BiomassBiomass“Struggling to make it “Struggling to make it work”- the Canadian work”- the Canadian

ExperienceExperience

IEA Task 38 MeetingIEA Task 38 Meeting

Doug Bradley- DomtarDoug Bradley- DomtarEdinburgh, Nov 12, 2001Edinburgh, Nov 12, 2001

ContentsContents

Canadian Forest Industry Biomass Canadian Forest Industry Biomass UsageUsage

Biomass success storiesBiomass success stories Issues holding back developmentIssues holding back development

Canadian Forest Industry-Canadian Forest Industry- Energy from External Energy from External SourcesSources

0

4

8

12

16

20

72 77 82 87 92 97

GJ per tonne of product

Coal, Distillates and Others

Natural Gas

Electricity

Fuel Oil 80%

18%

11%

83%

Source: Forest Products Association of Canada

Canadian Forest Canadian Forest IndustryIndustryGHGGHG Emissions Emissions

0

2

4

6

8

10

12

14

16

90 91 92 93 94 95 96 97 98 99

Mtonnes

Source: Forest Products Association of Canada

19%

Canadian Forest IndustryCanadian Forest IndustryEnergy Use - 1999Energy Use - 1999

Oil7%Natural Gas

16%

Biomass54%

Other2%

Electricity21%

Source: Forest Products Association of Canada

Biomass: includes wood, bark, sawdust, and pulping liquor

Biomass Utilization- P&P Biomass Utilization- P&P Ind.Ind.

9.412.3

9.15.4

02468

101214161820

1990 1998

Million B

Dt

pa

SurplusUse

GHG Emissions – GHG Emissions – (without (without sinks)sinks)Canada vs Pulp & Paper IndustryCanada vs Pulp & Paper IndustryIndex of emissions vs 1990Index of emissions vs 1990

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

CanadaP&P IndTarget

Grand Prairie, AlbertaGrand Prairie, AlbertaWaste Wood CogenWaste Wood Cogen

20 MW cogen20 MW cogen Wood waste from Canfor Wood waste from Canfor

sawmills sawmills Process and Bldg Heat to Process and Bldg Heat to

CanforCanfor Power to CanforPower to Canfor Possible district heat to Possible district heat to

town town Driven by high fuel & Driven by high fuel &

power costs, waste power costs, waste incineration, deregulated incineration, deregulated powerpower

St. Felicien – QuebecSt. Felicien – QuebecBiomass CogenBiomass Cogen

$63 million project$63 million project 290k GMT/yr bark from area sawmills290k GMT/yr bark from area sawmills 24k lbs/hr steam to Alliance sawmill24k lbs/hr steam to Alliance sawmill 21.4 MW sold to Quebec Hydro21.4 MW sold to Quebec Hydro Why?Why?

Steam hostSteam host Many bark sourcesMany bark sources 66¢/kwh¢/kwh from Quebec Hydro from Quebec Hydro

Windsor, QuebecWindsor, QuebecDomtar cogenDomtar cogen

$23 MM bark cogen inaugurated Oct $23 MM bark cogen inaugurated Oct 26, 200126, 2001

At 560,000 tpa Windsor pulp/paper At 560,000 tpa Windsor pulp/paper millmill

50% on site bark, 50% area purchases50% on site bark, 50% area purchases 25MW power and steam to mill25MW power and steam to mill Displaces 3.8Displaces 3.8¢ power from Hydro ¢ power from Hydro

Quebec Quebec

Dynamotive- Vancouver Dynamotive- Vancouver Fast Pyrolysis to BioOilFast Pyrolysis to BioOil

10 tpd liquid BioOil demo 10 tpd liquid BioOil demo plant- completed 2000plant- completed 2000

Ran design capacity Ran design capacity 8mos8mos

Scale up to 100 tpd- 4Q Scale up to 100 tpd- 4Q 2002- Isle of Arran2002- Isle of Arran

2.5 MW generation for 2.5 MW generation for island using forest wasteisland using forest waste

Drivers- Drivers- 1010¢/kwh for ¢/kwh for renewable powerrenewable power

Next scale up 400 tpd Next scale up 400 tpd 20MW20MW

Temiskaming- Biomass Temiskaming- Biomass boiler boiler

Uses spent sulfate liquor from pulp Uses spent sulfate liquor from pulp mill, bark from area sawmillsmill, bark from area sawmills

10MW power for pulp mill10MW power for pulp mill Steam, hot water for cellulose millSteam, hot water for cellulose mill 14MM liters ethanol14MM liters ethanol Canada’s Canada’s

vinegarvinegar DriversDrivers

Many area sawmillsMany area sawmills Have sulfite millHave sulfite mill Limited by Quebec HydroLimited by Quebec Hydro

Cornwall- Ethanol PlantCornwall- Ethanol Plant

$48 million plant$48 million plant To use 6.25 MM bushels corn paTo use 6.25 MM bushels corn pa To produce 66 MM litres pa ethanolTo produce 66 MM litres pa ethanol Project driversProject drivers

Ontario elimination of “road and usage tax” on Ontario elimination of “road and usage tax” on ethanol fuelethanol fuel

Canada exempting ethanol portion of fuels from Canada exempting ethanol portion of fuels from 10% excise tax 10% excise tax

Project awaiting insuranceProject awaiting insurance

Why do projects remain on Why do projects remain on the drawing board?the drawing board?

Biomass supplyBiomass supply Alternative fuel pricesAlternative fuel prices Low Power pricesLow Power prices TechnologyTechnology InfrastructureInfrastructure Money!Money!

Problems- Biomass SupplyProblems- Biomass Supply

AmountAmount- Sawmill waste reduced from - Sawmill waste reduced from 9.1 to 5.4 million BDT pa9.1 to 5.4 million BDT pa

Haul distanceHaul distance- Remaining pockets of - Remaining pockets of biomass smaller, further awaybiomass smaller, further away

LocationLocation- Excess biomass at sawmills - Excess biomass at sawmills not at pulp mills which need power, not at pulp mills which need power, steamsteam

Alternative UsesAlternative Uses- Higher fibre value - Higher fibre value in OSB or MDF than energy in OSB or MDF than energy

Problems- Biomass SupplyProblems- Biomass Supply

Free tradeFree trade- 19.3% export duty - 19.3% export duty shutting sawmillsshutting sawmills

Harvesting rulesHarvesting rules- Increase in - Increase in delimbing at stump for nutrientsdelimbing at stump for nutrients

ConcentrationConcentration- Most excess in - Most excess in British Columbia where power is British Columbia where power is only 3.5only 3.5¢/kwh¢/kwh

Problems- Alternative Fuel Problems- Alternative Fuel Costs Costs

Fossil fuel costs lower in Canada Fossil fuel costs lower in Canada than Europe than Europe

Canada has large supply of oil, Canada has large supply of oil, natural gasnatural gas

Europe has carbon taxesEurope has carbon taxes Low fossil fuel costs hurt “biomass Low fossil fuel costs hurt “biomass

economics” economics”

Problems- Low power Problems- Low power pricesprices

Canada has lower power prices than Canada has lower power prices than Europe- less opportunity for revenueEurope- less opportunity for revenue

Regulated industry (provinces) Regulated industry (provinces) Prevented wheeling of powerPrevented wheeling of power Limited size of biomass plantsLimited size of biomass plants Controlled price of powerControlled price of power (Alberta now deregulated, Ontario next)(Alberta now deregulated, Ontario next)

Problems- TechnologyProblems- Technology

Difficulty with green biomassDifficulty with green biomass Instability of BioOilInstability of BioOil Gasification- not efficient for woodGasification- not efficient for wood Fuel cells- not there yetFuel cells- not there yet

Problems- Infrastructure Problems- Infrastructure

Europe has infrastructure for Europe has infrastructure for combined heat and power systemscombined heat and power systems

Canada has natural gas lines, oil Canada has natural gas lines, oil infrastructureinfrastructure

Problems- Money!!Problems- Money!!

Rate of return usually 10% at bestRate of return usually 10% at best Hurdle in forest industry 15-30%Hurdle in forest industry 15-30% Capital limited to “core business”- Capital limited to “core business”-

necessitates third party capitalnecessitates third party capital Huge capital investment requires Huge capital investment requires

long term contracts- fuels, power, long term contracts- fuels, power, heatheat

Carbon credits- indirect “power Carbon credits- indirect “power savings” don’t count savings” don’t count

SummarySummary

Success stories- but hanging fruit goneSuccess stories- but hanging fruit gone Need improved economic environment Need improved economic environment

to promote further developmentto promote further development Lower taxesLower taxes on biomass fuels, products on biomass fuels, products MoreMore incentives incentives for investment (capital) for investment (capital) Deregulated powerDeregulated power industry- green pricing industry- green pricing Green powerGreen power policies policies Non-residual biomassNon-residual biomass sources sources

Emerging technologies Emerging technologies