1. 1 TSEC-BIOSYS: Theme 1.4 Role of International Bioenergy Trade for the UK www.tsec-biosys.ac.uk Miles Perry Centre for Environmental Policy Imperial College, London Biomass role in the UK energy futures The Royal Society, London: 28 th & 29 th July 2009

2. Introduction  Biomass imports in UK energy – 2000-present  Biomass imports looking to 2020 – analysis using Biosys-MARKAL

3. Imported Biomass Total Biomass (plant&animal) Total Biomass (all)** Total Renewable* 3.15%9.89%8.83%9.97%7.21% Biomass Imports as Share of Primary RE Source: DUKES **inc. waste and tyres. excl. liquid biofuels. ‘Primary’ wind counted as electricity generated ** Total biomass = plant-&-animal-based + wood, wood waste, landfill methane and sewage sludge Sewage and landfill up 38% 2000-07 Biomass Imports go from 0%-10% of RE in 2 years Domestic biomass develops more slowly 2000 -> 2007 More renewables (inc. biomass) enter energy system

4. Source: DUKES. % refers to energy content of biomass input 2000 -> 2007 Growth Driven by Co-firing Market (Destination of 200220032004200520062007 Plant & animal biomass) - for electricity generation44%51%57%70%68%63% - for co-firing11%20%30%52%51%41% Advantages of Co-firing: - Low-cost, low-risk & rapid deployment at the margin Relative to other technologies - Technological neutrality of Renewables Obligation

5. Source: DUKES & DECC. % of co-firing feedstock refers to mass (tonnes) 2000 -> 2007 Co-firing & Imports Biomass imports crucial in bioenergy growth from 2002-2003 More domestic biomass co-fired since 2005? Not so sure… Likely Imports as % of Co-firing feedstock 20052007 Palm, olive & shea52%47% Wood pellet12%14% Sunflower pellet1%10% Tall Oil9%5% Total74%76%

6. * - co-firing of energy crops &/or in CHP units is exempt from this cap Bioelectricity & imports 2007 - Imports for co-firing less attractive due to successive RO reforms - ≤12.5% of ROCs can come from co-firing* (=> uncertainty at the margin) - Dedicated biomass plants receive 3 × more ROCs / MWh - 2006-07: Ratiofalls for the first time Includes 50% year-on-year increase in combustion of biomass of animal origin - Imports helpful as bridge towards larger UK biomass exploitation?

7. Source: Hawkins Wright, Forest Energy Monitor. OFGEM RO Accreditation Statistics Bioelectricity & imports post-2007 Dedicated Plant Capacity 30/06/09 197 MW of which 2007-08 additions78 MW Capacity of additional plants proposed1,975 MW Assume: Load Factor80% Avg. Efficiency30% Annual Feedstock Requirement183 PJ UK Existing Supply (Biomass Strategy, 2007234-282 PJ excl. mass energy crop planting)

8. Source: DECC (Renewable Energy Strategy Consultation), Pellet@las Project Renewable Heat & UK Wood Pellet Market - Renewable Sources account for <1% of UK heat generation - UK imports of pellet for industrial applications represent significant share of European pellet trade ~750,000 tonnes consumed (2008) ~150,000 tonnes used for co-firing (2007) - 600,000 tonnes (~8.5 PJ heat generation) is equivalent to ~1/3 of UK renewable heat consumption in 2007 - UK consumption of high-grade (residential) pellets almost uniquely low in W. Europe

9. Source: RFA Monthly Reports Biofuels in Transport RTFO year 1 target: 2.5% of road fuel by volume

10. Source: RFA Monthly Reports, European Biodiesel Board, European Bioethanol Industry Association Biofuels in Transport RTFO year 1 target: 2.5% of road fuel by volume Biodieselfrom UK oilseed rape26 Ml. [UK feedstock claimed under RTFO 08/09]from UK tallow5 Ml. from UK used cooking oil34 Ml. 65 Ml. [UK production – all feedstocks](EBB) 2008212 Ml. Bioethanol [UK feedstock claimed under RTFO 08/09]from sugar beet37 Ml. [UK production – all feedstocks]Bioethanol 200875 Ml. UK Biofuels Sector is Trade-oriented - Imported feedstocks are processed in the UK (vegetable oils, tallow) &/or - UK biofuels not produced exclusively for UK road transport market

11. UK Biomass Resources: a snapshot  Imports account for: 11% - 43% of biomass used in heat & power (depending on how you define ‘biomass’) & the vast majority of biofuel feedstocks in transport  even though UK resources are not fully utilised Source: various reports cited in Perry & Rosillio-Calle. UK Country Report for IEA Task 40. www.bioenergytrade.orgwww.bioenergytrade.org

12. UK Bioenergy Trade: Summary  Biomass -> electricity & transport pathways - initially dominated by imports - and integration with existing production and distribution infrastructure  Substantial planned capacity – irrespective of feedstock origin Electricity: ~2,000 MW dedicated plant planned + co-firing Transport Fuels: 671 Ml. biodiesel production capacity in 2009 820 Ml. bioethanol capacity under construction What does this mean?  Imports prevent realisation of UK supply potential?  Imports phased-out as UK supply chains develop?  Imports increase size and penetration of bioenergy in the UK?  What about other renewables? Source: European Biodiesel Board, European Bioethanol Industry Association

13. UK Bioenergy Trade: looking forward with MARKAL  Using BIOSYS_MARKAL: - we can examine the competing merits of imported biomass, domestic biomass and other renewables - in a realistic energy policy context The recipe: 1.) Take Biosys_MARKAL (developed by Jablonski et al.) & adjust for short-term analysis (2010-2020) 2.) Create 2 short-term policy scenarios i) business-as-usual ii) Renewable Energy Directive 3.) Examine role of imported biomass

14. UK Bioenergy Trade: looking forward with MARKAL  BIOSYS_MARKAL recap: Objective: Minimise discounted total system cost of UK energy provision subject to: Satisfaction of energy service demands (GJ of heat, km of travel etc.) Compliance with technical constraints and policy constraints  UK biomass resource & technology detail from TSEC_Biosys  Biomass import costs & quantities from literature review and consultation with industry experts

15. UK Bioenergy Trade: looking forward with MARKAL 2 Resource Scenarios: - Domestic Pessimism: UK Biomass available to energy system cannot exceed 2007-09 levels (DUKES, RFA) - Domestic Optimism: Potential 2020 resource fully available as per TSEC analysis and latest literature 2 Policy Scenarios: - Business-as-usual:Renewables encouraged by RO and RTFO - Renewable Energy Directive:15% renewables in final energy consumption (electricity, heat and transport collectively ) 10% renewables in transport

16. UK Bioenergy Trade: looking forward with MARKAL 2 Policy Scenarios ctd. - Business-as-usual: RO as per RO Order 2009 but only partially banded (by technology but not by biomass crop type) RTFO fully flexible between biofuels ≥ 5% liquid biofuel or biogas per litre of road transport fuel - Renewable Energy Directive (RED): RED requirements applied literally 15% renewables in final energy consumption (electricity, heat and transport collectively ) 10% renewables in transport in addition to BAU policies

17. UK Bioenergy Trade: looking forward with MARKAL BAU Policies, Domestic Pessimism Domestic Imported

18. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive, Domestic Pessimism Domestic Imported

19. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive – UK Biomass Supply 2020 Domestic - Pessimism Domestic - Optimism

20. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive – Biomass Imports 2020 Imported - Domestic Pessimism Imported - Domestic Optimism

21. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive: Transport Markets 2020 Total Renewable Transport Energy Domestic Pessimism: 207 PJ Total Renewable Transport Energy Domestic Optimism: 193 PJ

22. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive: Electricity Markets Domestic Pessimism:Domestic Optimism: - RED scenarios have very little biomass -> electricity (only landfill gas in 2020) - Presence of imports + full domestic supply -> less pressure on electricity market to meet RED target

23. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive: Biomass Destination (Primary Energy – feedstock equivalent) Domestic Pessimism:Domestic Optimism: Total: 509 PJTotal: 924 PJ

24. UK Bioenergy Trade: looking forward with MARKAL Renewable Energy Directive: How much biomass is that? PJ (feedstock)PessimismOptimism Domestic145596 Imported364328 Total509924 Compared to UK potential: DEFRA Biomass Strategy346 Compared to present-day use (UK & Imported): Heat & Power(DUKES 2007)127 Transport (RTFO year 1)64 191

25. UK Bioenergy Trade: looking forward with MARKAL Can we really import >300 PJ of biomass? - Biosys_MARKAL upper bounds based on literature review. Assuming either: - UK able to maintain global import share (biodiesel, bioethanol) OR - A ‘fair share’ of a global product is available to the UK (based on UK share of Global Primary Energy Supply or global of an equivalent fossil product) - But will this supply actually be realised? valid question for both UK and import markets

26. UK Bioenergy Trade: looking forward with MARKAL Can we really import >300 PJ of biomass? - Biosys_MARKAL has a number of upper bounds for biomass imports. Which of them are binding constraints in RED 2020? Dom. PessimismDom. Optimism Palm & Olive Ethanol (cane, starch & cellulosic) Biodiesel FT liquids Wood-derived Biomass (higher level constraint) Wood pellet In both scenarios, imports are dominated by biodiesel & wood (chip, pellet) - Potential biodiesel imports are not fully taken-up - Potential wood imports fully taken-up only when domestic wood is scarce

27. Conclusions - Imported biomass has been crucial to the development of bioenergy in the UK (by volume at least) - Imported biomass must be viewed in an energy-wide context (it’s linked to the UK biomass sector but capable of developing on its own) - UK biomass if exploited would be competitive with imports at current prices. (cellulosic -> heat: waste -> AD) - Even if UK biomass exploited, imports can be complementary - Imports can reduce reliance on other renewables for RED - Biodiesel imports dominate regardless - But how sustainable can imports be at this scale?

28. 28 Thank you for your attention! www.tsec-biosys.ac.uk miles.perry@imperial.ac.uk