Technology Advancements on Wood Pellets Cost Reduction and Quality Improvement

Conventional versus Advanced High Moisture Pelleting

Energy Consumption of Unit Operations duringConventional Pelleting

Advantages of Advanced High Moisture Pelleting

Biomass is pelleted at moistures >20% (w.b.).

Biomass loses moisture (5-10%, w.b.) due to frictional heat developed in the die

▪ Eliminates the rotary drying step and saves capital cost and energy.

Drying is optional (pellets can be dried only when highly durable and aerobically stable pellets are needed) and low-cost dryers such as grain or belt dryers which operate at low temperature (60–80ºC) ‒ No VOC emissions (VOC emitted results in formation of photo-oxidants which are harmful for humans if they inhale and also has detrimental effect on photosynthesis causing damage to forests and crops). ‒ Reduced risk of fire and explosion ‒ Low quality heat can be used for drying ‒ Better control over the product moisture ‒ Less capital intensive

Techno-economic Analysis

 

Fuel cost is significantly lower for High moisture pelleting process (HMPP) compared to conventional pelleting process (CPP) mainly due replacing rotary dryer with grain or belt dryer.

Lower capital costs using HMPP resulted in lower interest and depreciation.

Repairs, maintenance, insurance and taxes are also lower for HMPP process.

Pellets Quality Improvements via Advanced Characterization and Process Optimization

Pellet characterization studies CT-scan: X-ray CT provides 3D non-destructive images of pellets and enables spatial and morphological characterization without destroying pellet. Helps to understand the agglomerate size and surface area of the pellet particles.

Focused Ion Beam Tomography: 3D analysis of the pellets. Helps to understand the material flow in the pellet die and in turn the microstructure formation.

Energy-dispersive X-ray spectroscopy (EDS) Mapping: Quantification of carbon, silicon and oxygen distribution in the pellet.

 

2.Current market status

 

• Wood pellet production has developed rapidly in the past two decades

• In particular in Europe and North America

• But in the past 5 years, growth has shifted towards Asia, in particular China.

• Production in South America and Oceania remains small.

• Agro-pellet production might ramp up in the future (e.g. China, Brazil)

 

World pellet production and trade

Wood pellet analysis in literature vs actual developments

Supply chain cost estimates

Contract and spot prices of North American wood pellets delivered to the EU

Summary

 

3▪ Wood pellet markets have shown continues growth in the past two decades from 1.6 Mt in 2000 to 55 Mt in 2018

▪ Growth has shifted from the EU and North America towards Asia.

▪ The supply chain cost of pellets delivered to a port in western Europe (Rotterdam) are estimated between 99.7 US$/t and 149 US$/t

▪ Production of agro-pellets might increase in the future due to constraint wood supply (China) or new markets (Brazil, bagasse) and appear to be cost competitive for export

▪ Cost estimates are based on literature that focused on relatively small plants (up to 200 kt/a), far below industrial export capacities (up to 900 kt/a)

 

4.Market Outlook

Wood pellet prices developments and demand side considerations

Residential and industrial wood pellet price development

Demand side considerations I Further commoditization:

 

Public perception with respect to fungibility

Transparency, data availability and quality

 

▪ Improved storage possibilities → Increased fungibility (interchangeability) → Relatively low & stable European pellet price (excl. distance costs, taxes, seasonal fluctuations) → Extension of spatial consumer portfolio → Decreasing risks for suppliers → Increasing capacity utilization rates → BUT lower marginal profits

  

IEA WEO Oil, gas and coal price scenarios

 

Pellet price parity with fossil fuel prices

Table 1: Comparison between the World Energy Outlook “New Policy Scenario“ fossil fuel prices in €/GJ and the average 2016 wood pellet import price at the ARA-ports

 

• Parity in 2016 at a 60$/t_CO2

• In 2030 depending on decoupling from oil price

 

Future pellet markets Examples from emerging sectors

Future pellet demand

▪ Traditional sources of pellet demand under pressure, e.g.,

▪ Rapidly decreasing costs of wind & solar electricity

▪ Heat pumps are becoming increasingly competitive

▪What is the outlook for pellet demand in other sectors?

▪ Heavy industry?

▪ BECCS?

 

Heavy industry – steel examples

▪ Steel production 7% of global CO2 emissions

▪Blast furnace process dominates emissions (Fe2O3+3CO → 2Fe+3CO2 )

▪ Two possible routes of decarbonization: process shift or gradual reduction

 

Two routes towards zeroemission steel  

▪ Route 1: keep blast furnace process, add CCS

▪ Route 2: hydrogen direct reduction (H-DR)

 

Role for biomass in both routes

Route 1: CCS is limited to about 80% emission reduction, addition of biomass can enable 100%

Route 2: as a source of carbon needed for the conversion of iron to steel BECCS

 

▪ Combining bioenergy with carbon capture & storage -> BECCS

▪ BECCS and other negative emission technologies (NETs) likely necessary to stay within 2°

▪ Drax Power piloting BECCS based on pellets

BECCS prospects

 

Power station BECCS technology still immature

Public funding needed for scale-up & demos

How to incentivize negative emissions?