Solid biomass (e.g. wood pellets, sawdust, etc.) accounted for 58% of EU electricity generation from biomass in 2015.
40% of this biomass was burned in coal power plants.
- 23% co-firing with coal (20.9TWh): 152 operational coal power plants and CHP units co-fired biomass with at least 20% coal.
- 17% in converted coal power plants (15.6TWh): 7 coal power plants have been converted to run purely on biomass.
- Across a number of EU member states, biomass subsidies are directly and indirectly supporting coal generation. The following analysis and graphics expose where and why this is happening.
The 159 large-scale installations burning biomass in the EU are mapped in the graphic below (152 co-fired and 7 conversions).
The map also highlights that the majority of installations co-firing biomass are located in central and eastern Europe, and the majority of conversions are in western Europe.
Denmark, Finland & Poland get the largest proportion of their total electricity production from burning biomass in coal plants: 8% in Denmark, 6% in Finland and 5% in Poland.
Co-firing Biomass & Coal
Key finding: 23% of solid biomass used for electricity generation is co-fired with coal.
Poland, Finland, Denmark, the Czech Republic and Hungary accounted for over 88% of the co-fired biomass in Europe in 2015. Whilst this is not a new phenomenon, biomass co-fired in these countries has grown by 85% since 2008.
It is a very different story in the rest of the EU – biomass co-firing is less than a third of what it was in 2008, with sharp declines in the Netherlands, the UK, Belgium & Sweden. However, this is not the full picture, as these declines have been more than offset by the large increase in generation from biomass in converted coal plants (more on this later).
In 2015 Poland generated 8.3TWh from biomass co-fired in coal power plants. By far the largest co-firer is Polaniec power station (2.3TWh) in Southern Poland, which has increased its biomass burn steadily over the last 10 years and converted one of its eight coal units to fully fire biomass in 2012.
Until 2016, the main renewable support scheme was a renewable quota obligation, which was combined with a certificate trading scheme. Biomass co-firing installations were eligible to obtain a full certificate per MWh generated from biomass. These certificates could then be traded on a specialised market. This led to a very rapid increase in biomass co-firing in Poland’s coal power plants, however, over time, an oversupply of green certificates began to accumulate, by 2016 it was over 20TWh. Prices fell precipitously from approximately 280 PLN/MWh (€65) in 2010 to sub 50 PLN/MWh (€11.5) in 2017.
The Res Act of 2016 replaced the quota obligation and certificate trading scheme with a tender process as the main renewable energy incentive mechanism. However, the RES Act confirmed that generators on the certificate scheme would still be eligible to obtain a full certificate per MWh generated from biomass provided that at least 15% of the input fuel was biomass. 10 power stations accounting for 10% of Poland’s coal generation in 2015 met this 15% biomass threshold, these are shown in the chart below:
Under the new tender process, co-firing installations that achieve the same 15% biomass threshold are eligible to bid for support. This raises the prospect that coal stations not previously involved in the certificate scheme could be granted subsidies to co-fire biomass with coal for the full 15-year period stipulated by the Res Act, guaranteeing their lifetimes beyond the 2030s!
(It is possible for a co-firing installation that meets the 15% biomass threshold that has already received support under the certificate scheme to move over to the auction scheme, but for the existing installations the 15-year period of support under the new scheme is counted from the actual date of the first generation of electricity from biomass.)
In 2015 Finland generated 5.5TWh from co-fired biomass, the majority of this biomass was co-fired with peat, a dirtier fuel than hard coal or even lignite. Peat has a low heating value with high nitrogren and moisture content, and the burning, draining and degradation of peatland releases vast quantities of CO2.
Finland’s biomass plants are numerous but relatively small, with no plant generating more than 0.5TWh from co-fired biomass in 2015. They are mostly CHP units also providing local heat.
Biomass generation is supported by a feed-in tariff . For wood fuel power plants this comprises the target price (€83.50/MWh) minus the three-month mean market price of electricity. The feed-in tariff payable to timber chip power plants is determined according to the three-month mean price of emission rights and the energy tax on peat. Finnish power plants identified as co-firing (using Sandbag’s definitions & 2015’s fuel mix data) have received approximately €140 million in subsidy support since 2011.
Finland plans to introduce a law next year to phase-out coal by 2030. This transition will be hindered if subsidies continue to support the co-firing of biomass with fossil fuels rather than incentivising alternatives to coal.
Currently, 70% of Finland’s coal or peat generation is in power plants co-fired with at least 10% biomass.
In Denmark, 2.5TWh was generated from co-fired biomass in 2015, the vast majority of which took place in the Amager, Avedøre & Fyn power stations. All of these stations are split into units that burn 100% biomass and units that burn 100% coal, however, they remain classed as co-firing due to the likely cross subsidy the coal units receive from their biomass companions. These power stations emitted a combined 2.5MT of CO2 in 2015.
Electricity generation from biomass is supported in Denmark through a premium tariff system based on bonus payments. The operators usually receive a variable bonus, which is paid on top of the market price. Existing and new biomass installations are currently paid a price supplement of DKK 150/MWh, approximately €20/MWh, this is available to both co-firing and biomass-only installations. There is also an important indirect subsidy – the use of biomass is tax-free in Denmark.
The Czech Republic
Europe’s fourth-largest co-firer, the Czech Republic, generated 1.3TWh from co-fired biomass in 2015. This represents a 55% increase on 2008’s levels. The largest facility is CEZ group’s Hodonín power station (0.3TWh in 2015), after starting co-firing in 2008, CEZ group converted one of the units to burn pure biomass at the end of 2009, the other unit continues to burn lignite.
Hungary generated 0.8TWh from co-fired biomass in 2015, the majority of which was burnt at RWE’s 950W Mátrai Erőmű lignite power plant which co-fires approximately 10% biomass. This makes it the largest supplier of ostensibly “renewable” energy in the country. The plant emitted 6.4MT of CO2 in 2015.
Rest of EU
Electricity generation from co-fired biomass has fallen sharply in the rest of the EU in recent years. Below we highlight the key drivers:
- The Netherlands – closure of Gelderland under the Energieakkoord and the reduction in biomass co-firing at Amer in 2014 following a fire.
- Belgium – closure of Centrale Ruien and the full conversion of Rodenhuize.
- The UK – changing subsidy regime, reducing co-firing subsidies dramatically but keeping them high for dedicated installations, including coal plant conversions.
- Sweden – reduction of biomass co-fired at Värtaverket and coal burn at Åbyverket falling below our 20% threshold.
Despite the recent declines we are likely to see a revival of co-firing in the rest of the EU, driven by growth in The Netherlands. RWE has announced this August that it plans to retrofit their Amer 9 and Eemshaven hard coal plants to co-fire up to 80% and 15% biomass respectively. This is after the approval by the Dutch state of subsidies of up to €2.6 billion for the two plants which will be paid out over a period of 8 years.
Additionally – Uniper secured subsidies in the autumn 2016 SDE+ round to co-fire up to 15% biomass at its 1.1GW Maasvlakte 3 unit in Rotterdam. Engie was awarded just under €300m for co-firing at its Rotterdam coal plant in the spring 2016 SDE+ round.
*Update* – on the 10th of October the coalition agreement for the new Dutch government was presented. It plans to end biomass co-firing subsides by 2024. However, it is unclear as yet how this will impact the investment decisions for the coal plants mentioned above.
Coal to Biomass Conversions
Key finding: Seven converted coal stations account for 17% of electricity generation from solid biomass.
The converted coal plants at Drax (UK), Ironbridge (UK) and Rodenhuize (BE) were the first, third and fourth largest burners of biomass in large combustion plants in 2015 respectively.
Since some of the conversions were not yet operational by 2015, we have examined the total current conversion pipeline – the results are shown in the table below:
As you can see from the table, 2016 saw the addition of a further 3 units of converted coal plant to the European fleet, all in Denmark. The conversion of Lynemouth is expected by the end of 2017, beyond that projects look more uncertain.
The chart below outlines the past and projected generation from biomass burnt in converted coal plants. Here we have assumed that the Langerlo project is dead but all other projects materialise – we have chosen 2020 for the Drax Unit 4 conversion for illustrative purposes.
What needs to change?
Sandbag's recommendations on biomass use for energy generation
The EU should immediately move to outlaw biomass subsidies for co-firing with coal to remove this direct fossil-fuel subsidy.
This can be achieved through an amendment to article 26, paragraph 8 of the European Commission’s proposal for a revised Renewable Energy Directive. Amendments to this effect have been tabled and are currently under discussion. The ENVI committee is due to vote on the amended proposal on the 23rd of October 2017.
We are concerned at the continued use of subsidies to support the conversion of old coal plants to burn biomass. The main reasons are as follows:
- Converted coal plants are likely to have lower efficiencies than dedicated biomass units, their scale makes sourcing biomass locally and sustainably challenging.
- Subsidies can also financially support coal units on the same site, prolonging their lifetime and ironically leading to higher coal burn and emissions.
- Converted coal boilers also show worse environmental performance on other air pollutants such as NOx and Dust, which can be worsened with higher biomass use.
Without safeguards put in place, the conversion of a coal unit to burn biomass could become a “quick-fix” for old and inefficient coal units. Biomass is a scarce resource and should be utilised in the most efficient manner. Therefore we support the European Commission’s view in the revised Renewable Energy Directive that biomass subsidies should only be available to power plants applying high efficient cogeneration technology as defined under Article 2(34) of Directive 2012/27/EU – in fact, we would go a step further and propose that a minimum net fuel utilisation efficiency threshold of 85% should be introduced to qualify for biomass subsidies.
We think it is important to explicitly state the required efficiency (85%) due to the weakness of the definition of high efficiency cogeneration under Article 2(34) of Directive 2012/27/EU – which only requires a 10% primary energy saving as compared with the references for separate production of heat and electricity.
In July 2017, the European Environmental Agency published 2015 data for every large combustion plant in Europe. This data included the amount of fuel burnt in each installation larger than 50MWh, split by “biomass”, “gas”, and “solid fuel”, which can include coal, lignite and peat. For the purposes of this report, we will henceforth refer to “solid fuel” as coal, however, it is worth emphasising that environmental impacts will vary by country depending on the particular fuel used, for example, the co-firing of biomass with peat in Finland is a particular problem.
From this data set, we extracted two classes of plant as follows:
- Installations that burn biomass for electricity generation and burn at least 20% coal are classified as co-firing.
- Former coal power plants that were converted to burn purely biomass are classified as converted.
An installation is only flagged as converted if there is no coal burnt at the plant. This means there are a handful of units that have been converted to 100% biomass, but appear in this report as co-firing, because they are likely acting to subsidise continued coal generation. The exception to this rule is Drax which we have included as a conversion due to the low load factor of its coal units, their likely closure by 2025 under the UK’s coal phase-out commitment and a less generous subsidy regime for co-firing vs. dedicated biomass.
To align with Eurostat data on electricity generation we have removed plants tagged as district heating or iron & steel. These categories only account for a small proportion of biomass burnt in large combustion plants (4% in 2015).
We then converted the gigajoule fuel input data into terawatt-hours of electricity generation. To do this, we needed to make some assumptions on efficiency: 37.5% for biomass conversions and 35% for co-firing (in line with the average 1970’s coal power plant).
Our findings focus on solid biomass which accounts for 58% of EU electricity generation from biomass. The remainder is generated from biogas (39%) and liquid biofuels (3%).
- See https://www.iea.org/etp/etp2017/
- See https://www.eea.europa.eu/data-and-maps/data/lcp-3
- Eurostat Gross Electricity Production – http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_105a&lang=en
- Towarzystwie Obrotu Energią – http://www.toe.pl/pl/wybrane-dokumenty/rok-2016?download=1462:electricity-and-gas-market-in-poland-status-on-31-march-2016-toe-report.
- Finnish Energy Authority – http://www.energiavirasto.fi/en/web/energy-authority/feed-in-tariff
- See https://tuotantotuki.emvi.fi/Installations
- See EU-EUTL data https://www.eea.europa.eu/data-and-maps/data/european-union-emissions-trading-scheme-2
- Danish Energy Agency – https://ens.dk/sites/ens.dk/files/contents/service/file/memo_on_the_danish_support_scheme_for_electricity_generation_based_on_re.pdf
- See EU-EUTL data https://www.eea.europa.eu/data-and-maps/data/european-union-emissions-trading-scheme-2
- See page 9 of their H1-2017 results. http://www.rwe.com/web/cms/mediablob/en/3798674/data/105818/6/rwe/investor-relations/RWE-interim-report-H1-2017.pdf
- Courtesy of Argus Media – http://view.argusmedia.com/rs/584-BUW-606/images/Outlook%20for%20biomass%20co-firing%20UPDATE.pdf