Pacific Gas & Electric Company to research large-scale biomethane resources for its customers
Pacific Gas and Electric Company (PG&E), one of the largest combination natural gas and electric utilities in the United States, announced that it has issued a Request for Information (RFI) to identify partners for a potential project to demonstrate technologies that could cost-effectively produce significant quantities of biomethane - pipeline-quality, renewable natural gas. The demonstration project is part of PG&E's commitment to increase the amount of clean energy it provides customers throughout its northern and central California service area. The company created an online biomethanation forum where interested parties can meet.
Biomethane is pipeline-quality gas derived from biomass as defined [*.pdf] by the California Energy Commission (CEC), which includes any organic material not derived from fossil fuels, including agricultural crops, agricultural and forestry wastes and residues, and construction wood wastes, among others. Biomethanation, also called anaerobic digestion, is the biochemical process of converting biomass to biogas via microorganisms. Alternatively, a thermochemical pathway based on the gasification of biomass can be used to yield socalled synthetic natural gas (called 'bio-SNG' or 'greengas' in Europe).
Renewable biogas is then purified and upgraded to pipeline quality and can be blended with natural gas in existing pipelines. This is done in Europe on an increasingly large scale. In the U.S., the first such project was announced only recently (previous post).
According to energy experts, the highly efficient gaseous biofuel holds a large potential across the world. In Europe, a comprehensive study showed that biogas can replace all of the continent's Russian gas imports by 2020. The EU could generate around 500 million cubic meters of biogas per year, sustainably. Estimates of the potential for China and the U.S. are even larger (previous post). PG&E is aware of this potential.
Emerging biomethanation technologies and processes may increase conversion efficiency, expand the range of usable feedstock, and improve the quality of biomethane products. To accelerate the commercial availability of these emerging biomethanation technologies, PG&E is seeking partners to develop and operate a facility that will demonstrate the technical and economic feasibility of emerging technologies for developing significant quantities of biomethane:
energy :: sustainability :: natural gas :: biomass :: bioenergy :: biofuels :: biogas :: biomethane :: biomethanation :: anaerobic digestion :: bio-SNG :: California ::
Through the proposed biomethanation demonstration project, PG&E intends to promote viable biomethanation technologies that convert CEC-approved sources of biomass into biomethane that could be injected into PG&E's gas transmission system and delivered for high-value uses such as dispatchable power generation.
PG&E will hold a networking forum on March 5 from 10 a.m. to 4 p.m. at its San Francisco headquarters to answer questions about the RFI and provide an opportunity for potential project partners to meet. Parties interested in attending the forum must register online by February 22, 2008, here [*.pdf]. For more information about the RFI, or to participate in PG&E's online biomethanation RFI forum, please visit: www.pge.com/rfi.
PG&E is a leader in utilizing biomethane. The utility recently received approval by the California Public Utilities Commission of its gas purchase agreements with Microgy, Inc. and with BioEnergy Solutions to deliver up to 8,000 MMBtu per day each of pipeline quality biomethane captured from cow manure.
PG&E currently supplies 12 percent of its power from qualifying renewable sources under California's Renewable Portfolio Standard (RPS) program. PG&E continues to aggressively add renewable electric power resources to its supply and is on target to exceed 20 percent under contract or delivered by 2010. On average, more than 50 percent of the energy PG&E delivers to its customers comes from generating sources that emit no carbon dioxide, providing among the cleanest energy in the nation.
References:
PG&E: Pacific Gas and Electric Company Seeks to Research Biomethane Resources for its Customers - January 24, 2008.
PG&E: biomethanation forum.
Biopact: Germany considers opening natural gas network to biogas - major boost to sector - August 11, 2007
Biopact: Market study tracks global boom in biogas, Germany technology leader - July 13, 2007
Biopact: Report: biogas can replace all EU natural gas imports - January 04, 2008
Biopact: A first for the U.S.: company feeds biomethane into natural gas pipeline - January 22, 2008
Biopact: EU research project looks at feeding biogas into the main natural gas grid - April 08, 2007
Biopact: Schmack Biogas and E.ON to build Europe's largest biogas plant, will feed gas into natural gas grid - July 18, 2007
Article continues
Biomethane is pipeline-quality gas derived from biomass as defined [*.pdf] by the California Energy Commission (CEC), which includes any organic material not derived from fossil fuels, including agricultural crops, agricultural and forestry wastes and residues, and construction wood wastes, among others. Biomethanation, also called anaerobic digestion, is the biochemical process of converting biomass to biogas via microorganisms. Alternatively, a thermochemical pathway based on the gasification of biomass can be used to yield socalled synthetic natural gas (called 'bio-SNG' or 'greengas' in Europe).
Renewable biogas is then purified and upgraded to pipeline quality and can be blended with natural gas in existing pipelines. This is done in Europe on an increasingly large scale. In the U.S., the first such project was announced only recently (previous post).
According to energy experts, the highly efficient gaseous biofuel holds a large potential across the world. In Europe, a comprehensive study showed that biogas can replace all of the continent's Russian gas imports by 2020. The EU could generate around 500 million cubic meters of biogas per year, sustainably. Estimates of the potential for China and the U.S. are even larger (previous post). PG&E is aware of this potential.
There is a tremendous opportunity in California to utilize biomass, which would otherwise go unused, to contribute significantly to meeting the state's climate goals. With this request for information, we hope to identify promising biomethanation technologies and understand what the market needs for support. Biomethanation is the latest example of how PG&E is planning for the future by exploring innovative technologies to produce and deliver clean energy. - Fong Wan, vice president of Energy Procurement for PG&ECalifornia and the western region of North America contain large quantities of biomass, which could meaningfully contribute toward the state's renewable energy requirements while simultaneously providing other benefits, including greenhouse gas emission reduction, fire prevention, improved local air quality and landfill disposal reduction.
Emerging biomethanation technologies and processes may increase conversion efficiency, expand the range of usable feedstock, and improve the quality of biomethane products. To accelerate the commercial availability of these emerging biomethanation technologies, PG&E is seeking partners to develop and operate a facility that will demonstrate the technical and economic feasibility of emerging technologies for developing significant quantities of biomethane:
energy :: sustainability :: natural gas :: biomass :: bioenergy :: biofuels :: biogas :: biomethane :: biomethanation :: anaerobic digestion :: bio-SNG :: California ::
Through the proposed biomethanation demonstration project, PG&E intends to promote viable biomethanation technologies that convert CEC-approved sources of biomass into biomethane that could be injected into PG&E's gas transmission system and delivered for high-value uses such as dispatchable power generation.
PG&E will hold a networking forum on March 5 from 10 a.m. to 4 p.m. at its San Francisco headquarters to answer questions about the RFI and provide an opportunity for potential project partners to meet. Parties interested in attending the forum must register online by February 22, 2008, here [*.pdf]. For more information about the RFI, or to participate in PG&E's online biomethanation RFI forum, please visit: www.pge.com/rfi.
PG&E is a leader in utilizing biomethane. The utility recently received approval by the California Public Utilities Commission of its gas purchase agreements with Microgy, Inc. and with BioEnergy Solutions to deliver up to 8,000 MMBtu per day each of pipeline quality biomethane captured from cow manure.
PG&E currently supplies 12 percent of its power from qualifying renewable sources under California's Renewable Portfolio Standard (RPS) program. PG&E continues to aggressively add renewable electric power resources to its supply and is on target to exceed 20 percent under contract or delivered by 2010. On average, more than 50 percent of the energy PG&E delivers to its customers comes from generating sources that emit no carbon dioxide, providing among the cleanest energy in the nation.
References:
PG&E: Pacific Gas and Electric Company Seeks to Research Biomethane Resources for its Customers - January 24, 2008.
PG&E: biomethanation forum.
Biopact: Germany considers opening natural gas network to biogas - major boost to sector - August 11, 2007
Biopact: Market study tracks global boom in biogas, Germany technology leader - July 13, 2007
Biopact: Report: biogas can replace all EU natural gas imports - January 04, 2008
Biopact: A first for the U.S.: company feeds biomethane into natural gas pipeline - January 22, 2008
Biopact: EU research project looks at feeding biogas into the main natural gas grid - April 08, 2007
Biopact: Schmack Biogas and E.ON to build Europe's largest biogas plant, will feed gas into natural gas grid - July 18, 2007
Article continues
Friday, January 25, 2008
Coal's deep trouble makes biomass highly attractive
Let's do the math, but take into account that data for biomass price estimates are rudimentary and freight rates for the bulky fuel would be difficult to assess. We compare South African coal - more than a quarter of Europe's energy coal is shipped from Richards Bay - with prices for palm kernel shells, a biomass fuel that is being co-fired routinely by several European power producers. Palm kernel shells (PKS) are a waste residue from palm fruit processing; they are easy to ship, don't need to be densified and can be readily co-fired with coal (for PKS fuel properties, see the IEA Bioenergy Task 32 - Biomass Combustion and Co-firing and its databases on biomass fuels).
- European contracts for South African coal from Richards Bay for delivery to Amsterdam-Rotterdam-Antwerp with settlement next year rose to $112.25 per metric ton today. Spot prices for FOB deals have been consistently hovering around $100/ton for months, and have been higher than that for most contracts since the beginning of this year.
- Coal at Richards Bay has an average heating value of 25.1 Gj/ton. So today's price comes down to $4.427/Gj, which is high by any means, but still cheaper than continental natural gas.
- Palm kernel shells from Nigeria, Africa's largest producer, fetch farmgate prices of $6.45/ton. Biopact has an FOB quote for 20,000 tons at $40 per ton, for dry PKS, shipped out from Port Harcourt. It would seem that $40 per ton is high, compared to such a low farmgate price, but we take it as an indicator of inefficient logistics in Nigeria - we can imagine it isn't easy to collect PKS from plantations inland and to transport it over bad roads to port. So we take the FOB price as such (negotiations would certainly push it down a bit).
- Dry palm kernel shells have a heating value of around 21 Gj/ton. So the $40/ton price would be equivalent to $1.904/Gj. A major competitive edge over South African thermal coal.
- However, freight rates would be considerably higher for PKS because of the much lower bulk density of the biomass fuel (750kg/m³) compared with Richards Bay coal (around 1300kg/m³).
- Freight rates for dry bulk goods have seen records over the past year, but have crashed recently on fears of a global recession (see chart of the Baltic Dry Index, the most often quoted index for commodity freight rates; click to enlarge). So it's a bit tricky to estimate prices. We would however guesstimate, given the fact that the difference in the FOB price between coal and PKS is so big, even much higher freight rates would not close the price gap between the two fuels anywhere soon. We averaged shipping prices for grains with a similar bulk density (around 750kg/m³), and find PKS would still be considerably cheaper at their destination: Amsterdam-Rotterdam-Antwerp.
- Add that the distance between Port Hartcourt and Antwerp (4419 nautical miles) is considerably shorter than that between Richards Bay and Antwerp (7,033 nautical miles). So this would largely offset higher freight rates for PKS. On the other hand, handling procedures and other supply chain steps for such a new fuel like PKS are probably untested and inefficient at the moment. This would add some to the price.
- Finally, it is important to note that co-firing renewable biomass yields added value for power producers, because the fuel reduces carbon emissions - this added value can be expressed in many forms: green electricity certificates, carbon credits, etc...
In short, it seems like palm kernel shells from Nigeria could beat several contracts for coal from South Africa. If coal's problems persist over the coming years, similar forms of biomass could begin to find a niche as a commercially viable alternative fuel source. Supply chains and logistical infrastructures are virtually non-existent (some current biomass trade routes pictured in the map) which means a dedicated investment in these chains in places where a secure biomass supply is available, could lower prices still further.References on which we based our guesstimation can be found below:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: crop residues :: coal :: co-firing ::
Coal in trouble:
Bloomberg: Coal Rises the Most in Three Weeks as South African Mines Shut - January 25, 2008.
Reuters: S.Africa export coal to be kept for domestic - January 24, 2008.
AP: China Halts Coal Exports Amid Shortage - January 26, 2008.
Times Online: Coal, and not gold, should be the real concern - January 26, 2008.
Mining Weekly: More coal price increases on the way, says senior analyst - January 25, 2008.
Fairfield (Australia): Spot the boom as coal price soars - January 25, 2008.
Reuters: China may delay coal exports on power shortages - January 24, 2008.
News about spot prices, discussion of several contracts:
Reuters: Richards Bay, DES ARA coal prices rise - January 8, 2008.
Reuters: RPT-PREVIEW-Japan-Australia '08 thermal coal price record-bound - January 24, 2008.
Freight costs:
Coal Portal: Freight rates [subscription req'd].
The Baltic Dry Index, which measures shipping costs for commodities.
Example list of concrete freight rates for grains, per ton, over the past months and years - one company; we compared prices over at different charterers.
Co-firing PKS and biomass in general:
Essent Energy's Amer power plant in the Netherlands is one of the facilities in Europe co-firing PKS and coal.
Two interesting case studies about this practise can be found here:
IEA Bioenergy Task 38: "Greenhouse Gas Balances of Biomass Import Chains for “Green” Electricity Production in The Netherlands" [*.pdf], IEA Bioenergy Task 38, Greenhouse Gas Balances of Biomass and Bioenergy Systems.
IEA Bioenergy Task 40: "Sustainable International Bioenergy Trade: securing an international supply and demand", IEA Bioenergy Task 40: international bioenergy trade, 2006.
On co-firing biomass in general, see the IEA's Bioenergy Task 32, entirely devoted to the topic. See especially its co-firing database of 150 major power producers who burn biomass alongside coal. Data about fuel properties for different types of biomass can be found in these databases.
Farmgate price estimates for crop residues in Nigeria can be found here:
S.O. Jekayinfa, and V. Scholz, "Assessment of Availability and Cost of Energetically Usable Crop Residues in Nigeria", Tropentag 2007, University of Kassel-Witzenhausen and University of Göttingen, October 9-11, 2007, Conference on International Agricultural Research for Development.
The quote we received for the 20,000 tons of PKS comes from a Nigerian agribusiness company based in Owerri in Imo State. Contact us for details.
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posted by Biopact team at 10:50 PM 1 comments links to this post