Bioenergy – back to the future?

It was recently revealed that the new owners of Redbank Power station, once dubbed Australia’s “dirtiest power plant” (because it ran on the cheap old bits of coal that no-one else wanted) plan to repurpose it to run on biomass. Meanwhile, ARENA is developing a bioenergy roadmap. Is this the way forward for our energy sector? After all, for most of human history, bioenergy has been a key energy source – mostly through wood or dung burning. Although perhaps notably, the industrial revolution only took off when Britain led the way in developing coal-fired power.

Coal-to-biomass conversions are still quite rare across the world. The largest such project is at Drax, where the largest power station in the UK is now 2/3 biomass fuelled (4 out of 6 units for a total biomass capacity of around 2,700MW – this is about the same size as Eraring, Australia’s largest power plant). Drax is somewhat controversial because it sources its fuel mostly from North America and so critics question both the carbon neutrality of the fuel source and the scale of embedded emissions in the logistics chain to transport wood pellets from Canada.

Canada is the home of an equally controversial coal-to-biomass plant, but for different reasons. The Ontario government ordered Atikokan power station to be converted as a way to reduce emissions while preserving local jobs. This decision was slammed by Ontario’s auditor general in a scathing report on the mismanagement of the province’s power system. Bizarrely, the power station needed to source its fuel from outside Canada, resulting in an eye-watering cost of electricity of C$1,600/MWh.

There are a handful of less controversial projects around the world, such as the 180MW Rodenhuize plant in Belgium, although even this plant had to shut down for part of 2014 due to issues getting its fuel sources certified as “green”.

Redbank’s main advantage is that its original design allows for biomass-firing so costly conversion is not required. Success will be dependent on being able to source biomass at a price competitive with NSW coal plants (although if the operators can run it flexibly, it may only need to be competitive with gas).

Australia also of course has a handful of purpose-built biomass plants that run on by-products of the sugar, paper and waste collection industries.

ARENA’s bioenergy roadmap is looking much broader than burning biomass for electricity. Their definition is that “Biomass is any organic matter (biological material) that is available on a renewable basis, including material derived from animals or plants, municipal or industrial waste. End-uses include heat, electricity and transport fuel”. They are particularly interested in bioenergy use in transport and industry. Bioethanol blending in petrol and diesel is already occurring helped along by mandates in Queensland and NSW for sales of these fuels to include a small percentage of biofuel, though the Productivity Commission takes a dim view of these mandates.

Some modern economies have built sizeable bioenergy sectors. Helped in no small part by the contribution of Drax, bioenergy is the largest renewable energy source in the UK (when all energy sectors are considered). However, UK fossil fuels are subject to much greater taxation through policies such as fuel excise, the EU ETS (for now) and the UK’s own carbon price floor, making it easier for bioenergy to compete.