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Straw Tiger

Chinese farmers could earn more money by cutting their country's coal consumption. Straw residues from agricultural production are becoming an appealing feedstock for cofiring in power plants.
By Marianne Osterkorn
Shandong, a province of Eastern China, is richly endowed. Three new nuclear power plants are planned for the province, while China Light and Power, a major Hong Kong-based energy company, owns a wind farm and numerous coal-fired power stations in the area and is planning more. In 2004, 1,500 of the province's farms accounted for 25 percent of the entire nation's exports of grain, fruit, vegetables and other agricultural produce grown over 4.9 million acres. Some of those farms could find themselves selling their waste product to power stations if the country's first dedicated biomass plant starts operating soon, as hoped. Like most of the rest of the country, Shandong is a beehive that wants to buzz more.

Some government officials and environmentalists, alarmed by this rapid growth, are seeking to add another ingredient to this hyper-activity: straw. Straw is already used locally for paper making but it could instead be blown into the furnaces at coal-fired power stations, putting a brake on the nation's fossil fuel use and creating added income for farmers. It is an idea that has already been tried and tested in Europe, the United States and other parts of the world, but which has yet to be pioneered in China. "Cofiring simply hasn't really happened yet," says Rachel Child, an executive at energy consultancy ESD, which is funded by the Renewable Energy and Energy Efficiency Partnership to determine a path for biomass cofiring to become a reality in China.

Ironically, investment costs are lower than for many other alternatives. However, biomass cofiring has still been neglected. Dedicated biomass power has happened, and a number of these plants have sprouted across the country thanks to a preferential tariff for the power they produce. "There is an enormous amount of interest in biomass in China," Child says.

Examples of cofiring, which can be a cheaper solution than straight fossil fuels, exist in just a few provinces and only in Shandong province has a cofired plant been supported financially by the provincial government.

This lack of interest is not due to a shortage of resources; straw is plentiful across the country. According to ESD's study, carried out in conjunction with China's Center for Renewable Energy Development, at least 77 million tons of unused surplus straw is burned each year. In addition, large amounts currently used for fertilizer, making paper or other purposes are potentially available as feedstock for power stations.

Horizontal Integration
Despite the potential feedstock source, in China the relationship between farmers and power station managers is polarized-perhaps even more extremely so than in other countries. They are not accustomed to working together. As in other countries, it has been hard to make a new horizontal incision into the vertically integrated industrial infrastructure essential for a well-functioning biomass-to-energy industry.

Power station managers operate large assets dependent on enormous bulks of coal (660 million tons) burned in 2004 supplied via a large, established network. In China, farming is a family business. In 2004, the nation produced almost as much in food crops as it burned coal-520 million tons-but most of its farms are smallholdings less than 1.2 acres in size and producing 4.4 tons of straw each. The total output of agricultural straw amounted to 750 million tons-the energy equivalent of 370 million tons of coal-and 414 million tons were available for use as energy. The number of farms dwarfs the number of coal-fired power stations, and there are just five major companies in the Chinese power sector compared to millions of farmers.

Since logistical resources have been marshalled to meet the food production and export business, it follows that the same could be done for the energy business. "What it needs is a dedicated supply company handling this issue," says Child, following ESD and CRED's year-long investigation. However, the supply issue is a delicate one. A poor harvest could mean a sudden fall in feedstock, and competition for straw from a new industry could raise prices.

Lower Capital Costs
Not surprisingly, Shandong is the home to one of China's first cofiring plants. It is an enterprising state and one of the country's main producers of straw. Some aspects of adapting an existing power station to a cofiring facility are cost-effective when compared to costs of a dedicated biomass power plant. "Investment costs are pretty low for these plants," Child says. "They need storage for the biomass, but the overall capital expenditure is much lower than building a new dedicated biomass plant of an equivalent capacity."
Smaller power stations of less than 50 megawatts capacity are easier to adapt because often they do not use pulverized fuel, and there is less of a feedstock infrastructure problem due to their size. As some of these are supposed to be closed soon by the government, ESD and CRED reckons cofiring could help extend their life, thus possibly ushering in a new cofiring or biomass culture.

The future holds promise nevertheless, if only because of the breadth of the government's vision. "China has set very ambitious targets, and there's a growing recognition of renewable energy in the whole mix," says CRED's Hu Runqing.

China's recently launched National Climate Change Program sets a target of supplying 10 percent of the country's primary energy from renewable sources by 2010. In setting this goal, the country plans to move faster than many developed economies. According to ESD and CRED, cofiring is suitable for 10 of its 30 provinces, including Shandong, because of the combination of good biomass availability and network of coal-fired power stations.

As yet, cofiring plants do not enjoy the essential preferential feed-in tariff enjoyed by dedicated biomass plants, although there are plans to change this and make the preferential tariff available to cofiring plants too. A key issue is to develop a system that would monitor production and other activities in tandem with a new financial incentive.

A further snag is that there are currently no cofiring projects registered by the Clean Development Mechanism Executive Board, whereas a number of projects for dedicated biomass power plants have been registered. Hence, coal-fired power stations are still unable to claim funding through the carbon markets for any cofiring innovations at present.

History has shown that when the Chinese turn their minds to something, they make enormous steps very fast and with clear plans. The odds against cofiring are stacked quite high at the moment, but a top-down decision could alter the situation very quickly. Perhaps it is only a matter of time before they acknowledge the wasted energy-and earnings opportunities-visible when they pass farmers burning unwanted straw in the fields.BIO

Dr. Marianne Osterkorn is the international director of the Renewable Energy & Energy Efficiency Partnership. Reach her at marianne.osterkorn@reeep.org or +431 26026 3425.
 

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