Energetic Willow_in Romania_presentation_no movie

124.06.2014

Energetic Willow in Romania

Globalization, Sustainability and Technology

Carstoiu TudorFuertbauer Anna November 28, 2014

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The Triple Bottom Line Social Factors Environmental Factors Economic Factors

Energetic Willow EU Policies Preconditions in Romania

AGENDA

Introduction1

Concluding Remarks3

Impact on the Triple Bottom Line2

November 28, 2014Globalization, Sustainability

and Technology

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Energetic Willow EU Policies Preconditions in Romania

AGENDA

Introduction1

Concluding Remarks3



and Technology

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Background

ENERGETIC WILLOW

• Search for green energy sources intensified

• New political measures to support renewable energy supply

• Research for unconventional energy sources

• Solar, wind, and heat pump already a great success

Increasing awareness of environmenta

l problems and climate

change

Biomass

• Alternative solution

• Plants or plant-based materials

• Directly burned for heat

• Indirect use as biofuel

• Wood, hemp, corn, willow, bamboo, palm, sugar cane

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Willow as a biomass

ENERGETIC WILLOW

• Specifically grown for energy supply best energy results

• Popular in the Northern Hemisphere

• Different types according to local climate conditions

• Maximize output/ hectare with low input

• Short-rotation energy crops no long time scale (conventional forestry) harvested each year safe and secure energy source

Willow

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Salix viminalis

ENERGETIC WILLOW

Salix viminalis

• Belongs to the SRWC group (Short Rotation Woody Crops)

• Originally from Sweden (50,000 ha)

• Prefers cold areas and moist soil

• 4900 kcal/kg caloric value

• Very robust and resistant to various diseases can even be planted on swamp land

• 3 – 3.5 cm growth/ day

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• Growth in ~ 80 days 2.5m

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Salix viminalis

ENERGETIC WILLOW

Salix viminalis

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• Plantation-life of 25-30 years

• Special care only during the first year

• Then it grows fast without special intervention

• Investment of 2000€/ha

• Profit of 2800€/ha beginning the second year low-cost, “risk-free”, not labour intensive

• Profitable even in small areas for energy independence

https://www.youtube.com/watch?v=lvXqPqnGP-A

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Salix viminalis

ENERGETIC WILLOW

• Traditional agriculture machines

• In winter after leaf fall (November – March) better exploitation of the stock of labour and machines

• 40-60t/ha dry material depends on water availability, plant density, light, temperature

• Rods, billets or chips

• Water content decreases by 14-16% within months no artificial drying

• Chips may lose energy content due to fast composting

Harvest

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Salix viminalis

ENERGETIC WILLOW

• Mechanically or hydraulically compressed compact product with a high caloric value (even higher than beech wood)

• 60% cost savings compared to gas heating

• 40% cost savings compared to wood heating

• Low production costs, huge demand 1 t of briquettes instead of 1.5-2 t of wood that still requires work before burning

Briquettes

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• 2003: direct subsidies for farmers that cultivate biomass

• 45€/ha if production is covered by a processing contract

• Total limit 1.5m ha, raised to 2.0m ha in 2006 (and then pro-rate deduction)

• Romania was a strong user

• Energy crop was a controversial issue bonus is stopped now

• But still eligible for the general single farm payment if following certain rules and conditions

Shortage of fossil fuels, environmental concerns RES but still some inconveniences intervention energy independence and environmental protection

EU POLICIES

EC Regulation No. 1782/2003


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• 2003: direct subsidies for farmers that cultivate biomass

• 45€/ha if production is covered by a processing contract

• Total limit 1.5m ha, raised to 2.0m ha in 2006 (and then pro-rate deduction)

• Romania was a strong user

• Energy crop was a controversial issue bonus is stopped now

• But still eligible for the general single farm payment if following certain rules and conditions

• 2020: 20% of energy production with renewables 20% reduction of CO2 emissions

• Each Member State submitted a National Action Plan set share of renewables in transport, heating and energy production support mechanisms cooperation with other Member States

Shortage of fossil fuels, environmental concerns RES but still some inconveniences intervention energy independence and environmental protection

EU POLICIES

• Includes other mechanisms to support the growth of energetic willow training, investment support

• Rural Development programs support investment and infrastructure

• “Health check” of the CAP (2008) shift money from direct aid to Rural Development program (10% cut) reinforce renewables programs, co-financed by the EU in regions with low GDP

EC Regulation No. 1782/2003

CAP (Common Agricultural Policy)

European Directive 2009/28/CE


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The ongoing modernization of agriculture and the vast availability of land are great preconditions

PRECONDITIONS IN ROMANIA

• 9.4 million ha arable land about 1 million ha remain uncultivated (called fallow, decreasing from 3 million some years ago)

• Almost half a million ha of degraded land (not producing anything) 2% of the total area of the country may find some productive use sooner or later

• The county with most degraded land is Alba(with 43,376 ha); second, Cluj (with 33,452 ha)

• Reason: Three strong waves of emigration 1989: After the revolution 2002: Limitation of visas in Schengen countries 2007: Entrance in the EU

Land availability

Structural change in

agriculture

• Development from subsistence agriculture to activities that are more lucrative

• Agriculture is modernizing at a quite fast pace Agriculture (6-7% of annual GDP) brought 18.5 billion Euros into the economy in 2013, the best result in history and a plus of 28% compared to 2012


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Know-how about energetic willow is already present and there are incentive to share it



and Technology

Building on the shoulders

of giants

• Vertical organization of industries in the first world ‘matters’ not just for the growth of the first world but also for the growth of other nations

• The leading know-how in this sector is found at the Swedish company SalixEnergi Europa AB more than 30 year of experience

• Incentives to create win-win solutions expansion of the market for energy willow and thus the use of this of this source of biomass at a larger scale strongly depends on how fast the diffusion takes place

• The core complementary asset (land) is not that easy to acquire or manage at a very large scale fragmented markets division of inventive labour

• Owner of the technology has a strong interest in convincing many firms to invest in the different varieties of energetic willow Licensing the technology and spreading the know-how to other players

• SalixEnergi Europa AB has signed license and distribution agreements for certain energy willow varieties with three Romanian companies: S.C. Rebina Agrar S.R.L., S.C. Agrifarm S.R.L., Kontrastwege S.R.L. … but also several others around Europe

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Know-how about energetic willow is already present and there are incentive to share it



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Building on the shoulders

of giants

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Despite the good soil conditions, energetic willow is not yet widespread


• Favourable conditions for the cultivation of energetic willow in riverbeds and unused flood plains

• Large general good groundwater supply, especially in the Danube Meadow and the Danube Delta

• Where needed, irrigation also an option, as Romania has quite high groundwater level in many areas

Soil conditions

Infant industry

• Short rotation coppice are still at the beginning in Romania

• In 2010, only 49 test plantations were realized

• In 2012, about 850 ha of energetic willow existed

• Long way until saturation, many options available


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Also Romania needs to implement the EU “20-20-20” directive


• Romania has to use 20% renewable energy by 2020

• Renewable sources energy production rate is insignificant compared to the rest of the EU only 1.14% of the total electric energy production

Renewables in Romania

Legislative framework

• Law 220/2008 regarding the production of renewable energy was introduced in 2008 not applied until recently due to the strong tensions caused

• Secondary requirements had to be added in order to solve the technical problems associated with wind and photovoltaic energy, caused by discontinuity of natural forces

• Introduced a state aid scheme for green certificates

• Energy suppliers that use biomass receive two certificates for every MW/ hour produced

• Power stations that use energetic plants like willow get a free certificate

• Stimulation of the production of renewable energy started enthusiastic, but bureaucratic labyrinth investors needs a lot of patience


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The Romanian National Program for Rural Development (P.N.D.R.) provides further incentives for cultivating energetic willow


• Together with the European Union program Phare, it invests around 10 billion Euro in rural development

• Grants for energetic willow crops are on the rise through the measures 112: Installing of young farmers 121: Modernization of agricultural tools

• Economically underdeveloped areas have priority

P.N.D.R.


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The Triple Bottom Line Social Factors Environmental Factors Economic Factors

AGENDA

Introduction1

Concluding Remarks3



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TBL: Social, environmental, economic3BL: People, planet, profit

THE TRIPLE BOTTOM LINE FRAMEWORK

• Is an accounting framework for the three pillars of sustainability company's responsibility lies with stakeholders rather than shareholders coordinate stakeholder interests instead of maximizing shareholder profit

• Many organizations have adopted the TBL framework to evaluate their performance in a broader context

• Interest in triple bottom line accounting has been growing in both for-profit, non-profit and government sectors

• Became the dominant approach to public sector full cost accounting in 2007

• Growing number of financial institutions incorporate a triple bottom line approach in their work

• Similar, UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the EcoBudget standard for reporting ecological footprint

The Triple Bottom Line


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The Triple Bottom Line


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• Fair and beneficial business practices toward labour/community/region• Reciprocal social structure well-being of corporate, labour and other

stakeholder interests are interdependent• “Give back" by contributing to the strength and growth of the community

E.g. health care and education• Quantifying this bottom line is relatively new, problematic and often

subjective

Social

Environmental

• Benefit the natural order as much as possible or at the least do no harm minimise environmental impact

• Reduce the ecological footprint careful consumption of energy and reduction of manufacturing waste

• A business which manufactures and sells a problematic product should bear part of the cost of its ultimate disposal

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• The "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society

• Often confused to be limited to the internal profit made by a company or organization which remains the starting point real economic impact the organization has on its economic environment

• Not simply traditional corporate accounting profit + social and environmental impacts

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Economic

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What are the possible impacts of planting energetic willow in Romania?

TRIPLE BOTTOM LINE

Triple Bottom Line


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Social Factors

TRIPLE BOTTOM LINE

• Productive use for the large amount of unused land Additional income by renting or producing themselves Revival

Give use to land

Support areas with low economic

development

• Special impact on land with low economic value Helps people that live in areas with low economic development where families own lots of land but are nevertheless poor

• Productive use price of abandoned land increases

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Social Factors

TRIPLE BOTTOM LINE

• Jobs for unskilled labour

• Harvesting in winter (usually less work during this period)

• New jobs at willow-selling units

• Agricultural machinery used all year long

Better use of resources

Diversification

• Additional income source for traditional farmers (not labour intensive) Risk diversification More robust than most other crops

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Energy independence

• Save alternative energy source for small villages

• Heating of municipal buildings Save money and reduce hard labour required for transforming wood

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Environmental Factors

TRIPLE BOTTOM LINE

• Real alternative to coal, natural gas and oil and other biomass 1000kg of dry energetic willow = 700kg high-quality black coal

• High calorific value of 4900 kcal/kg higher than oak (3460 kcal/kg)

• First step towards a green, sustainable and independent energy supply in Romania:

Planting 20,000 ha 1,000,000 tonnes of pellets heating source of 4,900,000 Gcal/year heat for more than 145,000 apartments

Green energy source

Low carbon fuel

• Co2 emissions close to zero

• Only some emissions occur during harvesting, transport etc.

• Absorbs emissions during its growth

• Natural cycle maintained due to the short rotation decomposing vs. burning

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TRIPLE BOTTOM LINE

CO2 emission and

reabsorption timescale

(wood pellets)

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TRIPLE BOTTOM LINE

• Protect forests and countervail deforestation in Romania caused by the need for a cheap energy supply

• Energetic willow as a low-cost, viable alternative even for countries with huge forest areas

• Same output on smaller area (due to the high energy willow output per hectare)

• Growing demand for biomass secure sufficient supply by planting more efficient alternatives

Stopping deforestation

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TRIPLE BOTTOM LINE

Phytoremediation

• Treatment of environmental problems with plants instead of excavating and disposing contaminated material

• Energetic willow can take up high amounts of heavy metal without losing its vitality

• More efficient than other plants hyper-accumulator:Concentrates metal higher metal content in the plant then in the soil

• Ions permeate into roots and are then transported to the whole plant body

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• Cheap alternative wastewater treatment

• Save costs compared to biological treatment

• Bringing it in contact with contaminated water slow but constant purification

• High evapotranspiration capacity of 15-20l/m2/day clean 20-30 tonnes of sludge per hectare

• Flooding plant with wastewater even leads to a faster growth of energetic willow

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Economic Factors

TRIPLE BOTTOM LINE 2 31


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Low investment, sustainable

profits

• Traditional agricultural equipment can be used with just slight adaptations• Initial planting costs about 1,500 – 2,500 €/ ha (only once for a harvest of

25-30 years)• Starting from the second year, harvest of about 40-60t/ ha annual profits

of about 1500-1600 €/ ha with only minor costs (200€/ ha) and little care required

• Kontrastwege SRL (energetic willow business) yearly turnover of about 200,000 € owns the distribution license in Romania for various types of salix viminalis started with 146 ha in 2011, now 240 ha profit per ha of willow is twice the profit they would get from a ha of corn customers are usually small farmers or guesthouses in rural areas that use it for in-house heat production Also large biomass power stations are important clients (demand is expected to increase)

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Economic Factors

TRIPLE BOTTOM LINE 2 31


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Efficient use of roadsides

• Plantation along roads effective against snowstorms and car accidents• County of Arad (Romania)

first test on a 20km long route between Semlac and Nădlac now investment of about 112,000€ in the expansion of the project to an area of 67 ha price of 50€/ t, harvest of 40t/ ha costs recovered after the first harvest in two years

• Positive impact on society’s security for no cost

Unused land becomes profitable

• The plant can be cultivated on land that is otherwise unused, creating value where there is none

• Under favorable conditions (intensive irrigation) production can reach up to 60 t / ha

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Economic Factors

TRIPLE BOTTOM LINE

• If willow is cultivated on sufficiently large areas (1,000-1,5000 ha) investment in a pellets plant feasible cheap alternative energy source for cities central heating of their houses can be installed

• If no pellets plants available more economic to use copped energetic willow

• Low cost of producing one kWh of energy all end-users can save money by using energetic willow for heating wood, gas and diesel can be successfully replaced

Cheap energy source for

cities

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AGENDA

Introduction1

Concluding Remarks3



and Technology

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Energetic willow is a proven economic resource with great profitability, stability and a long term perspective

CONCLUDING REMARKS

• Obvious positive impact for the environment

• Strong social potential due to its contribution to rural development

• Geopolitical conditions (the need for energy independence) support the development of energetic willow

• Demand is expected to increase trend of continuous increasing cost of traditional sources like oil, gas and wood multiple uses of energetic willow

Energetic willow


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POSITIVE ARGUMENTS NEGATIVE ARGUMENTS High fertility and yield Lack of integrated bio-energy consumer market

High environmental tolerance Necessity of fast utilization after harvesting

Long exploitation of plantations Energy overproduction Low labour consumption and advantageous year

schedule on labour demand during cultivation High volume of biomass

Improvement of local economy High moisture content in fresh harvested biomass

Reduction of unemployment Threats resulting from monoculture cultivation on large agricultural areas

Diversification of energy resources Unexpected weather and climate changes

Low capital consumption during vegetation Damages caused by diseases and pests

High energy effectiveness Reduced consumption of conventional fuels

Environmental friendly biomass utilization for energy purposes

Exploitation of lie fallows Efficient assimilation of heavy metals Possible cultivation on soils unusable for other

crops

Possible reclamation of deteriorated lands

Constant price increase in fossil fuels Increase of ecological awareness of the society

Financial support from EU and local institutions

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Thank you for your attention!

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