The “Tree Line” of Biomass

At the end of September, the cabinet draft of the Renewable Energy Sources Act (EEG) 2021 was adopted. This draft contains considerable improvements compared to the EEG 2017 – in our opinion a clear signal for biomass. One positive aspect, for example, is the increase in the volume of tenders from 200 MW to 350 MW and the bidding maximum for new and existing plants by 1.5–2 ct/kWh each to 16.4 ct/kWh for new plants and 18.4 ct/kWh for existing plants. The implementation period between the end of the auction and commissioning will be increased from 18 and 24 months to 36 months. The feed-in priority for waste wood power plants will remain in place even after the EEG is no longer applicable. This also applies to new plants that are commissioned outside the EEG.

But despite this clear commitment to biomass, we believe there is still an urgent need for action. What we regard as extremely critical is the reduction of the remunerated rated output from 80 % to 65 %. This means that in future, biomass cogeneration plants should only receive 65 % of the electricity they generate, instead of 80 % as in the past. In this case, power plant operators would face many problems in economic, technical and logistical terms.

The 20% reduction from the EEG 2017 was already an immense loss, this would of course be drastically increased by another 15%. In addition, no more heat is produced when the power plant is shut down. Process or district heat would have to be generated from other sources, such as fossil fuels. Consequently, the lack of electricity revenues is compounded by a lack of heat revenues. Power plant operators would thus be forced to produce heat by other means, which would entail additional costs.

Technology is also reaching its limits. Due to the inertia of wood boilers, starting and shutting down can take at least 24 hours, which means more energy or fuel is consumed. There is expansion, tension, boilers are getting dirty faster, etc. The installation is likely to be subject to higher loads, require more frequent cleaning and this in turn involves costs and more personnel.

A particular challenge is the fuel supply. Power plants usually have little or no storage areas and the fuels are often delivered “just-in-time”. Additional storage areas would therefore have to be created in the immediate vicinity.

One essential point should also be considered. Biomass cogeneration plants play an important role in energy transition in the regions in which they are based and supply renewable electricity and heat according to demand. Just as the power plants are integrated into heat sinks that cannot simply be switched on and off, they are an integral part of the wood sales of the surrounding forestry and circular economy companies. Particularly in times of high volumes of damaged wood and constantly falling prices on the wood market, reliable sales of wood energy play an important role in the liquidity of the companies. This sustainable and long-term cycle must be supported and expanded both in terms of climate protection and forest conversion. And especially in view of the current oversupply of wood-based fuels, we do not believe it is right to shut down power plants and burn the fuel in other regions of Germany or even abroad, thus overturning regional supply.

So as much as we appreciate the new EEG, we fear that in this form the previous tailwind for biomass will be dampened and that without the right framework conditions there will ultimately be far fewer new power plant constructions. For all these reasons, we see an urgent need to adapt the flexibility requirements for wood-fired combined heat and power plants.

>> Click here for a video on this subject from our “Inside Brüning” series on YouTube.