Biofuels use in Poland - Novator

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Biofuels use in Poland - Novator

BIOFUELS USE IN POLAND — BARRIERS AND BENEFITSROGULSKA M., GRZYBEK A.Institute for Building, Mechanisation and Electrification of Agriculture (IBMER)Rakowiecka 32, 02-532 Warszawa, Poland, fax (+4822) 491737e-mail: mrogul@ibmer.waw.pJANOTA BZOWSKI J.EcoFundBelwederska 18A, 00-662 Warsaw, Poland, tel. (+4822)8400901, fax.(+4822)8400942e-mail: climate@ekofundusz.org.plABSTRACT: In the paper authors are presenting actual situation in biofuels use in Poland. In Poland particular biomassenergy conversion technologies are developed in different level: some of them are almost in market phase, some other -need further R&D works. As concerning solid biofuels biomass-fired boiler plants of various capacities are operated tosupply heat both to private farms and to public buildings. There are nearly 50 straw-fired and over 5000 wood-firedboilers with total capacity over 500 MW(t). Several straw-fired district heating plants have been erected during lastyears with total capacity about 9 MW(t). Possibilities of novel energy crops introduction are also tested.As concerning liquid biofuels first agrorefinery processing rape into biodiesel was established and ethanol is acceptedas additive to gasoline in fuel standard.1. BACKGROUNDPolish energy production sector traditionally has beenbased on hard coal as well as lignite. Other fuels werenot in use in a wider scale. In Poland according tostatistical data arable land covers about 59% of countrytotal surface. In crop structure the biggest group isformed by cereals (together with corn grain) - 71,3%,potatoes - 10,5% and sugar beets - 3,4%. At presentincomes of Polish farmers are rapidly falling down.Energy crops production and use of traditional crops forindustrial purposes may be solution.In Polish conditions the following sources of biomassare important:• wood from forests, tree cutting, orchards and specialplantations, wastes from wood processing industry;• straw and other vegetable waste from cerealsproduction;• liquid/solid manure used for methane fermentation;• oil seeds processed into estrified oil used as fuel;• potatoes, cereals and other vegetable wasteprocessed into ethanol.Poland’s geographical location as well as its diversifiedwater and climate conditions may contribute to thegrowth of the potential of biomass allocated for energypurposes.2. ANALYSIS OF IMPLEMENTATION OF CHOSENBIOENERGY TECHNOLOGIES IN POLANDBiomass use for energy purposes has gained more andmore interest in the past few years in many countries, inthat in Poland. Sustainable development, reduction ofunemployment, security of energy and food supply,improvement of financial balance and reduction ofpollution are the most important drivers.2.1 Solid biofuelsPoland is starting a wider usage of biomass from forestsand agricultural residues (straw) in district heatingplants.In rural regions especially important is usage of straw asenergy source. In last years production of basic cerealswas equal about 22 million of tons (grain). In Polishagriculture straw is utilised for various purposes: asfodder, as lining for live stock, as organic fertiliser andas insulation material. Till half of 80 s straw was mainlyused in animal production. But at the beginning of 90 stogether with animal production decrease a straw surpluswas about 8 mln of tons, what has caused the problem ofstraw utilisation for energy production to be noted.First installations were based on Danish technicalsolutions. Actually biofuel-fired boiler plants ofvarious capacities are operated to supply heat both toprivate farms and to public buildings. On Polish marketa few manufacturers of small straw-fired boilers(Elektromonta_, Gda_sk, GRASO in Starogard, BoilersPlant in Pleszew, ATEX in Zamo__) are operating. Thereare dozens straw-fired boilers in private farms. Severalstraw-fired district heating plants have also been erectedduring last years.At present following straw-fired district heating plantsare in operation:Szropy k/Malborka 1 MW importGrabowiec k/Zamo_cia 1 MW Danish licenceWieniec k/Gda_ska 0,6 MW Danish licenceB_czek k/ Starogardu Gd. 0,6 MW own constructionKamiennik k/Elbl_ga 0,3 MW own constructionTrutnowy k/Tczewa0,3 MW own constructionMort_gi k/I_awy 0,2 MW own constructionCzernin k/Malborka 3 MW importRybina k/Stegny 0,3 MW Danish licenceLuba_1,0 MW Danish-PolishALL TOGETHER 8,3 MW2.2 Biogas from manureIn half of eighties in IBMER research and design workswere started in area of small and medium scale biogasinstallations. According to IBMER designs or with our


co-operation installations were implemented in 10farms up to 500 LU (large animal unit with weight over500 kg). At present may be only one is working.There is a necessity of modern technology solvingproblems connected with proper management ofagricultural wastes (especially in animal production) inaspect of environment protection.Within EUREKA programme technology of manurefermentation and compost production "BIOMET-IBMER-EUROTECHNOLOGY" was worked out for farmswith animal breeding systems without bedding withconcentration above 100 SD. It can be also used fordisposal of municipal wastes mixed with manure.2.3 Liqiud biofuelsThe idea of using plant raw material as a fuel is not newone. As concerning e.g. bioethanol first production ofanhydrous alcohol on industrial scale in Poland wasbegan in 1928. During 40s and 50s total production ofspirit was very high and mixtures of gasoline with 20% ofalcohol were used. High prices of spirit on world marketsand low prices of fossil fuels reduced production ofanhydrous spirit to only one enterprise in Kutno. In 90 swe were reminded again of these fuels made fromagricultural raw materials.Polish standard, regulating gasoline quality andcomposition PN-92/C-096025 allows for the mixing oforganic oxygen compounds, in that dehydrated ethylalcohol, but not more than 5% by volume with petrol,with a maximum total oxygen content 2.8 % by weight.This standard was submitted by Ministry of Industryand Trade and introduced by Polish Committee ofStandards, Measures and Quality on 31 January 1992 asstandard obligatory from 1 March 1992 (Dz.Norm i Miarnr 2/1992, poz. 3). This standard allows use of ethanoladditive in all types of gasoline used in motorisation.Polish standard, regulating gasoline quality andcomposition PN-92/C-096025 allows for the mixing oforganic oxygen compounds, in that dehydrated ethylalcohol, but not more than 5% by volume with petrol,with a maximum total oxygen content 2.8 % by weight.This standard was submitted by Ministry of Industryand Trade and introduced by Polish Committee ofStandards, Measures and Quality on 31 January 1992 asstandard obligatory from 1 March 1992 (Dz.Norm i Miarnr 2/1992, poz. 3). This standard allows use of ethanoladditive in all types of gasoline used in motorisation.In Poland rape is the main oil plant, with traditionallyknown and accepted methods of cultivation. For thatreason research works in our country are concentratedon processing of rape oil for biofuel. The project PBZ-056-01ªEpal - Polish rape biofuel for ignition enginesfinanced by Polish Committee for Scientific Research(KBN) was going on in years 1994-97, as the result firstPolish agrorefinery was established. Three researchcentres participated in it: IBMER as coordinator wasdealing with whole problems connected with biofuelproduction (organisation, economics etc.), Technical-Agricultural Academy in Olsztyn was solving problemsconnected with fooder production on basis of rape mealand Warsaw Avionation Institute was testing quality ofbiofuels.In aspect of actual price relations (cheap diesel fuel andhigh prices of rapeseed) a substitution of mineralenergy products with rape based products in Poland isrequiring large expenditures from the State budget forrape biofuel production subsidy.3. IDENTIFICATION OF BARRIERS CONNECTEDWITH BIOMASS-ENERGY CHAINS IN POLAND.3.1 EconomyIn case of heat production systems based on biomasscombustion existing barriers are connected mainly withinvestment costs. However pay-back periods are quiteattractive in analysed cases (shorter than 5 years) closingof financial balance is very difficult, especially localadministration units, schools etc. have problems withgathering of financial means for investment.When it comes to the introduction of biomass fuel intothe energy systems the cost of energy produced frombiomass, compared to production based on other energysources is one of the most important factors. Thecompetition with low-cost fossil fuels impedes marketintroduction.3.2 Legal and regulatory frameworkIn Poland, the usage of biomass as an energy source inheating systems is regulated by several legal acts. Actual(1999) legal and regulatory framework on one handencourages development of local biomass heatingsystems, but on the other one defines some limitations(barriers) to it.On 2.02.1999 Minister of Economy issued a Regulationfor purchasing electricity and heat produced from nonconventionalsources (in that RES), including biomasscogeneration heat and power plants (Dz.U.nr 13/1999).According to this Regulation utility companies areobliged to purchase electricity and heat produced fromnon-conventional sources (in that RES) by nationalproducers, but only if power of plant is smaller than 5 MWand price of offered heat unit is not higher than thehighest price of heat unit offered by others fromconventional sources.Implementation of biomass heating plant project shouldbe also consistent with Building Act of 7.07.1994(Dz.U.89/1994 poz.414), which requires receiving apermission from authorities proper for given territory.Requirements connected with installations for solidbiomass combustion are specified in Polish Standard PN-87/B-02411. This standard concerns designing anderection of boiler plants placed inside building and waterboilers (placed outside), with water temperature


aspects, organisational aspects, institutional, structuraland political aspects, and environmental factorsHowever with the use of biomass energy is associatedimportant benefit - the reduction of CO 2 emissions -people’s perception of biomass burning remainsambiguous, and could constitute a strong barrier insome cases (visible atmospheric emissions, forestdepletion). Another important insufficiency isconnected with the lack of professional organisations(public entities or private companies) which couldprovide technical information and assistance, thussecuring biomass supply. There is a strong necessity toimplement a set of pilot projects showing positiveimpacts connected with biomass energy use.4. CHANCES FOR THE BIOMASS USE FORENERGY PRODUCTION IN POLAND.4.1 Possibilities of obtaining soft loans and grants fromEnvironmental Funds (National, Provincials, EcoFund)There is a Polluter Pays Principle applied in Poland.Every undertaking that emits pollution to theenvironment is obliged to pay environmental fees. Feesare similar to environmental taxes and could becalculated as a part of company production cost. Thismoney is collected by the environmental funds andcould be spend for environment improvement only.Also environmental fines supply the same funds. In thiscase the main difference is within the financial reportingwithin the company because fines could be onlycovered from the enterprise net profit. Even thoughproblems with the efficiency of the environmentalmoney collection that in the country scale is at thelevel of 80% it still creates huge flow of money whichcould be used only for the environmental purposes.Total income of environmental funds in 1998 was about870 million EURO. This money is divided amongNational Fund of Environment Protection and WaterManagement, Provincial Funds of EnvironmentProtection and Water Management and CommunalFunds. The latter can mostly finance waste watertreatment and waste management projects in local scale,however two first funds can support Renewable EnergyProjects Funds recently increase interest with thiscategory of investments.National and Provincial Funds administer about 85% ofenvironmental budget. Financial support is givenusually in a form of soft loans. Average interest rate ofthese loans is at level of 50% rediscount rate so it israther attractive. Moreover some categories of investorslike charitable organisations, schools and state medicalservice can get not repayable grants.There are also some additional possibilities to getfinancial assistance for Renewable Energy Projects.Most of them are based on international funds. In thisgroup the most important is EcoFund that has beencreated to manage funds originated from debt-toenvironmentswap . This foundation offers about 40 MEURO/y in a form of not repayable grants only.Renewable energy sources use is one of the mostimportant priorities of this institution. EcoFund wantsto play a role of an effective catalyst in this area. Apartfrom funding the most interesting and best preparedrenewable energy projects EcoFund also wants topromote some of the technologies not known and notpopular in Poland, but well checked in other countrieslike biomass gasification or combined heat pumps-solarsystems.There are also some bilateral international programsmostly oriented for funding consulting services.Usually majority of this money is consumed by foreigncompanies preparing reports very often not useful inPolish conditions which doesn t fit˚to the needs of localinvestors.Summing up it is worthy to say that Polish system ofsubsidies is a good incentive for investors in Polandand could play significant role in renewable energyprojects development. It is especially important as thereis no governmental supporting policy for thisimportant sector.4.2 Polish Energy Law (obligation of renewable energypurchase by the utilities, Third Part Access)There was a new Energy Law adopted by the PolishParliament in 1998. There are some articles beneficialfor renewable energy sources in this act. First one is theobligation for the utilities to buy heat and electricalenergy produced from the renewable energy sources.Unfortunately there are still some delays with issuespecific regulation concerning the formula for sale pricecalculation. In practice it makes this regulationunworkable however for future it seems to be promising.In Energy Law the most beneficial section for therenewable energy sources is Third Party AccessPrinciple. This regulation stops the monopoly of stateowned utilities in the energy market. TPA providespossibility to fix direct contracts between energyproducers (also renewable) and final users paying alump sum to the state owned grid for the energytransmission. It makes possible to share profits gainedfrom the low operational costs of renewable energybased installations between energy producers and userswithout excessive˚contribution˚paid˚to˚the˚utilities.These regulations could be very useful in futuredevelopment of renewable energy source use in Poland.4.3 Proposed method of evaluation of biomass projectsIt is very important to compare the economic efficiencyof projects undertaken to reduce the CO 2 emission,where various methods are employed to achieve thatgoal. The most common method considers capital costsonly. This approach is not fair for the RES, which incomparison with traditional energy sources, usuallyhave higher investment costs. That s why it should beused the unit cost of the reduction of carbon dioxideemission as an evaluation index. This index shows thedependence between the reduction in the carbon dioxideemission and the discounted capital expenditureincurred for this purpose plus the operating costs of thetarget system of energy generation.This method represents very well the actual costsincurred to achieve the desired environmental benefit.We must remember that it is not enough to investmoney in a project, because it is only the operation of anewly built or modernised system that brings about theactual reduction of emissions. The comparative analysiscannot, therefore, ignore the actual system operatingcosts incurred after the project is completed becausesuch costs make an important constituent of the totalcost borne during the system service life to achieve thespecific reduction of pollutant emissions.This method of project evaluation makes it possible tovalue a project at a higher level if the project operatingcosts are low, although the investment outlay is higher.Thus the projects aimed at using the renewable energy,where the investment outlay is usually high, but the3


operating costs are considerably lower than thoseincurred in the case of traditional technologies, maysuccessfully compete with the other projects designedto reduce the CO 2 emission.Example:The principle of representing the project efficiency bythe unit cost of reducing the CO 2 emission may bevisualised by an example shown below, where the saidindex is calculated for a project of modernising aboiler plant through the replacement of its coal-firedboiler with one fuelled with gas (option 1) or straw(option 2) and the calculations are carried outtraditionally, i.e. with taking into account theinvestment outlay only, and according to the methoddiscussed above.Technical specifications of the boiler plants:Coal-fired boiler plant (existing)Power rating 1 MWEnergy demand 16 200 GJEfficiency 60%Fuel calorific value 28 MJ/kgQuantity of the fuel burnt 964 tCO 2 emission 1 824 tOperating cost 91 500 EURGas-fired boiler plant ( modernized)Power rating 0.67 MWEnergy demand 16 200 GJEfficiency 90%Fuel calorific value 45 MJ/m 3Quantity of the fuel burnt 400 000 m 3CO 2 emission 907 tReduction of the CO 2 emission 917 tOperating cost 54 070 EURInvestment outlay 60 976 EURStraw-fired boiler plant ( modernized)Power rating 0.71 MWEnergy demand 16 200 GJEfficiency 85%Fuel calorific value 19 MJ/kgQuantity of the fuel burnt 1 003 kgCO 2 emission 0Reduction of the CO 2 emission 1 824 tOperating cost 42 630 EURInvestment outlay 177 561 EUR4.4 Activities of NGO — Polish Biomass AssociationIn November 1998 in Warsaw IBMER researchworkers together with other institutions and privatepersons founded the Polish Biomass Association(POLBIOM). The association was officiallyregistered in February 1999, in April 1999 — becamea member of European Biomass Association.POLBIOM has today 59 members, in those 8collective ones. POLBIOM is a non-governmental,non-profit organisation the objective of which is topromote the use of biomass in non-food applicationsin accordance with sustainable development by:1. Dissemination of information about biomass usefor non-food purposes, in that for energyproduction,2. Consolidation of all actors acting at that sector(researchers, producers, users, farmers, etc.),3. Working out a strategy of wider introduction ofbiomass use to national and local energy plans.5.CONCLUSIONSThe most important non-technical barriers connectedwith biomass-energy chains in Poland are as follows:• Lack of state policy supporting biomass use forenergy production (promotion, taxes, customduties)• Lack of state, country-wide programs financiallysupporting biomass use for energy production• Traditional approach of the decision makers to theenergy production based on hard coal and ligniteburning• Psychological barriers of energy producers who areafraid of biomass use as a fuelAs can be seen on example of other countries theintervention of local politicians or regional decisionmakersis a key issue for the development of biomassprojects.Modernisation typeCoal-to-gasconversionCoal-to-strawconversionCoal-to-gasconversionCoal-to-strawconversionCalculation Index valuemethod [EUR/t]A 66.6A 177.1B 69.5B 39.0rediscount rate R = 15% andthe project service life n = 20 yearsA - Taking into account the investment outlay onlyB - Taking into account the operating cost and thediscounted investment outlay4

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