global wood pellet markets - bioeconomy...
TRANSCRIPT
GlobalWoodPelletMarkets:ForecastsforDemand
andWhatabout“black”pellets?
PresentedbyWilliamStrauss,PhD
President,FutureMetricsDirector,MaineEnergySystems
ChiefEconomist,BiomassThermalEnergyCouncilJune16,2016
FutureMetrics
ConsultantstotheWorld’sLeadingCompaniesintheWoodPelletSector
“IntelligentAnalysisandThoughtLeadershipforthePelletSector”
8AirportRoad Bethel,ME04217,USAwww.FutureMetrics.com
WilliamStrauss
40yearsofmakingthermalpowerfromMSWandwood.
Recipientofthe2012InternaConalExcellenceinBioenergyAward.
JohnSwaan
The“grandfatherofwoodpellets”.Recipientofthe2014InternaConal
FoundersAwardforpioneeringinthewoodpelletsector.
SeniorLeadership
FutureMetrics-GloballyRespectedConsultantsintheWoodPelletSector
LesOQen
TheleaderinthedevelopmentoftheUSbulkheaCngpelletmarkets.
FounderofMaineEnergySystems:NorthAmericaslargestpelletboilerand
bulkfuelsupplycompany.
WhyWoodPelletsareanEasySubsRtuteforCoalinPulverizedCoalPowerPlants
• Woodpelletsareupgradedsolidfuelmadefrombiomass.• Theyaregrindable.• Theyaredry(~6%moisturecontent).• Theyhandleeasily.• Theyhaveanenergydensityof~18Gigajoules/tonne.Atlowco-firingraRos(lessthan~6%whitewoodpellets)nomodificaRonsarerequired.InsomeapplicaRons,advancedwoodpelletscanbeusedat100%withalmostnomodificaRons.Moreonthislater…
SomeconversaRonsaboutdropincoalreplacementgravitatetoward“bio-coal”.
Bio-coalisessenRallybiomassthathasbeenthroughaprocessthatremovesmuchofthevolaRleorganiccompounds(VOC).Theprocessresultsindarker(someRmes
black)materialthathasahigherenergydensitythanwoodpellets.
Therearetwocommonconversiontechnologies:
TorrefacConSteamExplosion(thermallytreated)
MoreontorrefacEonandsteamexplosionlater…
WhitePellets Brown(steamexploded)Pellets Black(torrefied)Pellets
WhitewoodpelletsarethedefaultsubsRtuRonforcoalinPCpowerplants.
Steamexplodedpellets,whicharewaterproof,arebreakingintothemarket.
The“costperunitofenergy”or$/GJisthekeymetric.
WhataboutAgResidues?
FutureMetricsspecializesinwoodpelletsbecausewethinktheyarethebestalternaRverenewablelowcarbonsolidfuelforpulverizedcoalpowerplants.
Issueswithotherfeedstocks:• Highinchlorine–corrosionissues
• Highinmineralsanddirt–erosionissues
• Lowashfusiontemperature–slaggingandfouling
• Lowbulkdensity–costlytotransportintermsof$/GJ–largevolumeneededforfuelstorage
• Grindablity
• Highmoisturecontentifnotupgradedtopelletsorpre-dried
Source:“Ash-relatedProblemsduringBiomassCombusRonandPossibiliResforaSustainableAshURlizaRon”,FriedrichBiedermannandIngwaldObernberger,AustrianBioenergyCentreGmbH,Sept.,2006
CombinedHeaRngandIndustrialMarkets
IndustrialMarket-TradiRonalBestCase!
13003400 4200 5000
7000 75009000 10000 10000 10000 10000 10000 10000 10000
100100 100
100
5001500
2000
30003800
48005500
6800 8000 9000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
IndustrialWoodPelletDemandForecastfortheEurope,theUK,Korea,Japan,Canada,andUS(thousandsofmetrictonnes)
UK Netherlands Belgium Denmark Sweden Other Korea Japan
source:analysisbyFutureMetrics
WorstCase!(compareto32millionMTonpreviousslide)
PreviousslidesdidNOTincludepotenRalindustrialwoodpelletmarketsintheUSandCanada!
PotenRal(andUSandJapancouldbelarger!)
13003400 4200 5000
7000 7500 9000 10000 10000 10000 10000 10000 10000 10000
100100 100
100500 1500
2000
3000 38004800 5500 6800 8000 9000
20003500
68009000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
IndustrialWoodPelletDemandForecastfortheEurope,theUK,Korea,Japan,Canada,andUS(thousandsofmetrictonnes)
UK Netherlands Belgium Denmark Sweden Other Korea Japan Canada US
source:analysisbyFutureMetrics
Canada–AlbertaandOntarioUS–CleanPowerPlan
PotenRalforUSIndustrialPelletDemand
DashboardisfreetouseattheFutureMetricswebsite.
ProducRonCapacityisAheadofMarketDemand
NorthAmericanProducRonCapacity
Jan-16, $151
Jun-16, $124
Jan-16, $214
Jun-16, $158
$120$125$130$135$140$145$150$155$160$165$170$175$180$185$190$195$200$205$210$215$220$225
May-09
Jul-0
9Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-1
0Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-1
1Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-1
2Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-1
3Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-1
4Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-1
5Sep-15
Nov-15
Jan-16
Mar-16
May-16
IndustrialWoodPelletsSpotPrice- May2009thruearlyJune2016(CIFARA- atEuroexchangerateateachdatapoint)
US$/MT Canadian$/MT
source:Argus BiomassReport,analysisbyFutureMetrics
GapbetweenCanadianandUS
January-16 $63.12June-16 $34.32
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
13,000,000
14,000,000
2012 2013 2014 2015 2016
USandCanadaIndustrialPellets- SupplyandDemand
ProductionCapacity(at80%ofNameplate)
Exports
ExcessSupply-RightAxis
source: Exports2012-2014datafromUNFoodandAgDatabase,November,2015;2015-16forecastbyFutureMetrics;CapacitybasedonBBIdatabaseinformationfrom2013topresent;AnalysisbyFutureMetrics
TheBadNews…
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
13,000,000
14,000,000
15,000,000
16,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
USandCanadaIndustrialPellets- SupplyandDemand- toEUandUKforecastassumessomesupplytoLynemouth,MGT,Langerlo,andDutchmarkets
ProductionCapacity(at80%ofNameplate)
Exports
ExcessSupply-RightAxis
source: Exports2012-2014datafromUNFoodandAgDatabase,November,2015;2015-16forecastbyFutureMetrics;CapacitybasedonBBIdatabaseinformationfrom2013topresent;AnalysisandforecastbyFutureMetrics
FORECAST
TheGoodNews…
Whatarethekeychangesthatarerequiredtomodifyapulverizedcoalpowerplanttobeabletoco-fireindustrialwoodpellets?
• AtlowblendraRos(lessthan6%pelletstocoal),nomodificaRonsarerequired.
• AthigherblendraRossomemodificaRonsarerequired:• Dedicateddrystorageforthepelletfuel(silosordomes)• Fuelprocessingandtransporttotheburners• Burners• Ashhandling
DashboardisfreetouseattheFutureMetricswebsite.
TherearemanylargepowerstaRonsthathavebeenmodifiedtoco-fire(blendingpelletsandcoal)orfullfire(100%pelletfuel).Thereareseveralworldclassfirmsthathaveextensiveexperienceinthedesign,engineering,andimplementaRonofpowerplantmodificaRons.Ramboll-EPCformodificaRonsandconversionswithalonglistofsuccessfulco-firingandfullfiringprojectswww.Ramboll.comDoosanBabcock–Fuelprocessing,handling,andburnersforco-firingandfullfiringwww.DoosanBabcock.comDraxPower–PowerplantoperaRonsatequalorbeQerreliabilitythancoalandnoderaRngwithco-firingandfullfiringwww.drax.com/about-us/our-businesses/drax-power
OPG’sARkokan100%WhitePelletFueledPowerStaRon
OPG’sThunderBaystaRon–Asuperpeakingplantthatrunson100%steamexplodedadvancedwoodpellets
WaterproofArbaflamepelletshavesatinthecoalyardoverwinterwithnodegradaRon.
LYNEMOUTH UK BIOCONVERSION RAMBOLL - OWNERS ENGINEER DOOSAN-BABCOCK - EPC
AlternaRveRtleslide
Drax Power Sta,on – Three 645 MW lines running on wood pellets
Storage domes
Rail unloading
Screening building
Transfer tower
Rail unloading
Screening building
Storage domes
Transfer tower
Boiler and generator
Screening building
- 3 unit conversion - No impact on
efficiency and no loss of output
- Flexible output
from 200MW to 645MW per unit
Will“black”pelletsimprovetheeconomics?
BothtorrefacRonandsteamexplosionresultinhigherenergydensityandhigherbulkdensitypellets.Inbothprocesses,acomparisonoftheincomingwoodandfinaldensifiedproductprovesthatthelossofmassisgreaterthanthelossofenergy.
ThechangeinbulkandenergydensiResareadvantageoustologisRcs.
Moretonsperunitofvolumeandmoreenergypertonlowersthedeliverycostperunitofenergy.
ButwilltheadvantagesoftheimprovementindensiCesoutweightheincreasedcostsofproducCon?
Thisanalysiswillmeasuretheenergybygigajoules(GJ)permetrictonne.
Thepowerplantsarebuyingenergy.
TheanalysiswillassumethatthebuyeriswillingtopaythesamepriceperGJforanyofthethreetypesofpellets.
Moreontheeconomicadvantageofwaterproofnesslater.
GJ/Tonne kg/m3 GJ/m3 TonnesonShip GJOnboardShipping$/Tonne
ShippingPriceperGJ
White 17.5 650 11.38 39,000 682,500 $17.00 0.971$Torrefied 22.0 650 14.30 39,000 858,000 $17.00 0.773$SteamEx. 19.5 750 14.63 45,000 877,500 $14.73 0.756$
Assumingacostof$17/tonnefora45,000tonneshiploadofsteamexplodedpellets,theesRmatedcostspertonneforshippingpelletsareshownbelow.
Aswouldbeexpected,thetotalvalueofadeliveredshiploadofhigherbulkandenergydensityfuelishigherthanforwhitepellets.
Netvalueofpelletsatforeignport
Marginoverwhitepellets
White $5,187,000 $0Torrefied $6,691,286 $1,504,286SteamExploded $6,820,821 $1,633,821
Theassumedrevenueis$160/tonneFOB.
However,producingtorrefiedandsteamexplodedpelletsrequireshighercosts.
Theanalysisassumesthatpelletfeedstockis$36/greentonne,andfuelfordryingandforsteamgeneraRonforthesteamexplodedprocess,ifneeded,islowergradehogfuelatacostof$20/tonne.
MoreWoodNeeded
Pertonneofpellets-feedstockandfuelat50%andpelletsat5%moisturecontent
TorrefiedSteam
ExplodedWhite
Dryerfuelconsumption(odt) 0.000 0.000 0.133Steamconsumption(tonnesofSteampertonneofPellets) 0.000 1.400 0.000Additionalwoodforreactorsteam(odt) 0.000 0.211 0.000Woodneededtomaketonneofpellets(odt) 1.420 1.150 0.950Totalwoodtomakeatonneofpellets(odt) 1.420 1.361 1.083GreenWoodat50%moisturecontent/tonneofpellets 2.840 2.722 2.165
WoodCost GJonboardWoodCostperGJ
White $2,874,668 682,500 $4.212Torrefied $3,987,360 858,000 $4.647SteamEx. $4,105,800 877,500 $4.679
Valueofpelletsatforeignportin
$/GJ
TotalCostperGJ
NetPerGJbeforeDryStorage
White $7.600 $6.859 $0.741Torrefied $7.799 $7.207 $0.592SteamEx. $7.809 $8.151 -$0.342- =
Thenetofvalueattheport(notyetdeliveredtothepowerstaRon)minusthetotalcosttogetthepelletstotheportisshown.
UndertheassumpConsusedinthisanalysis,whitepelletshavethebestoutcome.
SteamexplodedpelletshaveanegaCvevalue.
Pertonneofpellets-feedstockandfuelat50%andpelletsat5%moisturecontent
TorrefiedSteam
ExplodedWhite
Dryerfuelconsumption(odt) 0.000 0.000 0.133Steamconsumption(tonnesofSteampertonneofPellets) 0.000 1.400 0.000Additionalwoodforreactorsteam(odt) 0.000 0.000 0.000Woodneededtomaketonneofpellets(odt) 1.420 1.150 0.950Totalwoodtomakeatonneofpellets(odt) 1.420 1.150 1.083GreenWoodat50%moisturecontent/tonneofpellets 2.840 2.300 2.165
IfnowoodisusedforsteamgeneraRon,thensteamexplodedpelletsshowposiRvenet.However,energyfromsomesourceisneededforthethermaltreatmentanddrying.
Valueofpelletsatforeignportin
$/GJ
TotalCostperGJ
NetPerGJbeforeDryStorage
White $7.600 $6.859 $0.741Torrefied $7.799 $7.207 $0.592SteamEx. $7.809 $7.719 $0.091- =
NetPerGJbeforeDryStorage
CostofDryStorage/GJ
NetincludingDry
Storage/GJWaterproof?
White $0.741 0.71$ $0.028 NoTorrefied $0.592 0.57$ $0.025 NoSteamEx. $0.091 -$ $0.091 Yes
NetPerGJbeforeDryStorage
CostofDryStorage/GJ
NetincludingDry
Storage/GJWaterproof?
White $0.741 0.71$ $0.028 NoTorrefied $0.592 0.57$ $0.025 NoSteamEx. -$0.342 -$ -$0.342 Yes
Woodneededforsteamreactor Nowoodneededforsteamreactor
IgnoringthesourceofenergyforthermaltreatmentandmoneRzingtheavoidedcostofdrystorage*,steamexplodedpelletsshowanadvantage.
ArigorousmassandenergybalanceanalysiswillrevealtheactualrelaRvevalues.
*Drystoragecostsarebasedon$300perkWofgeneraRngcapacityamorRzedover10yearsata7%discountrate.
WhitepelletsaresRllthelowestcostfuelperGJ
Fordropincoalreplacementforpulverizedcoalsystems,pelletsofanycolorworkatlowco-firingrates.
Howmuchlowertheenergydensityofpelletsareversuscoaldictates
theco-firingraRoatwhichchangestothefuelfeedsystemsandburnersarerequired.
Can“black”pelletsprovidecheaperfuelandworkbeQer?
ThisanalysissuggeststhatthereissRllworktobedone…
Theinputvaluesusedinthisanalysiswillbedifferentfordifferenttechnologies.
ThankYou!www.FutureMetrics.comWilliamStrauss,PhD
MyhomeinwesternMaineisinthisphoto.AlloftheforestyouseeisSFIcerRfiedandismanagedandusedforRmberharvesRng.