for co-
USD 11/tonne, where a market exists. These low generation in industry with the surplus electricity sold
bagasse prices make the economics of bioenergy to the market. 25
23 Which is a residue from process and has no transportation costs if used in the same alcohol/sugar plant for electricity generation
24 1 USD = 1.80 R$
In India, the price for bagasse is around USD 12 For landfill gas, the cost of the feedstock is simply
to USD 14/tonne, and the price of rice husks is the amortised cost of the investment in the gas
around USD 22/tonne (UNFCCC, 2011). The biomass collection system. However, the economics of these
resources are multiple as rice straw, rice husks, projects can be greatly enhanced if credits for the
bagasse, wood waste, wood, wild bushes and paper avoided methane emissions are available. The United
mill waste26. In India, small-scale gasifier systems for States Environmental Protection Agency (EPA)
off-grid, mini-grid and grid-connected applications Landfill Methane Outreach Program undertook an
are relatively successful and as much as 28 MW were economic assessment for 3 MW landfill gas electricity
installed by mid-2008 in industry and up to 80 MW in project using an internal combustion engine (ICE).
rural systems (Winrock International, 2008). The costs related to gas collection and flare are
around USD 0.9 to USD 2.8/GJ. Biogas has relatively
Anaerobic digestion biogas systems typically low energy content (from 18–29 MJ/m3) and hence
take advantage of existing waste streams, such as significant volumes are required to produce a useful
sewage and animal effluent, but it is possible to biogas output. The efficiency can be improved by
supplement this with energy crops. They are therefore finding customers for the heat produced; in Germany,
well-suited to rural electrification programmes. In Denmark and Austria, it is becoming popular to use
developed countries, costs tend to be higher and digesters for heat and power (Mott MacDonald, 2011).
significant economies of scale are required compared
to developing countries to make biogas systems
economic. 27 In the United States, AD systems to 5.2 BIOMASS POWER GENERATION
produce biogas were identified as interesting options TECHNOLOGY COSTS
for dairy farms with 500 cows or more, pig farms
with at least 2 000 pigs and where the manure The cost and efficiency of biomass power generation
management system collects and stores manure in equipment varies significantly by technology.
liquid, slurry or semi-solid form. Equipment costs for an individual technology type
can also vary, depending on the region but also
depending on the nature of the feedstock and how
much feedstock preparation and handling is done on-
site.
25 A study that looked at the economic feasibility of a small CHP plant identified woodchip and charcoal mill prices of USD 9/GJ and
USD 5.3/GJ if these were to be bought from the forestry and charcoal industries (Rodrigues, 2009)
26 According to Shukala, Nearly 55 MW of grid connected biomass power capacity is commissioned and another 90 MW capacity is under
construction. There are estimates of 350 million tons of agricultural and agro-industrial residues produced annually in India.
27 An additional complication is that systems in hot climates will have faster reaction rates, improving the “efficiency” of the process.
7000
6000
5000
2010 USD / kW
4000
3000
2000
1000
0
BFB / CFB
Stoker
Gasifier
Stoker CHP
Gasifier CHP
LFG
Digester
Co-firing
FiGU rE 5.3: i nSTaLLED CaPiTaL COST ranGES By BiOm aSS POWEr GEn EraTiO n TECH nOLOGy
The total investment cost – capital expenditure includes any in-line elements, such as particulate
(CAPEX) – consists of the equipment (prime matter, filters etc. As can be seen, the prime mover,
mover and fuel conversion system), fuel handling feedstock conversion technology and feedstock
and preparation machinery, engineering and preparation and handling machinery account for
construction costs, and planning (Figure 5.3). It can between 62% and 77% of the capital costs for the
also include grid connection, roads and any kind biomass power generation technologies presented.
of new infrastructure or improvements to existing
infrastructure required for the project. Different The total installed cost range, including all balance
projects will have different requirements for each of of plant equipment (e.g. electrical, fuel handling, civil
these components with infrastructure requirements/ works), as well as owners costs including consultancy,
improvements in particular being very project- design and working capital is presented in Figure 5.3.
sensitive.
The contribution of the prime mover to the total
Figure 5.4 presents a breakdown of the typical cost costs is very low and ranges from 5% to 15% (Mott
structure of different biomass power generation MacDonald, 2011). The converter system (e.g. stoker
technologies28. The feedstock conversion system boiler, gasifier) usually accounts for the largest
comprises boilers (stoker, CFB, BFB, etc.), gasifiers share of capital costs, although fuel handling and
and anaerobic digesters with a gas collection system, preparation is also an important contributor to total
as well as the gas cleaning systems for gasifiers and costs (Figure 5.4).
gas treatment systems for AD systems. The prime
mover is the power generation technology and
28 Transmission lines, road and any kind of infrastructure are not being considered in the costs breakdown as they are site/location specific
100%
Prime mover
80%
Converter system
60% Electrical/
balance of plant
20% Civils
Consultancy/
0% design
Food waste
advanced
aD
aD
manure-Slurry
aD
Energy Crops
aD
Gasifier iC
BFB / CFB
Stoker (wood)
Stoker
(waste wood)
note: “electrical/balance of the plant” includes grid connection and control and monitoring systems, but not any cost for
extending transmission lines. ad = anaerobic digester and Ic = Internal combustion.
FiGU rE 5.4: CaPiTaL COST B rEaKDOWn FOr BiOm aSS POWEr GEn EraTiO n TECH nOLOGiES
For co-combustion, the costs quoted are incremental 5.3 OPERATION AND MAINTENANCE
costs only. These will raise the installed cost of a EXPENDITURE (OPEX)
new coal-fired power plant from around USD 2 000
to USD 2 500/kW to USD 2 100 to USD 3 100/ Operation and maintenance (O&M) refers to the fixed
kW, depending on the configuration. Another and variable costs associated with the operation of
consideration is that high co-combustion rates will biomass-fired power generation plants. Fixed O&M
also start to significantly reduce the capacity of the costs can be expressed as a percentage of capital
coal-fired plant with a consequent impact on the costs. For biomass power plants, they typically range
LCOE. from 1% to 6% of the initial CAPEX per year (Table
5.6). Fixed O&M costs consist of labour, scheduled
In developing countries, some small-scale manure maintenance, routine component/equipment
and wastewater systems associated with electricity replacement (for boilers, gasifiers, feedstock handling
generation have been installed under Clean equipment, etc.), insurance, etc. The larger the
Development Mechanism projects – 42 manure and 82 plant, the lower the specific (per kW) fixed O&M
wastewater projects – most of them with capacities costs, because of the impact of economies of scale,
between 1 MW and3 MW and investments between particularly for the labour required. Variable O&M
USD 500 and USD 5 000/kW. costs depend on the output of the system and are
usually expressed as a value per unit of output
(USD/kWh). They include non-biomass fuels costs,
ash disposal, unplanned maintenance, equipment
replacement and incremental servicing costs. The
data available will often combine fixed and variable oxygen as a reactive agent, gas clean-up and gas
O&M costs into one number so a breakdown between turbines to scale-up this technology to larger power
fixed and variable O&M costs is often not available. plants still requires more demonstration, especially
because it requires expensive gas clean-up, which is
Care should be taken in comparing the O&M costs currently the main focus of gasification technology
of gasifiers with other bioenergy power generation improvements. In anaerobic systems (AD), the main
technologies since gasifiers have less commercial technological development needed is linked to the
experience and are not as mature as the other digesters (as better control of the process: enzymes,
solutions. pH, temperature) and the clean-up of the biogas
before combustion.
9–11
– 20%
– 2%
8–10 8–10
2010 USD / GJ
7–9
5–8 Feed-
– 20% Feed- stock
4–7 stock 5–6
– 25%
pelle-
4
tising
Feed- Feed-
stock stock Long-
Long-
range range
trans- trans-
port port
FiGU rE 5.5: BiOm aSS FEEDSTOCK COST rED UCTiO n POTEnTiaL TO 2020 i n EU rOPE
TaB LE 5.7: LO nG-rU n COST rED UCTiO n POTEnTiaL OPPOrTU niTiES FOr BiOEn ErGy POWEr GEn EraTiO n
TECH nOLOGiES
30 This was a simplifying assumption, as ash levels vary significantly depending on the feedstock type and conversion process used. Ash disposal costs also vary significantly
by region, depending on the qualities of the ash and whether there is a local market for ash or not.
CaPEx
(Overnight Costs)
investment Costs
internal
consumption
and loses 7%
ash disposal 1% Capacity factor 85%
For combusion
& gasification
technologies
Transport Costs
3% – 5%
FiGU rE 6.1 : TH E LCOE Fram EWOrK FOr BiOm aSS POWEr GEn EraTiO n
To account for the value of the heat from biomass- 6.1 THE LCOE OF BIOMASS-FIRED
fired CHP, the IEA’s methodology was used. 31 POWER GENERATION
This assumes a credit for heat based on IPCCC
assumptions and ranges from between USD 10 and The range of biomass-fired power generation
45/MWhth . 32 technologies and feedstock costs result in a
large range for the LCOE of biomass-fired power
The capital cost assumptions for different biomass- generation. Even for individual technologies, the
fired power generation technologies are summarised range can be wide as different configurations,
in Figure 5.3. They range from as little as USD 1 325/ feedstocks, fuel handling and, in the case of
kW for stoker boiler systems to almost USD 7 000/ gasification, gas clean-up requirements can lead to
kW for stoker CHP. very different installed costs and efficiencies for a
“single” technology.
0.30
assumes a 10% cost of capital
0.25
2010 USD / kWh
0.20
0.15
0.10
0.05
0.00
BFB / CFB
Stoker
Gasifier
Stoker CHP
Gasifier CHP
LFG
Digestor
Co-firing
FiGU rE 6. 2: LCOE ranGES FOr BiOm aSS-FirED POWEr GEn EraTiO n TECH n OLOGiES
Figure 6.2 summarises the range of costs that is facilities are available to keep feedstock and capital
possible for the core biomass power generation costs low. The development of competitive supply
technologies when the low and high estimates of chains for feedstocks is therefore very important
investment costs (Table 5.8) and feedstock costs are in making bioenergy-fired power generation
examined. 33 Assuming a cost of capital of 10%, the competitive.
LCOE of biomass-fired electricity generation ranges
from a low of USD 0.06/kWh to a high of USD 0.29/ When low-cost stoker boilers are available and fuel
kWh. costs are low (e.g. agricultural, forestry, pulp and
paper residues), stoker boilers producing steam to
Where capital costs are low and low-cost feedstocks power a steam turbine offer competitive electricity
are available, bioenergy can provide competitively at as low as USD 0.062/kWh. However, where
priced, dispatchable electricity generation with an capital costs are high and only imported pellets are
LCOE as low as around USD 0.06/kWh. However, available to fire the boiler, the LCOE can be as high as
with higher capital costs and more expensive fuel USD 0.21/kWh. Combustion in BFB and CFB boilers
costs, power generation from bioenergy is not likely has a slightly higher LCOE range than stoker boilers
to be able to compete with incumbent technologies due to their higher capital costs.
without support policies in place. Many of the low-
cost opportunities to develop bioenergy-fired power The LCOE range for gasifiers is very wide, in part
plants will therefore be in taking advantage of forestry due to the range of feedstock costs, but also due to
or agricultural residues and wastes (e.g.from the pulp the fact that fixed bed gasifiers are a more proven
and paper, forestry, food and agricultural industries) technology that is cheaper than CFB or BFB gasifiers.
where low-cost feedstocks and sometimes handling The LCOE for gasifiers ranges from USD 0.065/kWh
33 For CHP technologies, the value of the heat produced is fixed at USD 15/MWhth.
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BFB / CFB
Stoker
Gasifier
Stoker CHP
Gasifier CHP
LFG
Co-firing
FiGU rE 6.3: SHarE OF FU EL COSTS i n TH E LCOE OF BiOEn ErGy POWEr GEn EraTiO n FOr HiGH an D LOW
FEEDSTOCK PriCES
for a fixed bed gasifier with low-cost bioenergy fuel Landfill gas, anaerobic digesters and co-firing have
to USD 0.24/kWh for a small-scale gasifier with an narrower cost ranges. For landfill gas, this is because
internal combustion engine as the prime mover (600 of the narrow capital cost range and the fact that this
kW) that would be suitable for off-grid applications also determines the fuel cost. For anaerobic digestion,
or mini-grids. However, although this is expensive the capital cost range is relatively narrow, but the
compared to grid-scale options, it is more competitive feedstock can vary from free for manure or sewage
than a diesel-fired solution. up to USD 40/tonne for energy crops for digestion.
For co-firing, the incremental LCOE cost is as low
CHP systems are substantially more expensive than USD 0.044 and USD 0.13/kWh. 34
an equivalent electricity-only generating system.
However, they have higher overall efficiencies, and the The share of fuel costs in the LCOE
sale or opportunity value of heat produced can make of biomass-fired power
CHP very attractive, particularly in the agricultural, Figure 6.3 presents the impact of the high and low
forestry and pulp and paper industries; where low- ranges for the feedstock costs on their share of the
cost feedstocks and process heat needs are located LCOE. Excluding co-firing, which is a special case,
together. The LCOE of stoker CHP systems ranges feedstock costs typically account for between 20%
from USD 0.072 to USD 0.29/kWh, including the and 50% of the LCOE of power generation only
impact of the credit for heat production. Gasifier options. The range is significantly wider for gasifier-
CHP systems have a higher but narrower range from based CHP projects, where the feedstock cost can
USD 0.12 to USD 0.28/kWh due to the higher capital account for as little as 14% of the LCOE but up to 85%
costs. in the case of using imported wood chips.
34 Analysis of the average LCOE of the power plant with and without biomass co-firing is another way of comparing the overall value of co-firing.
0,25
0.20
0.15
2010 USD / kWh
0.10
0.05
0.00
Heat revenue
–0.05 Feedstock
OPEx
–0.10
CaPEx
–0.15 Total
Stkr 50 mW, Fr
LFG 5 mW
Digestor 1 mW
Digestor 1 mW
Digestor 1 mW
Co-firing, Wchip
Co-firing, Pellets
FiGU rE 6.4: B rE aKDOWn OF TH E LCOE OF SELECTED BiOEn ErGy-FirED POWEr GEn EraTiO n TECH nOLOGiES
Breakdown of the LCOE of biomass-fired power technology. Table 6.1 presents the assumptions for
generation equipment, feedstock and installed capital costs for
Figure 6.4 illustrates the impact of the different each of the chosen examples presented in Figure 6.4.
cost components on the LCOE of a range of specific
bioenergy power generation technologies and Assuming a 10% discount rate, results in the LCOE
feedstock cost assumptions. 35 These have been of stoker boilers varying from a low of USD 0.062/
selected as examples and are not necessarily kWh to a high of USD 0.21/kWh. A stoker boiler using
indicative of typical or average costs for each forest residues has an LCOE of USD 0.14/kWh with
35 These are indicative examples and are not meant to be average or median values for the ranges presented in Figure 6.2. They are designed to give an indication of the
relative importance of the various components that make up the LCOE of a biomass power plant.
around half of this accounted for by the investment The chosen gasifier examples achieve an LCOE of
cost and 35% by the fuel costs. A stoker boiler fired between USD 0.09 and USD 0.16/kWh. In a simple,
by bagasse with lower capital and fuel costs has an fixed bed gasifier with an internal combustion engine
LCOE of USD 0.098/kWh. In this case, the capital and relatively low capital costs, the share of capital
expenditure accounts for a slightly higher proportion costs in total LCOE is 45% and that of fuel costs 40%.
(57%) of the LCOE and fuel costs for just 27%. A low- In a more sophisticated BFB/CFB gasifier with gas
cost stoker boiler using agricultural residues that cost clean-up for use in a gas turbine, capital costs are
USD 50/tonne delivered has an LCOE of USD 0.10/ significantly higher and account for 55% of the LCOE
kWh, with 39% of the total cost attributable to the with fuel costs accounting for 30%.
capital expenditure and around half coming from the
fuel cost. There is a range of possible digester solutions with
significant differences in capital costs and feedstock
CFB and BFB boilers driving steam turbines have an costs, but capital costs dominate. Capital costs
LCOE of USD 0.17 and USD 0.15/kWh when using account for between 66% and 81% of the three
pellets and local energy crops, respectively. The examples analysed.
capital costs account for 31% and 51% of the LCOE
of the CFB and BFB systems, respectively, with the The LCOE of the large-scale CHP systems (stoker
use of pellets doubling the absolute cost of fuel and gasifier) is between USD 0.12 and USD 0.15/kWh.
from USD 0.05/kWh to around USD 0.10/kWh and Capital costs account for around half of the total
increasing the share of fuel costs in LCOE from 36% to LCOE with the feedstock accounting for around one-
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FOB – Free-on-board
MC – Moisture content
C o pyr
p right 2012