Germany's experience in developing the use of solid ... seminaras/05_Krug.pdfJan 16, 2014 · Part-financed by the European Union (European Regional Development Fund and European

Part-financed by

the European Union (European Regional

Development Fund and European

Neighbourhood and Partnership

Instrument)

Germany's experience in developing the use of solid biomass fuels for electricity and heat production

Michael Krug

Seminar

The use of biofuels development in

Lithuania - the benefits and threats

Kaunas, January 16, 2014

http://www.ceinsight.com/uploads/Image/Biomass%20with%20Plant.jpg

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Agenda

• Key facts and figures

• Key national policy targets and support schemes

• Development of biomass electricity and heat production

• Success stories and success factors

• Problems and challenges

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Primary energy consumption (2013)

Primary energy consumption (individual shares compared to 2012); in total 14.005 PJ; Source: AGEB (2014)

Natural gas – 22.5 (21.6) Hard coal – 12.7 (12.5)

Lignite – 11.6 (12.1)

Nuclear – 7.6 (8.0)

Renewables – 11.8 (11,5)

Others – 0.8 (1.1)

Mineral oil – 33.0 (33.2)

Source. Ziesing 2013

Renewable energy sources and their share

in energy supply (2012)

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Structure of RES based final energy supply in Germany 2012 (Total 318.1 TWh)

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Gross electricity production 2011

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Structure of heat consumption in households (2011); total 499 TWh

Natural gas 39,8 % / (198 TWh)

Domestic fuel oil 27.8 % (139 TWh)

Electricity 5.8 % (29 TWh)

District heating 8.2 % (41 TWh)

Coal 2.9 % (15 TWh)

Renewables 15.4 % (77 TWh)

Source: BMWi (2012)

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Structure of RES based heat supply 2012 (Total 140.2 TWh)

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Percentage share of citizens served by DH/C

Source: EUROHEAT (2012)

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Key facts & figures: DH/C sector (I)

• DH/C covers 10% of the total heating/cooling market in Germany

• DH/C systems are typical in larger cities + East Germany

• Operators are traditionally multi-utility companies in full or partial municipal ownership

• Operators are traditionally vertically integrated

• Municipalities can require mandatory connection of buildings to municipal DH/C systems (low relevance in practice; 12% of heat sales)

• New business models for small scale renewable DH/C systems in rural areas (e.g. energy supply contracting, DH/C systems owned by co-operatives, citizens etc.)

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Key facts & figures: DH/C sector (II)

• RES share in DH/C is only 10% on average

• RES share in DH/C can be increased by

integrating RES into existing urban DH/C systems

construction of new small-scale DH/C systems based on RES

Good practice example: • 137 “bioenergy villages” with small scale DH grids

based on biogas and woody biomass plants

• 50% of electricity and heat demand covered by RES, particularly bioenergy

• Often muncipalities or co-operatives of citizens build and operate the DH grid

• Active involvement of local residents

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Key facts & figures: Bioenergy production and use

• In 2012 bioenergy made up 5.7 % of electricity consumption, 9.2 % of heat consumption, and 5.5 % of transport fuel consumption.

• 278,606 pellet combustion facilities (including pellet boilers <50 kW)

• 60 pellet producers, 600 pellet traders

• > 1,200 biomass heating plants >500kWth (2011)

• 264 biomass CHP plants (2011)

• 7,515 biogas plants (3,352 MW)

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Key targets of the federal government

Nuclear phase out • Decommissioning of all nuclear power plants by 2022

GHG emissions • Reduction by 40% until 2020 and by 80-95% until 2050 (compared to 1990)

RES • Increase share of RES in gross final energy consumption to 18% by 2020

• Increase share of RES-E to 35% until 2020, 40%-45% (2025) and 55-60% (2035)

• Increase share of RES-H to 14% until 2020

• Increase the share of RES-T to 10% until 2020

Energy efficiency • Increase share of CHP in electricity production to 25% (2020)

• Reduction of PEC by 20% until 2020 and 50% by 2050 (compared to 2008)

• Double annual building renovation rate from 1% to 2% of the total building stock

• Carbon neutral building stock by 2050

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Key national support schemes for bioenergy

Sector Measure Details

Electricity Renewable Energy Sources Act (EEG)

Technology-specific feed in tariffs guaranteed for 20 years; optional feed in premiums

Heat Renewable Heat Act (EEWärmeG)

Renewable heat obligation for new buildings and public buildings under major renovation (15 - 50% of heat demand)

Heat Market Incentive Programme (MAP)

Investment grants for small scale/individual RES-H systems & reduced interest loans for larger scale RES-H systems, RES based DH/C networks & storage systems

Electricity/Heat

Combined Heat and Power Act (KWKG)

Market premiums for electricity from CHP plants Investment grants for DH/C networks and storage systems

Cross sector

Contests “Bioenergy Regions”,“Bioenergy villages”

Grants for “soft” measures, e.g. network management and coordination, awareness raising, training, potential analyses, feasibility studies etc.

Cross sector

Regional bioenergy advisory services

Information and advise for forestry, agriculture, municipalities and the public

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Renewable Energy Sources Act

Input material category I: forest residues, energy crops, grass, maize, SRC, etc.

Input material category II: ecologically beneficial material like e.g. manure, straw, landscape management material

• Special remuneration categories for biowaste fermentation plants and small scale biogas plants which use at least 80 per cent liquid manure

• Improved conditions for direct sale of electricity and demand oriented electricity production (optional feed in premium + management premium + flexibility premium for biogas)

• Since 2000, amended in 2004, 2009 and 2012

• Feed in tariffs and optional feed in premiums

• Additional costs of RES are paid by the customers (surcharge)

• Basic remuneration rates depending on size of the plant

• Bonus remuneration depending on the type of biomass

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Feed in tariffs for electricity from biomass and biogas (in ct/kWh, 2014)

Source: BMU (2013) Assumption: Plant commissioned in 2014, tariff digression of 2% p.a. (except bonus for input material)

Capacity

Solid biomass and biogas (except from bio-waste)

Special category:

Fermentation of bio-waste

Special category:

Fermentation of manure

≤ 75 kW

Bonus for electricity from bio-methane

Basic remuneration

Bonus for input material

Category E1

Category E2

(Environmentally beneficial material)

Energy crops etc.

Bark, forest residues

Landscape management material, straw etc.

Manure

≤ 75 kW 13,73

6.0 8.0 15.37 24.01 ≤ 700 Nm3/h: 3.0

≤ 1,000 Nm3/h: 2.0

≤ 4,000 Nm3/h: 1.0

≤ 150 kW 6.0 8.0 15.37 -

≤ 500 kW 11.81 6.0 8.0 15.37 -

≤ 750 kW 10.56 5.0 2.5 8.0 6.0 13.45 -

≤ 5 MW 10.56 4.0 2.5 8.0 6.0 13.45 -

≤ 20 MW 5.76 - - - - 13.45 -

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Sustainability considerations in the FIT-system

Stronger priority for biomass residues compared to energy crops

Special bonus payments for the use of environmentally beneficial material

For new biogas plants maximum share of 60% maize in the input mix

Better remuneration rates for small-scale plants

Energy efficiency requirement and minimum heat use for bioenergy plants (60% of electricity have to be produced in cogeneration mode; exemption if direct sales)

Germany supports binding EU wide sustainability criteria for solid and gaseous biomass used in electricity, heating and cooling

ECOFYS et al 2013

Remuneration ranges for electricity from solid biomass (forestry residues) in the EU-27 MS, in 2011

Average to maximum remuneration for solid biomass in the EU-27 MS in 2011 (average tariffs are indicative) compared to the long-term marginal generation costs (minimum to average costs).

ECOFYS et al 2013

Remuneration ranges for centralised biomass heating plants in the EU-27 MS in 2011

Remuneration ranges (average to maximum remuneration) for centralised heating plants in the EU-27 MS in 2011 (average tariffs are indicative) compared to the long-term marginal generation costs (minimum to average costs).

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Development of electricity supply from biomass and installed capacity of biomass and biogas plants

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Development of solid biomass electricity & CHP plants (by plant size categories)

Nu

mb

er

of

faci

litie

s

(Source: DBFZ, April 2013 – without CHP < 10 kWel und co-firing facilities)

Installe

d e

lectric capacity (M

W)

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Electricity from solid biomass - actual developments

• 540 solid biomass electricity generation plants in Germany (2012) with an

installed electric capacity of 1,560 MW;

• 10 fold increase of the number of biomass CHP plants since 2000;

• Three technologies have reached market maturity: steam turbine, ORC process, wood gasification

• Dynamic development: small scale plants (< 1 MWel) in 2011 and 2012

• Dynamic development for thermo-chemical wood gasification

• 2012: 80 new facilities (7 MWel)

• 2013: 90 new facilities (9 MWel)

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Development of household expenditure for energy services (EUR/month)

Assumptions: 3 persons household, individual oil heating, gasoline car

RES-E surcharge

Costs for electricity (without surcharge)

Costs for domestic fuel oil

Costs for transport fuel (gasoline)

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Development of prices for fuel oil, natural gas wood pellets and wood chips (EUR/MWh)

Domestic fuel oil

Wood pellets

Natural gas

Wood chips

Source: C.A.R.M.E.N (2013)

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Success stories and factors

• Effective national support schemes

• High economic incentive effect

• Policy mix and complementary support at the federal state level (e.g. investment support, networking, training, consultancy)

• Long term investment security and calculability for investors

• Feed in tariff digression, regular revisions and FIT adjustments

• Considerable learning effects for wind, PV, wood gasification

• Adjustments of support schemes towards sustainability

• Many regional and local success stories

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Problems and challenges

• Partly over-compensation and windfall profits

• Surcharge for RES-E in the electricity tariff increases from 1.12 ct/kWh (2008) to 6.24 ct/kWh (2014). Increasing financial burden for electricity consumers)

• RES-E: Transition from FIT/FIP system to a tendering system in 2018?

• Stop and go support in the field of RES-H

• Political focus so far on RES-E; RES-H/C is fairly neglected

• Importance of the heating sector to balance fluctuating electricity production from wind and PV (power to heat systems, thermal storage)

• Availability of biomass and environmental sustainability concerns (annual energy crops, use of logging residues, biomass imports)

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Thank you very much for your attention!

[email protected]

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Additional slides

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• Aim: Build up functioning bio-energy actor networks and co-

operation structures on a regional level

• Aim: Increase regional value added and contribute to employment

creation

• Aim: Exploit the regional potential and develop local supply chains

• Network management, information exchange, know how transfer,

training, qualification etc.

• Regions had to prepare a Regional Development Concept

• No direct investment support!

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• 210 regions applied for public funding

• 25 regions have qualified

• Public funding: 400,000 EUR for each

region (3 years)

• Regions to implement the regional

development concepts

• 20 regions qualified for a second

funding phase 2012-2015 (→ co-

operation with “twinning” regions)

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• Build up of network structures, network coordination and management

• Awareness raising and motivation of stakeholders

• Exhibitions, bioenergy tours and site visits

• Training and qualification measures

• Regional biomass potential analyses + feasibility studies

• Establishment of regional biomass trade and logistic centres

• Waste heat utilization from existing biogas plants and construction of small scale district heating grids

• Creation of energy cooperatives and citizen owned energy enterprises

• Creation of public private partnerships and contracting models

• Promotion of “bioenergy villages”

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Evaluation of wood fuel resources on national and regional scale

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Potential of biogenic residues in 2020

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Evaluation of wood fuel resources on national and regional scale

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Final energy consumption (2011, in PJ)

Space heating – 25.1% (2,256 PJ)

Hot water – 5.1% (447 PJ)

Other process heat – 22.6%

(1,979 PJ)

Space cooling

– 0.4% (34 PJ)

Mechanical energy

38.1% (3,327 PJ)

Process cooling

– 1.9% (162 PJ)

ICT – 2.5%

(219 PJ)

Lighting – 3.7%

(321 PJ)

Final energy consumption (individual shares per end use 2011; in total 8,744 PJ; Source: BMWi, AGEB (2013)

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Cost components for 1 kWh of electricity for household customers

Documents

Germany's experience in developing the use of solid ... seminaras/05_Krug.pdfJan 16, 2014 · Part-financed by the European Union (European Regional Development Fund and European