Green gold or conveniently-packaged solar energy are just two of the phrases used to describe wood biomass.
Its advantages are clear: it’s sustainable, CO2 neutral and, as fossil fuel prices continue to rise, wood is expected to gain a bigger share of the energy market.
DTI sources show that between 2004 and 2006, domestic fuel prices for electricity, gas and heating oil rose 27.5%, 18.9% and 41.8% respectively. Clearly, renewable energy from a plentiful source like timber makes a cost-effective alternative.
It’s certainly why sawmill and forest products companies like Balcas and UPM are investing millions of pounds into building biomass renewable energy plants, while energy companies like E.ON and RWE Renewables are building power stations that will be powered by thousands of tonnes of wood fuel a year.
The future for biomass looks rosy, but not everyone is happy. The panel industry for one is worried that raw material will be diverted from primary processing into the biomass industry – creating a shortage of material and pushing wood prices up.
“The question isn’t whether wood can play an important role in contributing to the renewable energy market,” said Alastair Kerr, director-general of the Wood Panel Industries Federation (WPIF), “rather, how big can that role be without it impacting significantly on existing wood industries?”
Across Europe, he said, there are examples where increasing demand for wood for fuel is resulting in shortages for wood processing industries. On average, wood costs to the European panel industry increased by 17% in 2006, a situation that could have been worse were it not for a mild winter which resulted in a surplus of wood pellets in Europe.
Using wood for fuel is hardly a new idea, but the recent upsurge in interest in renewable energy in the UK means that biomass is suddenly a hot topic. The principal benefit of using wood for fuel rather than fossil fuels is a reduction in carbon dioxide emissions.
The UK government is committed to combating climate change by reducing carbon emissions by 20% below 1990 levels by 2010 and by 60% by 2050. Biomass, including wood fuel, is a renewable source of energy that is expected to make a contribution to achieving these targets. Just how much of a contribution remains to be seen – although its use is definitely on the increase.
The Renewables Obligation Order is the government’s mechanism for increasing the proportion of electricity produced from renewable sources – licensed electricity suppliers are required to supply a certain percentage of their total sales from renewable sources.
By doing so, they can qualify for and sell Renewable Obligation Certificates (ROCs) rather than having to buy in. Until recently, wind power had benefited most from ROCs. However, in the past two years, the fastest growing technology attracting ROCs has been co-firing, which has grown by 392%. The majority of the biomass used in co-firing to date has been imported energy crop, but the potential to consume large quantities of UK-sourced wood exists.
“Co-firing is recognised as being the cheapest of the renewable technologies, therefore they have the greatest ability to pay for their raw material,” said Mr Kerr.
But, he warned: “If co-firers choose to enter the UK wood market aggressively, they could significantly impact on the wood supply market – and put existing wood processors at risk.”
It’s a view echoed by David Sulman, executive director at the UK Forest Products Association (UKFPA). He believes its “vitally important” that quality virgin fibre which provides the feedstock for current wood processors should not be diverted to the energy sector, aided by government subsidy, but that greater emphasis should be placed on making better use of recycled wood fibre as a source of fuel.
“Figures are regularly quoted that suggest that significant volumes of waste wood, including arboricultural arisings, are being disposed to landfill,” said Mr Sulman. “There can be little doubt that this particular wood flow offers great potential for development for an additional source of wood fuel.”
While he agrees that it is “right and proper” that the UK fully explores the opportunities for development of renewable fuels and the role that wood fibre can play, he added: “We need to make sure that only the most appropriate material is supplied for fuel use and that the existing UK wood processing sector does not suffer as a result of unintended consequences of government instruments.”
Bottom of the league
The UK’s performance in renewables – at 1.5% of all energy production – puts it at the bottom of the EU league. Austria and Sweden, at the top with 30%, derive most of their renewables from wood energy in various forms. The UK, then, is playing serious catch-up.
Despite concerns from the manufacturing sector, there are signs that the biomass message is starting to filter through. The Forestry Commission, for example, has pledged to support the development of wood fuel and intends to bring an additional two million tonnes of wood into the market, annually, by 2020 – saving 400,000 tonnes of carbon and enough to supply 250,000 homes with energy.
To achieve this, it said it would be focusing its efforts on the potential wood resources available in the 60% of English Woodlands that are currently under-managed.
But, as with any emerging market, financial support is needed in order to get the infrastructure in place – and to ensure consumer confidence. Awareness of biomass among consumers is still very low – in a recent survey, 94% of people in Ireland said they’d “never heard of it”.
“There are opportunities, but there are also barriers to market development, such as customer confidence in fuel supply, standards, training of heating engineers and wood fuel suppliers, which require initial intervention,” said Chris Ingles, executive director of ConFor.
“Woody biomass is an existing, renewable fuel, which is best suited to local heat, or combined heat and power production. It should take its place alongside renewables,” he said, adding that, for those who process wood as their core business, “converting to wood fuel must be an obvious choice”.
Balcas capacity
A case in point is sawmiller Balcas, which has invested £20m in a biomass renewable energy plant at Invergordon, 25 miles north of Inverness. It will have twice the capacity of the company’s Ulster combined heat and power plant (CHP) commissioned in 2005.
“We want to grow this side of our business,” said managing director Ernest Kidney. The plant is expected to come on stream in 2008 and will provide 8MW of electricity, 5MW of which will be exported to the grid; the remaining 3MW will be used internally.
Meanwhile UPM is investing £59m in a new renewable energy plant at its Caledonian mill in Scotland. The new boiler will use 350,000 tonnes of combined biomass and site-derived residues as its primary fuel.
Timber and forestry management company UPM Tilhill has been given a sole deal to supply the biomass. The plant is expected to be operational by 2009 and will reduce UPM’s carbon emissions by 75,000 tonnes a year.
Ultimately, the continued development of biomass will depend on the supply of material to provide the energy. While there’s little doubt that enough material exists, critics believe much greater attention should be paid to recycled timber such as construction waste and off-cuts from timber manufacturing. In this way, there would still be enough material to satisfy all parties.
The Scandinavian wood processing industry, for example, is already opting to use quality virgin fibre for traditional wood processing uses and putting greater emphasis on recycled wood fibre for fuel use.
Little surprise then that David Wood, president of UKFPA, describes the future for wood fuel as “bright, but not dazzling”. Despite its benefits, he warns that it must be kept in perspective. “To replace just one medium-sized power station of 2,000MW, you would need to supply 22 million tonnes of fresh wood a year,” he said.
“My best guess is that for all purposes, including heat and power generation, the UK might come up with five million tonnes a year. Others might increase this figure by planting and using short rotation coppice on more agricultural land. But I remain profoundly sceptical.”
