Biomass in District Heating - Swedish Model for Exports - EPU-NTUA, Greece
Summary
This project aimed to promote the use of biomass for district heating with an exemplary realisation in Sweden. District heating is a major biomass user at about 100PJ/yr (in a network of close to 200 district heating plants for a nominal load of about 24 GW). The well-developed district heating systems in Sweden therefore provide an important opportunity for the use of biomass. This case study was included in the results of the WP-6 of EU - OPET CHP/DH project. Partners were six organizations in the OPET network: EPU-NTUA (Greece), ZERI (China), EREC, CSFTA, ISNOVA (Italy) and ENEA (Italy). Activities included the development of case studies to disseminate EU energy information and increase the awareness of OPET in China. The main result was t o further improve awareness among Chinese energy actors concerning EU energy policies, energy efficient and renewable energy technologies, products, and management mechanisms.
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| End-user area | Industry Sustainable communities |
| Target audience | Utilities |
| Technical scope | District Heating |
Context
EPU-NTUA, in cooperation with the six other OPETs, carried out the Work package "Increasingly promotion and market penetration of EU energy-efficient measures in China" of OPET CHP/DHC project. The WP duration was 14 months. Approximately 35% of the energy used for heating buildings comes from district heating today. District heating systems are also strategically important for producing electricity efficiently in co-generation. Electricity production from biomass is relatively low and, accounting for recent plans, is likely to represent about 500 MW, mainly produced in CHP plants. On the other hand, bio-fuels play an increasingly important role in the Swedish energy system. They now contribute almost a fifth of the overall energy supply, and their expanded use is a cornerstone in the government's plan for a sustainable energy system. Sweden has, with its large forest industry and rich farmlands, a large supply of residual biomass-products that can be processed into bio-fuels.
According to several global studies, biomass has the potential to become one of the largest renewable energy sources by the end of this century, both globally and in Sweden. Today, biomass (including wood fuels and black liquor) contributes 14% of the Swedish energy supply. The major share of this is used within the forest industry (63%) and the district heating systems (23%). The remaining share is used in small-scale heaters in one- and two-family dwellings. Between 1990 and 1999, biomass use in Sweden has increased by 44%. In the district heating system there has been a fourfold increase. The share of the district heating that was based on biomass in 1999 was 39%.
Objectives
The main objectives were to:
Process
The tasks involved the following activities:
Policies in place to reduce greenhouse gases and fulfill Sweden 's commitment to the Kyoto Protocol are the main market driver for a continued increase in the use of biomass in the country. On the other hand, Sweden 's energy policy includes commitments to phase out its nuclear generation capacity. Sweden has a policy objective to replace electric domestic heating with combined heat and power or district heating systems, especially making use of biomass for fuel.
The increased use of biomass fuels in the wood products industry and district heating sector has been a result of rising and volatile oil prices, taxes on emissions such as (SO2, NOx and CO2) and tax benefits and investment subsidies directed at biomass energy schemes. The tax reform in 1991 seems, however, to have been the most important factor responsible for the rapid bioenergy expansion. Through this reform, the taxation of fossil fuels in district heating systems increased by approximately 30-160%, depending on fuel, whereas bioenergy remained untaxed. Industry is exempted from the energy tax and pays reduced carbon tax. No tax is levied on fossil fuels used for electricity production. Investment grants have existed for biomass-based electricity production but these grants have not been large enough to make biomass-based electricity production economically competitive in the period of decreasing electricity prices.
Despite this, the biomass-based electricity production has increased slightly between 1990 and 1999. The Swedish government has recently analyzed a new taxation system, aiming at a removal of the tax difference between the industry, district heating and electricity sectors. One risk with such a system is that it reduces the competitiveness for biomass in district heating systems, as it seems unlikely that the taxes on fossil fuels in the industry and electricity sectors will increase to a level much higher than in other countries. On the 1th of January, 2001, the general CO2 tax level increased, while the energy taxes were reduced, the carbon tax in industry remained unchanged and the tax level increased for fuels used in buildings and district heating systems.
Investment grants for plants producing electricity from biomass have been in force during the 1990s. The investment grant 400 Euro/KW was introduced in 1991 and resulted in the construction of 16 new biomass-based plants. Twelve of them were cogeneration plants in the district heating systems and four cogeneration plants in industry. In the 1997 energy policy programme, the level of the investment grants was reduced to 300 EUR/KW, or a maximum of 25% of the investment costs. Since the 1970s, the state has constantly supported research and development into alternative fuels. Parliament's decision on energy policy of 10 June, 1997, marks the beginning of the third phase of this work. A total of 210 million SEK (23 MEUR) was invested in a program for developing ethanol production from forest biomass during the period 1998-2004. The Swedish government has supported the development of technologies for producing and using biomass-based transport fuels in several ways.
The feedstock for the biomass-based transport fuels so far has, to a large extent, been grain and surplus wine from the European market. The use of biomass for transport fuel production seems also less efficient in a CO2 reduction strategy than the use for heat and electricity production.
Actions
- Market Analysis
- Webpage
- Articles - Brochures
Financial resources and partners
Partners in this WP of our project and their roles were:
| European Commission | |
| ZERI, EREC, CSFTA, EPU-NTUA, ISNOVA, ENEA | |
| Total Cost | € 10,000 |
Results
The results of the project were:
The results of the project are laid down in four main deliverables, which are available from the project website www.opet-chp.net:
Lessons learned and replication potential
The Swedish experience indicates that co-ordinated government support to research and investments in new technologies is important for the implementation of renewable energy technologies, which have to compete with established traditional technologies on an uncertain market. Consistency and stability in the government policy is therefore particularly important. The institutional development would not have occurred without government support and the declarations made by government about a new long-term energy policy focused on promotion of renewable energy sources.
The increased demand of biomass has, in turn, led to reduced biomass production costs as new methods and technical solutions for biomass have continuously been introduced. The market changes have led to a combination of increasing demand and decreasing prices. On the other hand, further expansion is less certain, since the most advantageous markets for biomass are already utilized and there may be a new taxation system, which might be less supportive to biomass than the current. It seems that the annual biomass increase in the next 10 years will be very low.
From the Swedish experience we can conclude that one 'success story' does not guarantee a continued success in the renewable energy field.
Contact for more information
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