BIOMASS S UPPLY CHAIN ASSESSMENT

1. BIOMASS SUPPLY CHAIN ASSESSMENT CLAUDIA BASSANO Renewable Sources and Innovative Energetic Cycles Supply chain assessment C.R. CASACCIA – Via Anguillarese, 301 TEL. + 39 06 30484042 00060 S. MARIA DI GALERIA FAX +39 06 30486486 ROMA E-Mail: claudia.bassano@alice.it

2. CONTENTS Biomass supply chain assessment • Advantages and disadvantages from a sustainable energy use of biomass • Planning bio energy chain • Biomass Resource Assessment • Supply chain assessment • Analysis of biomass supply chain cost

3. Advantages from a sustainable energy use of biomass • Forestall biomass • Protecting the wood land • Forest management • Less firewood hazard • Agricoltural biomass • Alternative to disposal problem since burning in the field is being discouraged • Land set aside • Avoid the land abandon

4. Advantages from a sustainable energy use of biomass • Environmental benefits • reduction in carbon dioxide emissions through the carbon sequestrationby the trees • Economic benefits • Reduces dependence on foreign oil • Energy use of biomass offers an opportunity to use local and regional available renewable energy sources • Improves rural economy and jobs

5. Disadvantages from a sustainable energy use of biomass Barriers to bioenergy expansion • Higher costs of bioenergy technologies and resources • not homogenous biomass geographic distribution • administrative and legislative bottlenecks • not sustainable use of forestall biomass without any plan and management may cause deforestation and adverse impact to the environment. • the project success of biomass utilization need interdisciplinary of several technical and scientifically skills

6. Disadvantages from a sustainable energy use of biomass Overcoming these barriers • improving the cost-effectiveness of conversion technologies; • developing and implementing modern, integrated bioenergy systems • developing dedicated energy crops productivity • establishing bioenergy markets and developing bioenergy logistics • valuing of the environmental benefits for society: e.g. on carbon balance.

7. BIOMASS TO ENERGY Biomass has several advantage but: competitive fuel It’s necessary planning Barriers to the promotion of biomass energy use. The lack of an efficient and cost-effective supply chain system (harvesting, transportation, and delivery of biomass resources) If each step of bioenergy chain is not optimised the final cost of produced energy may not result to be competitive in comparison with energy from traditional fossil fuel

8. BIOMASS TO ENERGY Supply chain complexity Planning

9. BIOMASS TO ENERGY Complexity is not only a problem of choose the correct logistic chain for your specific situation, but there are other problem like: • low territorial density, his not homogenous geographical distribution • seasonality , it’s necessary optimise the storageto have a constant feed to the plant of energy conversion • choose of correct energy conversion technique adapted to the territorial context The project success of biomass utilization need interdisciplinary of several technical and scientifically skills

10. Planning biomass supply chain The goal of a biomass resource assessment and of a supply chain is to promote the cost-effective, sustainable use of biomass energy. Assessment of biomass use Objectives to follow • Biomass resource assessment • Identify how much biomass, how much biomass is available, where it is located, its characteristics and the cost • Supply chain system assessment • Establish a supply chain to deliver biomass to final use in a efficiently and economy way

11. Planning biomass supply chain • 3. Best locations for a potential biomass conversion to energy site • Correct plant dimension must be taken into account of the distribution of the demand and the supply in the area • Logistics chains are established to link energy demand and biomass supply 4. Evaluate the economical and environmental impacts of biomass use;

12. Planning biomass supply chain 5.Analyses the different biomass energy technologies, choose the better technologies for the local necessity

13. Biomass Resource Assessment It’s an important and critical point of a sustainable exploitation of biomass sources Biomass resource assessment consist to estimate the quantity of material necessary, taking into account technical and environmental constraints, and evaluate the quantity of material that could be recovered and made "available" for biomass energy uses. • Knowing the quantityit’s important because the success of bioenergy is critically dependent on having a large supply of low cost, high quality biomass, • This allow to design correctly the dimension plant on the local resource

14. Biomass Resource Assessment • Knowing the type and the quality of biomass it’s important for choose the correct technology of energy conversion • Woody biomass thermo chemical conversion • Cellulose biomass (sugar cane, maize) conversion on ethanol • Oil biomass (canola oil, palm oil) conversion on biodiesel • Knowing the geographic distribution: not homogenous biomass distribution in the territory • It’s necessary planning correctly the supply chain so to use only the economically biomass recoverable Resource assessments require making a lot of assumptions

15. Biomass Resource Assessment There is always a difference between the existing total biomass supply and the economically biomass “available” supply. Theoretical potential: the theoretical maximum biomass potential Technical potential: the potential that is limited by the technology of harvesting used and the natural circumstances. Economical potential: the technical potential that can be produced at economically profitable levels. Ecological potential: the potential that takes into account ecological criteria, e.g. loss of biodiversity or soil erosion.

16. Biomass Resource Assessment How to calculate the biomass yearly obtainable Forest Wood Residues Information on the forest status, their extension (ha), location and type Source : local statistical institute, the local institution, the Fao and other sources. • Theoretical potentiality of forestall biomass • To calculate the wood availability in order to avoid the forestresource consumption, it will be necessary to yearly cutting a biomass quantity less than the quantity that the forest itself is able to regenerate yearly, this value depend on forest local condition. • In Italy for example it is possible suppose the fallowing forest harvesting that allow not altering wood natural physiology: • a percentage of cutting area of 2 % yearly for conifer forest trees • a percentage of cutting area of 4 % yearly for coppice forest trees • This harvesting correspond to a turn of 50 years (2%) and 25 years (4%)

17. Biomass Resource Assessment • TechnicalForestall biomass available • Accessibility: reality of the territory and his accessibility for barrier like: slope land or not easy road inside the wood, this quantity of biomass can’t be harvested. • Protect law • To evaluate the others uses of wood from forest industry Residue yield sets the quantity of biomass yearly obtainable for one hectare of forest Forest residue yield = 1,5-2 t d.m./ha/year

18. Biomass Resource Assessment Example: technical forestall biomass available 6000 h/year

19. Biomass Resource Assessment Agricultural Residues yearly available The residues coefficient is the ratio of the dry weight of the residue to the weight of the harvested crop at field moisture. • Use of residues: • fertilizer to insure the long-term productivity of the land • the local use in the farm Available No-till farming for corn

20. Biomass Resource Assessment Production and Consumption of Crop Residues in Asia (1995) Source: AGRICULTURAL AND FOREST RESIDUES - GENERATION, UTILIZATION AND AVAILABILITY1Regional Consultation on Modern Applications of Biomass Energy, 6-10 January 1997, Kuala Lumpur, Malaysia

21. Biomass Resource Assessment Yeld energy crops Sources: McKendry (2002), Venturi and Venturi (2003).

22. Availability of bioenergy in Sardegna (Italy region)

23. Availability of bioenergy in Europe Mtoe/yr *: It is assumed that 50% of the set-aside area is available for solid energy crops and 25% each for liquid bio-fuel (bio-ethanol and biodiesel) crops Source:BTG, 2004

24. Supply chain assessment The supply biomass chain is constituted by a sequence of activity that from biomass resource lead to energy conversion. This activity are: Harvesting transportation Storage Pre-processing transportation Energy conversion Careful supply chain planning and logistics management will be of central importance to the success of the biomass industry

25. Supply chain assessment Preprocessing

26. Supply chain assessment Harvesting and collection • first step in the feedstock supply chain: • cost-effective manner. • efficiency of collection machinery • sustainability ( soil compaction, erosion control) • technical constraints • mechanised methods do not exist or are not available in an economic way to collect forestall or agricultural biomass

27. Supply chain assessment

28. Preprocessing • Biomass harvested • low energy density; • high moisture content; • size, shape, density variables improved fuel quality • Preprocessing treatments • size reduction, • cleaning, • separating and sorting, • mixing/blending, • controlling moisture, • densifying • chemically or biochemically treating Biofuels Chips Pellets Briquettes

29. Preprocessing Chipping and chip load Chippers are used to reduce the size of wood residues for ease of handling and to fit boiler feed systems. boilers require relatively uniform fuel load • wood-chips • 4mm-10mm thick • 15-20mm in length and width

30. Preprocessing Chipping at road side landing or at the power plant? ? • In the roadside chipping: dependent on each other, ”hot chain” • Chipping at a plant: independent of each other • Chipping at a plant large plants, investment cost is high. • Road side landing chipping system: small plants

31. Supply chain assessment Preprocessing

32. Storage The storage systems should be integrate with other elements of the feedstock supply chain • Biomass is seasonal: storage is necessary to assure a constant load during the year to the energy conversion unit. • Storage is in the forest, at a wood processing area and at the energy conversion plant • Biomass has a low density (300-500 kg/m3 apparent density)big storage volumes • Processing methods and yields can be altered by compositional and other changes that occur in feedstock during storage

33. Storage • The size of the storage facility depends on type of biomass delivered. • Storage may be indoor or outdoor • outdoor storage • applied to dry the biomass during the winter from mc 50% to about 30 %; no costs • biochemical and physical modifications to thebiomass, biomass may decompose

34. Supply chain assessment Transport direct from collection to energy conversion

35. transportation Biomass geographical dispersion Transportation is a crucial element The transport cost may became the higher cost in the total delivered cost Maximum supplying distance between the point of harvesting and the point of the energy conversion plan. • biomass low energy density; • fuel high transport costs; • transportations infrastructures availables between the points of biomass collection and transformation point; • environmental impacts from the transportation. Economically shortest transport distance lead to a supply area limited

36. transportation Economically shortest transport distance lead to a supply area limited Maximum supply distance: Italy 50 km radius U.S.A 100 mile radius biomass that has lowest transport cost The analysis of the total biomass which it’s possible delivered to the energy conversion plant allow to fix a range of plant dimension plant Power plant size: Depends on local supply Depends on local energy demand Small scale 10 MW

37. Supply chain assessment Conclusion: careful supply chain planning and logistics management will be of central importance to the success of the biomass industry. Because design an efficient and cost-effective supply chain allows to biomass to be competitor with other conventional fuels(coal, natural gas, oil)

38. ANALYSIS OF LOGISTICS COST • Design an efficient and cost-effective supply chain so to be competitive with other conventional fuel. Biomass compete on cost with fuel oil, liquid petroleum gas (LPG) and electrical heating that in many country may be cheaper than wood fuel • Logistics costs (transport, storage and handling) are shown to represent a significant proportion of total delivered cost in biomass supply. • Feedstock cost constitutes about 35-50% of the total production cost of ethanol or power. • The actual percentage depends upon biomass species, yield, location, climate, local economy, and the type of systems used for harvesting, gathering and packaging, processing, storing, and transporting of biomass as a feedstock.

39. ANALYSIS OF LOGISTICS COSTS Scale effect in chipping Norwegian market, pulpwood pine, chipping in a terminal. (moisture 30- 40 % ) Source: “Bioenergy logistics chain cost structure and development potential” byEnergidata ASTransportøkonomisk institutt (TØI)andKEMA Consulting- 01 November 2005

40. ANALYSIS OF LOGISTICS COST cost of delivery: 200-230 €/ton on 2005 The cost structure for production and delivery of pellets, for small scale application, in the Norwegian market Source: “Bioenergy logistics chain cost structure and development potential” byEnergidata ASTransportøkonomisk institutt (TØI)andKEMA Consulting- 01 November 2005

41. ANALYSIS OF LOGISTICS COST • The cost of producing biomass fuel is dependent on: • the type of biomass (humidity), • the amount of pre-treatment necessary to convert it to a fuel, • distance to the energy plant, • supply and demand for fuels in the market place. • Factors that may lead to an higher cost: • Biomass fuel is low-density and non-homogeneous and has a small unit size (e.g., individual wood chips are small). Consequently, fuel is costly to collect, process, and transport to power plant. • Biomass-to-energy power plant are much smaller than conventional fossil fuel power plants and therefore cannot produce electricity as cost-effectively as the fossil plants. They don’t benefit of the scale effect

42. FUEL PRICE Fuel prices in Europe 2002/2003 €/MWh Pelets prices Chips prices Source Eubionet

43. ANALYSIS OF COSTS PROBLEMS It is difficult to develop efficient chains if the sector consist of many small parties, each operating within only a small part of the chain. This might result in a logistics system which is not optimal, with too many transaction links and consequently high costs. On the other hand, too few players may lead to a lack of competition and monopoly tendencies. • The cost of power from conventional biomass combustion is higher than the power generated from fossil fuels • Incentive and Funding • Supporting Policies

44. 50 Cost max Cost min CostCO2 40 20 18 16 14 12 10 8 6 4 2 0 Waste Wind Oil comb Coal Nuclear CCGT Biomass Geothermal Mini Hydro photovoltaic Solar thermodynamic Cost of electrical power (€/kWh) c€/kWhe Source: Enea

45. BIOMASS SUPPLY CHAIN ASSESSMENT Conclusion It’s necessary planning a bioenergy chain If each step of bioenergy chain is not optimised the final cost of produced energy may not result to be competitive in comparison with energy from traditional fossil fuel The goal of a biomass resource assessment and of a supply chain is to promote the cost-effective, sustainable use of biomass energy.

46. Biomass resources characterization and biofuels Thank you for your attention! Claudia Bassano claudia.bassano@alice.it