Biomass for Power Generation in the EU-27

Biomass for Power Generation in the EU-27: Estimating Potential Demand, CO2 Abatements and the Biomass and CO2 Breakeven Prices for Co-firing / Vincent Bertrand, Benjamin Dequiedt et Elodie Le Cadre. Chaire économie du climat, Paris-Dauphine, December 2013, 36 p. (Informations et débats ; 28)

Authors’s abstract :

This paper gives an overview on the potential of using biomass in the European power sector. First, we introduce the main questions related to this topic. Next, we present a method that enables us to estimate the potential volumes of biomass which may be used in the European power generation. We also derive the biomass and CO2 switching prices, which make profitable the biomass co-firing in different types of coal plants. Finally, we rely on recent literature to figure out what are the potential biomass feedstocks in the EU countries, and we compare those resources with results of our estimations. Results indicate that the potential biomass demand from the power sector may be quite high compared with the potential biomass supply. We also identify that the biomass co-firing can produce high volumes of CO2 abatements, which may account for more than two times the potential abatements from the coal-to-gas fuel switching. Our economic analysis about biomass and CO2 breakeven prices shows that co-firing can remain profitable with very high biomass prices, when the carbon price is high enough. Hence,
the carbon price appears as an important driver of co-firing, which can make a high share of the potential biomass demand from the power sector being economically profitable, even with high biomass prices. However, as biomass stocks are limited, such a situation would result in potential conflicts between different biomass usages.

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