According to a recent study released by the Texas Forest Service, as many as 500 million trees in the state – roughly 10 percent of the state’s forests – succumbed to heat and water stress over the past year as a result of 2011’s unrelenting drought. The study does not include the 4 million acres already lost to wildfires across the state over the past year.
The finding is an alarming reminder of the deteriorating health of forest landscapes worldwide. From pine beetle infestation in evergreens to declining aspen forests throughout the Rockies, a number of tree species are showing signs of acute stress. In areas already clobbered by persistent drought, wildfires root out what’s left. Across Russia, 10 million to 30 million acres of forest have gone up in flames, or are still burning. Estimates suggest that 2009 wildfires in Australia released the energy equivalent of 1,500 Hiroshima-sized atomic bombs.
In light of dying forests, large scale biopower, which mostly relies on wood biomass to generate electricity and heat, faces difficult challenges ahead. Derivatives of woody biomass – black liquor, tree trimmings, urban waste wood, sawdust, etc. – currently account for nearly three-quarters of the fuel used in the biopower industry. In the forthcoming Pike Research report, Biopower Markets & Technologies, we estimate that consumption of biomass resources will reach 1 billion tons by 2021. Industry expansion depends heavily on a burgeoning trade in densified biomass pellets, largely derived from wood resources, expected to reach at least 17 million tons by the end of the next decade. The two trends – the succumbing of forests to drought and wildfire on one hand, and growing demand for wood biomass from the biopower industry on the other – appear to be on a collision course, with difficult consequences for the industry.
As a recent New York Times article explains, in all cases, the magnitude of recent devastation raises concerns over the loss of carbon sinks and is a grim reminder of the potential threat posed by climate change. Forests play a pivotal role in mitigating the climate impact of greenhouse gas emissions. Studies show that tropical forests absorb about 18 percent of all carbon dioxide added by fossil fuels. The loss of forest cover can also increase the reflectivity of surface areas, contributing to a positive feedback loop that could accelerate global warming.
With “natural” phenomena already wreaking havoc on the world’s forests, if left unchecked, accelerated demand for wood biomass could compound the problem by hastening the loss of vital forest cover. Although the use of forest thinnings and sustainable forest management – or “milking” the forest – can alleviate fire danger in threatened areas, this process is often too expensive and the resources too distributed to justify large scale operations.
With an increasing number of 100MW+ biopower facilities under construction, the volume of demand for biomass feedstocks from the power generation sector will require the development of an efficient and stable supply chain.
The burgeoning biomass pellet trade is showing early signs of meeting this challenge. According to our analysis, the bulk of production is currently centered in North America with the EU-27 countries consuming an estimated 5.5 million tons or 70percent of the global supply.
Although Pike Research’s analysis shows that the trade in biomass pellets will grow rapidly over the next decade, markets that are highly dependent on these resources will have to contend with increased opposition from environmental groups. Our forecasts assume this to be the case in the EU, where despite strong policies promoting the use of biomass for power and heat generation, growth is expected to fall short of 2020 targets due to challenges associated with sourcing wood biomass.
The Swedish state-owned multinational Vattenfall, a company featured in our forthcoming Biopower report, demonstrates the challenges associated with navigating these issues. Currently Europe’s fifth largest energy producer, its affiliate Vattenfall Europe, based in Berlin, is planning to build one of the largest biomass power plants in Europe, with a total capacity of 190 megawatts (MW). The company has also drawn up plans for a smaller plant (32 MW) and will co-fired facilities (260 MW) in four existing coal-fuelled plants. With limited forest resources available locally, Vattenfall Europe is planning to import pellets from rubber trees in Liberia. The move has faced significant opposition.
As the Vattenfall case study illustrates, the large-scale use of biomass can hardly be met by local sources, leading to an increasing global trade in woody biomass. Although purpose-grown trees offer a sustainable solution, these short rotation species are hardly a replacement for the carbon abatement potential of old growth forests. The scale-up potential of the biopower industry rests squarely on the industry’s ability to navigate these complex issues amidst persistent drought and wildfires.
Mackinnon Lawrence is an analyst at Pike Research with a focus on advanced biofuels and bioenergy.