In this latest feature on the economics and feasibility of sustainable technologies, Simon Rawlinson of Davis Langdon examines the potential for biomass energy systems, considering the adequacy of the fuel supply and the viability of various system types at different scales

01 Introduction

Biomass heating and combined heat and power (CHP) systems have become a major component of the low-carbon strategy for many projects, as they can provide a large renewable energy component at a relatively low initial cost. Work by the Carbon Trust has demonstrated that both large and small biomass systems were viable even before recent increases in gas and fuel oil prices, so it is no surprise that recent research by South Bank University into the renewables strategies of large London projects has found that 25% feature biomass or biofuel systems.

These proposals are not without risk, however. Although the technology is well established, few schemes are in operation in the UK and long-term success depends more on the effectiveness of the local supply chain than the quality of the design and installation.

02 How the biomass market works

Biomass is defined as living or recently dead biological material that can be used as an energy source. Biomass is generally used to provide heat, generate electricity or drive CHP engines. The biomass family includes biofuels, which are being specified in city centre schemes, but which provide lower energy outputs and could transfer farmland away from food production.

In the UK, much of the focus in biomass development is on the better utilisation of waste materials such as timber and the use of set-aside land for low-intensity energy crops such as willow, rather than expansion of the biofuels sector. There are a variety of drivers behind the development of a biomass strategy. In addition to carbon neutrality, another policy goal is the promotion of the UK's energy security through the development of independent energy sources. A third objective is to address energy poverty, particularly for off-grid energy users, who are most vulnerable to the effects of high long-term costs of fuel oil and bottled gas.

Biomass’ position in the zero-carbon hierarchy is a little ambiguous in that its production, transport and combustion all produce carbon emissions, albeit most is offset during a plant's growth cycle. The key to neutrality is that the growing and combustion cycles need to occur over a short period, so that combustion emissions are genuinely offset. Biomass strategy is also concerned about minimising waste and use of landfill, and the ash produced by combustion can be used as a fertiliser.

Dramatic increases in fossil fuel prices have swung considerations decisively in favour of technologies such as biomass. Research by the Carbon Trust has demonstrated that, with oil at $50 (£25) a barrel, rates of return of more than 10% could be achieved with both small and large heating installations. CHP and electricity-only schemes have more complex viability issues linked to renewable incentives, but with oil currently trading at over ($100) £50 a barrel and a plentiful supply of source material, it is argued that biomass input prices will not rise and so the sector should become increasingly competitive.

The main sources of biomass in the UK include:

  • Forestry crops, including the waste products of the tree surgery industry
  • Industrial waste, particularly timber, paper and card: timber pallets account for 30% of this waste stream by weight
  • Woody energy crops, particularly those grown through “short rotation” methods such as willow coppicing
  • Wastes and residues taken from food, agriculture and manufacturing.

Biomass is an emerging UK energy sector. Most suppliers are small and there remains a high level of commercial risk associated with finding appropriate, reliable sources of biomass. This is particularly the case for larger-scale schemes such as those proposed for Greater London, which will have sourced biomass either from multiple UK suppliers or from overseas. Many have adopted biofuels as an alternative.

The UK's only large-scale biomass CHP in Slough has a throughput of 180,000 tonnes of biomass per year. The contrast between this and the planned 1,100-tonne annual biomass capacity of BedZed, the Peabody Trust's flagship sustainable housing scheme in south London, illustrates the diversity of the UK sector and the area where major development is required – achieving scale.

The 180,000-tonne plant in Slough requires the total production of more than 20 individual suppliers – not a recipe for easy management or product consistency. However, Carbon Trust research has identified significant potential capacity in waste wood (5 million to 6 million tonnes) and short-rotation coppicing, which could create the conditions for wider adoption of small and large-scale biomass.

03 Biomass technologies

A wide range of technologies have been developed for processing various forms of biomass, including anaerobic digesters and gasifiers. However, the main biomass technology is solid fuel combustion, as a heat source, CHP unit or energy source for electricity generation.

Solid fuel units use either wood chippings or wood pellets. Wood chippings are largely unprocessed and need few material inputs, other than seasoning, chipping and transport. Wood pellets are formed from compressed sawdust. As a result they have a lower moisture content than wood chippings and consistent dimensions, so are easier to handle but are about twice as expensive.

Solid fuel burners operate in the same way as other fossil fuel-based heat sources, with the following key differences:

• Biomass heat output can be controlled but not instantaneously, so systems cannot respond to rapid load changes. Solutions to provide more flexibility include provision of peak capacity from gas-fired systems, or the use of thermal stores that capture excess heat energy during off-peak periods, enabling extended operation of the biomass system itself

• Heat output cannot be throttled back by as much as gas-fired systems, so for heat-only installations it may be necessary to have an alternative summer system for water heating, such as a solar collector

• Biomass feedstock is bulky and needs a mechanised feed system as well as extensive storage

• Biomass systems are large, and the combustion unit, feed hopper and fuel store take up substantial floor area. A large unit with an output of 500kW has a footprint of 7.5m x 2m

• Biomass systems need maintenance related to fuel deliveries, combustion efficiency, ash removal, adding to the lifetime cost

• Fuel stores need to be physically isolated from the boiler and the rest of the building in order to minimise fire risk. The fuel store needs to be sized to provide for at least 100 hours of operation, which is approximately 100m3 for a 500kW boiler. The space taken up by storage and delivery access may compromise other aspects of site planning n Fire-protection measures include anti-blowback arrangements on conveyors and fire dampers, together with the specification of elements such as flues for higher operating temperatures

• Collocation of the fuel source and burner at ground level require larger, free-standing flues.

As a result of these issues, which drive up initial costs, affect development efficiency and add to management overheads, take-up of biomass has initially been mostly at the small-scale, heat-only end of the market, based on locally sourced feedstock. In such systems the initial cost premium of the biomass boiler can be offset against long-term savings in fuel costs.

04 Sourcing biomass

Compared with solar or wind power installations, the initial costs of biomass systems are low, the technology is well established and energy output is dependable. As a result, the real challenge for successful operation of a biomass system is associated with the reliable sourcing of feedstock.

Heat-only systems themselves cost between £150 and £750 per kW (excluding costs of storage), depending on scale and technology adopted. This compares with a typical cost of £50 to £300 per kW for a gas-fired boiler – which does not require further investment in fuel or thermal storage bunkers.

As a high proportion of lifetime cost is associated with the operation of a system, availability of good-quality, locally sourced feedstock is essential for long-term viability – particularly in areas where incentivisation through policies like the Merton rule is driving up demand.

Research funded by BioRegional in connection with medium-scale biomass systems in the South-east shows that considerable feedstock is already in the system but that far more is required to respond to emerging requirements.

The researchers estimate that the existing biomass resource within 25km of London totals 330,000 tonnes a year, sourced from waste wood, energy crops and forestry (tree-surgery) byproducts. However, they calculate that a new, 2,000-unit low-energy residential system would require 35,000 tonnes a year. This means that London’s total biomass would have the potential to support the equivalent heating load of just 20,000 homes.

Fortunately, the scale of the UK’s untapped resource is considerable, with 5 million to 6 million tonnes of waste wood going to landfill annually, and 680,000ha of set-aside land that could be used for energy crops without affecting agricultural output.

Based on these figures, it is estimated that 15% of the UK’s building-related energy load could be supported without recourse to imported material. However, the supply chain is fragmented in terms of producers, processors and distributors – presenting potential biomass users with a range of complexities that gas users simply do not need to worry about. These include:

• Ensuring quality. Guaranteeing biomass quality is important for the assurance of performance and reliability. Variation in moisture content affects combustion, while inconsistent woodchip size or differences in sawdust content can result in malfunction. The presence of contaminants in waste wood causes problems too. High-profile schemes including the 180,000-tonne generator in Slough have had to shut down because of variations in fuel quality. Use of pellets reduces this risk, but they are more expensive and require more energy for processing and transport

Functioning markets. The scale of trade in biomass compares unfavourably with gas or oil, in that there are no standard contracts, fixed-price deals or opportunities for hedging which enable major users to manage their energy cost risk

Security of supply. The potential for competing uses could lead to price inflation. Biofuels carry the greatest such risk, but many biomass streams have alternative uses. Lack of capacity in the marketplace is another security issue, with no mechanism to encourage strategic stockpiling for improved response to crop failure or fluctuations in demand

Installation and maintenance infrastructure. The different technologies used in biomass systems creates maintenance requirements not yet met by a readily available pool of skilled system engineers.

05 Optimum uses of biomass technology

Biomass is a high-grade, locally available source of energy that can be used at a range of scales to support domestic and commercial use. Following increases in fossil fuel prices, one of the main barriers to adoption is, now, the capability of the supply chain.

The Carbon Trust’s biomass sector review, completed before the large energy price rises in 2007, drew the following key conclusions about the most effective application of the technologies:

  • Returns on CHP and electricity-generating systems depend heavily on government incentives such as renewable obligations certificates. Under the present arrangements, large CHP systems provide the best returns
  • Heat-only systems are very responsive to changes in fuel prices, with systems at all scales providing returns in excess of 10% when oil prices are at $50 (£25) a barrel
  • Small-scale heat-only plants produce the best returns, because the cost of the displaced fuel (typically fuel oil) is more expensive
  • Small-scale electricity and large-scale heat-only installations produce very poor returns
  • There is little difference in the impact of fuel type on the returns generated by projects.

The study also concluded that heat installations at all scales had the greatest potential for carbon saving, based on a finite supply of biomass. This is because heat-generating processes have the greatest efficiency and, in the case of small-scale systems in isolated, off-grid dwellings, displace fuels such as oil that have the greatest carbon intensity. Ninety percent of the UK’s existing biomass resource of 5.6m tonnes per annum could be used in displacing carbon-intensive off-grid heating, saving 2.5m tonnes of carbon emissions.

Small-scale systems are well established in Europe and the existing local supply chain suits the demand pattern. In addition, since the target market is in rural, off-grid locations, affected dwellings are less likely to suffer space constraints related to storage. As fuel costs continue to rise, the benefits of avoiding fuel poverty, combined with the effective reduction of carbon emissions from existing buildings, mean smaller systems are likely to offer the best mid-term use of the existing biomass supply base, with large-scale systems being developed as the supply chain matures and expands.

Large-scale systems also offer the opportunity to generate significant returns, but the barriers that developers or operators face are significant, particularly if there is an electricity supply component, which requires a supply agreement. However, while developers are required to deliver renewable energy on site, biomass in the form of biofuels, has the great attraction of being able to provide a scale of renewable energy generation that other systems such as ground source heating or photovoltaics simply cannot compete with.

Whether biomass plant should be used on commercial schemes in urban locations is potentially a policy issue. Sizing of both CHP and heat-only systems should be determined by the heat load, which for city-centre schemes may not be that large - affecting the potential for the CHP component. The costs of a district heating element on these schemes may also be prohibitively high, and considerations of biomass transport and storage also make it harder to get city-centre schemes to stack up.

It may be a more appropriate policy to encourage industrial users or large scale regenerators to take first call on the expanding biomass resource, rather than commercial schemes. The launch of a 45MW biomass power station in Scotland illustrates this trend. Data shows that 50% of the market potential for industrial applications of CHP could utilise 100% of the UK’s available biomass resource. The issues that city-centre biomass schemes face in connection with storage, transport, emissions and supply chain management might be better addressed by industrial users or their energy suppliers in low-cost locations rather than by developers in prime city-centre sites.