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UNITED NATIONSINDUSTRIAL DEVELOPMENT ORGANIZATION

Renewable Energy inIndustrial Applications

An assessment of the 2050 potential

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

Renewable Energy inIndustrial Applications

An assessment of the 2050 potential

Disclaimer

This document has been produced without formal United Nations editing. The designations employed andthe presentation of the material in this document do not imply the expression of any opinion whatsoeveron the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO)concerning the legal status of any country, territory, city or area or of its authorities, or concerning thedelimitation of its frontiers or boundaries, or its economic system or degree of development. Designationssuch as "developed", "industrialised" and "developing" are intended for statistical convenience and donot necessarily express a judgment about the stage reached by a particular country or area in thedevelopment process. Mention of firm names or commercial products does not constitute an endorsementby UNIDO.

Although great care has been taken to maintain the accuracy of information herein, neither UNIDO nor itsMember States assume any responsibility for consequences which may arise from the use of the material.

This document may be freely quoted or reprinted but acknowledgement is requested.

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This technical paper has been produced by theUnited Nations Industrial DevelopmentOrganization (UNIDO) under the general guidanceof Pradeep Monga, Director of the Energy andClimate Change Branch. RENEWABLE ENERGY ININDUSTRIAL APPLICATIONS An assessment of the2050 potential was written by Emanuele Taibi,Dolf Gielen and Morgan Bazilian.

The work has greatly benefited from thesubstantive guidance received from DiegoMasera, Chief of the Renewable and Rural EnergyUnit. Special thanks go to the external reviewersfor their precious comments and suggestions, in

particular to Milou Beerepoot from the IEARenewable Energy Division and to Werner Weissand Christoph Brunner from AEE Intec. Additionalthanks for the useful discussions from which thework greatly benefited go to Paolo Frankl, Headof the IEA Renewable Energy Division; CédricPhilibert, IEA Renewable Energy Division; NathalieTrudeau, IEA Energy Technology Policy Division;Mark Howells, IAEA Planning and EconomicStudies Section; Gustav Resch, TU Vienna EnergyEconomics Group; Tom Howes, EuropeanCommission Renewable Energy Policy Unit; andStefano Zehnder, Parpinelli TECNON.

ACKNOWLEDGEMENTS

7

TABLE OF CONTENTS

List of Figures . . . . . .6

Executive Summary . . . . . .7

I. INTRODUCTION . . . . . .9

II. BIOMASS . . . . .14a. Biomass supply potential . . . . .14

Competition for biomass among different sectors . . . . .16b. Biomass process heat . . . . .16

Regional and sectoral discussion . . . . .16Bioenergy Technologies . . . . .19

c. Biomass as petrochemical feedstock . . . . .23

III. SOLAR THERMAL SYSTEMS . . . . .28a. Solar process heat . . . . .28b. Solar cooling . . . . .34

IV. HEAT PUMPS . . . . .35a. Heat pumps for process heat . . . . .35

V. REFERENCES . . . . .39

VI. ANNEXES . . . . .42

ANNEX 1 . . . . .42Modelling energy transitions: . . . . .42

ANNEX 2 . . . . .45Biomass preparation technologies . . . . .45

ANNEX 3 . . . . .47The production of synthetic organic materials from biomass feedstocks . . . . .47

ANNEX 4 . . . . .51Solar thermal heating and cooling systems for industry . . . . .51

ANNEX 5 . . . . .55Cost-effectiveness of renewables for industrial use . . . . .55

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LIST OF FIGURES

Figure 1: Renewables potential in industry by 2050 - final energy and feedstocks . . . . .12

Figure 2: World biomass supply cost curve for industrial process heat production . . . . .14

Figure 3: Regional and sectoral breakdown of biomass potential for process heatin industry in 2050, excluding interregional trade . . . . . .17

Figure 4: Regional and sectoral breakdown of biomass potential for process heatin industry in 2050, including interregional trade . . . . . .18

Figure 5: Biomass solid fuels roadmap . . . . . .19

Figure 6: Share of Alternative Fuel Use in Clinker Production by Country . . . . . .21

Figure 7: Alternative fuels roadmap for cement production . . . . .22

Figure 8: Potential contribution of biomass to the petrochemical feedstock pool . . . . .24

Figure 9: Regional and sectoral breakdown of solar thermal potential forprocess heat in industry in 2050 . . . . .28

Figure 10: Low and medium temperature process heat demand by sector . . . . .30

Figure 11: Parabolic trough field, El NASR Pharmaceutical Chemicals, Egypt . . . . . .31

Figure 12: Supply cost curve for solar thermal in the food and tobacco sector . . . . .33

Figure 13: Calculation of the renewable energy contribution of a heat pump,according to the European Renewable Energy Directive . . . . .35

Figure 14: Regional and sectoral breakdown of the heat pump potential forprocess heat in industry in 2050 . . . . .36

Figure 15: Supply cost curves for heat pumps in the food and tobacco sector . . . . .38

Figure 16: Logistic substitution of biomass in the paper and pulpand wood industries . . . . .43

Figure 17: Logistic substitution of biomass in the chemical and petrochemicaland cement industries . . . . .44

Figure 18: Cost of useful process heat produced by main fossil fuels,under different CO2 prices . . . . .55

LIST OF TABLES

Table 1: Global Energy Assessment scenario assumptions . . . . . .11

Table 2: Economics of thermal applications of biomass gasifiers in SMEs . . . . .22

Table 3: Production capacity for bio-based plastics in 2009 . . . . .23

Table 4: Investment and generation costs for solar thermal for industrial . . . . .29process heat - 2007

Table 5: Break even analysis and learning investments for solar thermal in industry . .32

Table 6: Investment and generation costs for solar thermal forindustrial process heat - 2050 . . . . .33

Table 7: Main characteristics of thermally driven chillers . . . . .53

9

Manufacturing industry accounts for about onethird of total energy use worldwide. Roughly threequarters of industrial energy use is related to theproduction of energy-intensive commodities suchas ferrous and non-ferrous metals, chemicals andpetrochemicals, non-metallic mineral materials,and pulp and paper. In these sectors, energycosts constitute a large proportion of totalproduction costs, so managers pay particularattention to driving them down. As a result, thescope to improve energy efficiency tends to beless in these most energy intensive sectors thanin those sectors where energy costs form asmaller proportion of total costs, such as thebuildings and transportation sectors. This limitsthe overall potential for carbon dioxide (CO2)reductions through energy efficiency measures inindustry to 15% - 30% on average.

Industrial production is projected to increase by afactor of four between now and 2050. In theabsence of a strong contribution from energy effi-ciency improvements, renewable energy and CO2capture and storage (CCS) will need to make a sig-nificant impact if industry is substantially to reduceits consequent greenhouse-gas (GHG) emissions.

Although renewable energy has received a gooddeal of attention for power generation and for resi-dential applications, its use in industry has attract-ed much less attention. Renewable energy playsonly a relatively small role in industry today.Biomass currently makes by far the most significantrenewable energy contribution to industry, provid-ing around 8% of its final energy use in 2007.

The present analysis of the long-term potentialfor renewable energy in industrial applicationssuggests that up to 21% of all final energy useand feedstock in manufacturing industry in 2050can be of renewable origin. This wouldconstitute almost 50 exajoules a year (EJ/yr), outof a total industry sector final energy use ofaround 230 EJ/yr in the GEA Scenario M that isused as the baseline projection in this study. Thisincludes 37 EJ/yr from biomass feedstock andprocess energy and over 10 EJ/yr of process heatfrom solar thermal installations and heat pumps.

The use of biomass, primarily for process heat,has the potential to increase in the pulp andpaper and the wood sectors to 6.4 EJ/yr and 2.4 EJ/year respectively in 2050. This representsan almost threefold increase in the pulp andpaper sector and a more than fivefold increase inthe wood sector, reaching a global average shareof 54% and 67% respectively of the total finalenergy use in each sector. Other sectors,including some of the most energy intensive suchas chemicals and petrochemicals and cement,also have potential to increase their use ofbiomass, but they will only achieve that potentialif there is a concerted effort for them to do so.For chemicals and petrochemicals, wider biomassdeployment will depend mainly on investment inbio-refineries that can make profits and spreadrisk through the production of a range ofproducts. In the cement sector what is mostneeded is a proper policy framework for themanagement of wastes and incentives toincrease their use in cement production.

EXECUTIVE SUMMARY

10

RENEWABLE ENERGY IN INDUSTRIAL APPLICATIONS

Interesting potential lies in the development ofbio-based vehicle tyres and their subsequent usein cement kilns at the end of their useful life.

This analysis suggests that, by 2050, biomasscould constitute 22% (9 EJ/year) of final energyuse in the chemical and petrochemical sectorsand that alternative fuels could constitute up to30% (5 EJ/year) of final energy use in the cementsector.

Across all industrial sectors, biomass has thepotential to contribute 37 EJ/yr. But theachievement of this potential will depend on awell-functioning market and on the developmentof new standards and pre-processingtechnologies. About one-third of the potential (12 EJ/yr) could be achieved throughinterregionally traded sustainable biomassfeedstocks.

Solar thermal energy has the potential tocontribute 5.6 EJ/yr to industry by 2050. Almosthalf of this is projected to be used in the foodsector, with a roughly equal regional distributionbetween OECD countries, China and the rest of theworld, mainly in Latin America (15%) and OtherAsia (13%). Costs depend heavily on radiationintensity. They are expected to drop by more than60%, mainly as a result of learning effects, from arange of USD 17 - USD 34 per gigajoule (GJ) in2007 to USD 6 - USD 12/GJ in 2050.

Heat pumps also have a part to play in lowtemperature process applications and areestimated to contribute 4.9 EJ/year in 2050. Most(43%) of this will be concentrated in the foodsector, mainly in OECD countries (60%), China(16%) and the Former Soviet Union (15%). Costsfor useful energy supply are projected to drop bybetween 30% and 50%, due mainly to reducedcapital costs, increased performance and moreconsistent, market driven, international electricityprices, from a range of USD 9 - USD 35/GJ in2007 to USD 6 - USD 18/GJ in 2050.

The competitiveness of biofuels with fossil fuelsis strongly dependent on national energy policyframeworks and energy prices. In the lastdecade, the ratio between the highest and lowestend-use prices for natural gas for industry indifferent countries has at times been as high as60. At the end of 2009, the ratio stood at 10.For coal, the ratio between different countrieshas been as high as 30 and, at the end of 2009,stood at 15 (Annex 5).

Renewables are not cost competitive where fossilfuels are subsidised. They are, however, alreadycost competitive in many cases and manycountries with unsubsidised fossil fuels. This iseven more so where CO2 emissions carry afinancial penalty that reflects their long-termeconomic and environmental impact. Wherenational energy policies subsidise fossil fuels,they strongly affect the competitiveness ofrenewable energy.

Overall, an increase in renewable energy inindustry has the potential to contribute about10% of all expected GHG emissions reductions in2050. At nearly 2 gigatonnes (Gt) of CO2, thisrepresents 25% of the total expected emissionreductions of the industry sector. This isequivalent to the total current CO2 emissions ofFrance, Germany, Italy and Spain, or around one-third of current emissions in the United States.

This potential can only be realised, however, ifspecific policies are developed to create abusiness environment conducive to private sectorinvestment, particularly in the transition period.Current best practice shows the conditions underwhich the successful deployment of renewablescan take place and this should guide futurepolicy making. Research, development anddeployment (RD&D) and cost reductions througheconomies of scale are the priorities. In thelonger term, a price for GHG emissions of theorder of USD 50/t CO2 is needed to support thedevelopment of a market for renewable energytechnologies and feedstocks in industry.

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In recent years, renewable energy hasincreasingly attracted public and policy attentionparticularly for its potential to contribute toreductions in GHG emissions. Most interest hasfocused on the use of renewables in powergeneration and as biofuels. Although someattention has been paid to the potential forrenewables, particularly biomass and solarthermal technologies, to contribute to heatingand cooling in residential space heatingapplications, their use in industrial applicationshas received less interest. This report focuses onthe potential of renewable energy sources forprocess heat in the industrial sector and forbiomass feedstock substitution in industrialprocesses.

Renewable energy can be widely applied inindustrial applications. The four options primarilydiscussed in this report are:

• Biomass for process heat;

• Biomass for petrochemical feedstocks;

• Solar thermal systems for process heat; and

• Heat pumps for process heat.

Several other options may also become relevantin the time horizon of this study. But these areunlikely to make anything more than a nichecontribution and they are accordingly notdiscussed in any detail in this report. Theyinclude:

• Conventional geothermal heat. This is highlylocation dependent. Transporting heat overlong distances is costly, leads to large lossesand feasible in only a few specific conditions.1

For industrial process heat, the industrialplant must be located very close to thegeothermal reservoir. This is unlikely to bepossible in any but a few highly specialisedapplications;

• Enhanced geothermal systems may make acontribution in the long run, subject to theresolution of technology issues;

• The use of run-of-river hydro for motivepower, of the kind that has been used forcenturies for grinding mills; and

• The use of wind for motive power, forexample by driving air compressors enablingthe storage of energy in the form ofcompressed air.

In combined heat and power (CHP) plants, thewaste heat from biomass electricity generationcan be used very effectively in industrialapplications. Electricity generation is not coveredin this paper, so CHP electricity and heat is notincluded in the analysis.

The full achievement of the potential describedin this analysis will depend on the widespreadadoption by industry of the Best AvailableTechnologies (BAT). The speed of the adoption ofBAT is, however, subject to a number of

I. INTRODUCTION

1 Iceland has a 63 km pipeline transporting hot geothermal water, but such approaches are rarely feasible elsewhere.

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significant barriers. These include:

• Lack of information on the potentialcontribution of renewables and ways ofachieving it;

• Cheap fossil fuels;

• The absence of appropriate technology supplychains;

• Lack of technical capacity;

• The high cost of capital in many developingcountries;

• A focus on upfront investment cost instead offull lifecycle cost;

• Risks associated with technology transitionsand the adoption of early stage technologies;

• Restricted access to financial support to coverthe extra costs of BAT; and

• The lock-in of inefficient, pollutingtechnologies with long lifetimes.

International cooperation can help to addressthese barriers, especially where it is conducted inclose collaboration with national governments.

The industrial sectors of many emergingeconomies are developing rapidly. It is importantthat they do so in a sustainable way. They needto be encouraged to leapfrog to climate friendlytechnologies if they are to avoid lockingthemselves into long-lasting, inefficient andpolluting technologies for decades to come.

The barriers to the implementation of BAT affectfirms' decision making processes in ways whichundermine otherwise rational economicinvestment in renewable technologies. Evenwhere supply cost curves show excellentopportunities for energy efficiency and renewableenergy investments in industry, these investmentsare often not happening.

The successful deployment of climate friendlytechnologies depends heavily on firms having thefinancial capacity to invest in the relevanttechnologies. But it also depends on their havingthe knowledge to develop and exploit suchtechnology and on the existence oforganisational structures and cultures, includinginstitutional settings and rules, that encouragethe use of such technology.2 Site-specific issueswill also influence the most appropriate climatefriendly technologies for a particular industrialapplication. To maximise efficiencies, the demandfor process energy inputs must be minimisedthrough the introduction of low-cost, efficienttechnologies and through systems optimisationbefore renewable energy options are applied.

This analysis looks at the long-term potential forthe use of renewables in industry on a worldwidebasis, with some regional disaggregation. It isclear, however, that national conditions varywidely in terms of resource availability, energyprices, industrial structures and financial sectorperformance. This will materially affect the speedof conversion to BAT in different countries.

Competition with fossil fuels is one of the mainfactors that determines the rate of transition torenewable energy sources in industry. TheInternational Energy Agency (IEA) estimates thatfossil fuels still receive subsidies of around USD550 billion a year worldwide. Country end-useindustrial energy prices can vary by severalorders of magnitude (Annex 5).

This paper discusses the long term potential forselected renewable energy sources andtechnologies in the industrial manufacturingsector. It is part of the UNIDO contribution to theGlobal Energy Assessment (GEA), a forthcomingcomprehensive assessment of energy issues

2 Work by IIASA has characterised these components as hardware, software and orgware (Arthur, 1983)

13

INTRODUCTION

coordinated by the International Institute forSystems Analysis (IIASA). The reference scenarioenergy demand assumptions come from the GEAoverall hypothesis on Infrastructure, Lifestylesand Policy (Table 1) and the IEA's EnergyTechnology Transitions in Industry (IEA, 2009b). Acombination of these scenarios is used as theGEA scenarios do not contain sub-sectoral detailsfor the industry sector.

2050 (Figure 1).3 This equates to a growth from8% to 21% of total final energy use.

In absolute terms, 70% of this potential growthcomes from the greater use of biomass andwastes, with smaller contributions from solarthermal technologies and heat pumps. Bio-feedstocks constitute 7 EJ/yr out of the total ofalmost 50 EJ/yr of industrial feedstocks estimated

The analysis is based on a combination ofcountry and regional resource data, data andprojections for the industrial activity of individualindustry sectors, and data on the current andfuture technical and economic characteristics ofrenewable energy technologies for industrialapplications. The main focus is on potentialoutcomes in 2050, and on the transitionpathways that will best achieve those outcomes.

This study suggests that renewable energy use inindustry has the potential to grow from less than10 EJ a year in 2007 to almost 50 EJ a year in

for 2050, while biomass for process heataccounts for over 30 EJ/yr. Solar thermal isestimated to contribute up to 5.6 EJ/yr. Althoughnot part of the scenario considered here, theapplication of concentrating solar power (CSP)technologies in the chemical sector couldpotentially increase the contribution of solarthermal to 8 EJ/yr. Heat pumps will compete withsolar thermal technologies for low-temperatureprocess heat applications, depending onelectricity prices and the availability of solarradiation. The estimated potential for heatpumps in 2050 is 4.9 EJ/yr.

Table 1Global Energy Assessment scenario assumptions (IIASA, in preparation)

3 The chart shows the projected average growth in the role of renewables from 2007 to 2050. It does not purport to suggest atransition pathway. Growth is represented in the style of Pacala and Socolow (2004).

GEA-LL GEA-MM GEA-HH

Infrastructure Decentralized-Renewables, Regional Centralized, supply-Limited Nuclear, emphasis hetrogeneity in orientation, eg CCS,on "Intelligent grids" technological Nuclear, large-scale

choice renewables

Lifestyles Major transformation in Supply and Less emphasis on consumer choices, large demand side "dematerialization".uptake of demand measures Continued reliancesavings measures, mass on individualtransit systems mobility

Policy More re-regulation; Mix of policy Centrally regulated subsidies, new business "balanced" markets, "feed-in"models, "feed-in" tariff measures across tariff for generationequivalents in end use the energy system


Currently around one third of the final energyconsumption of the pulp and paper sector comesfrom biomass and waste, with a maximum of82% achieved in Brazil. Wood and agriculturalstraw are an important feedstock for pulpmaking. Around 37% of the final energy used bythe wood processing industry also comes frombiomass residues, with a maximum of 81% inFrance. Biomass is also an important resource forsynthetic organic products such as fibers,detergents, lubricants and solvents. About 10% ofall feedstock for synthetic organic products is ofnatural organic origin. This includes cellulosefrom wood and natural oil for alcohols (polyols)and other chemical feedstocks.

Charcoal is still used for iron making on anindustrial scale in Brazil. ArcelorMittal

Bioenergetica produces charcoal from eucalyptusforestry operations. This charcoal is used to fueliron furnaces in Juiz de Fora or exchanged for pigiron with local producers.

The cement sector has the capability to usealmost any waste products with residual energycontent including the combustible fraction ofmunicipal solid wastes, discarded tyres, wasteoils, plastic wastes, paper residues and other lowgrade biomass wastes locally available. Althoughinterest in using such wastes is growing, theseresources account for only 5% of the cementindustry's fuel needs in developing countries,compared to an average of 16% in OECDcountries. For this analysis, only the renewablefraction of waste is taken into account in thecalculation of the renewable energy potential.

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Figure 1Renewables potential in industry by 2050 - final energy and feedstocks. UNIDO analysis.

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15

INTRODUCTION

New applications for industrial biomass usehave emerged in the last decade. These includebiomass gasification for process heat incountries such as China and India, the use ofbiogas from the digestion of residues in theagro-food industry, and new forms of bioplasticsand biochemicals. Ethanol and methanol, whichserve as a basis for a wide range ofcommodities, can be produced from biomass.Bulk chemicals such as ethylene are now beingproduced on a commercial scale from suchbioethanol feedstocks. The Brazilianpetrochemical firm Braskem S.A., for example,plans to have the capacity to produce 200 000tonnes/yr of polyethylene from sugar-canederived ethanol by October 2010. The company continues also to develop work onsugar-cane derived polypropylene and syntheticrubber.

Chemical pulp plants have become much moreenergy efficient to the point that they can nowproduce surplus electricity, heat or synfuels fromproduction process wood residues, withoutadditional fossil fuel use.

Solar energy is widely used for dryingprocesses, although much of this is notaccounted for in energy statistics. Solar processheating has now been applied in a few hundredenterprises in applications such as swimmingpools, laundries, dairies and breweries. Thetemperature levels achieved are graduallyincreasing, as is the scale of the applications.Some of the technologies used for CSP can alsobe used to generate steam at a wide range oftemperature and pressure levels for industrialprocess heat.

Solar cooling seems to have only a limitedpotential in industry, probably concentrated inthe food sector. Demonstration plants have beensuccessfully running under several researchprojects, including the IEA Solar Heating andCooling (SHC) programme, and the Mediterraneanfood and agricultural industry applications ofsolar cooling technologies (MEDISCO).

Other renewable energy technologies forindustrial process heat production include heatpumps4. Industry needs heat at a temperaturegenerally significantly higher than the ambienttemperature.4 So far, heat pumps have not beenable to meet this demand in many applicationsand they have therefore achieved only limiteddiffusion. Geothermal heat and the direct use ofwind energy, for example for water pumping, canalso play a role in niche markets.

Altogether, about 30% of the total final energyuse in industry, excluding feedstocks, can be ofrenewable origin by 2050. This excludes the useof electricity produced from renewable resourcesfor industrial use. In addition, up to 14% of thefossil feedstock expected to be used by industrycan be substituted with biomass. Taken together,the potential exists to replace 21% of the finalenergy and feedstock energy expected to beused by industry in 2050 with renewables.

This analysis also suggests that renewables havethe potential to play a key role in the reductionof CO2 emissions and fossil fuel dependence inthe industry sector. These benefits warrant moreattention. This report identifies obstacles to theachievement of this potential and discusses theconditions for their mitigation.

4 For the scope of this analysis, heat produced by heat pumps is considered renewable as long as the low temperature source isrenewable (such as from air, ground, surface and ground water, hot water produced by solar thermal systems or biomassboilers). Another condition is that the energy provided should be higher than the one consumed. Air heat pumps use a singleunit of electricity to produce three to five units of usable heat. This means that 75% to 80% of the final energy produced isfrom a renewable source: ambient energy. The rest can also be renewable (electricity or heat produced from renewables) or not(electricity or heat produced from fossil fuels). Only the renewable portion of the heat produced by heat pumps is counted asbeing renewable. In the case of power production with efficiency of 40%, the Coefficient of Performance (COP) of a heat pumpshould be higher than 2.5 in order to save primary energy and be considered as providing renewable heat.

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16

A. BIOMASS SUPPLY POTENTIALThe starting point for the estimation of thepotential for biomass use in industry is the

resource potential of biomass inputs (Figure 2).The construction of this figure is described inBox 1.

II. BIOMASS

Figure 2World biomass supply cost curve for industrial process heat production(ref. to final energy). UNIDO analysis.

17

BIOMASS

The regional break down of the resourcepotential accounts for the differences in sectorstructure and its consequences for biomass use.Looking forward to 2050, many technologicalbreakthroughs may happen, both in the industrialsector and in the transportation sector.

This supply curve allows for increases in food production and land use for other purposes. It assumes a significant increase inproductivity and a moderate change in lifestyle, notably a moderate growth in meatconsumption.

Box 1: The biomass supply cost curve

The figures presented are based on the estimated potential biomass resource that can bededicated to industry. This is derived from an estimate of 150 EJ/year of sustainable biomasssupply in 2050 and the assumption that no more than one-third of this can be dedicated toindustrial applications. The rest will be shared between transportation, power generation andresidential sector. The upper bound of 50 EJ of biomass for industrial applications is based on acomprehensive literature review. If this biomass were grown on agricultural land it would requireabout 300-600 million hectares. Also significant amounts of agricultural and forestry and woodprocessing residues are available, in the order of 100 EJ per year.

The Y-axis shows the estimated long term supply cost for biomass from residues and fromenergy crops delivered at the point of use, including cost, insurance and freight. Prices maydiffer from supply costs given the volatility of commodity prices, the non-liquidity of manyregional biomass markets and the absence of true global markets for biomass trading. Thesefigures should be considered as a lower bound of cost for the actual price of different biomasscommodities. The price will be determined by many factors that are difficult to predict,including:

• different buyers may be competing for the same commodity for different uses. In thesecircumstances, the price of the commodity is determined by the demand from both markets,as for example seen from the competition from biodiesel producers and food producers onthe palm oil exchange in Malaysia and from ethanol producers and food producers for cornon the Chicago Board of Exchange;

• the price of biomass will be strongly linked to the price of the commodity the biomass issubstituting for. So the price of other edible vegetable oils will influence the price of palmoil and the price of coal will influence the price of pellets, charcoal and bio-coal. The price ofcoal is especially relevant for GEA, because with high carbon prices the price of coal may beeven higher than the cost of biomass substitutes, driving up the biomass price. With CO2 atUSD 200/t, coal will cost USD 20/GJ, compared with USD 1 - USD 2/GJ today.

• the lock-in for some technologies such as power generation is very long. Once a plant hasbeen designed for a specific fuel such as coconut shells, rice husks, or other specificresidues, those fuels cannot be easily substituted and substitution will make no economicsense during the lifetime of the plant. This can drive up prices.

18


Competition for biomass amongdifferent sectors

IIrroonn aanndd sstteeeell

Iron production requires the combustion ofcarbon-containing fuels to produce carbonmonoxide which is reacted with ferrous oxide toproduce iron and CO2. Historically, iron wasproduced using charcoal exclusively as fuel. Atthe beginning of the 18th century, charcoalstarted to be substituted by coke. Coke is nowby far the dominant fuel in iron and steelmaking, with at least 10 Gt of coke beingconsumed per tonne of steel produced. Even so,significant amounts of pig iron are stillsuccessfully produced using charcoal.

The use of electrochemical processes to produceiron ore, known as electrowinning, is currently inan early R&D phase. Aluminum is producedentirely by electrowinning and the approach isalso used in the production of lead, copper, gold,silver, zinc, chromium, cobalt, manganese, andthe rare-earth and alkali metals. Electorwinningoffers the possibility to produce iron without theuse of carbonaceous fuels. If a technologicalbreakthrough were to make the production ofiron by electrowinning feasible, and if in futurethere were large quantities of low cost, lowcarbon electricity available, this would offer aroute to the production of iron and steel withsignificantly reduced carbon emissions.

PPeettrroocchheemmiiccaall ffeeeeddssttoocckkss

Carbon is also needed for the production ofmaterials in the petrochemical sector, where itcomprises around 75% of the total feedstock.

The main alternative feedstock to fossil fuels inthe petrochemical sector is likely to be biomass.But waste products, such as recycled plastics,can also substitute for some fossil fuel feedstock.Alternatively, organic materials such as cellulosefibers, coconut fibers, starch plastics, fibre

boards and paper foams can be produced whichcan directly substitute for petrochemical productsin end use applications, as described in Annex 3.It is also possible to produce textile materials(mainly viscose and acetate) from wood pulp andas by-products from cotton processing.

TTrraannssppoorrttaattiioonn

The transport sector is likely to be a significantcompetitor for any available biomass resource. Ifby 2050 biofuels are still the main option todisplace fossil fuels from the transport sector, theavailability of biomass for the industrial sectormay be extremely limited. This would increasethe attractiveness of other, non-biomass,renewable energy sources and of the furtherelectrification of many industrial sectors. But atthe same time, if biofuels increasingly replacepetroleum fuels, this may free up large amountsof refinery-produced naphtha at low cost. Inthese circumstances, shifting away from naphthaas a petrochemical feedstock to alternativefeedstocks or processes will be very difficult toachieve.

B. BIOMASS PROCESS HEATRegional and sectoral discussion

Biomass is the most widely used renewableenergy source both generally and in industry.Biomass availability and use is stronglydependent on regional conditions.

Although biomass provides 8% of industry's finalenergy, in some regions there is almost nobiomass use in any industrial sector. In regionssuch as Latin America and Africa, by contrast,biomass contributes around 30% of industry'sfinal energy (IEA statistics). Wide differences inuse are also observed among different industrialsectors.

Biomass is used to a significant degree forindustrial heat in the food and tobacco, paper,

19

BIOMASS

pulp and printing and wood and wood productssectors in most regions. By contrast, almost noprocess heat is produced from biomass in theiron and steel and non-metallic mineral sectors,except in Brazil, or in the chemical andpetrochemical, non-ferrous metals, transportequipment, machinery, mining and quarrying,construction or textile and leather sectors.

The cement and iron and steel sectors in Braziluse biomass for 34% and 40% respectively ofthe sectors' final energy consumption. The factthat such a high level of biomass contributioncan be sustained in the two most energyintensive sectors in Brazil means that a similarlevel of contribution should also be technicallyfeasible elsewhere. The limiting factors on theextension of biomass use in these two sectorsare clearly therefore non-technical ones. Theymay include resource availability, economics andcompetition from other energy sources.

The estimates of the potential role of biomass in2050 are strongly sensitive to the state of themarkets for biomass trading among differentregions. If there is no interregional trading ofbiomass, the potential contribution of biomass inindustry is estimated to be 18.3 EJ/year; if thereare liquid markets for interregional biomasstrading this contribution is estimated to be 30.3 EJ/year (Figures 3 and 4).

Transporting biomass is unlikely to have asignificant impact on overall emission reductions.A state of the art coal-fired power plant with46% efficiency co-firing pellets shipped by a 30 kilotonne (kt) ship over 6 800 km wouldproduce emissions of around 85 grams ofCO2/kilowatt hour (kWh). Using bio-coal5 shippedby a 80 kt ship over 11 000 km, the emissionswould be reduced to 32 grams of CO2/kWh. Bycomparison, the same power plant using coalwould emit 796 grams of CO2/kWh.

5 Bio-coal is a solid fuel with physical characteristics (energy density, hydrophobicity, mechanical stability, etc.) comparable tocoal. It is generally produced through the torrefaction of biomass feedstocks.

Figure 3Regional and sectoral breakdown of biomass potential for process heat in industry in2050, excluding interregional trade. UNIDO analysis.

China

27%

Other Asia

20%

OECD Total

17%

Latin America

13%

Former

Soviet Union

11%

Africa

11%

Non-OECD

Europe

1%

Middle East

0%

Regional breakdown

18.29 EJ in 2050

Chemical and

petrochemical

37%

Non-metallic

minerals

25%

Paper, pulp and

printing

18%

Wood and wood

products

10%

Food and

tobacco

4%

Iron and steel

4%

Sectoral breakdown

18.29 EJ in 2050

20


In the absence of interregional markets, theestimated marginal cost of biomass would bearound USD 7/GJ of primary energy, mostly in theform of locally consumed residues and energycrops in Latin America, with a smaller level oflocal consumption in Africa. With liquidinterregional markets, large volumes of biomasswill be moved around the world, mostly intoOECD countries (11 EJ) and some into theChinese market (less than 1 EJ). Despite muchhigher levels of demand, the marginal costwould be around USD 7.5/GJ, assuming theexploitation of Africa's very large potential forenergy crops, and significant use also of Asia'spotential.It is clear from this analysis thatcreating tradable biomass commodities andallowing free trade from developing countries toindustrialised ones will have a potentiallypositive impact on GHG emission reductions inindustry. It will also, importantly, provide anopportunity significantly to increasedevelopment. Supporting sustainable biomass

production, deploying technologies that willenable the conversion of biomass into tradablecommodities and allowing those commodities toreach OECD markets will provide Africa with apotential cash flow of up to USD 50 billion ayear for the industrial sector alone. It will beimportant that these markets are developed in asustainable manner.

In addition, the demand for biomass forindustrial applications may present anopportunity for biomass resource-rich countriesto secure a larger share of industrial production.This could become a source of economic growthand provide a basis for new industries and jobsin developing countries. In a developmentcontext, biomass resources may help developingcountries to increase their industrial value added,moving progressively up the value chain frombeing exporters of their resources to using theirresources to manufacture exportable finishedproducts.

Figure 4Regional and sectoral breakdown of biomass potential for process heat in industry in2050, including interregional trade. UNIDO analysis.

OECD Total

47%

China

19%

Other Asia

12%

Latin America

8%

Former Soviet

Union

7%Africa

6%

Non-OECD

Europe

1%

Middle East

0%

Regional breakdown

30.37 EJ in 2050

Chemical and

petrochemical

37%

Paper, pulp and

printing

26%

Non-metallic

minerals

20%

Wood and wood

products

10%

Food and

tobacco

3%Iron and steel

2%

Sectoral breakdown

30.37 EJ in 2050

21

BIOMASS

BBiiooeenneerrggyy TTeecchhnnoollooggiieess

A range of bioenergy technologies for industrialprocess heat production are alreadycommercialised. Others are at earlier points on theRD&D spectrum. Biomass derived fuels, like fossilfuels, come in solid, liquid and gaseous forms.

Liquid biofuels include ethanol from thefermentation of sugars and biodiesel from thetransesterification of vegetable oils. Secondgeneration biofuels are currently the subject ofintensive RD&D. About 57 kilotonnes (kt) ofproduction capacity is in operation, and aboutten plants each with a capacity of between 50 ktand 300 kt per year are planned to startoperation in the coming two years.

Solid bioenergy products are likely to be themost effective substitute for coal. Several options

are already on the market. Charcoal, for example,

was well established as a coal substitute

thousands of years ago. Other products such as

pellets, described in more detail in Annex 2, have

been developed more recently.

Significant quantities of biomass are already co-

fired with coal in conventional coal power plants.

For example, the Amer 9 CHP power plant in the

Netherlands, which produces 600MW of electricity

and 350 MW of heat, currently co-fires 35% of

biomass mostly in the form of wood pellets with

65% coal. The technological development of

solid biomass fuels is likely to be directed at a

scaling up in the energy density of the

reprocessed biomass until it can be used without

any modification on its own in coal-burning

power plants, furnaces and industrial processes

(Figure 5).

Figure 5Biomass solid fuel roadmap

Wood chips

Now

* In comparison to woodchips Sources: BioMass Capital analysis

In 1-2 years

In 4+ years ? ?

Standardpellets• 5 MWh/t• Improved

handling and combustion

• 4 times bulkenergydensity*

Bio-coal(step 1)• 6.5 MWh/t• Hydrophobic• Uniform

properties• Possible to

gasify• 8 times bulk

energydensity*

Bio-coal(step 2)• 9-10 MWh/t• Hydrophobic• Uniform

properties• Ideal to

gasify• Excellent total

economics• New

applications• > 16 times

bulkenergydensity*

22


The two main current forms of gaseous biofuelsare biogas from anaerobic fermentation andproducer gas or synthetic gas (syngas) frombiomass gasification.

Anaerobic fermentation yields a biogas productwhich is very similar to natural gas. Oncecleaned, it can be fed directly into existingnatural gas distribution pipelines or used instationary power generation in gas engines. Itsuse for gas turbines is still limited, mostly due tothe relatively small scale of existing biodigestersrelative to the gas demand and to the need toimprove the quality of gas purification.

Biomass gasification, although still only in an earlycommercial phase, offers good prospects for theuse of biomass for process heat and powergeneration. Gasifiers produce a synthetic gas(syngas) that can be adjusted for direct use incombined cycle gas turbine plant for powergeneration, or fed into existing distributionnetworks, or used for the production of liquidfuels through the Fischer-Tropsch process, or evenbe used for hydrogen production through the useof special catalysts in the gasification bed. Most ofthese routes are currently in pilot demonstrationphase in the CDFB gasifier in Güssing, Austria.

It is not clear yet whether the most effectivetechnology will be a highly flexible gasifiercapable of transforming many different qualitiesof low cost biomass into a standardised, goodquality syngas, or whether it will be based on ahighly optimised gasifier that is fine tuned to usepre-processed solid or liquid biomasscommodities in the form of, for example, pelletsor black liquor.

Three current examples of the use of biomass inindustry are discussed in more detail below.

CChhaarrccooaall uussee iinn bbllaasstt ffuurrnnaacceess

Charcoal is widely used today as a fuel. World

average charcoal production from 2001 to 2005was around 43 Mt per year (equivalent toapproximately 1.3 EJ/yr). It has been expandingby around 2% a year in recent years.

Most of this charcoal is used for cooking indeveloping countries. Around 37 million cubicmetres (m3) a year (2004 figures, equivalent toapproximately 7.7 Mt), however, are used for ironmaking particularly in small scale blast furnacesin Brazil. Charcoal does not have the mechanicalstability of coke, but it has similar chemicalproperties. A processed type of charcoal withbetter mechanical stability is under development.This "biocoal" could substitute for coke.Assuming the complete replacement of fossilfuels on a thermally equivalent basis, theproduction of 1 t of hot metal requires 0.725 t ofcharcoal produced from 3.6 t of wet wood.Charcoal produced in Minas Gerais costs aboutUSD 200/t (Santos Sampaio, 2005). This iscomparable with current coking coal industrialprices in non-subsidised markets. So theeconomic impact on iron prices would be neutral.

Alternatively, the use of renewables could beincreased in iron and steel making by usingrenewable power for electrowinning. At thecurrent stage of technological development,electrowinning it is not feasible for iron and steelproduction. Significant further technologydevelopment would be needed, together witheconomies of scale, if this were to become arealistic option. Some industry R&D is in train todevelop such technology, but its long-termsuccess is uncertain.

Biomass co-ccombustion in cement kilns

The use of alternative fuels in the cementindustry is a long established practice in manycountries. It offers the opportunity to reduceproduction costs, to dispose of waste, and insome cases to reduce CO2 emissions and fossilfuel use.

23

BIOMASS

Cement kilns are well-suited for wastecombustion because of their high processtemperature and because the clinker product andlimestone feedstock act as gas-cleaning agents.Used tyres, wood, plastics, chemicals, treatedmunicipal solid waste and other types of wasteare co-combusted in cement kilns in largequantities. Where fossil fuels are replaced withalternative fuels that would otherwise have beenincinerated or land filled, this can contribute tolower overall CO2 emissions. In a surveyconducted by the World Business Council onSustainable Development in 2006, participantsreported 10% average use of alternative fuels, ofwhich 30% was biomass (WBCSD, 2006).

European cement manufacturers derived 3% oftheir energy needs from waste fuels in 1990 and17% in 2005 (IEA, 2009b). Cement producers inBelgium, France, Germany, the Netherlands andSwitzerland have reached substitution ratesranging from 35% to more than 80% of the totalenergy used (Figure 6). Some individual plantshave achieved 100% substitution of fossil fuels

with waste materials. Waste combustion incement kilns also needs an advanced collectioninfrastructure and logistics (collection, separation,quality monitoring, etc.).

If waste materials are more generally to achievewidespread use in cement kilns at highsubstitution rates, tailored pre-treatment andsurveillance systems will be needed. Municipalsolid waste, for example, needs to be screenedand processed to obtain consistent calorificvalues and feed characteristics. In Europe, theburning of alternative fuels in cement kilns isregulated by European Directive 2000/76/EC. Insome non-European countries the use ofalternative fuels is controversial, because cementkilns may not be subject to sufficiently stringentemission controls and regulations. Clearguidelines and public information campaignscould help reduce misconceptions and facilitatethe increased use of waste in cement kilns. Awell-designed regulatory framework for wastemanagement is an important factor in facilitatingthe use of waste.

Figure 6Share of alternative fuel use in clinker production by country (IEA, 2008a)

90

80

70

60

50

40

30

20

10

0

PER

CEN

T

Neth

erlan

ds

Switz

erlan

d

Austr

ia

Germ

any

Norw

ay

Fran

ce

Belgi

um

Swed

en

Luxe

mbo

urg

Czec

h Re

publi

c

Japa

n

Unite

d St

ates

Cana

da

Austr

alia

Unite

d Ki

ngdo

m

Denm

ark

Hung

ary

Finla

nd

Kore

a

Italy

Spain

Polan

d

Gree

ce

Irelan

d

Portu

gal

24


Outside the OECD countries, the use ofalternative fuels is not widespread. In developingcountries, although interest is growing,alternative fuel use constitutes only 5% ofcement industry fuel needs, compared to an

average of 16% in the OECD. This suggests thatthere is considerable scope to increasealternative fuel use globally with benefits bothfor profits and for the environment.

Figure 7Alternative fuels roadmap for cement production (IEA and WBCSD, 2009)

Table 2Economics of thermal applications of biomass gasifiers in SMEs

Gasifier unit size Gasifier unit size (30 kW) (100 kW)

Unit capital costs for gasifiers (USD/kW) 200 146

Total gasifier capital costs (USD) 3750 12,500

For SME units with existing liquid fuel consumption

Substitution of liquid fuel by biomass (litres/h) 9.4 31.3

Net savings (USD/h) 3 9

Payback (months) 6 6

For SME units with existing solid biomass burning

Reduction in biomass consumption (kg/h) 30 100

Net savings (USD/h) 0.8 2.7

Payback (years) 2 2

Source: Gosh et al., 2006Note: An average 8 hours of daily operation is assumed for a firm in the SME category.All cost figures in the study are in 2003 USD.

100

80

60

40

20

02006

16%

40-60% 40-60%

25-35%

10-20% Developing regions

Developed regions

5%

2030 2050

Alte

rnat

ive

fuel

use

(%)

Estimated alternative fuel use 2006-2050

Source: ECRA Technology Papers (2009), Getting the Numbers Right data 2006 (WBCSD), IEA (2009)Note: the maximum levels in each region depend on competition from other industries for alternative fuels

25

BIOMASS

Biomass gasifierrs forr kilns and furrnaces

In India, the use of gasifiers for thermal

applications in SMEs offers favourable economic

and financial outcomes across a wide range of

different unit capacities and for different

feedstocks such as rice husk and other

agricultural residues. Where gasifiers replace

liquid-fuel use, small (~30 kW) or medium (~100

kW) sized gasifiers have payback periods of the

order of only 6 months, assuming a biomass

supply price of less than 2 USD/GJ (USD 27/t

biomass) (Table 2). However biomass

gasification is still in a stage of variation and

there has been no dominant design yet (Kirkels

and Verbong, 2010). In most markets it is unable

to compete with other technologies, and

technology standardization is needed to ensure

proper operation.

C. BIOMASS AS PETROCHEMICALFEEDSTOCKCarbon is also needed for the production of

materials in the petrochemical sector, where it

comprises around 75% of the total feedstock.

Olefins (mainly ethylene, propylene and

butadiene) are typically produced through the

steam cracking of various petrochemical

feedstocks such as ethane, liquid petroleum gas,naphtha and gas oil. Naphtha is the mainfeedstock for the production of aromatics such asbenzene, toluene and xylenes through reforming.

The main alternative feedstock to fossil fuels islikely to be biomass. But waste products, suchas recycled plastics, can also substitute for somefossil fuel feedstock. Alternatively, organicmaterials such as cellulose fibers, coconut fibers,starch plastics, fibre boards and paper foams canbe produced which can directly substitute forpetrochemical products in end use applications,as described in Annex 3. It is also possible toproduce textile materials (mainly viscose andacetate) from wood pulp and as by-productsfrom cotton processing.

The production of ethylene from bioethanol istechnically relatively straightforward and somecompanies are already doing it on a large scale.For example, Braskem is currently producing 200 000 t of bio ethylene from sugar caneethanol, to be polymerised into high densitypolyethylene (HDPE) and linear low densitypolyethylene (LLDPE). The current production ofother petrochemical products from bio feedstocksis set out in Table 3.

Table 3Production capacity for bio-based plastics in 2009

[kt/yr]

Cellulose plastics (of which at least 1/3 fully bio-based) 4 000

Partially bio-based thermosets 1 000

Partially bio-based starch plastics 323

Polylactic acid (PLA) 229

Ethylene from bio-based ethanol 200

Polyhydroxyalkanoates (PHA) 80

PUR from bio-based polyol 13

Partially bio-based PTT 10

Bio-based monomers 10

Bio-based Polyamide (PA) 5

Total 5 870

* fully bio-based unless otherwise stated Source: Shen et al, 2009

26


Bio feedstocks are estimated to have thepotential, based on the assumptions in GEAScenario M, to supply 6.9 EJ/yr of thepetrochemical sector's energy needs in 2050(Figure 8). The achievement of this potential islikely, however, to be dependent on a number offactors, including the cost and availability ofpetrochemical feedstocks which will themselvesbe dependent on limitations in the refineryproduct mix and refinery product demand.6

The achievement of this potential will require theuse of bio feedstocks in the production of anumber of materials and products and throughthe substitution of bio-based products forconventional ones. For example bio-basedpolyethylene can be used as a substitute forpolypropylene. Aromatics can also be producedfrom biomass feedstocks, particularly from ligninwhich is an important constituent of wood thatmay be produced in substantial amounts as a by-

6 Since 2005, motor gasoline demand has been stagnating worldwide. It is declining in OECD countries. This has led to refineryovercapacity in certain areas. As a result, naphtha has been increasingly available as a low cost petrochemical feedstock. Inthese circumstances, it will be increasingly difficult for bio-feedstocks to compete on availability and cost with surplus naphta. Ifthe use of naptha for gasoline is constrained, the potential for biomass as petrochemical feedstock is assumed to be as low as4% by 2050. But if there were to be an increase in demand for naptha, or a widespread conversion of cat-cracking capacity tohydrocracking, then the potential demand for bio feedstocks may be as high as 23% in 2050. In a mid-case scenario, biofeedstocks are estimated to meet 14% of the petrochemical sector's demand, equivalent to around 7 EJ/yr, in 2050.

Figure 8Potential contribution of biomass to the petrochemical feedstock pool (UNIDO analysis)

0

10

20

30

40

50

2007 2050

EJ

Potential contribution of biomass to the petrochemical feedstock pool

non renewable feedstock bio-feedstock

27

BIOMASS

product if second generation ethanol productiontakes off. This would offer new opportunities forthe development of biorefineries.

The most promising petrochemical bio-feedstocks other than bio-ethylene, are polylacticacid (PLA) as a substitute for polyethyleneterephthalate (PET) and polystyrene (PS), polyhydroxy alkaonates (PHA) as a substitute forhigh density polyethylene (HDPE), and bio polytrimethylene terephtalate (PTT), as a substitutefor fossil-based PTT or nylon 6 (Dornburg et al,2008).

Traditional fossil feedstocks can be substitutedwith bio-derived ones at a number of points inthe petrochemical products production chain:

• fossil feedstock can be substituted with a bio-based one (e.g. natural gas can besubstituted with synthetic natural gas frombiomass gasification and subsequentmethanisation);

• petrochemical building blocks can besubstituted (e.g. ethylene can be substitutedwith bio-ethylene);

• traditional plastics can be substituted with abio-based substitute (e.g. PET can besubstituted with PLA); or

• a petrochemically produced material can besubstituted with a bio-based material withsimilar functional characteristics (e.g. plasticcan be substituted with wood or nylon withsilk).

Several substitution processes are discussed inmore detail in Annex 3.

Worldwide plastics consumption amounts toapproximately 245 Mt/yr. Olefins (ethylene andpropylene) are the most important feedstock.The steam cracking of naphtha, ethane and gasoil is the dominant production technology. Largeamounts of aromatics are also produced fromrefinery streams. World-wide, steam cracking

accounts for approximately 3 EJ of final energyuse and approximately 200 million tonnes ofCO2 emissions. This represents around 20% ofthe total final energy use and about 17% of thetotal CO2 emissions from the chemical andpetrochemical sector. A number of newtechnologies are being developed tomanufacture olefins from natural gas, coal andbiomass. Only those based on biomass offer thepotential to eliminate fossil fuel use and GHGemissions.

The first chemicals and man-made plastics,commercialised in the 19th century, were made ofbio-based polymers. Most of these materialswere gradually displaced by synthetic polymersas the petrochemical industry grew after the1930s, although some, such as man-madecellulose fibers, maintained a market niche. Inthe last twenty years, bio-based chemicals andplastics have been receiving increased attentionas a means of responding to problems withwaste management (limited capacities andlittering), high prices for fossil fuels andfeedstocks, questions about the medium- tolong-term supply security of these feedstocks,technological progress, and policy goals includingclimate policy.

Bio-based polymers are produced in three mainways:

• by using natural polymers such as starch andcellulose which can be modified;

• producing bio-based monomers byfermentation or conventional chemistry andpolymerising them, for example to producePLA; or

• producing bio-based polymers directly inmicroorganisms or in genetically modifiedcrops.

The first of these three production methods iscurrently by far the most important, beinginvolved for example in the use of starch in

28


paper making, in man-made cellulose fibers, andin the development of starch polymers. Much isexpected of the future development of thesecond option, with the first large-scale plantscurrently coming into operation. No meaningfulquantities are yet produced by the thirdproduction method, although a good deal ofresearch is being devoted to it.

In addition to ethanol, a number of basicchemicals required for advanced manufacturingcan be generated from biological sources (Spathand Dayton, 2003; Werpy et al. 2004). Mostchemical co-products can be created from thebasic chemical building blocks of sugars andalcohols. For example:

• Polyols, used in a variety of productsincluding antifreeze, plastic bottles, brakefluid, synthetic fibers, resins, auto bodies, andsweeteners, can be derived from xylose andarabinose;

• Using genetically modified (GM) micro-organisms, glucose can be converted into 3G(1,3-propanediol), which can then be used tomanufacture the polymer 3GT in existingfacilities. 3GT has excellent stretch recovery,resilience and toughness, and it can be dyedeasily;

• Using GM bacteria, succinic acid can beproduced from sugars. This chemical can beused as a precursor in many industrialprocesses, and can be used in themanufacture of butanediol, tetrahydrofuran,and other chemicals used in the manufactureof plastics, paints, inks, and food and as a

possible replacement for the benzene class of

commodity petrochemicals (Crawford 2001).

Ten years ago the primary advantage of bio-

based chemicals and polymers lay in their

biodegradability. Now non-degradable bio-based

polymers are increasingly being commercialised

such as bio-based polyethylene, bio-based

polypropylene, blends of petrochemical

polypropylene with starch, and bio-based epoxy

resin. It is estimated that bio-based plastics

could replace around 80% of petrochemical-

based plastics (Shen et al., forthcoming).

The non-renewable energy used in the production

of most bio-based chemicals and polymers is

clearly significantly less than that used in the

production of their petrochemical equivalents. The

savings are even larger if R&D manages to

succeed in making woody biomass

(lignocellulosics) available as feedstock for

biotechnological routes. Even larger savings can

be obtained by using tropical crops (e.g. sugar

cane) and tropical wood types due to the higher

yields and larger amounts of byproduct which can

be converted into heat, power or products (Patel

et al., 2006). In the long term, the potential exists

to save around two-thirds of the non-renewable

energy that would be consumed by petrochemical

bulk products, and similar advantages can be

expected for GHG emissions. Total energy use

(including non-renewable and renewable energy)

is in some cases higher for bio-based chemicals

and polymers than for comparable petrochemical

products, given the higher efficiency of the

traditional conversion processes.

29

BIOMASS

Box 2: Green tyres

Several leading tyre manufacturers are looking to identify alternative, non-fossil based syntheticrubber for vehicle tyres. Bio-isoprene has been successfully produced by the Danish companyGenencor, one of the leaders in the production of enzymes for second generation biofuels. Thecompany is preparing to build a pilot plant in 2011 to brew more bio-isoprene, which it plans tosell to Goodyear and other tyre manufacturers. Goodyear says it expects to have tyres suitablefor road testing in mid-2011.

Other major manufacturers are looking to substitute black carbon filler with silica, fossil processoil with vegetable oil, and poly-isoprene with chemically modified natural rubber. Through suchsubstitutions, the Sumitomo Rubber Industries for Dunlop have managed to reduce the fossilcontent in the Enasave tyre to only 3%. The Yokohama dB Super E-spec tyre uses chemicallymodified natural rubber and processing oil derived from orange peels shipped from orange juicefactories, reducing fossil content of the tyre to 20%. Michelin uses sunflower oil in its PrimacyMXM4 all-weather tyre.

All these tyres, by reducing their fossil fuel content, reduce the demand for oil in thepetrochemical sector. They also save further CO2 emissions from the large share of the billiontyres discarded every year that end up being burned in cement kilns.

30

A. SOLAR PROCESS HEATThe analysis underpinning this paper hasidentified the potential for solar thermal sourcesto produce 63 EJ of process heat for industry in2050. This potential is shown, by region and bysector, in Figure 9.

From the regional breakdown, it is clear thatmost regions have the potential for thesignificant application of solar thermal systemsfor process heat production. Regional potentialsare mainly dependent on the overall

consumption of the selected sectors, on their

demand for low temperature process heat and,

importantly, on the amount of solar irradiation

available. OECD countries have a large potential

due to their large industrial energy demand.

Niches exist in several sectors in which part of

the low-temperature energy demand can be

economically supplied by solar thermal systems.

In terms of the sectoral breakdown, the food and

tobacco sector has almost half of the potential,

with the balance well spread among other

III. SOLAR THERMAL SYSTEMS

OECD Total

35%

China

32%

Latin America

15%

Other Asia

13%

Africa

3%

Former Soviet

Union

2%

Non-OECD

Europe

0%

Middle East

0%

Regional breakdown

5.62 EJ in 2050

Food and

tobacco

46%

Machinery

20%

Mining and

quarrying

16%

Textile and

leather

13%

Transport

equipment

5%

Sectoral breakdown

5.62 EJ in 2050

Figure 9Regional and sectoral breakdown of solar thermal potential for process heat inindustry in 2050. UNIDO analysis7

7 Figures are in useful energy terms, after accounting for efficiency losses in solar panels and distribution systems

31

SOLAR THERMAL SYSTEMS

sectors. This is particularly important fordeveloping and least developed countries, wherethe development and modernisation of the foodindustry has a critical role to play in terms offood security. Solar thermal systems can helpdeveloping countries to stabilise food prices byreducing their connection to the volatile prices ofoil and other energy commodities.

Unlike biomass, where resource availability maylimit the potential and raise sustainabilityconcerns, solar has an almost unlimited resourcepotential. Estimates of the theoretical potential of

different configuration and radiation levels shownin Table 48.

This shows that, where good solar radiation isavailable, solar thermal technologies for industrialprocess heat are very close to break even. TheTable shows average figures. In many specificcases where the cost of the reference energy unitis higher or where locally manufactured solarthermal systems are cheaper, solar thermaltechnologies are already cost effective withoutany need for subsidies. In areas with lower solarradiation, such as in central Europe, solar thermal

solar energy are in the range of millions of EJ/yr(e.g. 3.9 million EJ/yr). This is hundreds ofthousands of times larger than the current worldtotal primary energy supply of 503 EJ in 2007(IEA statistics). The quality of the resource, i.e.the insolation rate, however, depends on latitudeand climatological conditions.

An analysis of several sources suggests thecurrent generation and investment costs for

technologies need substantial cost reductions tobecome competitive. In some specific markets,taxes on fossil fuels or subsidies for renewableenergy make solar thermal competitive alreadytoday even in areas of low solar radiation.Although solar cooling is still in an earlydemonstration stage, in countries with stablesolar radiation and unstable, expensive electricity,solar cooling may become a viable alternative toelectric chillers in the next ten years.

8 The most comprehensive and recent survey is the IEA's Solar Heating and Cooling brochure (2009) athttp://www.iea.org/papers/2009/Solar_heating_cooling.pdf9 Assuming, based on IEA data on capacity and production, a world average load factor for 2007 of 605 full load hours/yr, a 7%interest rate, and a capital recovery factor of 9%. O&M costs, in USD/MWh/year, are 2.5% of the ratio between investment costsand full load hours.

Table 4Investment and generation costs for solar thermal for industrial process heat - 20079

General Cost Investment CostUS$/MWh thousands US$/MW

Case 1: 2000kWh/m2/year current 57 450storage break even 50 350

Case 2: 1200kWh/m2/year current 94 450daily storage break even 50 238

Case 3: 1200kWh/m2 year current 90 765seasonal storage break even 60 508

Case 4: 2000 kWh/m2/year current 137 1,450including cooling break even 80 847

32


solar radiation conditions and achievingsufficiently high temperature levels needed forthe most likely applications, boiling anddistilling. So far there is only very limitedexperience with solar thermal energy in thissector or at this scale. This makes an accurateestimate of the potential difficult at this stage.

In 2006, 7 of the identified 85 potentialapplications for solar thermal in industry were inthe chemical sector (ESTIF, 2006). In 2007, heatdemand in the chemical industry was around 11 EJ/yr. Around half of this (5.7 EJ/yr) isestimated as being below 400oC and 20%

The chemical sector has also a high potential forsolar thermal, but generally on a very large scale.Cost reductions in CSP technologies, combinedwith the growth in the production of chemicals inAfrica and Middle East, suggest growing scopefor the development of solar thermal applicationsin the chemical sector. The main barriers to thegreater use of solar thermal in this sector are thescale of the area needed for solar collectors,

(2.3 EJ/yr) below 100oC. If half of this processheat demand were to be met in areas wheredirect natural insolation is sufficient to justify theuse of CSP technologies, the potential for theuse of solar thermal technologies in the chemicalsector in 2050 would be around 2.4 EJ/yr. Thiswould increase the total estimated potential forsolar thermal in industrial applications in 2050from 5.6 EJ/yr to around 8 EJ/yr.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Transport equipment Machinery Mining and quarrying Food and tobacco Textile and leather

Below 60 C 60 - 100 C 100 - 160 C 160 - 400 C

1.5 EJ 4.5 EJ 2.6 EJ 6.4 EJ 2.3 EJ

Figure 10Low and medium temperature process heat demand by sector (Taibi 2010)

In industry, five sectors use a significant

proportion of their process heat at temperatures

lower than 400oC, and are therefore likely to

have a strong potential for solar thermal to meet

their process heat needs. These are transport

equipment, machinery, mining and quarrying,

food and tobacco, and textiles and leather

(Figure 10). Many processes and activities that

are common to these sectors can benefit from

the implementation of solar thermal systems.

These include: washing, pre-heating of boilers

feed water and space heating in industrial

buildings.

33


Different solar technologies have differentinvestment costs per unit of capacity, anddifferent levels of capability in terms of thermaloutput. Flat plate collectors are the cheapesttechnology, but they can only be used to heatloads to around 70oC. Vacuum tubes or parabolicmirrors in combination with a suitable heatenergy carrier can reach 120oC to 400oC.Successful tests have been carried out usingsolar energy to achieve temperatures sufficient toproduce pure metals from ore. But the cost andtechnical challenges involved in upscaling thesetests make the widespread application of solarheat at temperature levels above 400oC unlikelybefore 2050.

Given the profile of temperature needs inindustry (Figure 12), most process heat demandcan be met using relatively low cost flat plateand vacuum tube collectors. Only 8% (0.5 EJ/yr)of the estimated 5.6 EJ/yr of solar thermal energyin 2050 will require the use of CSP technologies;

the rest can be achieved using flat panecollectors and evacuated tube collectors.

The economic competitiveness of solar thermalenergy in industry will be very positively affectedby high carbon prices. Among renewabletechnologies, solar has an advantage overbioenergy as it is not exposed to feedstock pricevolatility. To increase competitiveness, the capitalcost of solar technologies needs to be reducedthrough learning, starting with the deployment ofsolar thermal systems in selected sectors inregions where solar radiation is abundant and asconstant as possible throughout the year, suchas for example in the dairy sector in India(discussed further in Annex 4). The deploymentof solar thermal systems where they are alreadycompetitive today will facilitate the diffusion ofeconomically attractive, reliable, industrial-scalesolar thermal systems to other regions andsectors, as learning effects and economies ofscale come into play.

Figure 11Parabolic trough field, El NASR Pharmaceutical Chemicals, Egypt(Weiss and Mauthner, 2010)

34


The main competitors for solar thermal systemswill be heat pumps. Heat pumps operate insimilar low-temperature ranges. Like solartechnologies, the lower the temperature increasethey have to provide, the more efficient they are.In general, the relative competitiveness of thesetwo technologies in any specific situation willdepend on a balance between the main factorsunderpinning each technology, i.e. on the balancebetween available solar radiation and localelectricity costs. By 2050, the competitiveness ofthe two technologies is expected to bedetermined by regional considerations as muchas by sectoral ones.

Solar thermal technologies will need to beimplemented widely if they are to become

radiation. Such deployment is already costeffective today. As further such investments aremade, the cost of solar thermal systems shouldreduce, making them progressively moreeconomically viable in other less favourableconditions.

To achieve the projected 5.6 EJ/yr in 2050, thesolar capacity needed by the industrial sectorwould be over 2 500 gigawatt hours (GWth),assuming current levels of full load at 605hr/year and that learning effects are achievedonly in the industrial sector. Depending on thelifetime of the systems and on the rate of theirdiffusion, the total cumulative capacity that willneed to be installed by 2050 would be in therange of 3 500 GWth. At the current learning rate

competitive with conventional process heatproduction (Table 5). The cases describe differentlevels of insolation and different storageapproaches. As with other technologies, there areclearly advantages in deploying early systemswhere they are most effective, i.e. initially onsimple systems in areas with abundant solar

of 20%, solar thermal would be expected tobreak even in most potential applications, evenin temperate climates using seasonal storage forsolar cooling. (Table 6). Given that, in 2008, thetotal capacity of solar thermal installations wasonly 171 GWth, this will require a majorinvestment programme.

Table 5Break even analysis and learning investments for solar thermal in industry10

10 Table 5 is based on the same assumptions and calculation methodology as Table 4. The full load hours (in hours/yr) for thefour cases are: 750, 450, 800 (with the benefit of seasonal storage) and 1000 (benefiting from a good match between the loadcurve for cooling and peak production from solar thermal systems).

Break even Total cost of reaching Learning cumulative capacity Break even investment

GW Billion US$ Billion US$

Case 1: 2000kWh/m2/year 252 34 2daily storage

Case 2: 2000kWh/m2/year 1,235 320 67daily storage

Case 3: 2000kWh/m2/year 609 264 41seasonal storage

Case 4: 2000kWh/m2/year 908 769 144including cooling

35


For the calculation of 2050 supply cost curves(Figure 12), the feasible temperature limit for solarthermal is set at 100oC. This is a conservativeassumption. There are already pilot systems, suchas the ARUN solar concentrator dish in India, thatproduce solar thermal process heat attemperatures up to 250oC (as described in Annex 4). The cost per unit of energy produced iscalculated on a regional basis. The potential isbased on the proportion of the process heatdemand of each industrial sector that is less than60oC for 2007 and less than 100oC for 2050.

Similar cost curves have also been developed forthe other four industrial sectors in this analysis.Each of them illustrates how the potential forsolar thermal technologies in industrialapplications is distributed among regions andtemperature levels, showing the cost of usefulenergy for each of them. This cost can becompared with the local energy marketconditions for currently used fuels to evaluatethe economical feasibility of investing in solarthermal systems in specific industrial sectors andprocesses.

B. SOLAR COOLINGThe chemical and petrochemical and food andtobacco sectors are the largest industrial users of

process cooling. Most of the cooling in bothsectors is currently done with electric chillers.The main alternative, especially in the chemicaland petrochemical sector, is natural gas poweredabsorption chillers.

Data from the United States Energy InformationAgency's Manufacturing Energy ConsumptionSurvey (MECS) indicates that process coolingaccounts for 8.5% of the total power demand ofthe global chemical industry and for 12.5% of theglobal demand of the petrochemical industry11. Itis unlikely, however, that much of this demandcan be met by solar cooling, given the very lowtemperatures required by chemical processes andthe relatively high energy demands of individualfacilities. These characteristics are difficult tomeet with solar thermal systems, given the largeareas of solar panel that would be needed todeliver them.

This leaves only one sector with a good potentialfor solar process cooling, the food and tobaccosector. According to the MECS, process cooling inthe food and tobacco sector accounts for 27% ofthe sector's electricity demand, equivalent to 6%of the sector's total final energy demand. On thisbasis, the total process cooling demand for thefood and tobacco sector is estimated in 2007 to

Table 6Investment and generation costs for solar thermal for industrial process heat - 2050

General Cost Investment CostUS$/MWh thousands US$/MW

Case 1: 2000kWh/m2/year 2050 21 170storage break even 50 397

Case 2: 1200kWh/m2/year 2050 36 170daily storage break even 50 238

Case 3: 1200kWh/m2 year 2050 34 289seasonal storage break even 60 508

Case 4: 2000 kWh/m2/year 2050 52 549including cooling break even 80 847

11 http://www.eia.doe.gov/emeu/mecs/mecs2006/2006tables.html

36


have been less than 0.4 EJ/year worldwide.Although solar cooling can play an importantpart in niche applications in the industry, forexample in cooling greenhouses, it is unlikely to

offer the potential to achieve significant savingsin fossil fuel use or GHG emissions. Furtherdetails on the technologies and their potentialcan be found in Annex 4.

Afr

ica <

60 C

15

Mid

dle

East

< 6

0 C

16

Lati

n A

meri

ca <

60 C

17

China < 60 C18

Oth

er Asia

< 6

0 C

20

Afr

ica 6

0 -

100 C

21

Mid

dle

East

60 -

100 C

22

OECD Total < 60 C23

Lati

n A

meri

ca 6

0 -

100 C

23

Chin

a 6

0 -

100 C

24

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n-O

ECD

Euro

pe

< 6

0 C

25

Fo

rmer So

vie

t U

nio

n <

60 C

26

Oth

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OECD Total 60 - 100 C29

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32

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33

0

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Co

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Food and Tobacco - supply cost curve 2007

Latin A

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< 6

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6

Afr

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China < 60 C7

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8

Mid

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8

Afr

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Chin

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100 C

9

Fo

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9

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n-O

EC

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9

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100 C

10


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3800

3900

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14

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potential (PJ)


Figure 12Supply cost curve for solar thermal in the food and tobacco sector. UNDIO analysis.

37

A. HEAT PUMPS FOR PROCESS HEATHeat pumps can take heat from the environmentor from waste heat streams and supply it toindustrial applications without the need to burnany fuel. In applications where the pumpingenergy input is in the form of electricity producedfrom renewable energy sources, heat pumps area fully renewable energy technology. Where theelectricity is generated from fossil fuels, only part

of the energy output of heat pumps can be

regarded as renewable (Figure 13). So, for

example, if the electricity comes from fossil fuel

generation with an efficiency of 40%, the

coefficient of performance12 of the heat pump

needs to be higher than 2.5 if the pump is to

save primary energy and be considered as

providing renewable heat. The amount of useful

heat provided must be higher than the primary

energy consumed.

IV. HEAT PUMPS

Figure 13Calculation of the renewable energy contribution of a heat pump, according to theEuropean Renewable Energy Directive

12 The coefficient of performance is the ratio of useful output energy and useful input energy under standardized testing conditions

38


The analysis underpinning this paper has identified the potential for heat pumps to meet 4.87 EJ/yr ofindustry's process heat demands in 2050, as shown in Figure 14 by region and by sector.

Box 3: Advantages and disadvantages of usingheat pumps in industrial applications

Currrrent disadvantages of industrrial heat pumps

o Lack of refrigerants in the relevant temperature range;

o Lack of experimental and demonstration plants;

o User uncertainty about the reliability of heat pumps;

o Lack of necessary knowledge among designers and consulting engineers about heat pumptechnologies and their application.

Currrrent advantages of industrrial heat pumpso High coefficients of performance (COP) in applications requiring a low temperature lift and/or

operating in high ambient temperatures;o Long annual operating time;o Relatively low investment cost, due to large units and small distances between the heat

source and heat sink;o Waste heat production and heat demand occur at the same time.

Source: Jakobs, 2010

OECD Total

60%China

16%

Former Soviet

Union

15%

Other Asia

4%Latin America

3%

Non-OECD

Europe

2%

Africa

0%

Middle East

0%

Regional breakdown

4.87 EJ in 2050

Food and

tobacco

43%

Machinery

23%

Mining and

quarrying

17%

Textile and

leather

10%

Transport

equipment

7%

Sectoral breakdown

4.87 EJ in 2050

Figure 14Regional and sectoral breakdown of the heat pump potential for process heat inindustry in 2050. UNIDO analysis.

39

HEAT PUMPS

OECD countries have an important role to play inthe potential deployment of heat pumps forindustrial process heat. This reflects the fact thatmost OECD countries already have reliableelectricity grids which deliver electricity atcompetitive prices. The high efficiency of electricindustrial heat pumps makes this technologycompetitive with solar thermal technologieswhere electricity prices are low and solarradiation is less than optimum, conditions whichdescribe many of the regions where OECDindustrial production is located.

Two other factors, the capital cost of theequipment and its performance, are alsoimportant in determining the competitiveness ofheat pumps. Performance is expressed in termsof the number of units of energy the heat pumpcan move from the lower temperature of thesource to the higher temperature needed, usingone unit of electricity. In most normal operatingconditions, the amount of electricity required isconsiderably less than the amount of heatprovided, particularly in applications demandingrelatively low temperature process heat. The mainthermodynamically limiting factor in the use ofheat pumps for high temperature process heat,however, is that their performance decreases thegreater the difference in temperature between theinput source and the output demanded. So heatpumps are more efficient in delivering lowtemperature process heat demands. And air heatpumps are more efficient in warmer climates. Thisfactor has been taken into account in analysingthe cost of the process heat in individualregions.

Supply cost curves have been calculated for 2007and 2050 for the same temperature rangecategories as in the supply cost curve for solarthermal, using the cost per unit of useful energybased on the cost of electricity, an indicativecapital cost of the heat pump and itsperformance coefficient. The performance

coefficient of pumps decreases as thetemperature lift increases. It is much lower forthe 60o - 100oC range than for temperature liftsless than 60oC. Electricity costs are taken fromthe IEA Energy Prices and Taxes database, usingthe data for the final price of electricity for theindustrial sector. For those regions not in thedatabase, the data of a representative countryhave been used as a proxy, notwithstanding thevery significant differences in electricity pricesamong different countries in the same region. Forthose countries for which historical data aremissing, a 2007 figure has been calculated usingthe OECD price in 1996 as base and rescaling asa proportion of the OECD 2007 figure. Theresulting cost curve for the food and tobaccosector, as an example, is shown in Figure 15.

The curve for 2050 has been created usingreduced capital costs, increased performancesand more homogeneous electricity prices, rangingfrom USD 12 to USD 24/GJ (real terms 2007prices).

Heat pumps can already provide a competitivealternative to fossil fuels for low temperatureprocess heat in several regions. One of thedriving factors, for example in China, is theavailability of cheap electricity. But where thiselectricity is generated by low-efficiency or coal-fired power plant, this can completely offset thepotential CO2 emission reductions associatedwith the use of heat pumps.

The competition for low-temperature renewableprocess heat production between heat pumpsand solar thermal will be heavily dependent onregional and local conditions. This analysisshows how the relative competitiveness of thetwo technologies is likely to be both regionallyand sectorally polarised. Both technologies havesubstantial improvement potentials between2007 and 2050. But the cost of the electricitythat drives the cost of process heat from heat

40


pumps is unlikely to reduce significantly infuture. Indeed, the progressive introduction of acarbon price on non-renewable power generation,already in place today in the EU and other OECDcountries, will probably increase prices.

Conversely, solar thermal technologies still havea large potential for cost reduction. They may asa result become the dominant renewable energytechnology for low temperature process heat by2050 in many regions.

China < 60 C9

Mid

dle

East

< 6

0 C

13

Chin

a 6

0 -

100 C

13

Latin A

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ca <

60 C

13

Afr

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60 C

15

Fo

rmer So

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t U

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n <

60 C

15

OECD Total < 60 C18

Mid

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100 C

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100 C

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100 C

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EC

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100 C

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rmer So

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100 C

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n-O

EC

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< 6

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Form

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13 OECD Total 60 - 100 C

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Figure 15Supply cost curves for heat pumps in the food and tobacco sector. UNIDO analysis.

41

Arthur, W.B. (1983) On Competing Technologiesand Historical Small Events: The Dynamics ofChoice under Increasing Returns. IIASAWorking Paper, WP-83-090.

Biopol (2010) Green polyethylene in Brazildiesel.http://biopol.free.fr/index.php/green-polyetlylene-in-brazil/

BioMCN (2010) BioMCN opens largest 2ndgeneration biofuel plant.http://www.biomcn.eu/news/news.html

Crawford, C. (2001) Discussion Framework:developing biobased industries in Canada.Canadian New Uses Council (CANUC) ForHorticulture and Special Crops Division(HSCD) Market and Industry Services Branch(MISB).

Dornburg, V., Hermann, B., and Patel, M.K. (2008)Scenario Projections for Future MarketPotentials of Biobased Bulk Chemicals.Environmental Science & Technology Vol. 42,no. 7.

ESTIF (2006). Solar Industrial Process Heat -State of the Art. Intelligent Energy Europe,2006

Essent (2010)

Gielen, D., Fujino, J., Hashimoto, S., andMoriguchi, Y. , 2003. Modeling of GlobalBiomass Policies. Biomass and Bioenergy,Volume 25, Issue 2.

Ghosh, D., Sagar, A.D., Kishore, V.V.N. (2006)Scaling up of Biomass Gasifier Use: AnApplication-specific Approach. Energy Policy34, pp. 1566-1582.

Gudmundsson, J., Freeston, D. and Lienau, P.(1985). The Lindal Diagram, GeothermalResearch Council Transactions, Vol. 9, pp. 15-17.

IEA (2008a) Energy Technology Perspectives2008. IEA/OECD, Paris.

IEA (2008b) Deploying Renewables: Principles forEffective Policies. IEA/OECD, Paris.

IEA (2009a) World Energy Outlook 2009.IEA/OECD, Paris.

IEA (2009b) Energy Technology Transitions forIndustry. IEA/OECD, Paris.

IEA (2009c) Renewable Energy Essentials: Solarheating and cooling. IEA/OECD, Paris.

IEA (2010a) Energy Technology Perspectives 2010.IEA/OECD, Paris.

IEA (2010b) Technology Roadmap onConcentrating Solar Power. IEA/OECD, Paris.

IEA and WBCSD (2009). Cement TechnologyRoadmap 2009. Paris/Geneva.

IEA Bioenergy (2009) Bioenergy - A Sustainableand Reliable Energy Source.http://www.ieabioenergy.com/

IEA Task 33/IV, 2008. Potential for Solar Heat inIndustrial Processes.

Jakobs, R, 2010. Information Centre on HeatPumps and Refrigeration. Status andOutlook: Industrial Heat Pumps. EHPA, 2010.

Karagiorgas, M., Botzios, A., Tsoutsos,T.;Industrial solar thermal applications inGreece; Renewable and Sustainable EnergyReviews, 5-2001.

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Kleisterlee, G. and Frenken, R. (2010) RenewablePower Generation from Biomass - Perspectivefrom Essent, Presentation to the GBEPInternational Delegation, 18th March. GlobalBiomass Energy Partnership/FAO, Rome.

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44

ANNEX 1MMooddeelllliinngg eenneerrggyy ttrraannssiittiioonnss:: tthhee LLooggiissttiiccSSuubbssttiittuuttiioonn MMooddeell ffoorr bbiioommaassss iinn iinndduussttrryy

The Logistic Substitution Model is used in thewider analysis in this paper to assess the way inwhich fossil fuels will be replaced by renewablesas carbon emissions progressively attract a pricethat reflects their economic and social cost.

The model builds on a time series of thecontribution of different energy sources in aspecific sector in a specific region to project thedevelopment of new energy sources aspercentage of the relevant sector's total energyconsumption. For this analysis, the three mainsources competing with each other are taken tobe bioenergy, fossil fuels and electricity.

The resulting demand for bioenergy is thenaggregated by region and checked against theregional availability of sustainable biomassresources. In some regions, the potential demandfor biomass is far below its availability. But inothers, particularly the OECD, demand exceedssupply in every scenario. This demand can onlybe met by the trading of resources internationallyfrom regions with excess supply to those withexcess demand.

The development of a liquid international marketfor bioenergy will be fundamental both toeconomically effective international trading andto maximising the exploitation of the world's

biomass resources in industrial applications. Sucha market will be essential to the transformationof the use of bioenergy in the industrial sectorand to the achievement of the sector's fullpotential for biomass use. The modelling showsthat, if liquid international bioenergy markets arein place by 2050, there will be enoughsustainable biomass to provide more than 18 EJof heat and almost 7 EJ of petrochemicalfeedstocks. In the absence of such bioenergymarkets, these figures are scaled down by almost50%, with most of the reduction in achievedpotential occurring in the OECD countries.

The development of an international biomassmarket is likely to depend initially on theemergence of large volume biomass traders whoare active in the power generation market.Current subsidies for renewable energy aremainly in the form of feed-in tariffs or tradablegreen certificates for power generation. Thisattracts large volumes of biomass to the powersector for co-firing with coal or burning indedicated biomass power plants. Biomass isused for heat still mainly in residential spaceheating.

As the biomass quality becomes more consistentand as the supply quantities become morereliable, intercontinental trading of biomass forenergy purposes is already happening. Most of thistrading is by sea. The higher the energy density ofthe biomass commodity, the cheaper, the moreenvironmentally friendly and the easier its long

VI. ANNEXES

45

ANNEXES

distance shipping will be. A fully hydrophobic bio-coal could make direct use of the existingoverseas shipping and delivery infrastructure forcoal. The shipping of similarly large volumes ofwood chips, however, would require theadaptation of existing energy transport facilitiesand would be considerably more expensive interms of the amount of useful energy moved.

The pulp and paper and wood sectors, thefeedstocks and final products of which arewoody commodities, already make significant useof bioenergy in their final consumption. Thelogistic substitution modelling indicates that thisalready high proportion of final energy use canbe further increased, from around 33% in 2007to 55% in 2050 in the paper and pulp sector andfrom 45% to almost 70% in 2050 in the woodsector (Figure 16).

These numbers suggest a very high proportion ofbiomass use in these sectors. They may seem at

first glance to be unrealistically high and toassume implausibly large technologicaltransitions. But in Latin America (especially inBrazil) the pulp and paper sector alreadyachieves higher proportions, at 63% in 2007. Andin France, biomass constitutes 81% of the woodsector's final energy consumption, with a numberof other countries, most of them OECD countries,also performing very strongly. Emergingeconomies have a very high substitutionpotential for the use of biomass in these sectorswhich remains currently very far from being fullyexploited.

In the cement sector, around 3% of final energyconsumption comes from biomass (IEA,WBCSD,2009), although the situation varies widely byregion. In Brazil, 35% of the final energy in thenon-metallic minerals sector comes frombiomass. But in China, where more than 50% ofthe world's cement is currently produced, morebiomass would be needed to meet 35% of the

0%

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2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Logistic substitution potential for biomass in industry:

improving the already good results

Paper, pulp and printing Wood and wood products

Figure 16Logistic substitution of biomass in the chemical and petrochemical and cementindustries. UNIDO analysis.

0%

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Logistic substitution potential for biomass in industry:high potential but in the very long term

Chemical and petrochemical Cement

46


total final energy demand of the sector thancould be produced sustainably at a nationallevel.

In addition to conventional biomass, the cementsector makes significant use of alternative fuels,including municipal solid waste and otherdiscarded organic materials that are oftenaccounted for in the renewables and wastecategory in international statistics. Thesealternative fuels are expected to meet a largepart of the biomass substitution potential,thereby reducing the demand on conventionalbiomass resources.

No countries yet use biomass significantly in thechemicals and petrochemicals sector. Worldwide,biomass contributed 0.6% of the final energyuse in the sector in 2007. Integratedbiorefineries may offer the prospect of the wideruse of biomass for the co-production of plastics,fuels and energy. Depending on the catalystsused, synthetic natural gas (SNG), hydrogen andliquids can be produced from biomass which,

through methanisation, de-hydration and Fischer-Tropsch processes can be turned into fossil-substitute products. For example, ammonia andmethanol can both be produced from SNG inmuch the same way as they are currentlyproduced from fossil natural gas. Suchdevelopments offer the potential in the longerterm for biomass to play a much stronger role in the chemicals and petrochemicals sector(Figure 17).

The main limits to the further penetration ofbiomass penetration in the chemicals andpetrochemicals industry are the availability ofsustainable biomass resource and its economiccompetitiveness. Local availability has so farbeen the most critical constraint. The overcomingof this barrier through the development ofinternational biomass energy markets will beheavily dependent on the emergence of aneffective transformation sector that can turnbiomass from a geographically constrained fuelinto a modern energy commodity. This isdiscussed in more detail in Annex 2.

Figure 17Logistic substitution of biomass in the chemical and petrochemical and cementindustries. UNIDO analysis.

47

ANNEXES

ANNEX 2BBiioommaassss pprreeppaarraattiioonn tteecchhnnoollooggiieess

If biomass is to be more widely traded as acommodity on international markets, it will needto be available in very large volumes and in aform which enables easy handling and cost-effective transportation. Fundamental to theproduction of such commodities on an economicscale is the large scale provision of feedstocks tothe transformation industry. The biofuelprocessing plants that will be needed tounderpin that transformation industry will requirethe harvesting, treatment, transportation, storage,and delivery of large volumes of biomassfeedstock, to a desired quality, all-year-round.Supplies need to be guaranteed in advance for aprolonged period to reduce the investment risks.These factors will be critical to the success ofinvestments in biomass commodity productionfor the future.

Pelletising

In 2008, around 9 mt of wood pellets wereproduced worldwide. These replaced around 6.3mt of coal. Wood pellets contain about 17 GJ ofenergy per tonne. The total primary energyobtained from wood pellets was accordinglyaround 0.15 EJ/yr.

It is estimated that pellet production will doubleover the next 4 - 5 years. Some industry expertsforecast an annual growth of 25% - 30% globallyover the next ten years. Europe is currently themajor market for pellets, but the demand fornon-fossil fuels in North America is growing. As aresult, European pellet consumers will have tosearch for alternative supply sources in Asia,Latin America, Africa and Russia.

If the trade in wood biomass for powergeneration is to increase significantly, it willrequire the development of a standard aroundwhich transportation logistics and technology

requirements can be established. Wood pelletscan provide such a standard.

The wood pellet production process is relativelysimple: wood material is dried and turned into adough-like mass by being passed through ahammer mill and this mass is then squeezedthrough a high-pressure die with holes of thesize required for the specific pellets beingproduced. The pressure causes a rise intemperature which plastifies the lignin in thewood and holds the pellet together.

The raw materials primarily used for pelletmanufacturing have traditionally been sawdustand shavings from the sawmilling industry. Asthis supply source has started to be fullyexploited, the search for alternative sources haswidened. European pellet manufacturers areexpected increasingly to use forest residues,urban wood waste and fast-growing tree species.They will also begin to compete moreaggressively with pulpmills and wood-panel millsfor sawmill chips and pulp logs. Some pelletplants may look to import wood chips fromoverseas.

A surprisingly large share of the global pelletproduction is already shipped to markets outsidethe producing country, not only betweencountries but also intercontinentally. Anestimated 25% of world production was exportedin 2008. Most of this was shipped from BritishColumbia in Canada to Belgium, the Netherlandsand Sweden. Despite the seemingly prohibitivelyexpensive 15 000 kilometre journey, this marketis driven by the currently very low cost ofshavings and sawdust in Canada and the highprices for wood pellets in Europe.

The Andritz Group currently has about a 50%share of the global market for wood pelletproduction equipment. Andritz is an Austrian firmthat provides equipment and services for the

48


global hydro power, pulp and paper, steel, animalfeed and biofuels and other industries.

The largest pelleting machine produced to date,for a Russian paper company, produces over 900kt of pellets a year. It cost around USD 60/tcapacity. The demand for such very large machinesis limited by the availability of feedstock. A plantproducing 125 kt/yr costs approximately USD 20million, i.e. around USD 160/t capacity. The capitalcosts of the plant depend on the type of feedstockmaterial used. Material with moisture contentgreater than 12% will need drying. A dryer can costup to 40% of the entire capital costs. Significantworking capital is also needed to bridge the timeit takes a plant to achieve profitability: many pelletplants take 6 to 18 months to refine the processbefore becoming profitable.

Agricultural products and residues such as straw,hay, miscanthus or other energy crops which areused to form so-called agri-pellets have attractedadditional attention as feedstocks in recentyears. Unfortunately, all of these products areharder to burn cleanly than wood. To meetexisting emissions legislation in many countries,significant product development will be requiredbefore the widespread use of agri-pellets will bepossible.

Fast pyrrolysis

Pyrolysis is thermal decomposition that occurs inthe absence of air. The pyrolysis of carboniferousmaterial generates gases, liquids and char. Wherebiomass is pretreated by pyrolysis, the resultinghigher energy density liquid can be transported,handled and gasified more easily than solid bio-mass. Although costs are higher, pretreatmentwould enable larger scale plants and char-freegasification processes, with economies of scaleand a reduced need for residues treatment in thegasifier.

However the practical application of suchBiomass to Liquid (BtL) approaches raises someimportant questions of scale. BtL plants need tobe very large to be economic. With a minimumeconomic production capacity of 25 000 barrels(bbls) a day, a plant would require between 5 million and 7 million tonnes of dry biomassfeedstock a year. The economic and logisticalchallenges involved in financing, building andoperating such a biomass based plant are veryconsiderable. To address these concerns, anumber of alternative approaches are beingconsidered. These including downscaling, lessdemanding process conditions that lowerequipment requirements, using higher energydensity gasification feedstocks, and integratingthe BtL process into conventional refineries.

Bio-ccoal

Bio-coal can already be produced from biomass.Several new companies are entering the marketwith proprietary torrefaction13 technologies. Theseare able to produce an energy commodity whichhas characteristics similar to coal from biomass ofvariable qualities and grades. The product has thecapability to be certified as renewable coal.

These technologies offer the prospect of creatinga standardised energy commodity that can behandled and managed with the existing fossilfuel coal infrastructure and which can, in duecourse, be traded on the same market. On thisbasis, the main additional cost is entailed ininvestment in the torrefaction equipment, ratherthan in any downstream process.

Several processes are currently used for theproduction of biocoal. These include TIES, amicrowave-based process developed by RotawaveLtd. and the TORBED reactor from MortimerTechnology Holdings Ltd which is used fortorrefied pellet production by Topell Enerby BV.

13 Torrefaction is a form of heat treatment.

49

ANNEXES

ANNEX 3TThhee pprroodduuccttiioonn ooff ssyynntthheettiicc oorrggaanniicc mmaatteerriiaallssffrroomm bbiioommaassss ffeeeeddssttoocckkss

Ethylene Prroduction frrom Bioethanol

In June 2007, Braskem announced the successfulproduction of the first internationally certifiedplastics made from sugarcane ethanol. Onemonth later, Dow entered into a joint venturewith Crystalsev, the leading Brazilian ethanolproducer, to produce bioplastics. Both companieshave moved quickly to achieve commercialproduction. Braskem is now building a USD 300million plant at its existing Triunfo complex withthe capacity to produce 200 000 tonnes of greenplastics a year. The plant came online inSeptember 2010, the first facility of its kind toenter commercial operation (Biopol, 2010).

In parallel, Dow and Crystalsev are developingthe first facility to integrate a sugar caneplantation with an ethanol mill and a plasticsmanufacturing plant to produce bioplastics. Thisfacility will produce 350 000 tonnes of plastics ayear and is expected to start production in 2011,becoming a key part of Dow's growth strategy inBrazil. Although the integrated facility will takelonger to become operational than the Braskemplant, it will allow Dow and Crystalsev to takeadvantage of important synergies in theproduction process, such as using the water thatresults from the conversion of ethanol intoethane and co-generating electricity using the byproducts of the sugar cane production.

Braskem's second bioplastics plant, scheduled tostart production between 2012 and 2014, willalso be a totally integrated facility in order toexploit production synergies.

i. Methanol to Olefins

Olefins (ethylene and propylene) can beproduced from methanol. Bio-methanol can beproduced from biomass.

The BioMCN process for bio-methanol productionuses feedstock from non-food sources such asorganic waste materials and non-food crops.BioMCN, the world's first industrial scale bio-methanol producer, has received an investmentof EUR 36 million from the private equity firmWaterland to go towards the continuedconstruction of its bio-methanol plant in Delfzijl,Holland. BioMCN opened in June 2010 the largestsecond generation biofuel plant in the world.With a production capacity of 250 million litres,BioMCN can immediately fulfill the entire Dutchbiofuel obligation - a minimum of 4% blendedinto gasoline (BioMCN, 2010).

Bio-methanol is produced through an innovativeprocess, patented by BioMCN, and is made fromcrude glycerin, a sustainable biomass which is aresidue from the industrial processing ofvegetable oils and animal fats.. The facility isscheduled to expand again in future to 800 000 mt.

Two relatively new technologies have beendeveloped to produce olefins from methanol.These processes could as readily use bio-methanol as fossil fuel-based methanol.

Lummus Technology and Shaanxi Xin Xing CoalChemical Science & Technology Developmenthave signed a cooperative marketing agreementglobally to license dimethyl ether/methanol-to-olefin (DMTO) technology. This breakthroughtechnology not only enables the production ofolefins from methanol, but also producesenhanced yields that will enable producers cost-effectively to expand existing capacity-restrictedolefins plants. The first application of thistechnology will be at the Shenhua Baotou CoalChemicals plant in Baotou, China. The firstDMTO commercial unit in the world, with aproduction capacity of 600 000 tonnes of lowerolefins from methanol per year, was proved to besuccessful in its first commissioning operation.

50


The DMTO process (DICP Methanol to Olefins)

was a proprietary technology developed by

Dalian Institute of Chemical Physics, Chinese

Academy of Sciences (DICP). The

commercialisation of the DMTO process signified

a new milestone in the production of olefins via

a non-petrochemical route. It was a significant

R&D achievement, after the efforts of DICP

researchers over more than 20 years.

Viva Methanol Limited, a subsidiary of Eurochem,

has selected an olefin cracking process

technology to produce light olefins, the basic

building blocks for plastics, from natural gas-

derived methanol at a new facility in Nigeria. The

new facility will produce 1.3 mt of ethylene and

propylene annually for the production of

polyethylene and polypropylene. The new plant

is expected to come online in 2012.

ii. Bioplastics

Bioplastics are plastics that are up to 100% bio-

based. They may also be biodegradable. The

percentage of bio-based ingredients and the

conditions under which the product biodegrades,

if it does it at all, vary widely. The production of

bioplastics has expanded rapidly in recent years.

From an international capacity of 150 kt in 2006,

production is expected to rise to 2 Mt in 2011.

This represents about 1% of the total global

plastics market.

Bioplastics are made from a variety of natural

feedstocks including corn, potatoes, rice, tapioca,

palm fibre, wood cellulose, wheat fibre and

bagasse. Products are available for a wide range

of applications such as cups, bottles, cutlery,

plates, bags, bedding, furnishings, carpets, film,

textiles and packaging materials. In the United

States, the percentage of bio-based ingredients

required for a product to be classified as being

bio-based is defined by the U.S. Department of

Agriculture (USDA) on a product-by-product basis.

The Institute for Local Self-Reliance (ILSR) hasrecommended that the USDA set a minimumthreshold of 50 percent bio-based content forproducts to be considered bio-plastics.

Perrforrmance and usage

Many bioplastics lack the performance and easeof processing of traditional materials. PLA isbeing used by a handful of small companies forwater bottles. But shelf life is limited: the plasticis permeable to water so the bottles lose theircontents and slowly deform. Bioplastics areseeing some use in Europe, where they accountfor 60% of the biodegradable materials market.The most common end-use market is forpackaging materials. Japan has also been apioneer in bioplastics, incorporating them intoelectronics and automobiles.

Starrch based plastics

Constituting about 50% of the bioplasticsmarket, thermoplastic starch such as Plastarchcurrently represents the most important andwidely used bioplastic. Pure starch possesses thecharacteristic of being able to absorb humidityand is thus being used for the production ofdrug capsules in the pharmaceutical sector.Additives such as sorbitol and glycerine are usedto enable the starch to be processed thermo-plastically. By varying the amounts of theseadditives, the characteristic of the material canbe tailored to specific needs.

Polylactic acid plastics

PLA is a transparent plastic produced from canesugar or glucose. It not only resemblesconventional petrochemical mass plastics such aspolyethylene or polypropylene in itscharacteristics, but it can also be processedeasily on standard equipment that already existsfor the production of conventional plastics. PLAand PLA-blends generally come in the form ofgranulates. They are used in the plastic

51

ANNEXES

processing industry for the production of foil,moulds, tins, cups, bottles and other packaging.

Poly-33-hhydrroxybutyrrate

The biopolymer poly-3-hydroxybutyrate (PHB) is apolyester produced by certain bacteria as theyprocess glucose or starch. Its characteristics aresimilar to those of petroplastic polypropylene.The South American sugar industry has decidedto expand PHB production to an industrial scale.PHB can be used for production of transparentfilm that is biodegradable without residue.

Polyamide 11

Polyamide 11 (PA 11) is a biopolymer derivedfrom natural oil. It is also known by the tradename Rilsan B, commercialised by Arkema. PA 11belongs to the technical polymers family and isnot biodegradable. PA 11 is used in highperformance applications such as automotive fuellines, pneumatic airbrake tubing, electrical anti-termite cable sheathing, oil and gas flexiblepipes, sports shoes, electronic devicecomponents and catheters.

GGenetically modified bioplastics

Looking further ahead, some of the secondgeneration bioplastics manufacturingtechnologies under development adopt a "plantfactory" model in which they use geneticallymodified (GM) crops or genetically modifiedbacteria to optimise efficiency. A change in theconsumer perception of GM technology in Europewill be required for these to be widely accepted.

iii. Bio Building Blocks

Hydrolysis plants, based on a range of processes,are already operating commercially.The Biofineprocess, is a commercialised technology thatuses two-step dilute mineral acid hydrolysis tobreak down biomass containing lignocelluloseinto intermediate chemicals that can be furthertransformed into 2-Methyltetrahydrofuran (MeTHF)

and other chemical products. The Biofine processwas developed by BioMetics Inc with fundingfrom the United States Department of Energy.

A pilot plant producing 1 t/day of intermediatechemicals has been operating in South GlensFalls, New York since 1998. The first commercial-scale biomass-based plant, which produces 10t/day of levulinic acid from local tobacco bagasseand paper mill sludge, has been built in Caserta,Italy, by Le Calorie. This started operation in2006.

Levulinic acid can be produced in yields of up to70%, or about 0.5 kg per kg of cellulose, alongwith formic acid and furfural as valuable byproducts. Used for years in food, fragrance, andspecialty chemical applications, levulinic acid is aprecursor for methyltetrahydrofuran, v-valerolactone, and ethyl levulinate, which canall be blended with diesel or gasoline to createcleaner-burning fuels. Another derivative,diphenolic acid, is a potential replacement forbisphenol which is suspected to be an endocrinedisrupter.

iv. Wood Board and Engineered Wood Materials

Wood board materials are made from thinsheets (plywood), particles (particle board) andoriented strand board or fibers (fibreboard).Engineered wood includes a range of derivativewood products which are manufactured by usingadhesives to bind together the strands,particles, fibers, or veneers of wood to formcomposite materials. These products areengineered to precise design specificationswhich are tested to meet national orinternational standards.

Typically, engineered wood products are madefrom the same hardwoods and softwoods thatare used to manufacture lumber. Sawmill scrapsand other wood waste can be used forengineered wood composed of wood particles or

52


fibers, but whole logs are usually used forveneers, such as plywood. It is also possible tomanufacture similar engineered cellulosicproducts from other lignin-containing materialssuch as bamboo, straw, or sugar cane residue.

Engineered wood products are beneficial from anenergy and CO2 perspective because:

• They can be made from fast growing crops orresidues;

• Their properties are superior to those ofnatural wood;

• They open up new markets where wood couldnot compete;

• They reduce the demand for tropicalhardwoods.

The standing wood stock is about 422 Gtworldwide. The total global production of wood-based panels, including plywood, particle board,fibre board and oriented strand board, reached

266 million m3 in 2007, about 175 Mt).Production of saw logs and veneer logsamounted to1 007 million m3 in the same year,and of industrial roundwood to around 1 705million m3. This is around half of the totalroundwood production of 3 591 million m3 in thesame year, the other half of which was used inenergy production.

Engineered wood products accounted for only600 000 m3 in 2007, about 0.3 Mt. Engineeredwood product markets are very small todaycompared to conventional wood markets.

New products such as pressed bamboo canachieve considerable strengths, comparable tothat of tropical hardwoods. This market isgrowing rapidly. Total global bamboo productionis of the order of 100 Mt per year. China is by farthe largest producer, producing 60 Mt 80 Mt/yr),followed by India. Bamboo production is rapidlyexpanding worldwide.

53

ANNEXES

ANNEX 4SSoollaarr tthheerrmmaall hheeaattiinngg aanndd ccoooolliinngg ssyysstteemmssffoorr iinndduussttrryy

Solar heating is a well established andcommercial technology for residential hot waterand heating applications. So far, solar heating inindustry has been limited to a small number ofdemonstration projects. Solar thermal is notparticularly well suited to the high temperaturesthat are generally needed for industrialapplications other than in the food sector. Solarthermal technologies could be attractive in thefood sector, especially in developing countrieswith abundant solar irradiation. Solar cooling isan emerging technology, still at an earlier stageof development than solar heating.

This Annex provides a brief overview of currentsolar thermal technologies and illustrates thesewith a selection of examples of industrialapplications of solar heating and cooling.

OOppeerraattiinngg SSoollaarr TThheerrmmaall PPllaannttss ffoorr IInndduussttrriiaallAApppplliiccaattiioonnss::

Statistics as of Octoberr 2006

More than 80 solar thermal plants with a totalcollection area of about 34 000 m2 were inoperation in industrial applications in October2006. Most of these were in the food industry,particularly in dairies, in car washing facilities, orin metal treatment and textile and chemicalplants. The textile sector accounts for the highestshare, at about 40%, of the capacity installed.

Solar heat is used at 20° - 90°C for washing, thespace heating of production halls and thepreheating of boiler feed-water. In the dairysector, for example in Greece, solar is used toproduce hot water for the washing of equipmentand to preheat boiler feed-water at temperaturelevels up to 80°C. In Austria, the space heating of

production halls is the most common application.Car, lorry and container washing facilities accountfor 11 plants in Austria, Germany and Spain.Wineries account for 4 of the 6 plants reportedwithin the beverage sector, where there remains alarge potential for future applications.

The main solar thermal technologies aredescribed briefly below. About 80% of the plantssupply heat below 100°C. These are mostly flatplate collectors or evacuated tube collectorsystems working at 60° - 100°C. Only evacuatedtube collectors are used in the range 100° -160°C. Above 160°C, parabolic trough collectorsare used mainly for steam production or coolingwith double effect absorption chillers.

SSoollaarr tthheerrmmaall ffoorr pprroocceessss hheeaatt:: CCoolllleeccttoorrOOvveerrvviieeww1144

New designs for concentrating solar collectors areappearing on the market, dedicated to specificniches or needs. Some of these can be integratedinto roof structures, producing more than 200°C oftemperature increase at 60% efficiency, such as theChromasun design. Others enable the combinedproduction of electricity, heat, desalination and airconditioning at a household level.

In the field of solar concentrators, all thetechnologies use one of a limited range ofavailable optical designs. Cassegrain designs(Schmidt-Cassegrain, Maksutov-Cassegrain) thatintensely concentrate the light have not yetpenetrated the solar thermal market, althoughthey are very common in astronomical optics. Asimilar design has been recently implemented inCanada and has been patented as the KinleyDual Mirror System. In its initial tests, this designreached 1755°C before melting the platinumthermocouples that were measuring thetemperature reached by the system. In nicheapplications, this could provide an interesting

14 Overview from http://www.iea-shc.org/publications/downloads/task33-Process_Heat_Collectors.pdfSource: IEA Task 33

54


solution for the melting or even the vaporisation

of small quantities of metals.

A similar device is installed in the Paul Scherrer

Institut (PSI) in Switzerland and known as High-

Flux Solar Furnace. The furnace consists of a 120m2

sun-tracking flat heliostat on-axis with an 8.5 m-

diameter paraboloidal concentrator. It delivers up

to 40 kW at peak concentration ratios exceeding

5000 suns (1 sun = 1 kW/m2²). The solar flux

intensity can be further augmented to up to 10 000 suns by using CPC secondary concentrators.A venetian blind-type shutter located between theheliostat and the concentrator controls the powerinput to the reactor.

EExxaammpplleess ooff ssoollaarr tthheerrmmaall ssyysstteemmss aapppplliieeddttoo tthhee GGrreeeekk ddaaiirryy iinndduussttrryy

Two applications of solar thermal systems in thedairy industry in Greece are described in the boxbelow (Karagiorgas et al., 2001).

Mandrekas S.A.

Mandrekas S.A. is a small dairy situated on the outskirts of the city of Korinthos. Its mainindustrial activity is the production of dairy products such as yoghurt, milk and cream. Steam isrequired by a range of plant processes, including pasteurisation, sterilisation, evaporation anddrying, and hot water is required to maintain the yoghurt at 45°C during its maturing process.Steam is provided by a steam boiler running on liquid propane gas (LPG), the cold water beingsupplied by the water supply grid, and hot water is provided by the solar system. The factoryuses 15m3 of hot water a day.

The solar system was installed in 1993. It consists of 170m2 of tube-?n, flat plate collectorscoated with black paint located on the roof of the factory, an open loop circuit and two parallel,horizontal, 1000 l closed storage tanks located in the boiler room of the dairy. The water fromthe water supply grid enters the solar storage tanks and from there is fed to the solar collectorswhere it is heated and returned to the solar storage tanks. The hot water leaving the solarstorage tanks is either fed directly to the factory's washrooms or is fed to the yoghurt maturingprocess and then returned to the tanks. Any auxiliary heating required by the yoghurt maturingprocess is provided via a heat exchanger, which receives steam from the steam boiler.

The system is still operational and in very good working order. The hot water requirements ofthe yoghurt maturing process are much smaller than the amount of hot water produced by thesolar system which is oversized for the need. In addition, given the low hot water requirementof the yoghurt maturing process, the steam heat exchanger is heating the solar storage tanksthereby reducing the efficiency of the solar system.

Mevgal S.A.

Mevgal S.A. is a dairy situated on the outskirts of the city of Thessaloniki. Its main industrialactivity is the production of dairy products such as butter, cheese and buttermilk. Steam isrequired for pasteurisation, sterilisation, evaporation and drying and hot water is required forthe cleaning and disinfecting of utensils and machinery. Originally, steam was provided by steamboilers running on heavy oil which fed cold water exchangers. Today the hot water produced bya solar system is used to pre-heat the water; electric resistance heaters provide any auxiliaryheating required. The system is operational and in excellent working order.

55

ANNEXES

SSoollaarr ccoooolliinngg tteecchhnnoollooggiieess ffoorr iinndduussttrriiaallaapppplliiccaattiioonnss

Solar cooling technologies have so far been usedprimarily for space cooling. Applications forprocess cold, especially below zero degrees, havebeen typically powered with fossil fuel burners orelectric chillers. For solar systems withouttraditional burners, adsorption technologies arethe most promising. They range from 5 kW to600 kW capacity, with minimum watertemperatures between 50° and 60°C.

For systems with auxiliary burners available, deepfreezing down to -50°C is possible usingammonia-water absorption chillers. Other optionsmay be to use high temperature solar collectors,such as parabolic trough collectors (PTC) orlinear fresnel collectors (LFC). Well established

companies with experience in high-temperaturesolar thermal systems and solar cooling such asSolitem are already deploying PTC systemssuccessfully. The problem in deep freezing withconcentration solar technologies is that wheredirect solar radiation is strong enough to ensurethe production of high temperature process heatfor driving the absorption ammonia-water chiller,the outside temperature is also very high. Thehigher the outside temperature, the less cold thetemperature that can be reached, given amaximum temperature decrease of 55° Kelvin (K)(Table 7).

DY Refrigeration from China (now acquired by theCanadian company Thermalfrost) is in the processof implementing solar cooling applications downto -30°C in a dairy industry demonstration plant.

Table 7Main characteristics of thermally driven chillers

Single effect Double effect Triple effect Single effectH2O/LiBr H2O/LiBr H2O/LiBr NH3/H2O

Temperature drop (max) 25° K 25o K 25° K 55° K

Temperature of Cold 5° to 20°C 5° to 20°C 5° to 20°C -20° to 20°C

Driving temperature 70° to 90°C 140° to 180°C 230° to 270°C 160° to 180°C

Max. COP 0.7 - 0.8 1.1 - 1.4 1.6 - 1.8 0.6 - 0.7

56


One of the largest solar cooling systems is installed in Sudan. It provides cooling to a hospital, theSalam Centre for Cardiac Surgery, run by the NGO Emergency under critical operating conditions asdescribed in the Box below.

Another example is the use of solar heat for the dairy industry. Various designs have beendemonstrated. One of them is the so-called ARUN concentrator (Kedare et al., 2008).

Every hour, the Salam Centre requires 28 000 m3 of cold air.

This has been achieved by a system employing 288 vacuum-sealed solar collectors with a totalsurface of 900 m2. These produce 3 600 kWh with zero CO2 emissions, an amount of energy thatwould otherwise require the burning 335 kg of gasoline per hour. Each solar collector housescopper tubing lodged inside vacuum-chambered glass tubes through which water circulates,allowing the sun to heat the water by irradiation without heat dispersion. The water runningthrough the pipes constitutes the vector fluid transferring heat to a 50 m3 reservoir, where wateris stored at a temperature around 90°C. The transformation of heat into cooling power takesplace in two absorption chillers, where the circulating hot water heats up a solution of Lithiumbromide. By reaching the gaseous state, Lithium bromide removes heat and water cools down to7°C. This cold water is then circulated in the Air Treatment Units (ATU), cooling air to the desiredtemperatures. From the 8 ATU installed in the Centre, air is then further filtered by F7, F9 orabsolute filters, according to the needs of the different areas of the Centre. When solar energy isinsufficient to meet the Centre's cooling requirements, two gasoline boilers switch onautomatically, re-adjusting the water temperature in the reservoir, ensuring an optimalfunctioning of the chillers.

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ANNEXES

ANNEX 5CCoosstt-eeffffeeccttiivveenneessss ooff rreenneewwaabblleess ffoorriinndduussttrriiaall uussee

The competitiveness of renewables with fossil

fuels is strongly dependent on national

conditions and on fluctuations of energy prices in

international markets. According to the IEA

Energy Prices and Taxes database, between 1998

and 2009 natural gas end-use prices for industry

were at a minimum in 2000 of USD 16/tonne of

oil equivalent (toe) in the Russian Federation and

at a maximum in 2008 of USD 953/toe in

Hungary, varying by a factor of almost 60. At the

end of 2009, the lowest and highest industrial

end-use natural gas prices varied by a factor of

around 10, from USD 90/toe in Kazakhstan to

USD 870/toe in Denmark.

Similarly, coal prices varied by a factor of 30

from a minimum of USD 13/toe in Kazakhstan in

2003 and a maximum of USD 422/toe in 2008 in

Switzerland. At the end of 2009, prices differed

by a factor of almost 15, between USD 26/toe inKazakhstan and USD 373/toe in Austria.

If a liquid, effective and efficient carbon marketwas be in place, the price of CO2 would be oneof the main factors in determining the success ofrenewable energy and the mix of fossil fuels(Figure 18). In the short term, the existing plantinfrastructure is a significant barrier to price-driven fuel switching. But in the longer term, ifprices stabilise on the carbon market and majorenergy consumers become more directly involved,more carbon intensive fuels such as coal will seetheir role reduced in favour of less carbon-intensive fuels such as natural gas andrenewables. Biomass, through pre-processingtechnologies, will offer the only short term optionfor coal substitution without any replacement ofthe existing equipment, especially in sectorswhere the carbon content of the fuel isfundamental to the industrial process such as inthe iron steel and chemical and petrochemicalsectors.

Figure 18Cost of useful process heat produced by main fossil fuels, under different CO2 prices

0

5

10

15

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35

10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200

US

D/

GJ

USD/t CO2

Comparison of industrial process heat costs

under different CO2 prices

coal

natural gas

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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATIONVienna International Centre, P.O. Box 300, 1400 Vienna, AustriaTelephone: (+43-1) 26026-0, Fax: (+43-1) 26926-69E-mail: [email protected], Internet: www.unido.org

renewable energy in industrial applications · industrial applications an assessment of the 2050...

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