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China’s Crop Residue Capacity

Although using crop residues for centralized power facilities in China would bring higher costs than their continued use in households, the prospect has enormous potential that is already being realized.
By Lisa Gibson | February 22, 2011

Eastern China’s prime cropland and agriculture-friendly climate make it a great place to farm traditional crops such as wheat, rice, corn and cotton. Is it possible, then, that the region could represent a prime location for centralized power facilities that run on crop residues?


Apparently so, as numerous plants have sprung up there and around the country, jump-starting a growing market for the raw material. Power solutions provider DP Cleantech has helped establish 25 power plants in China that are currently operating on ag residues, mostly straw from cotton, corn, wheat and rice. Keeping the development alive and speedy, the company is offering solutions for several more similar facilities across the country. DP Cleantech is one of a few engineering, procurement and construction contractors to break into the elusive Chinese bioenergy sector, with an 85 percent market share, and sees almost endless potential for the 800 million tons of agricultural residues produced in the country annually.


Crop residues in China are traditionally collected and burned in the open, used in animal husbandry or in rural households for cooking and heating. In the past few years, however, centralized power facilities are offering a better, cleaner and more profitable solution for disposing of agricultural wastes.


Studying the Impact


“The Chinese biomass markets are excelling rapidly such that I think it’s realistic to assume that there will be anywhere from 22 to 35 plants contracted to start work this year,” says Simon Parker, CEO of DP Cleantech. Besides the 25 operating power plants—nine 12-megawatt (MW) and 16 30-MW—the company is contracting 12 more that are under construction currently, along with two 30-MW facilities in active development stages for Zunhua City in Hebei Province and Sihong City in Jiangsu Province, both in eastern China. Those plants are expected to consume around 250,000 tons of local crop residues each year.


The potential for these facilities, especially in productive, rural areas, is enormous, but will not come without a high cost, according to “An economic analysis of using crop residues for energy in China.” Additionally, that study says 60 percent of China’s crop residues are already used in rural households to replace coal in cooking and heating appliances, and new centralized facilities would cut into that supply. On the other hand, though, they would provide an extra source of revenue for farmers.


“The rural parts of China have been using crop residues for years,” says Robert Mendelsohn, study co-author and professor of forestry at the Yale School of Forestry and Environmental Studies. “Now there’s an opportunity cost where you’re taking away from something that already has a use.” But Parker says that problem is not one of the main issues DP Cleantech and its partners have faced in establishing centralized facilities. “A lot of that fuel is used in rural China and whenever you find a higher-value use for it, that would potentially take away from that other source, but that’s not our primary challenge.” He also reiterates Mendelsohn’s point that as residents of rural China begin to realize higher disposable incomes, household use of those residues decreases, and the fact that farmers are paid for their residues further increases that disposable income.


 Instead, the biggest challenge is collecting the fuel, Parker says. “It’s quite expensive to collect because there isn’t industrialized farming in China in the same way there is in other countries,” he explains. The lack of industrial baling machinery means that work has to be done by hand, far less productively than could be accomplished with machinery. Parker says the ag residue harvest machinery sector in China is “absolutely negligible” and an order for a mere 60 balers would more than double the existing capacity of baling equipment in the country. “That’s why the price of crop residue is higher than the competing use in households,” he says.


The logistics for that residue supply vary for existing centralized biomass plants, Parker says. Some operate through a middleman who helps harvest residues and then transports them to the collection centers, usually owned by the plant operator. Increasingly common though, is the development of cooperatives to eliminate the middleman and ensure that more of the profit goes to the farmer.


A Little Figuring


China contains 96 million hectares (237 million acres) of cropland, most of which is concentrated in the Eastern portion of the country along fertile river valleys, according to Mendelsohn’s study, which he cautions is only representative of rural, highly-productive areas in China. Specifically, it revolves around one village: Sunyang Village of Jiangsu Province. The province lies in the northern subtropics along the Yangtze River and belongs to one of the major agricultural production zones of China with prime ag land and rich water resources. “We argue that although only a humble starting point, the study makes a serious contribution by providing at least a first estimate of biomass production potential and cost,” the authors write.


Centered on possible carbon mitigation above the baseline already mitigated by replacing coal in household appliances, the study examines using crop residues in a 100-kilowatt trigeneration village facility, as well as a 40-MW centralized electrical plant with commercial or near-commercial technology. The village facility would produce gas for cooking, hot water for heating, and electricity for the grid.


The study recommends growing wheat and corn to produce the most residues possible, but also takes into account costs and carbon mitigation of wheat and rice residues, as well as growing trees for energy on prime agricultural land. Needless to say, transportation costs are nonexistent with household use of wheat, corn and rice, but jumps to $4.80 per ton for a village trigeneration facility, and $9.60 for a centralized power plant. Transportation costs for wood are just half that, although wood has an added drying and storage cost of $2.70 per ton in both scenarios. “Transportation costs are higher for the larger facility because it needs more fuel and therefore the crop residue has to be gathered from a larger circle,” Mendelsohn says. “We looked at least-cost options for transport.”


The centralized facility would require about 240,000 tons of residues and about 30,000 hectares of cropland. So assuming that 75 percent of the land around the facility is cropland, supplies would have to be drawn from a 10-kilometer (6.2-mile) radius, the study cites. In comparison, 600 tons of crop residues would be necessary for the village facility and, under the same assumption, that could be sourced from a 0.6 kilometer circle around the plant. Parker says most operating centralized biomass power plants in China target an area of about 40 to 50 kilometers, depending of course on the calorific value and density of the fuel.


But don’t jump on the village plant bandwagon just yet. It would possess an electrical efficiency of just 20 percent, 10 percent lower than that of the centralized facility. “The additional efficiency gain of the centralized facility outweighs the increased transportation costs compared to the village option,” Mendelsohn says.


Furthermore, using wheat and rice in the village facility would replace 1.6 tons of carbon per hectare and the centralized facility would replace 2.4 tons per hectare. Subtracting the amount already mitigated by household use, that yields a net contribution of 0.2 tons of carbon per hectare and 1 ton of carbon per hectare respectively, according to the authors’ calculations. For wheat and corn, the net contributions are even greater, at 1 ton for a village facility and 2.2 for the centralized plant.


Taking costs and carbon mitigation into account, the study found that using wheat and rice residue in a village facility instead of households would come with a marginal cost of $192 per ton of carbon. Wheat and corn in a village facility in lieu of households would come with a marginal cost of $195 per ton of carbon. Figures for the centralized facility are considerably lower, at $77 for wheat and rice and $117 for wheat and corn. 


“These do not look like attractive options for China,” Mendelsohn says. “The current social benefit of removing carbon is estimated to be between $10 and $30 per ton of carbon so spending $77 to $190 per ton is high for the moment.”


In addition to high costs, Bill Holmberg, chairman of the Biomass Coordinating Council, predicts densifying all that crop residue for centralized or village facilities would be a barrier. But on the contrary, Parker says densification is, in fact, not a problem at all, as China is installing more efficient systems that don’t require it. Instead, raw residues are fed directly into the systems, completely bypassing the need for energy intensive pelletizing processes. “If you can actually take the raw fuel and burn it as is, it’s a more efficient system and that’s what all the power plants in China are moving toward,” he says.


The Chinese government is pushing the efficient use of centralized systems around 30 or 40 MW, located strategically to prevent transporting the electricity over long distances to reach rural China, Parker says. Thus far, that push has been effective and Parker says the growth rate is explosive, giving way to a rapidly maturing market that is beginning to gain notice from other China-based contractors and developers.

Author: Lisa Gibson
Associate Editor, Biomass Power & Thermal
(701) 738-4952
lgibson@bbiinternational.com

 

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