Bio Markets Asia 2015 Maarten Gnoth presentation

Motivation Factors & Key Processes to look into for investment/partnership on forestry to pellet production projects

Maarten Gnoth, Manager Business Development - Biomass Upstream

Bio-Markets Asia - Biomass Supply Chain

27-29 January 2015 - Jakarta

GDF SUEZ Biomass power plants overview

Country Power / pellet plant Production Plant Type Biomass type

Belgium 2 sites, 2 plants, various

stages ~280 MW

+ 60 MW stopped in 2013

Dedicated (gasifier stopped in 2013)

Wood pellets, wood chips

and residues stopped

in 2013

Netherlands 1 plant, various stages Stopped Q3 2012

(~180 MW) Co-firing Wood pellets

Germany 1 plant ~20 MW Dedicated Wood chips

Poland 1 plant various stages ~330 MW Dedicated & Co-firing Agri-pellets & Wood chips

Thailand 1 plant ~ 30 MW Co-firing Wood chips

Brazil 2 plants ~60 MW Dedicated Wood chips

& Sugar cane bagasse

USA 7 power plants ~120 MW Dedicated Clean wood chips , waste

wood chips & paper pellets

Canada 1 pellet plant co-investment

extension

~350 kton/yr

production Pellet plant Wood pellet production

France, GE,

BE, NL

Operating > 120 local bio

installations ~ 200 MWth District heating, CHP

Local waste wood, pellets

etc.

27/01/2015 Bio-Markets Asia - Biomass Supply Chain

2

Rationale for co-investment in Pacific Bio Energy in 2010:

Biomass Market liquidity

Securing feedstock for own production as foundation for supply and trading

Security of supply and guaranteed quality and sustainability

Credible and professional investment counterparts locally rooted

Added value of our group and partners to the JV


3

Co-Investment & Partnership

Initial Pacific Bio co-venture objectives:

secure contract, capture upstream value… and learn


4

Co-Investment & Partnership

Opportunity Volumes Status

Fib

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up

ply

Pro

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qu

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an

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ert

ific

ati

on

Ex

po

rt lo

gis

tic

s

Pa

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er

reli

ab

ilit

y

Co

un

try

Su

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ly c

ha

in

len

gth

Co

-in

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stm

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t

Opportunity 1 200 kt/y (2009) 600 kt/y

by 2012 with developments Due-diligence + + + + + -

Opportunity 2 ~100 - 200 kt/y from 2011 Early stage

investigations + ? ? ? - =

Opportunity 3 200 kt/y (2009 – 2015) Early stage

investigations - + + + + +

Opportunity 4 150 kt/y Discussion = + + = - +

LT

off

ta

ke

ag

ree

me

nt

Opportunity 5 > 1 mt/y, 5 – 7 years Contract

preparation + + + + + +

Opportunity 6 ~100 – 500 kt/y from 2010 Contract

preparation + + + + + -

Opportunity 7 250 kt/y from 2011+ Lead + ? ? ? = =


5

Biomass supply funnel

Origination of biomass

Selection on sourcing, availability & logistics

Security of supply!

Selection on sustainability criteria

Selection on local stakeholders

Sample lab testing on chemical & physical comp.

Selection on technical applicability for stand-alone

CFB, co-firing and/or torrefaction

Selection on commercial feasibility

Integration feasibility in business modeling

Availability

Sustainability

Applicability

Affordability

Funnel and exclusion approach

to identify sustainable feedstock opportunities


6

Biomass identification



Security of supply!








Availability

Sustainability

Applicability

Affordability



Biomass value chain: feedstock availability


7

Growing supply

Stable/Decreasing supply

Growing deficit

Biomass supply in Europe remains stable.

Significant growth from Russia, US South, South America and Africa

Location Indication overview of geographical feedstock availability

Source: Pöyry

Biomass flows & developments


8

existing supply

future supply?

■ Wood pellets

■ Wood chips (fresh & recycled)

■ Agri residues

■ Potential sourcing countries

for Eastern Europe

■ Potential agri residues & wood pellet sourcing

countries for S.E. Asia demand

■ Demand: currently primarily Europe.UK, South

Korea & Japan to expand

Current biomass flows mainly based on mature production locations

with pellet export to Europe

Future flows increasingly based on lower fiber cost availability

Emerging demand and supply in S.E. Asia

Biomass Value Chain: security of supply

Agriculture

Encroaching

b(r)ush/bamboo

Energy crops

Forest /

Plantations

Inbound

logistics

Biomass

processing

Storage Outbound

logistics

Use

Agriculture

processing

Recycling

wood

Wood

processing

Pelletizing

Chipping Drying

Open air Silo

Warehouse Boat Train Truck

Residual stream

Primary stream

BIOMASS MARKET

USA & Canadian wood pellet plants as market reference

e.g. GDF SUEZ Pacific BioEnergy JV in Canada

From FOB to CIF shipment under various arrangements

e.g. Leasing contracts for dedicated vessels GDF SUEZ Ghent

for transport from Vancouver (BC- Canada)

Dedicated and co-firing plants using all types

of biomass in Europe


9

Optional stream

Perspective : European utility looking for LT security of supply

The various steps in the supply chain


10




Security of supply!








Availability

Sustainability

Applicability

Affordability




11

Sustainability criteria and implementation

Principle Clarification NTA 8080

(Cramer) FSC RED UK

Belgium

(LBE) GGL

SBP

(IWPB)

1 GHG

balance

Positive CO2 balance of total

biomass supply chain (against

conventional)

2 Carbon

stocks

Production of biomass not

impacting high carbon stocks

in vegetation & soil

3 Bio-

diversity

No production of biomass at

protected or vulnerable biodiversity

4 Soil Soil (quality) is maintained

or improved

5 Water Water not exhausted and water

quality maintained or improved

6 Air Air quality is maintained

or improved

7 Social Preserve food- and local biomass

applications from unfair competition

8 Local

welfare

Production of biomass contributes

to local prosperity


12




Security of supply!








Availability

Sustainability

Applicability

Affordability




13


as received

milled


14




Security of supply!








Availability

Sustainability

Applicability

Affordability




15

Biomass value chain: feedstock cost

Sustainability issues and competition make feedstock strategically

important. Diversification and certification are key.

Agri-residues

& encroaching

biomass

Woody based agri

residues

WOOD INDUSTRY RESIDUES

Logs from existing

forest mgt

Wood plantations

& specific energy

crops

LOW HIGH

Reduced (to be mitigated and managed)

To be sustained QUALITY

FEEDSTOCK COST


16

Delivered cost analysis of pellets

Wood pellet price Jan 2015 ~ 9 €/GJ CIF ARA | ~ 10,5 US $/GJ | ~ 180 US $/ton

Wood chips price Jan 2015 ~ 6 €/GJ CIF ARA | ~ 7 US $/GJ

Source: Pöyry


17

Examples for wood pellets use from USA & Canada

Availability

Sustainability

Applicability

Affordability

The Netherlands

500.000 ton/year (1 plant)

Belgium

1.100.000 ton/year (2 plants)


18

… and for wood chips and agri 200 MW for 1 power plant in Poland

Availability

Sustainability

Applicability

Affordability

Agri Residues

300.000 ton/year

Wood chips

900.000 ton/year

Thanks for your attention


19

Maarten Gnoth

Manager Business Development - Biomass Upstream

GDF SUEZ Energy Management Trading

Boulevard Simon Bolivar 34

B 1000 Brussels, Belgium

Mob +32 473 850 567

[email protected]

www.gdfsuez.com

www.gdfsuez-trading.com

mailto:[email protected]

mailto:[email protected]

http://www.electrabel.nl/

http://www.gdfsuez-trading.com/



Documents

Bio Markets Asia 2015 Maarten Gnoth presentation