<strong>Performance</strong> <strong>of</strong> <strong>Generating</strong> <strong>Plant</strong>: Managing the Changes Executive Summary <strong>World</strong> <strong>Energy</strong> <strong>Council</strong> 200712Table 3 Land area required for different renewable power plantsSource: WEC and US DOE<strong>Energy</strong> source Wind Solar (PV) Biomass GeothermalLand area for a 1 GW plant100 km²but can be used foragricultural purposes30 km²but panels can beinstalled on ro<strong>of</strong>s5000 km² 200 km²biomass actually delivered only 1% <strong>of</strong> the globalelectricity, far behind fossil fuels (66.4%), largehydro (16.2%), and nuclear (15.2%).Europe and North America are the two leaderswith almost 75% <strong>of</strong> the global bioelectricityproduction ahead <strong>of</strong> Asia (about 18%) and Africawith only 0.2%.Wood and other biomass materials can beprocessed and used to generate electricity.There are three major transformations presentlyin use: combustion, gasification and pyrolysis <strong>of</strong>biomass.Combustion is the most common way <strong>of</strong>converting solid biomass fuels to energybecause <strong>of</strong> the low cost and high reliability.Gasification and pyrolysis are still underdevelopment but are generally expected tobecome more common in the future.Biomass is a part <strong>of</strong> the renewable energyportfolio and it can <strong>of</strong>fer an array <strong>of</strong> benefits:• No greenhouse gases during the life cycleand lower overall emissions than fossilfuelplants• Forest sustainability• <strong>Energy</strong> independence and regionalintegration• Proven technologies for combustion andco-firing• Use <strong>of</strong> low-cost productsBiomass systems are most <strong>of</strong>ten fuelled bywaste wood, from logging operations, forestthinning, low-grade wood or sawmill residues,which are far too frequently burnt in the openwithout pollution control. These systems createa commercial market for wood, while alsoboosting the forestry economy.Moreover, biomass cultivation can reduce therisk <strong>of</strong> wildfires by removing small diameter treesthat act as a fuel. It prevents harmful effects <strong>of</strong>forest fires on the atmosphere, including release<strong>of</strong> mercury, toxic materials, GHGs and NOx.Biomass conversion to electricity providessignificant benefits, but is also has several majordrawbacks:• Seasonal availability• Transport and processing• Emissions• Land area requirementThe land area that is required for exploitation bya biomass power plant is huge when comparedto other energies. Table 3 shows this land arearequired for exploitation <strong>of</strong> a 1GW renewableenergy plant (average values).Theoretically biomass energy has enormouspotential. The long-term biomass electricityproduction potential is estimated at 11,000TWhper year, i.e. more than 60% <strong>of</strong> the worldwideelectricity production in 2005 (18,140TWh). Thispotential is higher than that <strong>of</strong> other renewableenergies: hydro (7,500 TWh), wind energy(around 4,500 TWh), Solar energy (4,400 TWh).However, biomass must be divided amongst alluses (food, heating, electricity, bio-fuels).
<strong>Performance</strong> <strong>of</strong> <strong>Generating</strong> <strong>Plant</strong>: Managing the Changes Executive Summary <strong>World</strong> <strong>Energy</strong> <strong>Council</strong> 200713Technical advances are expected and shouldpromote a decrease in cost and diversifysolutions to adapt power plants to the feedstockand needs. However, biomass needs incentivemechanisms to accelerate its development, findnew markets and encourage technicalimprovements.Biomass is a relatively clean energy. It willcertainly be beneficial and can play a sizeablerole in GHG emission reduction. However, dueto its different uses – heat, electricity, bio-fuelsand especially food – and geographically limitedlocalisation, biomass electricity alone will beunable to supply the entire electricity needs.Markets & Risk ManagementStrategiesThis new PGP project was conducted by theWork Group on Markets and Risk ManagementStrategies which was set up to establish meansto determine the risks in power markets and themethods implemented to manage such risks.Cognisance is to be taken <strong>of</strong> the continuingchanging market environment while maintainingconfidentiality <strong>of</strong> the project participants.Objectives: Establish world wide participationreflected by the Work Group Members Identify those risks, uncertain futureevents, and the relevant markets thatcould influence the achievement <strong>of</strong> thepower plants objectives. Establish a categorisation standard forthese risks indicating opportunities forbenefit or threats to success Establishment <strong>of</strong> best practices for RiskManagement with regard to termination,tolerance or mitigation <strong>of</strong> each risk andthe use <strong>of</strong> flexibility, forward planning etc Establish a glossary <strong>of</strong> marketdevelopments that have created changesin risk to power plants. Establish methods for reviewing andreporting on risk tolerance and riskmanagement processesEnterprise Risk Management (ERM) is anintegral part <strong>of</strong> Good Corporate Governance andmanagement in general. Corporate Governanceis essentially about:• Promoting best business practice• Enhancing organisational performanceand well-being• Adding shareowner and stakeholder valueIt goes beyond pure structure to encompass allbusiness processes. It is therefore important tonote that corporate governance is not aboutindicating compliance to appropriate ‘rules’, butrather towards demonstrating that fundamentalgood business practice is alive and well ineverything the organization undertakes.