Biomass power costs recently published by IRENA showed how critical could be to obtain reductions in feedstock costs and footprint at power station gate. We suggest ways for success.

Recent IRENA reports have showed the world that biomass based renewable power costs could be easily lower that conventional fossil or “not renewable” energy costs.  But they also showed us that fuel costs (biomass in this case) are critical to obtain low power costs using most “mature” technologies at commercial scale. Unfortunately most research has taken place in devloped countries where feedstock is not always largely available and labor, energy and land use costs are always very high (e.g. Europe, USA, etc.).

Michael Taylor, IRENA renewable energy cost status and outlook analyst, explained that the organization has a mandate from its members to accelerate the deployment of all types of renewable energy, and as part of this mandate, IRENA’s Innovation and Technology Centre has a specific program that focuses on the costs and performance of renewable technologies.  “The rapid growth in installed capacity of renewable energy technologies, coupled with technology improvements and associated cost reductions, means that even data from one or two years ago can significantly overestimate the cost of electricity from these technologies,” Taylor says.

BIOMASS FEEDSTOCK: what are reasonable feedstock costs?

We have a different scenarios to consider. A very cheap land often is a best solution if productivities and right management can match a “win-win” story.

Irena published some costs from US in figure below.

The truth is that those costs could be oftten lower, especially in developing countries and when using low cost biomass on marginal lands.

While IRENA’s report recognizes that there are many possible influences on cost, its modeling is based off of three key drivers: equipment cost from factory gate to site delivery; total installed project cost, including fixed financing costs; and the levelized cost of electricity (LCOE), a calculation of the cost of generating electricity at the point of connection to a load or electricity grid.

BIOMASS RESIDUES AND ENERGY CROPS (FEEDSTOCK) COSTS 

Companies looking for profitable business development, require to minimize feedstock costs. However this is difficult because faming developers, experts in logistic and companies offering low cost biomass fuel products are often not available where power stations are planned. Choosing a reliable supplier requires understanding of local ways and farming techniques that can be introduced to a management unit or Joint Venture dedicated to secure feedstock at a relatively low cost.

 It is our understanding that  low feedstock costs produced by dedicated energy crops having a “multi-feedstock approach” could become a key issue for successful biobased industrial projects.

Potential cost reduction strategies 

• Residues available should be studied carefully to minimize their collection costs at reginal level. Logistics and harvesting operations plus contracts require always to be revised
• Dedicated plantations might offer very low cost. Linkages between potential productivity, lease land costs, water/soil interactions, are all critical issues while defining operational expenses and capital expense of any project.
• Reducing supply peaks can determine lower costs in long term supply and power productivities. Production and storage measures are always required.
• Not always highest yields determine lowest average fuel costs. There are several ways to reduce establishment and harvest management costs in higher acreage and consider more than one species to get low fuel biomass costs and uniform and stable supply chains.
• Outgrowers and local farmers located close to the power station often produce very good opportunities to minimize biomass supply costs
• Self production olf bio fertilizers may represent an way to reduce purchase costs.
• Improved logistics see here.
• Improve drying process when required and explore carefully all post harvest, storage pre-treatment (densification) measures. There are even some cases in which best results are obtained by combinations of two raw materials (bagassa+grass silage at 50% moisture or woody chips + energy cane).
• Reduce distances from biomass fuel origin to power destination. This might require several measures including selection of suitable areas to produce low establishment costs for energy crops or adequate scale choices.

IRENA data collection for the cost analysis series included acquiring information from industry associations, project developers, development banks, consultancies, market research data, government reports and auction data.   Full report can be downloaded here