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CLOSE THIS BOOKRenewable Energy Technologies: A Review of the Status and Costs of Selected Technologies (WB, 1994, 184 p.)
Biomass Energy
VIEW THE DOCUMENTFormation of biomass
Energy from biomass
VIEW THE DOCUMENT(introduction...)
VIEW THE DOCUMENTLiquid fuels from biomass
VIEW THE DOCUMENTElectricity from biomass
VIEW THE DOCUMENTEnvironmental effects
The cost of biomass energy
VIEW THE DOCUMENT(introduction...)
VIEW THE DOCUMENTCost of liquid fuel production from biomass
VIEW THE DOCUMENTCost of electricity from biomass
VIEW THE DOCUMENTThe future of biomass energy

Renewable Energy Technologies: A Review of the Status and Costs of Selected Technologies (WB, 1994, 184 p.)

Biomass Energy


Biomass is the term used to describe all plant-derived material. It may be used to generate energy by direct combustion or by conversion to either a liquid or a gaseous fuel. Plane materials use the sun's energy to convert atmospheric carbon dioxide to sugars during photosynthesis. On combustion of the biomass, energy is released as the sugars are converted back to carbon dioxide.

Figure 2.1 Energy from Biomass

Thus, energy is harnessed and released in a shore time frame, making biomass energy a renewable energy source. Fossil fuels have also ultimately been derived from atmospheric carbon dioxide, as they are degraded residues of plant and animal sources. However, the tune frame is very long—in the order of millions of years rather than a few years, as in the case of biomass.

Biomass has been used as a source of energy for centuries, and even today is the major type of energy source in the developing world. As is illustrated in Figure 2.2, biomass forms 35 percent of total sources of energy in developing countries. This energy is mainly used for cooking and heating.

Figure 2.2. Sources of in Developing Countries, 1987

In some "renewables intensive" scenarios, a number of studies show biomass as a major player (see Johansson and others 1993, chap. 1; U.S. DOE 1990a; and World Energy Council 1992). Several reasons are given for this. The foremost, perhaps, is the versatility of biomass. It may be converted directly to electric power by burning, or it may be converted to liquid or gaseous fuel by physical or biological means. It is also amenable to storage. In many respects it can be compared to fossil fuels. However, it is worth noting that its energy density is lower. Hall and others (1993) quote heating values of 17.5 to 20 gigajoules per ton (on a dry weight basis) for biomass compared with 30 to 35 gigajoules per ton for bituminous coals and 23 to 26 gigajoules per ton for lignite. Therefore, transport and storage costs play a significant part in cost evaluations.

The main growth in energy demar is expected to occur in developing countries (World Bank 1992). It is worth noting that biomass combustion is a familiar idea in most of these countries, and this familiarity could play an important part when the feasibility of biomass projects, albeit on a larger and more efficient scale compared to current uses, is considered in these countries.

Efficiency is perhaps the key determinant of costs. To begin, therefore, the following looks at some points presented in the current Iiterature on the efficiency with which (a) biomass is created and (b) biomass is converted to commercially usable energy.

Formation of biomass

The limiting factor is the efficiency with which sunlight is converted to biomass energy. The maximum theoretical value quoted is 6.7 percent; this is for C4 plants (so called because the first product of photosynthesis is a 4 carbon sugar), such as maize, sorghum, and sugar-cane, which grow best in relatively hot climates. A value of 3.3 percent is given for C3 plants, such as wheat, rice, and trees, which account for 95 percent of global plant biomass. Once factors such as temperature, leaf cover, disease and pests, and presence of adequate nutrients and water are taken into account, however, the real values become much lower (2 to 3 percent and 1 percent of incident sunlight are quoted for C4 and C3, respectively, by one authority and 0.2 to 0.3 percent by another). Another point of interest is the possible effect of increased carbon dioxide levels, and therefore resulting climatic change, on growth. This is an important issue, and work on it includes some studies being carried out currently at Oak Ridge National Laboratory (ORNL; information is from the Environmental Sciences Division of ORNL and from discussions with ORNL staff on their Global Environmental Studies research).

The main point illustrated by the theoretical photosynthetic efficiency is the high land intensity of biomass energy compared with other sources of energy, such as photovoltaics, which have a solar energy to electricity conversion percentage of 3 to 17 percent in the field and even higher experimental efficiencies ((i to 34 percent) and theoretical efficiencies (47 percent for a tandem cell with two crystalline layers; see chapter 4). This raises the issue of whether the land might be better used for something else, such as crop production, given that increases in the world's population in the coming decades seem likely to place increasing pressures on land resources, even allowing for increases in crop yields (for discussion, see chapter 7 of the World Development Report 1992 [World Bank 1992]). Particular cases need to be considered in detail, however. Examples are growth of biomass for restoration of degraded land, as a by-product of afforestation schemes, and as a new livelihood for farmers in some developed countries in order to replace food production of excess capacity. An example of this high land requirement is the figure quoted in an Energy Department Working Paper of 600 hectares of plantation per megawatt or 30,000 hectares (300 square kilometers) for a 50 MW dendro thermal plant, quite a small plant by conventional fossil-fuel standards (Terrado 1985). These figures, although not completely up-to dam, illustrate that the use of biomass for commercial energy production will place significant demands on land and forestry management.

Several factors play an important part in determining the "efficiency" and therefore cost effectiveness of a biomass plantation (Terrado 1985; Hall and others 1993; and literature from ORNL Environmental Sciences Division). These include site establishment, including species selection, land cost, and equipment costs; plantation running cost - for example, costs of labor, fertilizer, and herbicides; and transport costs to the site of energy conversion. Naturally, the species selection and crop rotation play an important part, since the biomass energy density, leaf cover, productivity, water requirements, nutrient requirements, soil erosion, susceptibility to diseases, and effect on the biodiversity of the plantation and its surroundings are all related to this one factor. The United States Department of Energy's Oak Ridge National Laboratory (ORNL) has carried out extensive research on crop selection and rotation.

Aside from using plantations for energy production, there are many examples some going back many years—of the use of biomass residues for the production of energy. These are instances where crop residues are used, usually by the industry producing them, to generate both heat and power for use within the plant, with excess electricity being sold to the utility. These are called cogeneration plants. These plants can be very cost-effective, especially if the residue has no other value, and a good price (say, based on avoided costs as in the United States under the Public Utility Regulatory Policies Act [PURPA]) can be obtained from the utility. Lately, an increase in the availability of second-hand boilers is making the coatings feasible for cogeneration facilities in a number of developing countries, resulting in a flourishing private industry (Willem Floor, personal communication, 1992). However, because of subsidies in many countries, the cost of power from the grid can be artificially low, and thus setting up a cogeneration plant may not necessarily be economically feasible (see ESMAP 1988 for an example). Other problems may include electricity boards refusing to take privately generated power at all, imposing a sales tax on self-generated electricity, or even decreasing the maximum power available to industries with cogeneration facilities and providing no backup power (U.S. Congress 1992).

Energy from biomass

Biomass can be converted to energy by a variety of methods: direct combustion and use of the heat generated for space heating and cooking, combustion of biomass or biomass-derived products to generate steam, which in turn is used to drive steam turbines for power generation, and biochemical or thermochemical degradation of biomass to form biogas and liquid fuels. These in turn may either be used directly as fuel or converted to electric power by combustion in an internal combustion engine or in a gas turbine to obtain shaft power, which in turn can be coupled to a generator.

Liquid fuels from biomass

The fermentation of sugars to produce ethanol is an age-old process and essentially forms the basis for the production of alcohol from biomass. Both methanol and ethanol may be produced from biomass. Ethanol may be produced from sugars (such as sugarcane), starches (such as corn?, or cellulosic material. In the first case, the sugar is directly fermented to produce ethanol, with the waste bagasse sometimes being burned for cogeneration. In the latter two cases, the material has first to be broken down into sugars before fermentation. This is done either by using acids or hydrolytic enzymes. These two processes, scarification and fermentation, may be carried out in "one pot" (see Johansson and others 1993 and U.S. Congress 1992 for details of the latest technologies).

In cases other than sugarcane, fossil-fuel energy is also required, and therefore prices vary significantly according to the method of production. The main cost, however, is that of the raw material. According to most sources, this makes up 60 to 80 percent of the total cost of ethanol production (World Bank data; see also Hall and Overend 1987: 318). Brazil is most well known for use of ethanol as a transport fuel (Goldemberg, Monaco, and Macedo 1993; Monaco 1989; CENAL 1988; and unpublished World Bank data). Ethanol, of course, has other uses for example, in the chemical and beverage industries—but these are not considered here.

Methanol can be made by a thermochemical degradation reaction in the presence of oxygen to form "synthesis gas:' followed by a shift-gas reaction to obtain a precise mixture of hydrogen and carbon monoxide, and finally by passage through a pressurized catalytic reactor to form liquid methanol. This is not a commercial process as yet (see Johansson and others 1993 and U.S. Congress 1992 for details of the latest technologies).

Ethanol and methanol may of course be burned to generate energy or electricity. However, this is not economically desirable in normal situations. Their main use is as an additive to gasoline, and ethanol is considered to be more desirable in that respect than methanol in the United States, in terms of its physical properties, as on blending the ethanol mixture has a lower Reid Vapor Pressure than the methanol blend (Wyman and others 1993).6 "Pure" ethanol can either be used in its hydrated form (95:5 ratio of ethanol to water) as a transport fuel, or its anhydrous form can be blended with gasoline. The latter is naturally more expensive, because it involves the extra step of distilling the hydrated ethanol.

Electricity from biomass

The conversion efficiency of biomass to heat for cooking and heating—the traditional role is highly inefficient, being only a few percent. Considerable work has been carried out on the improvement of domestic stoves to improve efficiency (see Johansson and others 1993 or World Bank 1992, for example).

Most of the components of a direct combustion system plant are the same as in a conventional fossil-fuel-fired thermal plant. The main exception is the fumace, as biomass has a lower energy density and requires a furnace designed to cope with the higher moisture content of the fuel and the greater quantity of ash generated. The technology, nevertheless, is well developed, and a number of different types of commercial furnaces for firing wood in boilers are available (Terrado 1985; Johansson and others 1993; and U.S. Congress 1992 all describe the technology further).

Biomass may be converted to producer gas by thermochemical means or to biogas by anaerobic digestion; these, in turn, are used to generate electricity by combustion in an internal combustion engine. A number of small-scale facilities of this type already exist, particularly in Brazil (producer-gas-based) and in China and India (biogas-based). The cost of producing electricity from these systems is given in the section on cost of electricity from biomass, below. The technology utilizing biomass fuels in gas turbines is under development (see Elliott and Booth 1990; Johansson and others 1993; and U.S. Congress 1992 for detailed description of technologies). The heart of the technology already exists, but technological advances are needed to cope with the high ash and impurity content of the biomass-derived gaseous fuel and its consequent low efficiency. Elliott and Booth (1990) quote a current figure of 42 percent fuel efficiency. They also provide a lucid account of the technology advances needed to increase efficiencies and decrease capital costs. These include technology to cope with the low calorific value of the gas, the higher ash content from combustion of biomass compared with coal, and the higher concentration of alkali metals in the ash. This volatile ash can carry over and causes rapid deterioration of the turbines. There is one scheme, however, in which a ceramic heat exchanger separates combustion gas from heated air to drive a gas turbine (Edwin Moore, personal communication 1993}. The U.S. Congress's Office of Technology Assessment (1992) feels that some of these problems may already be resolved and describes technologies that are near commercialization, as well as others that may be available by the end of the century with a concerted R&D effort. These are all larger-scale operations than internal combustion engines. Estimated costs of electricity using these technologies are also discussed in the section, Cost of Electricity from Biomass.

Environmental effects

For environmental reasons, the "recycling" of carbon dioxide is important. There is no net increase in the short term of atmospheric carbon dioxide from burning biomass or biomassderived fuels a factor that is becoming increasingly important in the context of discussions about imposing a "carbon tax" because of the greenhouse effect. Biomass also has a far lower sulfur content than coal (0.01 to 0.1 percent sulfur by weight for typical biomass feedstocks compared with 0.5 to 5 percent for coal; Hall and others 1993). Thus, acid deposition from sulfur dioxide emissions on combustion are significantly lower than for coal. Some work is being carried out at Oak Ridge National Laboratory (ORNL), in conjunction with the Tennessee Valley Authority, on the co-combustion of wood and coal in coal-fired plants to reduce sulfur dioxide emissions. The NOX emissions of biomass, however, are higher than those of coal, and this may be something to consider in terms of their effect on the atmosphere. Biomass power plants also have far higher particulate emissions than conventional coal-fired plants (Terrado 1985).

The environmental aspects of burning ethanol as a fuel are also worth noting. First, the net quantity of carbon dioxide released to the atmosphere is zero if the initial capture of carbon dioxide from the atmosphere by the biomass is taken into account, and carbon monoxide emissions are lower than for gasoline. Second, ethanol does not contain lead additives (unlike gasoline), and therefore lead emissions are zero for "neat" ethanol use. Hydrocarbon emissions are also lower compared with gasoline. Opinion varies on whether NOx emissions are different, and in which direction. However, aldehyde emissions are significantly greater; this may prove to be a serious problem, as aldehydes are reactive species; acetaldehyde, for example, is a known irritant and possible carcinogen, and formaldehyde is a known carcinogen. Finally, the burning of sugarcane residues on plantations (preharvest burning of dry leaves to promote pest control and lower harvesting costs, and postharvest burning of residues to expedite replanting) does cause concern. The problem is made worse in some countries by the proximity of the plantations to urban areas (Goldemberg, Monaco, and Macedo 1993). Initially, on the introduction of the Proalcool program in Brazil, pollution of waterways increased in several cases because of the discharge of stillage from distilleries directly into the waterways. This is no longer a problem, as the stillage is now being used as fertilizer or being treated before discharge (World Bank data).

The cost of biomass energy

The costs of producing liquid fuels from biomass are considered first, followed by the costs of producing electricity.

Cost of liquid fuel production from biomass

Annex 2 gives some of the costs quoted in the literature for the production of ethanol from various biomass sources. Figures 2.3 to 2.5 provide a graphical presentation of the data Before interpreting these results, a note of caution needs to be sounded. First, the quoted costs vary in their assumptions, and this is one reason why estimates vary so much Examples are as follows:

a. It is not stated in all cases whether the cost of anhydrous or hydrous ethanol is being quoted. The former is mere expensive than the latter, as it involves the extra production step of distillation. Nevertheless, both have been plotted on the graph without any adjustments.

b. Capital costs are treated as sunk costs in some cases and are not included in the cost of production. These cases, where known, are noted in the table in Annex 2, but they have not been plotted on the graph.

c. It is not always clear whether the cost quoted includes government subsidies and credits from sale of byproducts of ethanol production. By-products include stillage for fertilizer, electricity from bagasse in the case of sugarcane, and carbon dioxide and animal feeds from corn.

d. The scale of production is rarely mentioned.

e. It is worth noting that the cost of setting up a distillery will vary depending on whether the plantation already exists, as this is a major cost. Also, the proximity of the plantation to the distillery is important because of high transport costs.

f. In the case of ethanol production from sugarcane, the data presented here is mainly from Brazil, and the following should be noted:

· Details such as the variation in pace caused by the number of rattoons (cuttings) per year or the proportion being sold directly as sugar in different distilleries are not taken into account and only averages are presented.

· Official data from Copersucar (the cooperative of sugarcane, ethanol, and sugar producers responsible for one-third of Brazilian sugar-cane production) tend to be on the high side. Copersucar estimate that making adjustments for the over-valued exchange rate and lowering the land value to reflect existence of large uncultivated areas could lead to a 20 percent reduction in costs (Goldemberg, Monaco, and Macedo 1993).

g. Costs given for ethanol production beyond 1992 are predictions that vary depending on the scenario assumptions. For example, some are based on a business-as-usual scenario, whereas others are based on an intensified R. D, & D scenario. These are noted in the table in Annex 2.

h. Costs shown for ethanol production up to and including 1992 are either actual costs or are results of engineering studies based on the technology of the time.

Figure 2.3. Cost of Ethanol Production from Different Raw Materials

Figure 2.4. Cost of Ethanol Production from Cellulosic Material Using Different Hydrolytic Processes

Figure 2.5. Cost of Ethanol Production Compared with Gasoline Prices

Second, the following must be taken into account when converting all production costs to 1990 U.S. dollars {using the procedure described in Annex 1):

a. Different constituents of the production cost such as machinery, land, labor, and raw materials will have increased by different inflation rates over time. The method used for converting costs to 1990 dollars does not take this into account.

b. The conversion of the Brazilian cruzado to its foreign exchange equivalent poses special problems. It is overvalued, and thus quite distinct official and black market rates exist. Not all sources mention how this conversion is dealt with when quoting
Brazilian ethanol costs in U.S. dollars.

c. In most cases, the source material gives the year of the price. Where it does not, this is noted in Annex 2, and the document's publication date is used as the year.

The following data from Annex 2 has not been plotted on the graphs:

a. Items 21, 23, 25, 27, 29, 31, 49, 51, and 67 to 70 have not been plotted as the quoted values do not include capital costs.

b. The data from CENAL (items 32 to 37}, World Bank data (items 42 to 47), and item 56 from Goldemberg, Monaco, and Macedo (1993) have not been plotted. The source data has been plotted instead (items 71, 72, and 74).

c. Items 57, 60 to 61, and 66 (from Wyman and others 1993) have not been plotted, as the data has not been specified for a particular year, and the sources from which the numbers are derived span several years.

d. Item 73 teas not been plotted, as the labor costs have been shadow- priced.

Despite the reservations discussed, which are illustrated by the dispersion in the graphs, these conclusions may be drawn on the basis of the data in Figures 2.3 to 2.5:

a. There has been a reduction in the cost of production of ethanol in the last 15 years (Figure 2.3).

b. Presently, ethanol from sugarcane is cheaper than that from corn and cellulosic material (the latter has yet to be commercialized; Figure 2.3).

c. For cellulosic materials, acid hydrolysis is more expensive than enzymatic hydrolysis (Figure 2.4).

d. Ethanol from cellulosic material is expected to become the cheapest alternative by the year 2000.

Let us now examine these in a little more detail. As discussed earlier, the delivered cost of the raw material accounts for 60 to 80 percent of the cost of production. This is the main reason why ethanol from cellulosic materials (e.g., woody materials and agricultural residues), which are more abundant and lower in cost, is expected to be the cheapest alternative in the future (Hall and Overend 1987; U.S. DOE 1990a; Wyman and others 1993; and U.S. Congress 1992). This is not currently the cheapest source of ethanol, as the technology needs further

Woody materials and starch crops (such as corn) need first to be broken down (or hydrolyzed) to sugars before fermentation (the process is shown in simplified form in Figure 2.6; Hall and Overend 1987; U.S. DOE 1990a; Wyman and others 1993; and U.S. Congress 1992). As the figure shows, either enzymes or acids are used as catalysts in the reaction Of the two processes, enzymatic hydrolysis is preferable, as it is more specific, and only one product is formed, unlike acid hydrolysis, in which competing side reactions decrease the yield of product and lead to higher production costs. In either case, the sugars are then fermented to form ethanol. For woody materials, this process is more difficult, and not all the sugars formed can be easily converted into ethanol, resulting in a lower yield of ethanol per ton of material. Advances in biotechnology have opened up some solutions that show promise for future lowcost ethanol production (Wyman and others 1993), but further evaluation is required before these methods are commercialized.

Figure 2.6. Formation of Ethanol (Simplified Scheme)

The costs quoted are for ethanol production from sugarcane in Brazil and from corn in the United States. In both cases, the distillery is one part of an operation that also sells the raw material as is, or other products derived from it. Thus, it is difficult to break up the cost estimate accurately. Various co-products are formed as a result of ethanol formation (see Wyman and others 1993 for a comprehensive summary). In the case of corn, carbon dioxide and animal feed are sold as by-products. However, the U.S. Department of Agriculture projects that as ethanol production increases, the cost of corn will rise and that of co-products will drop (Wyman and others 1993). For sugarcane, the stillage from fermentation is used as a fertilizer on the plantation, and bagasse residues are used for cogeneration purposes, with surplus electricity being sold to the grid (Goldemberg, Monaco, and Macedo 1993). Naturally, this revenue is not likely to decrease in the same way as that from corn co-products. In corn derived ethanol, fossil fuels are required to generate energy. Other points of difference between corn- and cane-derived ethanol are the extra processing (hydrolysis) of corn to produce ethanol, and differences in the simple costs of raw material production in Brazil versus the United States, such as the price of land (Goldemberg, Monaco, and Macedo 1993; Geller 1985; Hall and Overend 1987). Corn may be processed to produce ethanol either by wet or dry milling. The former is the cheaper alternative (Flaim and Hertzmark 1981 and Wyman and others 1993 give costs).

Finally, as can be seen from Figure 2.5, the cost of producing ethanol has decreased over the last 15 years. However, since the ethanol is replacing gasoline, its cost relative to gasoline is crucial. Figure 2.5 gives the same data from Figure 2.3, but converted to $/U.S. gallon of gasoline equivalent by applying a simple multiplier. The price of a gallon of premium gasoline based on spot prices (Rotterdam) over the same period is also shown up to the present (International Energy Agency 1992). Note that the cost of producing ethanol was beginning to compare well with gasoline prices before the collapse of oil prices in 1986.

Methanol and synthetic petroleum can also be derived from biomass. Neither of these are commercial processes at present. Calculations show that gasoline could be produced from biomass for $0.85 to $1.00 per gallon (U.S. DOE 1990a). In the case of methanol, current cost estimates range from $7 to $20 per GJ.

Cost of electricity from biomass

Annex 3 summarizes data from a variety of sources. Figures 2.7 to 2.9 illustrate this data in graphical form. As in the discussion on liquid fuels from biomass, a note of caution needs to be sounded. The figures being compared on the graphs vary in their underlying assumptions. The following are examples:

a. The graphs show costs for cogeneration facilities as well as and-connected plants, although Figure 2.7 distinguishes between the two.

b. Costs of actual facilities and engineering study estimates are given (Figure 2.8).

c. The costs are for plants based at different locations worldwide.

d. The method used for power generation ranges from direct combustion, to biogas gas turbines, to producer-gas internal-combustion engines.

e. The plant sizes vary from 5 kWp to 100 MWp. Figure 2.9 highlights larger units.

f. The method and underlying assumptions for the cost calculations (such as discount rates used) are not always specified in detail.

g. The revenues from sale of surplus electricity to the grid in the examples of cogeneration facilities may or may not be taken into account when quoting a cost for electricity generation. Furthermore, the sale of the electricity may have been accounted for at different rates.

h. The type of biomass used for power generation varies in the examples given.

Furthermore, this biomass will have been acquired in different ways, such as in entry number 19 the biomass is grown on a plantation on the premises and costs take into account the setting up of this plantation, whereas, in the case of entry 38, the biomass is purchased municipal solid waste. Entry 34, on the other hand, utilizes bagasse from an adjoining sugar mill. i. Costs given for electricity generation beyond 1992 are predicted costs which vary in terms of technology being utilized and scale of production. j. In the case of cogeneration plants, capital costs may only include the cost of additional equipment, rather than all equipment to generate electricity.

The hazards of converting currencies to 1990 U.S. dollars (using the procedure in Annex 1, unless specified differently in the table) in order to compare costs are again worth considering. For example, some currencies are overvalued, and inflation may affect different parts of the estimate in different ways. In most cases, the year of the currency is given in the source material. Where it is not, the price is assumed to be that obtained in the year of publication and is noted to this effect in Annex 3.

With the above caveats, in mind, data from Annex 3 were plotted in Figures 2.7 to 2.9. The value of this type of analysis is that quoted costs for the production of electricity from biomass are being compared. Each situation is different, and therefore attempts to make the calculations uniform may not be any more meaningful and may suffer in terms of other aspects.

Figure 2.7 distinguishes between cogeneration facilities and power plants. As the graph shows, the costs span a wide range of values. The lowest costs are for electricity generated in cogeneration facilities. However, some of the highest costs are also for electricity from cogeneration facilities. Although no distinct pattern is evident, there may be a slight decrease in costs over time. The range of costs in a particular year does appear to decrease, but this probably represents a reflection of the data collected rather than a real effect.

Figure 2.8 highlights the values based on actual operating facilities. The small number illustrates the general lack of actual data available and the degree to which even well-known authorities values on the basis of tabletop studies when discussing electricity generation from biomass.

Figure 2.9 shows the cost of electricity from plants greater than or equal to 30 megawatts (peak). The costs are lower for these cases, because of economies of scale. The higher costs for 1992 and those for 1995-96 are from a European source (Grass) 1992). Costs of electricity generation from biomass tend to be greater in Europe than in other areas, particularly compared with the United States. However, it is worth noting that the dominant part of the 9,000 MW of power generated in the United States from biomass is from cogeneration facilities, where the biomass source is mainly residue from the pulp and paper industries. Table 2.1 shows the type of biomass utilized by percentage in the United States for power generation (U.S. DOE 1992a).

Table 2.1. Power Generation in the United States by Type of Biomass

Percentage of total biomass capacity

Type of biomass fuel



Landfill gas


Agricultural waste


Gas from anaerobic digesters


The low costs turn out to be heavily dependent on the biomass being purchased at a price of $2/MilBtu or less (U.S. DOE 1990a). First, consider the cost calculation formula shown in Annex 1. This may be written in a more simplified form, for the purpose of discussion, as follows:

Cost of electricity = Capital cost factor + O&M factor + Fuel factor (cost + efficiency)

The operating and maintenance (O&M) costs are generally considered a fraction of the capital costs (about 4 percent). Capital costs vary with the technology being used to generate power, and for the larger plants also vary between the biomass gasifier plant and the conventional steam turbine plant.

Figure 2.7, Cost of Electricity from Bomass

Figure 2.8. Cost of Electricity from Biomass (Operating Facilities versus Engineering Studies and Projections)

Figure 2.9. Cod d Electricity from Biomass (Large" versus Small-Scale Plants)

Table 2.2 shows some historical current capital costs (taken from Annex 3), for plants greater than 20 MWp. They have been converted to 1990 dollars, using the methods described in Annex 1. The costs in Table 2.2 are from only four sources, all based on theoretical calculations rather than on a particular power plant. It is also necessary to take into account that the capital cost in the case of item 19 includes the setting up of the plantation (about $1,000/kW (1990) for 50 MW power plant only, excluding plantation), and in the case of items 1 through 4 and 20 appears to be the cost of the plant only. Clearly, no conclusions may be made on the basis of the above limited data regarding change in costs with time, other than the range of costs being quoted by different authorities. The only point that can be made is that the capital costs of the biomass gasifier plant are expected to be lower in the very near future compared with the steam turbine technology. Predicted costs for the gasifier technology range from $1,200 to $1,300/kW to as low as $870/kW, for the biomass-integrated gasifier/intercooled steam injected gas turbine by the year 2000 (EIIiot and Booth 1990 for the former figure, Johansson and others 1993 for the laker).

Table 2.2. Capital Costs for Large Scale (>20 MW) Biomass Energy Plants l

Reference from

Annex 3

Type of technology

Cost (1990 $/kWh)



Steam turbine




Steam turbine




Steam turbine




Biomass gasifier

1,600- 1,700



Gas turbine




Biomass gasifier



The delivered fuel cost is the other main factor that contributes significantly to the cost of the biomass-generated electricity. This consists of two factors, the transport cost and the cost of the biomass. The former is dependent on the distance of the biomass source from the power plant and the energy density and hence bulk quantity of fuel. The cost of the biomass is not only the cost of producing the biomass (i.e., land costs, plantation costs, and labor costs) but also the perceived cost of the biomass in terms of its other uses. For example, using maize for biomass power generation would mean a fuel cost the same as the market price for maize as a food crop rather than the actual cost of growing the crop. On the other hand, municipal solid waste could have a negative fuel cost, as burning it in a power plant would be a means of disposal. These are two extreme cases, however. Consider a short-rotation woody crop (SRWC) plantation. First, the setting up of any plantation will result in a large increase in the total capital cost of a biomass power plant/plantation (Terrado 1985). Second, the price of land is a major factor in developed countries and may be an important factor in developing countries future as population increases. Hall (1991) quotes an estimated cost of $56.36/ton (1990 dollars), equivalent to $2.9/GJ, for the total delivered cost of wood chips from poplar plantations in the United States. Earlier estimates for the delivered cost for SRWC were in the range of $3 to $4.10/GJ (1985 dollars) using the technology of the time (Hall 1991). This indicates considerable progress. Hall feels that $2/GJ is achievable for the United States. Note, however that the value of $2/MilBtu (equivalent to $1.9/GJ) is used in a number of estimates quoted earlier, although that value is an average and is probably heavily weighted by the cost of biomass residues (U.S. DOE 1990a; U.S. Congress 1992). Nevertheless, these figures are for current establishment of a SRWC site, and perhaps future figures may require the use of a higher value for land costs.

The future of biomass energy

For ethanol production from biomass sources, costs have decreased over the last 15 years. The production of ethanol from cellulosic material promises another significant decrease in costs in the future.

The gasifier/gas turbine technology does appear to offer a cost-effective method of power generation in the future. The land intensity, however does remain an important factor, together with associated problems of utilizing large amounts of land for producing biomass such as competition over land for food crops. However, each individual case requires particular attention, and in some cases, biomass for power generation will be the best alternative. An example is the ORNL/China project, where the setting up of the plantation/power plant serves a dual purpose: reforestation and electricity generation (Perlack, Ranney, and Russell 1991).

Cogeneration plants appear to be much more viable, especially if there are no fuel costs and the surplus electricity can be sold to the grid. Another important requirement is that the grid electricity is not already subsidized heavily. However, their use is limited to the quantity of "free" fuel available.


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