Bioenergy, an industry in transition
June 16, 2016 - Industry experts tackled a variety of bioenergy-related topics during the experts panel, “An industry in transition: A global overview,” during the International Bioenergy Conference and Exhibition in Prince George, B.C.
June 16, 2016 By Andrew Snook
Warren Mabee, director for Queen’s Institute for Energy and Environmental Policy, discussed advancing forest-based bioproducts capacity in Canada.
Mabee discussed the opportunities for the use of nanocrystalline cellulose, lignin and other bioproducts as substitutes in the manufacturing of a variety of products and the production of biofuels such as cellulosic ethanol, bio-oil and wood pellets as substitutes for petroleum fuels, coal and natural gas.
Why don’t we see more of these products out in the marketplace? Mabee says there are disconnects in the sector that negatively affect its growth, including misinformation about the role of bioenergy and bioproducts and how the public perceives them.
Mabee also discussed how policy in Canada could help drive the growth of the bioproducts sector and that there is a vital need for assistance in the commercialization of bioproducts.
“Commercialization is critical,” he says. “This is a place where we’ve really started to slow down. We don’t have the pilot and demo programs we once had. These technologies have to be proven on a commercial scale.”
He added that producer and consumer incentives are critical to the successful growth of the bioproducts sector and that carbon pricing has the potential to negatively affect the bioproducts sector, stating that carbon pricing may drive some innovation but it comes down to consistency in how the prices are imposed and that it’s possible that capital will focus on cleantech and skip bio-based products altogether.
William Strauss, president of FutureMetrics, discussed the industrial pellet sector as a replacement for coal or for blending in a co-firing application.
Strauss also touched on the growth of the wood pellet market stating that the global market grew to more than 26 million tonnes of wood pellets in 2014, up from more than 19.4 million tonnes in 2012. He said that number could grow to more than 30 million metric tonnes by 2025.
He added that the U.S. has great potential for the growth of wood pellets used for co-firing in coal plants under the Clean Power Plan. In Texas alone, he said the state could use 3 million tonnes of industrial wood pellets annually if 10 ten per cent of the state’s coal power stations were retrofitted into co-firing power plants using industrial wood pellets.
Strauss also warned that oversupply is currently a major issue in both the industrial and residential wood pellet markets and that it is a significant factor in the declining price of wood pellets.
“Producers can’t make money with the current spot price,” he told the crowd.
The good news was that the oversupply would likely be soaked up through the Lynemouth power plant in the U.K. and a few other larger power stations coming online in the next few years and that the market will be coming back to equilibrium by 2018-2019.
Don Roberts, CEO, Nawitka Capital Advisors, presented on how bioenergy and biochemical “follow the money.”
Roberts looked at past, present and future investments across the bioproducts sectors.
In the biofuels sector, Roberts discussed how low oil prices and big anxiety on the blend wall have negatively affected first generation biofuel investment; however, while it’s a lower amount of overall investment, the next generation biofuels investment, although volatile, shows positive investment trends.
Roberts also discussed the public sector support the industry receives in Canada. He stated that investment has been strong and that governments have played a direct role in supporting development of next-generation biofuels and other bioproduct ventures.
The federal government has invested $265 million in 61 bio-related projects. On the provincial side, Quebec has been leading the pack for support for the bioproducts sector. The province developed a formal strategy in 2012 and has supported the sector with a five-year $170 million fund.
More coverage of the 2016 International Bioenergy Conference and Exhibition:
IBCE 2016 comes to Prince George
Bioenergy sector’s opportunities and challenges
Prince George expands DES
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