Office of Technology Assessment at the German Bundestag

Christine Rösch • Detlef Wintzer • Ludwig Leible • Eberhard Nieke

Renewable resources

TAB report no. 041. Berlin 1996, 112 pages

Summary

The use of biomass as a renewable source for energy generation has a medium- to long-term potential in Germany of 6-13 %, based on the level of primary energy consumption. Currently, only a fraction (approx. 1 %) of this feasible contribution of biomass to energy generation is exploited in residues from agriculture and forestry. The cultivation of special solid biofuels is negligible, amounting at present to a cultivation area of approx. 340 ha, despite the financial support by the payment for setting aside agricultural areas.

The most important reason is the insufficient economic viability of generating heat and electricity from wood and solid agro-biofuels. Under the present boundary conditions in the power economy, competition with fossil energy sources is possible only in particularly advantageous cases. The capital requirement to build the plants to be operated on solid biofuels is clearly higher than that of plants fired with heating oil and natural gas. Although the necessary investments are not significantly above those of coal fired plants, the prices of biofuels clearly exceed those of imported coal or lignite.

The costs of making available biomass energy sources cannot be reduced by measures of breeding, cultivation or harvesting to such an extent, in a foreseeable time, as to improve decisively the economics of burning biomass for heat and electricity generation. Decremental cost effects in plant construction can be utilized only when a larger number of biomass fueled facilities have been built and mass production is possible.

The increased use of biomass instead of fossil sources for energy production could make a sizable contribution towards reducing CO2 emissions. The relation of subsidies required to the amounts of CO2 saved is relatively favorable, compared to other renewable energy sources. The cost of CO2 reduction due to the use of biomass for energy generation is slightly higher than the cost of generating hydroelectricity or electricity in wind power plants on particularly favorable sites. Compared to the generation of energy at locations with less favorable wind conditions (3-5 m/s) and in solar thermal and photovoltaic plants however, it is slightly lower.

The cultivation of energy crops is not likely to have any major negative impact on the environment. In contrast to the cultivation of food and feed stuffs, the goal of producing solid biofuels is not a high content of proteins and oil, but a high content of lignocellulose. Suitable energy crops therefore can be cultivated with less intensity than this would be the case for food and feedstuff crops. As far as combustion technology and emissions are concerned, biomass energy sources with low contents of nitrogen, potassium, and chloride would be beneficial. Energy conversion in modern, well-managed biofuel plants is not likely to give rise to any major environmental impacts due to pollutant emissions.

The current level and the rate of expansion of heat production and electricity generation from biomass in Germany is unsatisfactory at present,

• compared to the use of biomass in other European countries, such as Denmark or Austria;
• judged by the potential of using biomass on a medium to long term, and the possible contributions towards CO2 reduction in Germany;
• in view of the relatively good relation of the amount of subsidies required to the amount of CO2 saved, and
• in the light of the growing technological lead of some neighboring countries and the declining competitive chances of German industry in winning domestic contracts and exporting biomass combustion facilities.

These are the main reasons:

• The boundary conditions prevailing in the power economy.
• The need to upgrade some of the existing funding schemes, and the insufficient total scope of funding measures.
• The gaps still existing in research, development, and demonstration of the use of biomass for energy generation.
• The growing resignation in various project initiatives and with a number of plant vendors.

A pronounced turnaround of the situation described above could be achieved by a meshed concept of research, development and demonstration activities, and by the establishment of a nationwide program of market incentives, which could help building more than just a few pilot plants or demonstration plants for heat production and electricity generation from biomass. The appropriate support measures would allow between 3000 and 6000 MW of fuel capacity to be installed by 2005. The funds required for a program, as discussed here, supporting energy generation from biomass would have to rise to three-digit millions per annum by the year 2005.

Financial support should be made dependent on the size category of the furnaces involved. For medium-sized cogeneration plants feeding into a heat supply system in a way which could be measured reliably, a project-oriented funding scheme operating with a heat supply bonus and a continued electricity feeding bonus as well as limited financial support of electricity generation and investment support to match should be considered.