Opportunities in the Bioenergy Sector

Hilary Kinney, Kappa Consulting

5th December 2014

Agenda

• What is Bioenergy?

• Key Technologies

• Market Growth

• The Supply Chain Opportunity

• Market Entry

What is Bioenergy?

• What do we mean by ‘bioenergy’

• It is a critical part of the renewable energy mix and the only renewable

source that can be used to generate electricity, heat and biofuels

• It is a broad and varied industry, covering a wide range of feedstock and

technologies, at different stages of development.

Renewable energy (heat, electricity and biofuels) generated

from materials derived from biological sources

The key definer is the feedstock – organic biomass e.g.

Wood, wood waste, manure, sewage sludge, grass and

energy crops…..

What is Bioenergy? - Key Technologies

Feedstock/Fuel Technology % Bioenergy Capacity

% Growth 2011-2012

Wood and agri crops (eg straw)

Thermal –combustion; gasification; pyrolysis

39% +5%

Landfill Gas CHP 33% -1%

Waste (municipal RDF; wood)

Thermal –combustion; gasification; pyrolysis

19% +9%

Food and agri waste and agri crops

AD 3% +67%

Municipal sewage sludge

AD 6% -

Bioenergy – a rapidly growing industry

• Bioenergy will be key to the UK achieving its renewable energy and carbon

reduction targets – by 2020 projected to account for 50% of renewable

energy production.

• Bioenergy expected to be one of fastest growing renewable energy sectors

…… particularly heat generation

- to account for 10% of NI’s heat consumption by 2020 vs 1.7% currently (and as

much as 1.7% of industrial heat demand!!)

• Government incentives and targets accelerating growth

Bioenergy – key growth sectors

Renewable Heat Technologies

- driven by roll out of RHI

- CfD not for dedicated power only biomass

Anaerobic Digestion

(excl water industry – 44 new plants over last couple of years; further 189

through planning permission)

An Opportunity – on our door step

Project Status AD Dedicated Biomass Municipal

NI UK NI UK NI UK

Operational 11 118 7 60

Under Construction 2 37 1 13

Application Approved – awaiting construction 86 189 2 67 3

Application Submitted - pending 4 33 2 9 1

Application refused 2 22 13 2

Application withdrawn 1 15 16

Abandoned 1 12 37 1

No application made 1 3 9

Total number of projects 108 429 12 224 7 200

Total Installed capacity (MW) 58 523 56 9792 69 3497

Capacity Banding NI NI NI

0 - 1 MW 104 6 0

1 - 5 MW 4 4 2

5+ MW 0 2 5

Bioenergy – on our door step

• In ROI, annualised spend on bioenergy plants projected to increase by 60% to 2020

- €200mn/year to 2020 (biomass CHP, AD)

- €310mn/year (renewable heat technologies –biomass boilers, solar thermal and heat pumps)

(80% on capex; 20% O&M)

• SEAI estimates that Irish companies should be able to capture 70% of this expenditure (> €350mn pa)

• The local market provides a strong springboard for export to wider markets

Supply Chain Opportunities Across The Bioenergy Sector

• If bioenergy targets are to be achieved, local supply chains need to

expand

• Opportunities for wide range of products and services

Project Planning

Eg. feasibility studies,

permitting, financial services

Design, ManufactureInstallationEg. design & project mgt; component supply; civil

and electrical engineering

Operations & Maintenance

Eg. QA, technicians,

Anaerobic Digestion

Anaerobic Digestion

Anaerobic Digestion - Main Supplies

Planning, Permitting and Design

- Professional advisers (environmental. Engineering, legal, financial)

- Mechanical/electrical/civil engineering

Plant Manufacture

- Feedstock storage/receiving tank

- Feedstock mixers, pumps, hoppers, augers and mechanical handling equipment

- Main Digester/Fermenter tank

- Storage tank for digestate/residue

- CHP Unit/Heat exchanger

- Process control equipment and pipework

Installation/Commissioning

- Groundworks and civil engineering

- M&E Engineering

- Control Engineering

O&M

- M&E Engineering

- Residue Disposal

- Operators

Anaerobic Digestion – Indicative Capital Costs

Building and Infrastructure £ Machinery Capital £

AD Digester 900,000 CHP Generator 450,000

Separater 25,000 Cables and Pipes

Feedstock Storage 67,000 Heat Exchanger

Digestate Storage 65,000 Biogas Scrubber

Grid Connection 50,000 Fencing

Start/Backup boiler 20,000 Depackaging

Water Connection Cleaning Technology

Goundworks 75,000 Degritter

Reception building Odour management

Siliage clamp 8,000 Front end loader

Weighbridge Pumps

Grease Trap Shredder

Wheel Wash Pasteuriser

Roadways 5,000

District Heating System Total CHP Costs £450,000

Mixing Pit

Noise reduction 5,000

Project Development 35,000 Setup Capital Expenditure Summary

Professional costs 15,000 Total AD & Connection 1,270,000

Total CHP Costs 450,000

Total AD & Connection £1,270,000

Total £1,720,000

AD plant of 3,200m3 capacity with output of c500kW

Source: The AD Economic assessment tool (NNFCC 2013)

Anaerobic Digestion – ROI Indicative Spend

Average annual spend 2013-2020

Average annual spend 2013-2020

Feasibility, planning, permitting and design

€2mn Project mgt €0.5mn

AD Vessels €2mn Groundworks and civils

€0.7mn

Generator €0.5mn M&E and controls engineering

€0.2mn

Mechanical Handling €0.75mn Assembly €0.35mn

Other plant (Pipes. Pumps etc

€0.3mn O&M – M&E engineering

€3.52mn

Process control equip €0.3mn 0&M - Operatives €4mn

Source: SEAI

Thermal - Biomass boiler (large scale)

Thermal biomass boiler – Main Supplies

Planning, Permitting and Design

- Professional advisers (environmental. Engineering, legal, financial)

- Mechanical/electrical/civil engineering

Plant Manufacture

- Boilers

- Generator (if CHP); Accumulator

- Feed storage, hoppers and mechanical handling

- Air pollution control equip/flue

- Plant rooms and process control equipt

Installation/Commissioning

- Groundworks and civil engineering

- M&E Engineering

- Control Engineering

O&M

- M&E Engineering

- Residue Disposal

- Operators

Commercial Thermal Biomass, Heat – ROI Indicative Spend

Average annual spend 2013-2020

Average annual spend 2013-2020

Planning and permitting

€11mn Flue system <€1mn

Boiler €5mn Boiler installers €3mn

Fuel feeding system <€1mn Boiler house and Controls

€3mn

Fuels storage €1.5mn General installers, civils and project mgt

€40mn

Accumulator <€1mn O&M - maintenance €20mn

Pipes and Fittings <€1mn

Source: SEAI

Thermal Biomass, CHP – ROI Indicative Spend

Average annual spend 2013-2020

Average annual spend 2013-2020

Planning and permitting

€12mn Pother plant (pipes, pumps etc)

€2mn

Boiler €11mn Groundworks and civils

€7mn

Generator €3mn M&E and control engineering

€2mn

Mechanical Handling €3mn Device assembly €3mn

Air pollution control €2mn O&M –M&E €8mn

Process control equip €2mn O&M - Operatives €3mn

Source: SEAI

A Significant Market – Where to Start?

• Be clear on your sales channels?

• Where is your best skills fit?

• What will you compete on?

• How to build some track record?

• Partnerships to gain entry?

Sources of Information

• Invest NI – GB Bioenergy Market

http://www.investni.com/bioenergy_market_report_march_2013.pdf

• RESTATS

https://restats.decc.gov.uk/cms/welcome-to-the-restats-web-site/

• REPD

https://restats.decc.gov.uk/cms/planning-database/

• REPD Interactive Map

http://restats.decc.gov.uk/app/pub/map/map

• Biogas – Info Interactive Map

http://biogas-info.co.uk/maps/index2.htm

• Irish Bioenergy Association

• Biomass Energy Centre

http://www.renewables-map.co.uk/biomass.asp