Pöyry reports biomass cofiring as one option to coal conundrum

By Katie Fletcher | October 18, 2016

Pöyry Management Consulting, an international consulting and engineering company, released a new “point of view” report this month, considering the role of coal in a lower-carbon economy. The analysis finds that despite an increased understanding of climate change risks, higher global energy demand has increased coal consumption—what they refer to as the coal conundrum. In its report, Pöyry argues that the future role of coal in the global energy mix must include cofiring with biomass and a renewed focus on carbon capture and storage (CSS). These, as well as a few other options, are discussed as a means to address the large amount of coal capacity in operation coupled with an urgent need to reduce emissions to limit climate changes risks.

According to Pöyry, the global coal fleet makes up around one-third of total global electricity generation capacity and around 40 percent of total electricity generation. Despite growing climate change concerns, global demand for coal has almost doubled since the 1997 Kyoto Protocol, Pöyry illustrated with data in its report. The global coal fleet is spread around the world, with 45 percent of capacity in China, 16 percent in the U.S., 9 percent in India and 8 percent in Europe—the remainder is distributed across a number of other countries.

The consulting firm developed a retirement profile for existing global coal capacity. The analysis reveals that without radical change, it is likely that the majority of coal-fired generation capacity will be with us for the foreseeable future, with the projection indicating around 1,300 gigawatts (GW) still in operation by 2040. The analysis doesn’t even take into account the several hundred GW of new coal capacity under construction around the world and the many more that are still in consideration.

“Our research has revealed a worrying situation where we risk sleep walking in to the mid-century having not addressed the challenges posed by coal to the environment,” said Matt Brown, vice president at Pöyry. “As world leaders gathered at COP21, there was an implied commitment to reach net-zero emissions by 2050. Without significant change, that commitment may be difficult to meet with the retirement portfolio we have projected for coal.”

When Pöyry was preparing its analysis and options to reduce coal use and carbon emissions, it kept in mind that energy policy considers three objectives in meeting energy demand, referred to as the energy trilemma: security of supply, affordability and environmental protection. These objectives often compete, however, and the amount of focus on each changes over time, depending on what is perceived as important.

The first coal emissions improvement option Pöyry included in its report was to shut down existing coal fleets and replace with alternatives, although it acknowledged that this can be impractical large-scale and difficult in some locations. The older the assets of the plant, however, the more economical this option can be where efficiency or operation is low. Another option in the report is improving overall efficiency of existing plants through refurbishment, which lowers the amount of CO2 produced per unit of energy output. With higher fuel costs, including a carbon cost in some places, the economics of improving plant efficiency become more favorable.

Brown said that besides increasing the coal fleet's efficiency, cofiring coal capacity with biomass must occur, as well as a harder push on CCS. “Sadly on CCS, we are in need of urgent practical progress when it comes to the appraisal and development of CO2 storage sites and the economic model that makes costly CCS plants competitive with their carbon-emitting counterparts,” he said.

Cofiring biomass and increasing CCS will be needed in conjunction with the first two options in order to reduce emissions from the global coal fleet, in the same way that all energy options will be needed to meet our growing energy demand, Pöyry reasoned in the report. However, in order to implement the options there are a number of factors that must be considered for each plant and for each country, including geographical location and the alternatives available.

The report included a discussion on switching to lower-carbon fuel, such as biomass. It detailed how when wood pellets are used as a substitute for coal in modern power stations, they can be cofired up to 10 percent with limited investment. Pellets can completely replace coal with further capital investment. “Coal-to-biomass conversion projects offer great potential as this is a proven technology and capital expenditure can be 70-80 percent lower when compared to a new build biomass power station,” the report stated. “And future developments, such as black pellets, may reduce conversion costs and allow for higher levels of cofiring.”

Cofiring has been taking place at coal-fired power stations for the past decade. Pöyry cited subsidies for renewable energy and the EU Emissions Trading Scheme as the main drivers. Drax’s effort is the most notable with full conversion of three of the six units at its power station, representing a total of 1.9 GW. Drax imports over 7 million tons of wood pellets each year, and produces 11 terawatt hours of electricity annually that is carbon free, according to carbon accounting rules under the EU ETS—although, changes are expected for the next phase of the ETS. Another notable biomass conversion is the 400 MW Lynemouth Power Station, which is expected to come back online by 2019 at the latest. The Langerlo-Genk plant (420 MW) in Belgium is another example of a planned conversion of an existing coal power station to biomass.

“Coal-to-biomass conversions also present a cost-effective and quickly implementable opportunity for the aging fleet of coal stations in the East and Northeast U.S., a region which presents a substantial sustainable biomass resource potential,” Pöyry identified in its report. “Similarly, coal stations in Latin America and Asia could be decarbonized supported by sustainable fast-growing forestry, such as energy crop plantations or agricultural residues like palm kernel shells.”

Although Pöyry emphasized the importance of replacing coal with biomass to provide reliable low-carbon baseload energy, a few conditions need to be in place. Amongst these conditions is some form of carbon price or renewable incentive, as well as the establishment of high yielding and affordable feedstock resources and the development of efficient global trade flows for biomass fuels.

The report concluded that burning sustainable biomass in the existing coal fleet will be part of the solution, but CCS is necessary as well and development is currently too slow.

"If we want to keep the lights on and save the planet, then governments and companies alike need to urgently address the coal conundrum,” Brown said.