Helena ChumHelena ChumNational National BioenergyBioenergy CenterCenter

October 5, 2005October 5, 2005

Biomass and Renewables Opportunities

The Promise ofThe Promise ofEnergy IndependenceEnergy Independence

Examining national policy and regional actionExamining national policy and regional action

Secretary CohenSecretary Cohen’’s Paperss Papers

Major DOE National Laboratories

INLINLNRELNRELLawrence BerkeleyLawrence Berkeley

Lawrence LivermoreLawrence Livermore

Los AlamosLos Alamos

SandiaSandia

Pacific NorthwestPacific Northwest

ArgonneArgonneBrookhavenBrookhaven

NETLNETL

Oak RidgeOak RidgeNuclear SecurityScienceEnergy Efficiency and

Renewable EnergyNuclear EnergyFossil Energy

Nuclear SecurityScienceEnergy Efficiency and

Renewable EnergyNuclear EnergyFossil Energy

Operated for the U.S. Department of Energy byMidwest Research Institute • Battelle

Savannah RiverSavannah River

National Renewable Energy Laboratory

iOnly national laboratory dedicated to renewable energy and energy efficiency R&D

iResearch spans fundamental science to technology solutions

iCollaboration with industry and university partners is a hallmark

iResearch programs linked to market opportunities

U.S. Rep. Michael Michaud

State Rep. R. Hotham

State Rep. John Patrick

John Ferland,Director

Center for Environmental

Enterprise

Jack CashmanCommissioner,

Maine Department of Economic& Community Development

River Valley Growth Council

Chairman, Joe Derouche

Paul Nace, Nace &

Associates

Scott Christiansen,Executive Director,

River Valley Growth Council

Michael Bilodeau, Univ of Maine,

Pulp and Paper Lab

Bob EvansNREL

State Senator Bruce Bryant

National RenewableEnergy Laboratory

Science and TechnologyAssociate Director,

Stan Bull

River Valley Biorefinery Consortium

River Valley Technology Center

DirectorNorman L. MacIntyre

MOU Signing Maine Organizations/NREL Witnessed by the Maine Delegation Visitors to NREL

March 22, 2004

Outline

• Brief Biomass and Bioenergy History 1973-2000

• 2000 - 2005

• The Future of Renewable Energy

Secretary Cohen’s statements1973-1975

• “The era of cheap, abundant oil is over, and the sooner we accept this fact, the sooner we can get on with the task of developing alternative energy sourcesalternative energy sources” – 1973

• “…the crux of the energy challenge confronting us revolves around not only recognizing, but reconciling multiple reconciling multiple concernsconcerns of environmental quality, economic development, and national security” - 1975

Equally valid in 2005 Equally valid in 2005 –– but technology, but technology, markets, and policies made progress markets, and policies made progress

Renewable Share of U.S. Energy Supply(data for 2003)

Coal 23%

Petroleum 39%

Renewable 6%

Natural Gas 24%

Nuclear 8%

Wind 2%

Biomass 46%9 GW, 60 TWh

Hydroelectric 46%

Geothermal 5%

Solar <1%

Source: AEO 2004 tables (released in December 2003) based on US energy consumption. Overall breakdown Table A1 (Total Energy Supply and Disposition), and Renewable breakdown Table A18 (Renewable Energy, Consumption by Section and Source).

Reference

• Chum, H. L.; Overend, R. P. (2003). • Chapter 3: Biomass and Bioenergy in the

United States. • Goswami, D. Y., ed. • Advances in Solar Energy: An Annual Review

of Research and Development, Volume 15. • Boulder, CO: American Solar Energy Society,

Inc. (ASES); pp. 83-148

DOE Bioenergy and Biobased ProductsRD&D Annual Budgets in 2000$

$0

$20

$40

$60

$80

$100

$120

$140

77 79 81 83 85 87 89 91 93 95 97 99

Fiscal Year

Mill

ion

2000

$

Biobased Products - includes Forest Products and Agriculture (Interior)Energy from Municipal Waste-EMW (Interior and E&W)Alcohol Fuels R&D & Market DevelopmentBiomass, Biofuels, Biopower, Bioenergy (E&W)

Cumulative investment of $1.4-$1.5 Billion (2000$) (does not include loan programs)

$0

$20

$40

$60

$80

$100

$120

$140

77 79 81 83 85 87 89 91 93 95 97 99

Fiscal Year

Mill

ion

2000

$

Biobased Products - includes Forest Products and Agriculture (Interior)Energy from Municipal Waste-EMW (Interior and E&W)Alcohol Fuels R&D & Market DevelopmentBiomass, Biofuels, Biopower, Bioenergy (E&W)

Cumulative investment of $1.4-$1.5 Billion (2000$) (does not include loan programs)

DOE Bioenergy and Biobased ProductsThe context: key policies shifted periodically

Bioenergy and Biobased Products and Key Government Regulatory and Financial Incentives (1987-2000)

Approximately a $1.55 Billion (2000 $) investment without Loan Guarantees Program

$0

$20

$40

$60

$80

$100

$120

$140

77 79 81 83 85 87 89 91 93 95 97 99

Fiscal Year

Milli

on 2

000

$

Biobased Products - includes Forest Products and Agriculture (Interior)Energy from Municipal Waste-EMW (Interior and E&W)Alcohol Fuels R&D & Market DevelopmentBiomass, Biofuels, Biopower, Bioenergy (E&W)

President: Carter Reagan Bush Clinton

CleanAir Act

Amend.

TransportationEquity

ActFor the

21st Century

EnergyPolicy

ActEPACT

EnergyConservation

ReauthorizationActIntermodal

SurfaceTransportation

Act

TaxRelief

ExtensionAct

BiomassR&DAct

PollutionPrevention

Act

Approximately a $1.55 Billion (2000 $) investment without Loan Guarantees Program

$0

$20

$40

$60

$80

$100

$120

$140

77 79 81 83 85 87 89 91 93 95 97 99

Fiscal Year

Milli

on 2

000

$

Biobased Products - includes Forest Products and Agriculture (Interior)Energy from Municipal Waste-EMW (Interior and E&W)Alcohol Fuels R&D & Market DevelopmentBiomass, Biofuels, Biopower, Bioenergy (E&W)

President: Carter Reagan Bush Clinton

CleanAir Act

Amend.

TransportationEquity

ActFor the

21st Century

EnergyPolicy

ActEPACT

EnergyConservation

ReauthorizationActIntermodal

SurfaceTransportation

Act

TaxRelief

ExtensionAct

BiomassR&DAct

PollutionPrevention

Act

Energy Tax Credit

Public UtilityRegulatoryPolicy Act(PURPA)

Crude OilWindfallProfits

Tax Act

TransportationEquity

Act

EnergyConservation &Reauthorization

Act

CleanAirAct

Amend.EnergyPolicy

Act

1000 Peta Joules = 1 Exa Joule =0.95 Quads

1971

500

0

1000

2000

3000

1500

2500

3500

Industry

Commercial

MSW & LFG

Residential

EthanolUtility

1975 1980Year Biomassprimary

1985 1990 1995 1999

Crude OilWindfall

OTA (1981). Energy from Biological Processes. Washington, D.C., Congress of the United States, Office of Technology Assessment: p 113. EIA (2000). Renewable Energy Annual 1999. DOE/EIA 0603(99) Washington D.C., USA, 117.

PURPA

ProfitsTax Act

EPAct

EnergyTax Act

U.S. Biomass Resource Potential

•Millions dry tons per year

0

200

400

600

800

1000

1200

1400

$20 $30 $40 $50 GigatonVision

Forest Residues (and thinnings)Urban WastesAg Residues (and grain crops)Mill Residues Energy Crops

From 2000 Supply Curve by ORNL

3 Billion BOE

Biomass Availability and Type

• “Billion Ton” study indicates that enough biomass is potentially available to displace > 30% of current U.S. petroleum consumption

• But it requires variety of biomass types– Agricultural lands

• Corn stover, wheat straw, soybean residue, manure, switchgrass, poplar/willow energy crops, etc.

– Forest lands• Forest thinnings, fuelwoods, logging residues, wood processing and paper

mill residues, urban wood wastes, etc.

The 1.3 Billion Ton Biomass Scenario

Based on ORNL & USDA Resource Assessment Study by Perlach et.al. (April 2005) http://www.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf

Billion Barrel of Oil Equivalents

Today’s Options•Ethanol–Primarily produced from corn (U.S.) and sugar cane

–Most use as 10% blends in U.S.–All vehicles compatible

•Biodiesel–Primarily produced from soy (U.S.) and rapeseed–Most use as 20% blends in U.S.–Research to insure compatibility ongoing

• But all vehicles are compatible with 5% blends

Energy Policy Act of 2005

Actual and Projected U.S. Ethanol Production 2002 - 2012

0123456789

2002 2004 2006 2008 2010 2012

Cellulosic EthanolConventional EthanolRFS

Ethanol Production

Renewable Fuels Standard mandates 7.5 billion gallons by 2012Total US gasoline market ~140 billion annual gallons

Billion Gallons of Production

Ultimate Potential of Ethanol• On track to use 10% ethanol in all US gasoline• Main barriers are ethanol transport and distribution• Higher volumes might be produced from lignocellulosic biomass

Technical barriers remain in manufacturing process–Utilization of larger volumes will require expanded use of E85 and flex-fuel vehicles

Ethanol: the complete energy lifecycle picture, M. Wang, ANL, 2005

0.0

0.5

1.0

1.5

2.0

2.5

RFG CornEtOH:DM

CornEtOH:WM

Cell.EtOH

RFG CornEtOH:DM

CornEtOH:WM

Cell.EtOH

RFG CornEtOH:DM

CornEtOH:WM

Cell.EtOH

Btu for Fuel ProductionBtu in Fuel

Total Energy Fossil Energy Petroleum

Energy Required to Produce Fuels•Total Btu spent for 1 Btu available at fuel pumps

Source: Argonne National Laboratory’s results from GREET simulations

Fossil Energy Saved

PetroleumEnergy Saved

Tracking Progress in Reducing Costs

$2.87

$2.27$2.00

$1.77 $1.72

$0.77

$0.61

$0.57$0.73

$0.90$0.78

$0.33

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Conversion Feedstock Extrapolated Conversion Cost Reduction

•The NBC uses Process Engineering and Economic Models

Cellulosic Ethanol Cost ($/gallon)

FY 2010 costs based on $30/ton stover

$3.48

$2.84 $2.73 $2.67$2.50

$1.07

Biodiesel Production

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1999 2000 2001 2002 2003 2004

Gal

lons

•Total US distillate fuels market ~60 billion annual gallons•Current U.S. average rack price $2.76/gal (versus $2.25 for No. 2 diesel)

Urea

SyngasCO + H2

Mixed Alcohols

AmmoniaRefineries

Hydrogen

Fischer Tropsch FuelsWaxAlpha-olefins

Acetic Acid

Formaldehyde

MTBE

Diesel Additives

EthanolMethanol

DME

Bottom Ash Removal

InjectorScrews

High/Low PressureGasifier

Cyclone(Optional)

AIR/O2

BARK & SLUDGE

O2/AIR / STEAM

Fluidized Bed

Freeboard Disengaging Zone

SYNGAS

Bottom Ash Removal

InjectorScrews

High/Low PressureGasifier

Cyclone(Optional)

AIR/O2

BARK & SLUDGE

O2/AIR / STEAM

Fluidized Bed

Freeboard Disengaging Zone

SYNGAS

PolypropyleneAcrylonitrilePolyethylene

Ethylene GlycolAlpha-olefins

Olefins

Hydrocarbon fungibility will be a key characteristic of winning technology

Primary Energy Source Syngas Step Conversion Technology Products

Syngas(CO + H2)

Fischer Tropsch

(FT)Upgrading

Lubes

Naphtha

DieselSyngas to Liquids (GTL) Process

Mixed Alcohols (e.g. ethanol, propanol)

Syngas to Chemicals Technologies

Methanol

Acetic Acid

Others (e.g. Triptane, DME, etc)

Coal

Natural Gas

Biomass

Hydrogen

Extra Heavy

Oil

Syngas Syngas Liquid Fuels and Chemicals from:

BL Gasifier, andWood Residual Gasifier

Pulp Manufacturing

Extract portion of thehemicellulose

Convert the extract toethanol and chemicals

Black Liquor& Residuals

Steam,Power &Chemicals

Evolving Forest Biorefinery Concept

courtesy of: Del Raymond (Weyerhaeuser)

Cellulose still used tomanufacture paper

Evolving Decentralized Biomass Liquids Scenario

Evolving Decentralized Biomass Liquids Scenario

•Alternate Feedstocks Petroleum Refinery

PowerPlant

EthanolPlant

PyrolysisPlant

PyrolysisPlant

PyrolysisPlant

Oil Refinery

Range of Biorefinery ConceptsUsesUses§Fuels

– Ethanol– Renewable Diesel

– Others

§Power– Electricity– Heat– Heat and Electricity

§Chemicals– Plastics– Solvents– Chemical Intermediates– Phenolics– Adhesives– Furfural– Fatty Acids– Acetic Acid– Carbon Black– Paints– Dyes, Pigments, and Ink– Detergents– Etc.

•Food, Feed and Fiber

• Enzymatic Fermentation

• Gas/liquid Fermentation

• Acid Hydrolysis/Fermentation

• Gasification• Combustion• Co-firing

Conversion ProcessesConversion Processes

• Trees• Grasses• Agricultural Crops• Crop Residues• Animal Wastes• Municipal Solid

Waste

Biomass FeedstockBiomass Feedstock

U.S. Dependence on Foreign Oil

The U.S. uses more than the next 5 oil importing nations combined.

The U.S. uses more than the next 5 oil importing nations combined.

Katrina & RitaKatrina & Rita

NaturalNaturalDisastersDisasters

WarsWars2005

National Predicament• Very slow renewal of existing infrastructure geared to cheap fuel• Need to maintain security of:

–Fuel supply–Generating capacity

• We have only today’s technology for 2025

• Energy needs will grow

Infrastructure Life, years

Cars 10 -15Aircraft 20 -30

Wind turbines 25Power plants 40+

Trains 30+Electrical distribution 40+

Houses 70+

Source: Lord Ron Oxburgh, Royal Dutch Shell

Energy Challenges are Enormous

Economic Growth

Energy Security and Reliability

Environmental Impact

Market Restructuring

U.S. Energy Flows

RejectedEnergy

98.2

Qua

drill

ion

Btu Fuels

61%Fuels61%

Electricity39%

Buildings40%

Industry33%

Transportation27%

62%

Technology-based Solutions:There is no one silver bullet, we need many

• Energy efficiency• Renewable energy• Non-polluting transportation fuels • Separation and capture of CO2 from fossil fuels• Next generation of nuclear fission and fusion technology• Transition to smart, resilient, distributed energy systems coupled with

pollution-free energy carriers, e.g. hydrogen and electricity

Renewable Energy Will Play a Key Role in a More Diverse and Secure

Energy Supply

The Future for Renewable Energy

•Wind•Solar•Biomass

Renewable Energy Will Play a Key Role in a More Diverse and Secure Energy Supply

Renewable Energy Costs are DecreasingLevelized cents/kWh in constant $20001

PV

1980 1990 2000 2010 2020

100

80

60

40

20

0

Wind

1980 1990 2000 2010 2020

CO

E c

ents

/kW

h40

30

20

10

0

BiomassGeothermal Solar thermal

1980 1990 2000 2010 2020 1980 1990 2000 2010 2020 1980 1990 2000 2010 2020

CO

E c

ents

/kW

h

10

8

6

4

2

0

706050403020100

15

12

9

6

3

0

Source: NREL Energy Analysis Office (www.nrel.gov/analysis/docs/cost_curves_2002.ppt)1These graphs are reflections of historical cost trends NOT precise annual historical data.Updated: October 2002

Alaska1

California2,096

Colorado229

Hawaii9

Iowa632

Kansas114

Massachusetts1

Michigan2

Minnesota615

Nebraska20

New Mexico267

New York48

North Dakota

66Oregon259

Pennsylvania129

Tennessee29

Texas1,293

Vermont6

Wisconsin53

Wyoming285

Washington244

South Dakota

44

West Virginia66

Arkansas0.1

Idaho0.2

Maine0.1

Montana2

New Hampshire0.1

Oklahoma176

Utah0.2

Illinois81

Ohio7

6770 MW as of 12/31/04 Current cost is 4 to 6¢/kWh in best regimes (unsubsidized)

Wind Energy StatusWind Capacity (MW)

Solar Energy Status

• Concentrating Solar Power– Nine parabolic

trough plants – 354 MW capacity– 12-14¢/kWh

• Photovoltaics– 340 MW capacity– Price of power

from grid connected PV systems is 20 to 30¢/kWh

PV systems at the Arizona Public Service facility in Prescott, Arizona

Biomass StatusBiopower• Grid-connected capacity

– 9700 MW direct combustion– 400 MW co-firing

• Biopower electricity prices generally range from 8-12¢/kWh

Biofuels• Biodiesel – 15 million gallons (2002)• Corn ethanol

– 81 commercial plants– 3.4 billion gallons (2004)– ~$1.22/gal

• Cellulosic ethanol*– $2.73/gal

* Not commercially available

Rated at 21 MW and providing the San Francisco Bay Area with baseload capacity, the Tracy Biomass Plant uses wood residues discarded from agricultural and industrial operations.

Factors Inhibiting Pace and Volume of Renewable Energy Market Entrance

• Capital mobilization• Lack of consistent, stable policies• Electricity pricing: valuing externalities• Further technology advances

Mobilizing Capital:Creative Business Partnership Models

• Catalyze entrepreneurs

• Enhance strategic partnering

• Attract new corporate entrants

• Invigorate private equity/venture capital

State Policies are OpeningMarkets for Renewable Energy

Renewable Electricity StandardsNevada: 15% by 2013, solar 5% of annual

Hawaii: 20% by 2020

Texas:2.7% by 2009

California: 20% by 2017

Colorado: 10% by 2015

New Mexico: 10% by 2011

Arizona: 1.1% by 2007, 60% solar

Iowa: 2% by 1999Minnesota: 19% by 2015*

Wisconsin:2.2% by 2011

New York:24% by 2013

Maine:30%by 2000

MA: 4%by 2009

CT: 10% by 2010

RI: 16%by 2019

Pennsylvania:8% by 2020

NJ: 6.5% by 2008Maryland:7.5% by 2019

18 States + D.C.

*Includes requirements adopted in 1994 and 2003 for one utility, Xcel Energy.

Washington D.C:11% by 2022

Western Governors’ AssociationClean and Diversified Energy Initiative

• Western U.S is rich with fossil, hydro and renewable energy resources.

• Goal of 30,000 MW of clean energy by 2015, using solar, wind, geothermal, biomass, clean coal technologies and advanced natural gas technologies.

• Goal to increase the efficiency of energy use by 20% by 2020.

• Meet the West’s generation and transmission needs over the next 25 years.

Create an Electricity Pricing Structure that Values Externalities

• Intangibles have value– Greater value if dealt with in resource

planning– Allow a broader perspective

• Hard to quantify– Has been controversial– No accepted methodology

Wind OutlookTechnology• DOE Wind Program R&D goals

– 3¢/kWh* in class 4+ wind areas onshore

– 5¢/kWh* for offshore systems• New Technology will

– Expand range of feasible sites – Reduce siting risk – Enhance system value

Policy• State-led RPS • Production Tax CreditMarket Drivers• Natural gas prices• Green purchasing * unsubsidized

Arklow Banks Wind FarmThe Irish Sea

Photo: R. Thresher

Boeing 747-200GE WindEnergy3.6 MW Turbine

Solar OutlookTechnology DOE Solar Program goals:• Photovoltaics: 6¢/kWh by

2020• Concentrating solar

power/troughs: 5¢/KWh by 2012

Policy • 1000 MW initiative• Western Governors’

Association 30,000 MW by 2020 initiative

• State RPS with solar set asides

Market Drivers• Peak power prices• Green markets

Solar Photovoltaic ElectricitySolar Photovoltaic Electricity

Solar can supply all electricity for the U.S. using this area (100x100 mi.) in the SW

OR by usinga distributed* approachusing available areas throughoutthe U.S. Average area per Statewould be 17x17 miles.

Area required for solarsystems is 0.40% of thecontinental U.S.

*Vacant land, parking lots,building integrated, etc.

Source: Fraunhofer Institute for Solar Energy Systems ISE

Cumulative installed PV Peak Power [GWp]

Total World PV Market Sectors/Applications

200

100

200

300

400

500

600

700

1996 1997 1998 1999 2000 2001 2002 2003 2004

Meg

aWat

ts

On-GridResidential/CommercialOff-Grid

Central (>100kW)

Data Source: PV News, Paul MaycockVolume 24/No.4, April 2005

PhotovoltaicTechnology Penetration

and Price Experience (Learning) Curve

Biomass Outlook• Technology• DOE Biomass

Program goals:• 5.5¢/kWh by 2010• $1.07/gal bioethanol

by 2020• Policy• 2005 Energy Policy

Act created a renewable fuels standard that reaches 7.5 billion gallons/year by 2012

• Market Drivers• Future outlook for

crude oil prices• Best utilization for

biomass – fuels and/or electricity and/or refinery

The Biorefinery:The Path Ahead

• A diverse feedstock supply that provides 1.3 billion tons of biomass per year

• Equivalent of 2 billion barrels of crude oil per year or

• U.S. domestic petroleum production in 1970

Technologies

Policies Markets• Conventional

energy prices• Green markets

• Incentives & mandates

• High technology• Mass production

The U.S. Department of Energy’sNational Renewable Energy Laboratorywww.nrel.gov

Golden, Colorado

Helena L. Chum(303) 384-7711Helena_Chum@nrel.gov