Biomass gasification opportunities in a district heating system

This paper evaluates the economic effects and the potential for reduced CO₂ emissions when biomass gasification applications are introduced in a Swedish district heating (DH) system. The gasification applications included in the study deliver heat to the DH network while producing renewable electricity or biofuels. Gasification applications included are: external superheater for steam from waste incineration (waste boost, WB), gas engine CHP (BIGGE), combined cycle CHP (BIGCC) and production of synthetic natural gas (SNG) for use as transportation fuel. Six scenarios are used, employing two time perspectives – short-term and medium-term – and differing in economic input data, investment options and technical system. To evaluate the economic performance an optimisation model is used to identify the most profitable alternatives regarding investments and plant operation while meeting the DH demand. This study shows that introducing biomass gasification in the DH system will lead to economic benefits for the DH supplier as well as reduce global CO₂ emissions. Biomass gasification significantly increases the potential for production of high value products (electricity or SNG) in the DH system. However, which form of investment that is most profitable is shown to be highly dependent on the level of policy instruments for biofuels and renewable electricity. Biomass gasification applications can thus be interesting for DH suppliers in the future, and may be a vital measure to reach the 2020 targets for greenhouse gases and renewable energy, given continued technology development and long-term policy instruments.     

Wind power feasibility analysis under uncertainty in the Brazilian electricity market

Investors must be able to plan and analyze their investments in order to optimize decisions and turn them into profits associated with a particular project. Since electricity producers in the Brazilian electric power system are exposed to a short-term market, the goal of this paper is to propose a framework for investment analysis capable of encompassing different uncertainties and possibilities for wind power generators in a regulated market, characterized by auctions. In order to reach the proposed objective we employ a simulation technique which allows modeling cash flows considering uncertainties in variables related to project financial premises, electricity generation and producer exposure to the short-term market. For such goal, this study presents a new approach for investment analysis that allows the identification of the main uncertainty parameters and risks associated to this class of projects in the Brazilian electricity market. We also employ the Value at Risk technique to perform a risk management analysis in such context.     

Efficient pricing and investment in electricity markets with intermittent resources

Facing growing technological and environmental challenges, the electricity industry needs effective pricing mechanism to promote efficient risk management and investment decisions. In a restructured electricity market with competitive wholesale prices and traditionally regulated retail rates, however, there are technical and institutional barriers that prevent dynamic pricing with price responsive demand. In regions with limited energy storage capacity, intermittent renewable resources present special challenges. This could adversely affect the effectiveness of public policies causing inefficient investments in energy technologies. In this paper, we present an updated economic model of pricing and investment in restructured electricity market and use the model in a simulation study for an initial assessment of renewable energy strategy and alternative pricing mechanisms. A key objective of the study is to shed light on the policy issues so that effective decisions can be made to improve efficiency.     

Decision support system for exploiting local renewable energy sources: A case study of the Chigu area of southwestern Taiwan

The topic of climate and energy policy has drawn new attention since the Kyoto Protocol has now come into force. It is hoped that strengthened use of renewable energy sources can meet new international environmental requirements and provide self-sufficient domestic energy supplies. The decision support system established in this study integrates potential evaluations, cost analyses, legal incentives, and analysis of returns on investments with the aid of a geographic information system (GIS). This system can provide insights for policymakers into where and the extent of the potentials, for lawmakers into whether the current legal incentives are sufficient to encourage private investment, and for investors into whether investments in exploiting local renewable energy sources are economically feasible. Under the current incentive framework in Taiwan, the amortization periods of investment on renewable energy are generally longer than the period over which the investment is to be recovered. This presents an unfavorable condition for attracting investments to and for developing renewable energy. An increase in remuneration through legal revisions is needed before domestic investment in renewable energy will actively expand.     

Economic and environmental assessment on the energetic valorization of organic material for a municipality in Quebec, Canada

Waste-to-energy provides a solution to two problems: waste management and energy generation. An integrated anaerobic waste valorization process is an interesting option, but because of investments cost and low energy value in the province of Quebec, it is hard for a municipality to commit to that solution. This paper investigated the economic possibilities to manage organic material, organic fraction of municipal solid waste, and municipal wastewater sludge by anaerobic digestion for a 150,000 inhabitant municipality, with consideration to energy generation and greenhouse gas emission reduction. Using the biogas to co-generation solution brings a payback time on investment (PBT) of 3.7 years with electricity price at 0.10 $Cdn/kW h. The addition of manure from surrounding farms increases the biogas production by 37%, but increases the PBT to 6.8 years unless the leftover digestate can be used for agronomic valorization; then it becomes economically advantageous. The natural gas purchasing cost is too low to promote the enrichment of biogas into renewable natural gas. However, this scenario has the lowest energetic payback time (3.3 years) and reduces the most greenhouse gas emissions (4261 tCO₂eq/a).     

Economic analysis of renewable heat and electricity production by sewage sludge digestion—a case study

In this paper, we assess the total cost of energy recovery from sewage sludge through anaerobic digestion with biogas utilization in combined heat and power (CHP) system. The important advantage of anaerobic digestion process is the production of biogas, which can be used to generate electricity and heat as a source of renewable energy. From this study, it can be retained that the generated thermal energy from the anaerobic digestion process meets the needs of the wastewater treatment plant (WWTP) and guarantees its self‐sufficiency in heat. The surplus of renewable heat produced by CHP is not a primary factor to improve the economic viability of the process. Moreover, the sales of electricity output represent about 76% of the operating costs of anaerobic digestion process. Renewable energy production is not economically viable by its own, without considering the wastewater treatment function and the associated incomes. Nevertheless, sludge digestion helps to reduce the wastewater treatment costs mainly by giving a good source of revenue via electricity production. Copyright © 2014 John Wiley & Sons, Ltd.     

New energy strategies in the Swedish pulp and paper industry—The role of national and EU climate and energy policies

The Swedish pulp and paper industry has gone through a strategic change in its approach to electricity production and consumption over the past decade. This paper documents this reorientation, which includes increased on-site electricity production, investments and investment plans for wind power, and new partnerships concerning investments in electricity production assets. We also assess the extent to which these changes can be attributed to key energy and climate policies. Our analysis shows that this strategic reorientation has been driven by changes in the underlying economic conditions for the pulp and paper industry, in particular increases in the price of electricity following the Swedish energy market reform in 1996, and the introduction of the EU ETS. The scheme for tradable renewable electricity certificates, on the other hand, has provided a new source of income. While these market-based signals and responses are the most dominant drivers of strategic change, cognitive changes in the pulp and paper industry have also played a role in the strategic reorientation. The cognitive changes concerning the functioning of the electricity market, i.e. the pricing of electricity and influence of the EU ETS, have been particularly important in this regard.     

Investment screening model for spatial deployment of power-to-gas plants on a national scale – A Danish case

When transitioning to a 100% renewable energy system storing electricity becomes a focal point, as the resource flexibility is lost and the design of the energy system needs to provide flexibility and balancing options to integrate intermittent renewable resources. Using technologies such as power-to-gas offers an opportunity to store electricity in chemical form, which can be used as a long-term storage option. This paper develops a spatial modelling method by using a GIS tool to investigate potential generation sites for power-to-gas plants. The method determines the location of the plants by carbon source potential, proximity of the grid, costs of grid transmission and investment costs of the technology itself. By combining these types of data, it is possible to identify the investment costs of the power-to-gas plants. The method focuses on two paths: biogas upgrade and CO₂ methanation. The method is applied to a specific case by investigating the power-to-gas potential in Denmark. The potential and spatial deployment is found by examining the investment costs of plants with an annual gas production of 60 GWh. The findings of the analysis indicate that the biogas upgrade path is the cheapest one of the two, at the present cost level, but due to the relatively small number of biogas plants in Denmark, the chosen plant size is limited to around 55 plants. CO₂ methanation is a more costly path, but it has a larger potential of around 800 plants. As the analysis is based on the current sources for biogas and CO₂, it is important to emphasise that the potential for CO₂ methanation plants can be expected to diminish in the future as more renewable energy is introduced, lowering the need for thermal energy producers, while biogas production could see an increase. Nevertheless, the analysis of a specific case shows that the method gives a good indication of the extent of the power-to-gas resources by using a novel approach to the matter. The method can be applied in other countries as well, giving it a wide appeal.     

Hybridizing concentrated solar power (CSP) with biogas and biomethane as an alternative to natural gas: Analysis of environmental performance using LCA

Concentrating Solar Power (CSP) plants typically incorporate one or various auxiliary boilers operating in parallel to the solar field to facilitate start up operations, provide system stability, avoid freezing of heat transfer fluid (HTF) and increase generation capacity. The environmental performance of these plants is highly influenced by the energy input and the type of auxiliary fuel, which in most cases is natural gas (NG). Replacing the NG with biogas or biomethane (BM) in commercial CSP installations is being considered as a means to produce electricity that is fully renewable and free from fossil inputs. Despite their renewable nature, the use of these biofuels also generates environmental impacts that need to be adequately identified and quantified. This paper investigates the environmental performance of a commercial wet-cooled parabolic trough 50 MWe CSP plant in Spain operating according to two strategies: solar-only, with minimum technically viable energy non-solar contribution; and hybrid operation, where 12% of the electricity derives from auxiliary fuels (as permitted by Spanish legislation). The analysis was based on standard Life Cycle Assessment (LCA) methodology (ISO 14040-14040). The technical viability and the environmental profile of operating the CSP plant with different auxiliary fuels was evaluated, including: NG; biogas from an adjacent plant; and BM withdrawn from the gas network. The effect of using different substrates (biowaste, sewage sludge, grass and a mix of biowaste with animal manure) for the production of the biofuels was also investigated. The results showed that NG is responsible for most of the environmental damage associated with the operation of the plant in hybrid mode. Replacing NG with biogas resulted in a significant improvement of the environmental performance of the installation, primarily due to reduced impact in the following categories: natural land transformation, depletion of fossil resources, and climate change. However, despite the renewable nature of the biofuels, other environmental categories like human toxicity, eutrophication, acidification and marine ecotoxicity scored higher when using biogas and BM.     

De-risking investment into concentrated solar power in North Africa: Impacts on the costs of electricity generation

A low-carbon energy transition on the basis of renewable energy sources (RES) is of crucial importance to solve the interlinked global challenges of climate change and energy security. However, large-scale deployment of RES requires substantial investments, including the participation of private capital. Scientific evidence shows that the economic feasibility of a RES project hinges on the availability of affordable project financing, which itself depends on risk perceptions by private investors. Since financing costs tend to be particularly high for capital-intensive RES projects and in developing countries, we investigate the impacts of addressing these perceived risks on electricity prices from semi-dispatchable concentrated solar power (CSP) in four North African countries. By employing a levelized cost of electricity (LCOE) model we find that comprehensively de-risking CSP investments leads to a 39% reduction in the mean LCOE from CSP. However, this reduction is still not sufficient to achieve economic competitiveness of CSP with highly subsidized conventional electricity from fossil fuels in North Africa. Hence, our results suggest that de-risking reflects an important strategy to foster the deployment of CSP in North Africa but additional measures to support RES, such as reconsidering fossil fuel subsidies, will be needed.     

The expansion of renewable energies and employment effects in Germany

The promotion of electricity produced from renewable energy is a high priority of the European Union, as well of its member states. The German government wants to increase the share of renewable energies from about 5% to 12% by 2010. To attain this goal, the German government has introduced compulsory compensation schemes for electricity produced from renewable energy fed into the public grid. This paper examines the economic impact of this policy employing an econometric model. Particular emphasis was given to employment effects. In general, we distinguish two effects: (1) an expansive effect resulting from additional investments and (2) a contractive effect resulting from an increase in the production cost of power. The first effect will dominate during the first years and lead to an increase in employment of approximately 33,000 new jobs. However, the contractive effect will offset these gains and lead to a slightly negative employment balance by 2010.     

Top down strategy for renewable energy investment: Conceptual framework and implementation

Electricity market is undergoing a tremendous transformation throughout the world. A drastic reduction of carbon emission cannot be realized if renewable energy resources are not increased in share of generation mix. Currently, most of the traditional mechanisms, including regulatory policies, fiscal incentives and public financing, are initiated from and heavily relied on policymakers and governments. However, not only these schemes do not necessarily align with business interests of investors, but also the motivations for renewable energy developments are always initiated by governments. In order to realize the full potential of renewable energy investment, an innovative approach is necessary to motivate investors and lessen government expenditures.In this paper, we present a top down strategy for renewable energy investment. The proposed approach is a three-step framework. By applying the approach, renewable energy global market leaders and trends will be identified and analyzed that included: (1) economics and renewable energy policy, (2) specific renewable energy sectors that presents the most attractive investment opportunity, (3) and finally the most promising renewable energy investment vehicles for investors. Other stakeholders can also use the developed framework, such as consumers and policymakers, to make socio-economic decisions and assess renewable energy investments.     

Multidimensional evaluation of global investments on the renewable energy with the integrated fuzzy decision‐making model under the hesitancy

This study aims to assess global investment alternatives with respect to renewable energy. Within this framework, five different renewable energy types (biomass, hydropower, geothermal, wind, and solar) are determined as investment alternatives. Moreover, eight different criteria are selected by considering the four different dimensions of balanced scorecard. Additionally, the fuzzy‐based decision making trial and the evaluation laboratory under the hesitancy (HF‐DEMATEL) model are taken into the account to weight these dimensions and criteria and the technique for order the preferences by the similarity to the ideal solution with the fuzzy hesitant methodology (HF‐TOPSIS) is considered to select the alternatives of renewable energy investments. The novelties of this study are to propose an integrated model and provide the balanced scorecard–based evaluations of global renewable energy investment alternatives. The findings show that learning and growth and customer are the most important dimensions for the investment on renewable energy. It is also identified that market potential, product customization, and technological development are the most significant criteria for this situation. On the other side, solar and wind energy are the most important renewable investment alternatives. These results explain that technological improvement should be maintained, and customer expectations should be met by the companies. Furthermore, solar power plant and wind power plant should be developed in the countries. For this purpose, governments should give necessary incentives to the investors, such as allocating appropriate lands. These actions can attract the attentions of the potential investors for these renewable energy alternatives. Owing to this issue, it can be possible to increase the capacity of electricity productions in the countries with a potential minimum cost.     

Upgrading biogas produced at dairy farms into renewable natural gas by methanation

Renewable natural gas can be produced from raw biogas, a product of the anaerobic decomposition of organic material, by upgrading its CO₂ content (25‐50%) via thermocatalytic hydrogenation (CO₂ methanation). The H₂ needed for this reaction can be generated by water electrolysis powered by carbon emission‐free energy sources such as renewable or nuclear power, or using surplus electricity. Herein, after briefly outlining some aspects of biogas production at dairy farms and highlighting recent developments in the design of methanation systems, a case study on the renewable natural gas generation is presented. The performance of a system for renewable natural gas generation from a 2000‐head dairy farm livestock manure is evaluated and assessed for its economic potential. The project is predicted to generate revenue through the sale of energy and carbon credits with the payback period of 5 years, with a subsidized energy price.     

Promotional policy and perspectives of usage renewable energy in Lithuania

The article outlines renewable energy (RE) sources according to the energy efficiency policy in Lithuania as well as practical experience of implementation of RE projects within the framework of the government policy to promote RES use due to the requirement of the European Union. The main goal of the country is to reduce the import of fossil fuel, to improve environment conditions and to reduce the climate change impact. Analysis of implemented RE projects and forecasts for the future projects are also presented. Most of the efforts in Lithuania were aimed at drafting the biomass (wood chips, wood waste, straw, biogas) and small hydro projects and their subsequent implementation. At present the total capacity of wood-chip-fuelled boilers reached above 251 MW. No serious obstacles can be seen for the extension of wood fuel use. At present, new demonstrational projects have been started covering geothermal energy, solar energy, biogas, biofuels for transport and other. In this time, the RE sources comprise 7.69% of national energy balance. Taking into account feasible resources of RE (it is more than 19.85 TWh/year) and the ongoing implementation of projects it is clear that the share of RE sources will constitute 12–13% of national energy balance in 2010 year. The main factor limiting further growth is high investment costs. The electricity production from local and RE sources in Lithuania is mainly based on hydro energy. At this time the wind energy is not used for this purpose. The electricity production from local and renewable energy sources is about 3.22% of the total consumption.     

Feasibility assessment of introducing distributed energy resources in urban areas of China

In this study, based on the consideration of achieving a low-carbon city, a distributed energy system is promoted by integrating combined heat and power (CHP) plant, biomass energy and photovoltaic technology, for the urban areas in China. An analytical model has been developed for estimating an economically efficient installation and operation pattern for the distributed energy system. As an illustrative example, a numerical study is conducted of feasible distributed energy system for a model area in Shanghai, while considering five scenarios with different technology combinations. According to the simulation results, although enjoying reasonable environmental merits, it is hard to diffuse the distributed generation technologies, especially some renewable ones, in the model area from the economic point of view. Currently, the most feasible technology is the natural gas CHP system, which has a cost reduction ratio of only 0.7%. In addition, the sensitivity analyses illustrate that the introduction of electricity buy-back and the reduction of biogas price can promote the adoption of some renewable technologies to some extent.     

Valuing investment decisions of renewable energy projects considering changing volatility

Volatility is an important parameter when evaluating investments using the real options method. For renewable energy investments, the volatility of cash flow continuously changes, because as new information and knowledge are gathered, there is less foreseen variation. This paper proposes an extended recombining trinomial tree model, where the changing volatility is used to generate transition probabilities. The changing volatility is generated using a consolidation process where multiple random variables, including the market price of electricity, carbon price, and lending rate, are integrated into a low-dimension stochastic process. A two-factor learning curve is used to model the changes of investment cost. We apply the proposed model to analyze solar photovoltaic (PV) power generation investment in China. The results show volatility with changing feature. Compared with constant volatility, changing volatility may advance investment decisions and change the project value. Complete grid parity policy in the solar PV industry is infeasible because the opportunity cost brought by the option of delaying cannot be offset. The changing volatility may produce a lower and equally effective subsidy level compared with constant volatility. A carbon emission trading scheme is helpful in advancing investments in renewable energy, which is reflected in improvements in project value, advancements in investment decisions, and reductions in the required subsidy level.     

Spatial variation of emissions impacts due to renewable energy siting decisions in the Western U.S. under high-renewable penetration scenarios

One of the policy goals motivating programs to increase renewable energy investment is that renewable electric generation will help reduce emissions of CO₂ as well as emissions of conventional pollutants (e.g., SO₂ and NO_x). As a policy instrument, Renewable Portfolio Standards (RPS) encourage investments in wind, solar and other generation sources with the goal of reducing air emissions from electricity production. Increased electricity production from wind turbines is expected to displace electricity production from fossil-fired plants, thus reducing overall system emissions. We analyze the emissions impacts of incremental investments in utility-scale wind power, on the order of 1 GW beyond RPS goals, in the Western United States using a utility-scale generation dispatch model that incorporates the impacts of transmission constraints. We find that wind investment in some locations leads to slight increases in overall emissions of CO₂, SO₂ and NO_x. The location of wind farms influences the environmental impact by changing the utilization of transmission assets, which affects the overall utilization of power generation sources and thus system-level emissions. Our results suggest that renewable energy policy beyond RPS targets should be carefully crafted to ensure consistency with environmental goals.     

Flexible power generation scenarios for biogas plants operated in Germany: impacts on economic viability and GHG emissions

Biogas plants enable power to be generated in a flexible way so that variable, renewable energy sources can be integrated into the energy system. In Germany, the Renewable Energy Sources Act promotes flexible power generation in biogas plants. Two existing biogas plants in flexible operation were analyzed with respect to economic viability and greenhouse gas (GHG) emissions to assess the feasibility of flexible operation. To do this, a biogas technology simulation model was developed to reproduce the technical design of both biogas plants and to link this design with twelve flexibilization scenarios. The evaluation of the economic viability is based on a discounting method of investment appraisal. For assessing the level of GHG emissions, the life cycle assessment method has been applied. The results show that the profitability of flexibilization is contingent upon premium payments promoting flexibility and direct sales resulting from a higher electrical efficiency of new or additionally installed combined heat and power units. Overall, with respect to profitability, the results of the flexible power generation scenarios are dependent upon the properties of the technical plant, such as its power generation and gas storage capacities. Relative GHG emissions from flexible biogas plants show significantly lower values than for referenced fossil gas–steam power stations. Among the various scenarios, the results reveal that the level of GHG emissions especially depends on the number of operating hours of the additional combined heat and power unit(s). The results of the analyzed biogas plants showed no direct correlation between GHG emissions and the economic benefits. Overall, a flexible power generation of biogas plants may improve the economic viability as well as result in lower GHG emissions in comparison with a conventional base load operation. © 2016 The Authors. International Journal of Energy Research published by John Wiley & Sons Ltd.     

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Transforming energy systems to fulfill the needs of a low-carbon economy requires large investments in renewable electricity production (RES-E). Recent literature underlines the need to take a closer look at the composition of the RES-E investor group in order to understand the motives and investment processes of different types of investors. However, existing energy policies generally consider RES-E investments made on a regional or national level, and target investors who evaluate their RES-E investments according to least-cost high-profit criteria. We present empirical evidence to show that RES-E investments are made by a heterogeneous group of investors, that a variety of investors exist and that their formation varies among the different types of renewable sources. This has direct implications for our understanding of the investment process in RES-E and for the study of motives and driving forces of RES-E investors. We introduce a multi-dimensional framework for analyzing differences between categories of investors, which not only considers to the standard economic dimension which is predominant in the contemporary energy literature, but also considers the entrepreneurship, innovation-adoption and institutional dimensions. The framework emphasizes the influence of four main investor-related factors on the investment process which should be studied in future research: motives, background, resources and personal characteristics.