Renewables Update

Biomass co-firing: For the reduction of coal-fired power plants in Japanese

3 October 2017 (Japanese original published on 27 September 2017)
Takanobu Aikawa, Senior Researcher, Renewable Energy Institute

In principle, an ideal application of bioenergy is to use local bioenergy resources preferentially from waste and byproducts as fuel for heat generation or cogeneration. Considering the distance of fuel transportation and the area where heat can be reached, bioenergy facilities should be in a small to medium scale, widely distributed. However, the current Japanese FiT scheme has failed to serve as an incentive for these applications, and instead has brought about many problems.

First, as the resource limitations are not considered in the scheme, the upper limit for the purchasing amount of resources is not specified. Also, as the capacity registered for FiT is not controlled, rapid expansion of the registered capacity of ordinary wood, mainly imported materials, has given rise to concerns over a fuel shortage. In addition, although bioenergy power generation consumes a large amount of fuel, there is no standard to secure its sustainability. This issue is most obvious in the case of palm oil power generation, which raises concerns over deforestation and increase of CO2 emissions 1 .

Problems in support for biomass co-firing under the FiT

Another big problem is that biomass co-firing in new coal-fired power plants is supported under the FiT.

While withdrawal from the coal business is gaining momentum globally, construction of 42 new coal-fired power plants (with a total capacity of 18.6 GW) is planned in Japan 2 . In terms of countermeasures for climate change, these projects are facing harsh criticism because they will cause substantial increase in CO2 emissions. However, as if to try to mitigate the criticism, many of these projects plan to adopt biomass co-firing, which allows them to be institutionally supported by the FiT.

Among the above new construction projects, the adoption of biomass co-firing is considered in 17 projects 3 . In particular, many smaller projects with a capacity of less than 112.5 MW, which are not included in the Class-2 projects for the national environmental impact assessment, plan to adopt biomass co-firing at a ratio of around 30% to meet the electric efficiency standards specified in the Energy Saving Act. Moreover, the Minister’s opinion requests that some larger projects, which fall into the Class-1 projects for the environmental impact assessment, adopt biomass co-firing 4 .

While the Japanese FiT system does not support biomass co-firing enabled by modification of existing plants, electricity generated from biomass fuel in newly constructed plants can be purchased under the FiT system. The problem here is the lack of minimum co-firing ratio requirements, leading to insufficient reduction of CO2 emissions. Certainly, biomass co-firing will reduce the CO2 emission factor of a power plant. However, if the biomass co-firing ratio is around 30% only, which is often seen in the new projects, the CO2 emission factor will be much higher than that of conventional gas-fired power plants 5 .

Another problem is a higher level of support provided by the current FiT system relative to the cost required for co-firing. All the new construction projects have been registered under the “ordinary wood” category of the FiT; therefore, a tariff of 24 yen/kWh will be applied 6 . As the cost for biomass co-firing coal-fired power generation is said to be about ten-odd yen/kWh, the current FiT system obviously offers too much support.

The world is aiming for a higher co-firing rate and 100% conversion

Since the 2000s, biomass co-firing has been widely introduced in coal-fired power plants, mainly in Europe, also spreading in North America, Australia, and Asia. In Japan, conventional utilities adopted biomass co-firing at a ratio of around 3% in 12 plants nationwide before the FiT system was introduced. However, the world has seen a rise in the co-firing ratio, and over 20% biomass co-firing has been adopted in an increasing number of plants 7 .

In addition, with the recent trend to seek stronger climate change measures, control on coal-fired power plants has been tightened globally. In this situation, there are some cases in which a rise in the co-firing ratio eventually results in 100% conversion to biomass. For example, Drax, which used to be the largest coal-fired power plant in the UK, started co-firing efforts in 2003, and finally succeeded in 100% conversion to biomass. Atikokan Generating Station in Ontario, Canada also accomplished 100% conversion to biomass in 2014. Moreover, DONG Energy in Denmark announced in February 2017 that their thermal power plants (all of which are cogeneration type) would completely stop the use of coal and replace it with biomass by 2023.

Biomass co-firing policies in European countries

In this way, biomass co-firing has the characteristics of replacing coal and reducing its use directly. However, political support for biomass co-firing needs to be designed carefully in consideration of sustainable availability of fuel and other factors. Particular concerns in recent years are that the expansion of renewable energy deployment will reduce the capacity factor of thermal power plants, making it difficult to maintain sound operation 8 . Therefore, some European countries do not take a positive stance toward political support for co-firing. For example, the German FiT does not include biomass power generation or co-firing with a capacity of 20 MW or more 9 .

On the other hand, countries such as the UK and the Netherlands have offered political support for conversion from coal to biomass under certain conditions. These countries have some prerequisites for support. First, they have a clear policy to withdraw from coal-fired power (Table 1). Second, in consideration of the influence of the large consumption of fuel, they have formulated sustainability criteria to secure the ecosystem sustainability and CO2 reduction effect, and mandated compliance with such criteria 10 . Third, the total amount to be supported is controlled at the national level. Specifically, the auction system is adopted, aiming to control the supported amount and reduce the costs at the same time. For cogeneration using bioenergy, both the UK and the Netherlands have a support scheme different from that for co-firing.

In the EU, around half of 6.6 million t/year of imported palm oil has been used as auto fuel, but the EU is in the direction of imposing restrictions to palm oil. Specifically, the EU revised the Renewable Energy Directive in 2015 to modify its scheme in a manner to take into consideration effects of changes in land use, as well as to set higher standards for reduction of greenhouse gas emissions. In May 2017, the European Parliament adopted a resolution that use of vegetable oil that might result in deforestation as fuel, especially for automobiles, be phased out by 2020 11 .

Table 1: Overview of support measures for co-firing in the UK and the Netherlands

  UK Netherland
Policy for coal-fired power Decided to shut down all coal-fired power plants by 2025 - Agreed to shut down five aging coal-fired power plants (by the government and power industry)
- Requested to withdraw from coal-fired power (by parliamentary resolution)
Scheme name FiT-CfD SDE+
Sustainability criteria Required Required
Target for support Conversion to biomass (90% or more) Biomass co-firing (without ratio requirement*1)
Amount to be supported*2 2,500 MW 486 MW
Tariff 10.5 pence/kWh
(Standard price set by the government)
7.0-11.5 €ct/kWh
(Standard price in four auctions)
Period of support 15 years 8 years
Note 1) The actual co-firing ratio is 10-80% in the Netherlands. The weighted average of co-firing ratio adjusted with respect to installed capacity is equivalent to 31%.
Note 2) The amount to be supported is the generation capacity using biomass fuel. It is equivalent to the capacity adjusted with respect to the biomass ratio in Japan.
Source) Adapted from the following documents.
John Bingham (2015) The outlook for industrial wood pellets in Europe and Asia
Michael Carbo et al. (2017) Biomass and co-firing: Experience and future perspectives from the Netherlands

Direction of improvement of the Japanese FiT scheme

Now, let’s look at the situation in Japan. The Japanese FiT scheme includes biomass co-firing in new coal-fired power plants regardless of the co-firing ratio. Therefore, biomass co-firing supported under the FiT scheme actually encourages the increase of coal-fired power plants. Immediate action should be taken to correct this problem.

First, new coal-fired power plants should be excluded from the FiT because they will lead to an increase of coal-fired power generation. If the FiT includes these plants, there should be a minimum biomass co-firing ratio requirement that is comparable to the CO2 reduction level of latest gas-fired power plants, for example, so that significant CO2 reduction can be secured. Also, related rules need to be developed, and these rules should include the provision that registered plants whose co-firing ratio is lowered to a certain level will be excluded from the FiT. Moreover, in order to prevent serious fuel shortage, control of the total amount and the prompt formulation of the sustainability criteria are necessary.

Finally, while biomass co-firing in existing plants is not supported under the FiT, it may be worth considering a separate support measure for plants that satisfy certain prerequisites, such as 100% conversion from coal to biomass.

 1 Takanobu Aikawa (2017) “Great Risks Involved in Palm Oil Power Generation: Sustainability Standards Are Urgently Needed”
 2 Refer to the report “Business Risks of New Coal-fired Power Plant Projects in Japan —The Decline in Capacity Factor and Its Effect on the Business Feasibility” issued by Renewable Energy Institute (2017).
 3 Source: Japan Coal Plant Tracker by Kiko Network
 4 Source: Submitting the Minister’s opinion on the draft environmental impact assessment for the Taketoyo Thermal Power Plant replacement plan (1 August 2017)
 5 If co-firing is implemented in a conventional coal-fired power plant (emission factor: 0.867 kg-CO2/kWh), the emission factor will be 0.607 kg-CO2/kWh at the co-firing ratio of 30%, and 0.434 kg-CO2/kWh at the co-firing ratio of 50%. As the emission factor of a conventional gas-fired power plant is 0.415 kg-CO2/kWh, the co-firing ratio needs to be around 50% to achieve an emission factor equivalent to that of a conventional gas-fired power plant. However, most newly constructed gas-fired power plants employ combined-cycle technology, and their emission factor is 0.32-0.36 kg-CO2/kWh. To reach this level, the co-firing ratio needs to be more than 60%.
 6 Source: “Website to Publish Information on the Feed-in Tariff System” by the Agency for Natural Resources and Energy. Assuming that a biomass co-firing plant mainly uses coal as fuel if its registered capacity is reduced to half or less by being adjusted with the biomass ratio, there are 23 registered plants in 11 municipalities. According to the Agency for Natural Resources and Energy, these plants include some existing plants that were accidentally registered, although biomass co-firing in existing plants is supposed to be excluded from the FiT.
 7 According to the survey by the IEA Bioenergy Task32, biomass co-firing is adopted in 228 plants worldwide.
 8 A similar forecast has also been made in Japan. For details, refer to the report “Business Risks of New Coal-fired Power Plant Projects in Japan —The Decline in Capacity Factor and Its Effect on the Business Feasibility” issued by Renewable Energy Institute (2017).
 9 There are many biomass co-firing plants in Germany, but they use biomass fuel recycled from waste.
 10 Refer to “Recommendations for Woody Biomass Power Generation under FiT” proposed by Renewable Energy Institute (2016) for the sustainability criteria of the two countries.