Motivation Factors & Key Processes to look into for investment/partnership on forestry to pellet production projects
Maarten Gnoth, Manager Business Development - Biomass Upstream
Bio-Markets Asia - Biomass Supply Chain
27-29 January 2015 - Jakarta
GDF SUEZ Biomass power plants overview
Country Power / pellet plant Production Plant Type Biomass type
Belgium 2 sites, 2 plants, various
stages ~280 MW
+ 60 MW stopped in 2013
Dedicated (gasifier stopped in 2013)
Wood pellets, wood chips
and residues stopped
in 2013
Netherlands 1 plant, various stages Stopped Q3 2012
(~180 MW) Co-firing Wood pellets
Germany 1 plant ~20 MW Dedicated Wood chips
Poland 1 plant various stages ~330 MW Dedicated & Co-firing Agri-pellets & Wood chips
Thailand 1 plant ~ 30 MW Co-firing Wood chips
Brazil 2 plants ~60 MW Dedicated Wood chips
& Sugar cane bagasse
USA 7 power plants ~120 MW Dedicated Clean wood chips , waste
wood chips & paper pellets
Canada 1 pellet plant co-investment
extension
~350 kton/yr
production Pellet plant Wood pellet production
France, GE,
BE, NL
Operating > 120 local bio
installations ~ 200 MWth District heating, CHP
Local waste wood, pellets
etc.
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Rationale for co-investment in Pacific Bio Energy in 2010:
Biomass Market liquidity
Securing feedstock for own production as foundation for supply and trading
Security of supply and guaranteed quality and sustainability
Credible and professional investment counterparts locally rooted
Added value of our group and partners to the JV
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Co-Investment & Partnership
Initial Pacific Bio co-venture objectives:
secure contract, capture upstream value… and learn
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Co-Investment & Partnership
Opportunity Volumes Status
Fib
re s
up
ply
Pro
du
ct
qu
ali
ty
an
d c
ert
ific
ati
on
Ex
po
rt lo
gis
tic
s
Pa
rtn
er
reli
ab
ilit
y
Co
un
try
Su
pp
ly c
ha
in
len
gth
Co
-in
ve
stm
en
t
Opportunity 1 200 kt/y (2009) 600 kt/y
by 2012 with developments Due-diligence + + + + + -
Opportunity 2 ~100 - 200 kt/y from 2011 Early stage
investigations + ? ? ? - =
Opportunity 3 200 kt/y (2009 – 2015) Early stage
investigations - + + + + +
Opportunity 4 150 kt/y Discussion = + + = - +
LT
off
ta
ke
ag
ree
me
nt
Opportunity 5 > 1 mt/y, 5 – 7 years Contract
preparation + + + + + +
Opportunity 6 ~100 – 500 kt/y from 2010 Contract
preparation + + + + + -
Opportunity 7 250 kt/y from 2011+ Lead + ? ? ? = =
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Biomass supply funnel
Origination of biomass
Selection on sourcing, availability & logistics
Security of supply!
Selection on sustainability criteria
Selection on local stakeholders
Sample lab testing on chemical & physical comp.
Selection on technical applicability for stand-alone
CFB, co-firing and/or torrefaction
Selection on commercial feasibility
Integration feasibility in business modeling
Availability
Sustainability
Applicability
Affordability
Funnel and exclusion approach
to identify sustainable feedstock opportunities
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Biomass identification
Origination of biomass
Selection on sourcing, availability & logistics
Security of supply!
Selection on sustainability criteria
Selection on local stakeholders
Sample lab testing on chemical & physical comp.
Selection on technical applicability for stand-alone
CFB, co-firing and/or torrefaction
Selection on commercial feasibility
Integration feasibility in business modeling
Availability
Sustainability
Applicability
Affordability
Funnel and exclusion approach
to identify sustainable feedstock opportunities
Biomass value chain: feedstock availability
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Growing supply
Stable/Decreasing supply
Growing deficit
Biomass supply in Europe remains stable.
Significant growth from Russia, US South, South America and Africa
Location Indication overview of geographical feedstock availability
Source: Pöyry
Biomass flows & developments
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existing supply
future supply?
■ Wood pellets
■ Wood chips (fresh & recycled)
■ Agri residues
■ Potential sourcing countries
for Eastern Europe
■ Potential agri residues & wood pellet sourcing
countries for S.E. Asia demand
■ Demand: currently primarily Europe.UK, South
Korea & Japan to expand
Current biomass flows mainly based on mature production locations
with pellet export to Europe
Future flows increasingly based on lower fiber cost availability
Emerging demand and supply in S.E. Asia
Biomass Value Chain: security of supply
Agriculture
Encroaching
b(r)ush/bamboo
Energy crops
Forest /
Plantations
Inbound
logistics
Biomass
processing
Storage Outbound
logistics
Use
Agriculture
processing
Recycling
wood
Wood
processing
Pelletizing
Chipping Drying
Open air Silo
Warehouse Boat Train Truck
Residual stream
Primary stream
BIOMASS MARKET
USA & Canadian wood pellet plants as market reference
e.g. GDF SUEZ Pacific BioEnergy JV in Canada
From FOB to CIF shipment under various arrangements
e.g. Leasing contracts for dedicated vessels GDF SUEZ Ghent
for transport from Vancouver (BC- Canada)
Dedicated and co-firing plants using all types
of biomass in Europe
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Optional stream
Perspective : European utility looking for LT security of supply
The various steps in the supply chain
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Biomass identification
Origination of biomass
Selection on sourcing, availability & logistics
Security of supply!
Selection on sustainability criteria
Selection on local stakeholders
Sample lab testing on chemical & physical comp.
Selection on technical applicability for stand-alone
CFB, co-firing and/or torrefaction
Selection on commercial feasibility
Integration feasibility in business modeling
Availability
Sustainability
Applicability
Affordability
Funnel and exclusion approach
to identify sustainable feedstock opportunities
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Sustainability criteria and implementation
Principle Clarification NTA 8080
(Cramer) FSC RED UK
Belgium
(LBE) GGL
SBP
(IWPB)
1 GHG
balance
Positive CO2 balance of total
biomass supply chain (against
conventional)
2 Carbon
stocks
Production of biomass not
impacting high carbon stocks
in vegetation & soil
3 Bio-
diversity
No production of biomass at
protected or vulnerable biodiversity
4 Soil Soil (quality) is maintained
or improved
5 Water Water not exhausted and water
quality maintained or improved
6 Air Air quality is maintained
or improved
7 Social Preserve food- and local biomass
applications from unfair competition
8 Local
welfare
Production of biomass contributes
to local prosperity
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Biomass identification
Origination of biomass
Selection on sourcing, availability & logistics
Security of supply!
Selection on sustainability criteria
Selection on local stakeholders
Sample lab testing on chemical & physical comp.
Selection on technical applicability for stand-alone
CFB, co-firing and/or torrefaction
Selection on commercial feasibility
Integration feasibility in business modeling
Availability
Sustainability
Applicability
Affordability
Funnel and exclusion approach
to identify sustainable feedstock opportunities
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Biomass identification
as received
milled
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Biomass identification
Origination of biomass
Selection on sourcing, availability & logistics
Security of supply!
Selection on sustainability criteria
Selection on local stakeholders
Sample lab testing on chemical & physical comp.
Selection on technical applicability for stand-alone
CFB, co-firing and/or torrefaction
Selection on commercial feasibility
Integration feasibility in business modeling
Availability
Sustainability
Applicability
Affordability
Funnel and exclusion approach
to identify sustainable feedstock opportunities
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Biomass value chain: feedstock cost
Sustainability issues and competition make feedstock strategically
important. Diversification and certification are key.
Agri-residues
& encroaching
biomass
Woody based agri
residues
WOOD INDUSTRY RESIDUES
Logs from existing
forest mgt
Wood plantations
& specific energy
crops
LOW HIGH
Reduced (to be mitigated and managed)
To be sustained QUALITY
FEEDSTOCK COST
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Delivered cost analysis of pellets
Wood pellet price Jan 2015 ~ 9 €/GJ CIF ARA | ~ 10,5 US $/GJ | ~ 180 US $/ton
Wood chips price Jan 2015 ~ 6 €/GJ CIF ARA | ~ 7 US $/GJ
Source: Pöyry
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Examples for wood pellets use from USA & Canada
Availability
Sustainability
Applicability
Affordability
The Netherlands
500.000 ton/year (1 plant)
Belgium
1.100.000 ton/year (2 plants)
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… and for wood chips and agri 200 MW for 1 power plant in Poland
Availability
Sustainability
Applicability
Affordability
Agri Residues
300.000 ton/year
Wood chips
900.000 ton/year
Thanks for your attention
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Maarten Gnoth
Manager Business Development - Biomass Upstream
GDF SUEZ Energy Management Trading
Boulevard Simon Bolivar 34
B 1000 Brussels, Belgium
Mob +32 473 850 567
www.gdfsuez.com
www.gdfsuez-trading.com