Bioenergy:Turning Opportunity into Commercial Reality

The UK Bioenergy Sector Overview

Sir Ben Gill CBE (MA(Cantab)

Harper Adams University College

Tuesday December 16th 2008

Understanding the Big Picture?

• Projections simply take recent events and then find

– The trend line and

– Extrapolate this forward into the future assuming none of the fundamentals have changed

• Most newspaper articles are based on projections with limited attempts to forecast

• Forecasts take the projections and then adapt them to take account of the changed circumstances and can suggest to us what we can do to change the trend line

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What are the issues?

• Climate Change and its effects on the World and UK

specifically

• A fundamental change in the World‘s power balance

with the owners of the key resources assuming greater

influence

– Capital

– Oil and Gas

– Mineral stocks

• Population growth and wealth growth leading to

increased demands for

– Food

– Energy

– Water

What does the future hold for

us?

• ―Today‘s consumer has become accustomed to, as

of right, access to cheap, safe food, produced to a

consistent quality and in an environmentally benign

and animal welfare friendly manner‖

• Within 10 years if we do nothing, possibly only two

or if we are lucky three, of these attributes will be

on offer

• If we ignore the signs for change there is an

inevitability that those living in the ‗Western‘ world

will experience substantial reductions in their

standards of living

Climate Change and the consequences

for the West Midlands

• Globally

– Temperatures will continue to rise (faster than earlier predicted)

– Weather patterns will become stormier

– Rainfall patterns will change

– Persistent droughts will become increasingly common

– Forest fires become a much more common feature

– Water becomes the major limiting factor

– Increasing Salinity compromises ability to grow current crop plants

• For the West Midlands

– Efficient use of water becomes a critical issue

– Extended growing season

– New pests and diseases

– Extreme variations in weather patterns become more common

A Rapidly changing World

• The demise of the USA as the leader of the World

• The currency and banking crisis has far reaching effects

– On relationships between countries

– On market volatility

– On re-evaluation of priorities

• The emerging economies of the East:

– China

• Foreign exchange reserves hit $2 trillion

– India and the rest of Asia

• The increased power of the oil and gas rich countries

– Russia and the countries of the former USSR

– Angola

– Brazil and South America

21st Century Neo-

Colonialism

• The rush for land was triggered by this year's food crisis

and the European push for biofuels. The South Korean

firm Daewoo made headlines in November 2008 when

it bought a 99-year lease on 1.3 million hectares of

Madagascar to grow maize and oil palm. The deal is far

from unusual.

• China has already acquired large amounts of land and

oil palm plantations in neighbouring Asian countries

• Water Trading between countries becomes a major

industry

• China has also acquired access to vast reserves of

minerals and oil and gas around the world

• New World strategic alliances are being forged that

exclude the ―West‖

Population living in A City %

Region 1950 2000 2030

World 30 47 60

Africa 15 37 53

Asia 17 38 54

Europe 52 73 81

Latin Amer/Carib 42 75 84

North America 64 77 85

Oceania 62 74 77

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Increasing Global Food demands

• By 2050 the predictions are that world food demand will double as

a result of

– Increasing world population (50%) & wealthy lifestyle (50%)

– The UN is predicting increased demand for meat across the world by

2016 to reach:• Beef +30%

• Pigmeat +50%

• Poultry +25%

• World Bank estimates would suggest that the number of people in

developing countries in households that have incomes above

£8,000 per annum will rise from 352 million in 2000 to 2.1 billion

by 2030.

• Current trends in bioenergy production could add as much to the

demand for increased production as the needs for additional food

• This would mean that in 40 years we will have to triple total food

production from a shrinking area of cultivatable land

Changing Dietary Needs

• 1.1 billion people live on less that 50p/day; 75% of them suffer under-nutrition and hunger (calorie deficit).

• 2.7 billion people live on less than £1/day

• by £1 per day, most hunger (calorie) problems solved, but not malnutrition.

• Between £1 and £5 per day people eat more meat, dairy products, fruits, vegetables & edible oils, causing rapid growth in demand for raw agricultural commodities.

• Meat uses more land to produce the same amount of calorific intake than crops

• After £5 per day, people buy more processing, services, packaging, variety, and luxury forms, but not more raw agricultural commodities.

World Total Coarse Grains productionSource International Grains Council

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2005/06 2006/07 2007/08 2008/09

Production

Consumption

Closing Stocks

World Total Grain StocksSource International Grains Council

15.00%

16.00%

17.00%

18.00%

19.00%

20.00%

21.00%

2005/06 2006/07 2007/08 2008/09

stocks/consumption%

stocks/consumption%

Volatile Wheat Markets

Brent Crude Oil Prices 2007/08$US per barrel 12/12/08

Oil a finite resource?

17/12/2008 15:03 1517/12/2008 15:03 15

Latest

International

Energy

Agency

figures

predict that

world demand

in 2008 fell by

only 200,000

barrels per

day and that it

will rise again

in 2009 BUT

China now

expected to

reduce

consumption

Canadian Tar Sands

•Account for 175 billion barrels

of oil

•Expect to spend $100 bn

capital to extract

•By 2015 expect to produce

3 million barrels per day

•Accounts for 8% of

Canadian GHG emissions

•Expensive to extract

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Declining Land Availability

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Clean drinking Water:An increasingly Scarce Resource

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World Water Resource(light greens and blues show less resource

darker colours more resource)

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Water v. Energy

• Water is needed to generate energy. Energy is needed

to deliver water. Both resources are limiting the other—

and both may be running short. Is there a way out?

• Without water, people die. Without energy, we cannot

grow food, run computers, or power homes, schools or

offices.

• We cannot build more power plants without realizing

that they impinge on our freshwater supplies. And we

cannot build more water delivery and cleaning facilities

without driving up energy demand. Solving the dilemma

requires new national policies that integrate energy and

water solutions and innovative technologies that help to

boost one resource without draining the other.

An increasing Trade in Water:Food v. Lifestyle

• Around the world, water consumption will double in the next 20 years, twice the rate of global population growth, a Goldman Sachs report predicted in March.

• Governments around the globe are seeking drastic solutions to satisfy increasingly thirsty users.

– Australia will spend the equivalent of £3 billion this year buying back water from the Murray-Darling Basin to return it to stressed wetlands and rivers.

– Cyprus and Barcelona are importing water in tankers and building desalination plants to make sea water drinkable.

– Southern Californian farmers have fallowed land to sell their water to cities amid a drought and diminishing flows from the Colorado River.

– After growing maize for 20 years on the banks of the Tagus River in central Spain, Manuel Vicente Piriz didn't plant this spring. Instead he sold his water to arid towns in the south for €216,000, more than he would have earned on the crop.

–

Biomass Task Force Report

said2005

• We waste in the current production of electricity more than enough heat to heat the entire country for free

• We currently put to landfill around 5 to 10 million tonnes of reclaimed timber per annum

• While heat accounts for nearly 40% of our energy use, the potential for renewable use has not been recognised

• CHP and biomass heat have promised much and delivered little: Why?Energy Bill 2008

•Repeated many of the questions asked and answered in the Biomass

Task Force

•Set key targets

•But has it

•explained this to the key people who make the decisions:

•The planners and planning committees

•The developers

•Integrated and embedded the philosophy throughout all layers of

Government

Biomass & Electricity

• Current coal fired energy conversion efficiency

25% to 35%

• To be replaced by:

– Similar number of gas fired OR

– Larger number of CHP facilities based on biomass

• Need to overlay local maps of

– Heat need

– Electricity need

– Biomass availability

The Biomass Task Force identified the

following barriers in 2005

• Ignorance of the potential

• Ignorance of the availability

• Ignorance of the transformation

technologies that are available

• Ignorance of the economic

dynamics

• Ignorance of the potential carbon

savings

• Ignorance by some of the experts

• IGNORANCE

3/10

3/10

2/10

2/10

3/10

1/10

National

5/10

5/10

4/10

4/10

4/10

3/10

West

Midlands

A Wasteful society

• We probably waste as much food as we eat:

– Supermarket sell by dates

– BOGOFs

– Processing rejects

– Storage losses

– Left on plate

– Household waste

• We still waste enough heat in the way we generate electricity to

heat the whole country for free

• We are still putting to land fill between 5 and 10 million tonnes of

timber per annum

• The role of the Waste Framework Directive

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“Waste” as an Asset

• Removal of the stigma attached to the word waste

• Realisation of the value of ―Co-products‖

• Conversion of these products to produce energy

• Dry wastes by thermal conversion

– Combustion

– Pyrolysis

– Gasification

• Wet Wastes by anaerobic digestion or composting

• Creation of an holistic strategy towards the use of all plant products

between food and non food and fuel

• Creation of chains of utility

• ―Waste not, want not‖

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What potential has Biomass and

Bioenergy

for the West Midlands?

Substantial.

• You already have some good working demonstrations

in Worcestershire County Council

• You have Europe‘s biggest sewage works which

converts all the waste through anaerobic digestion

• You have the South Shropshire Biodigester using

domestic organic waste

• You have the resource available in

– Wood from forestry and woodlands

– Energy crops such as miscanthus and short rotation willow

– Waste food materials

What does Renewable Energy offer for

the West Midlands?

• Against the inevitable trend of rising fuel prices it offers

– Security of supply

– Stabilisation of the base price

– A new income stream for rural areas

• Against the increasing problems of climate change it

offers

– An opportunity to significantly reduce greenhouse gas

emissions

– Benefits to the general environment and biodiversity

And the Role of Government

should be?

• Nationally to

– Set realistic targets and timetables and the facilities to deliver them

– Ensure that we all work to the same policy objectives

– Invest in research to deliver ever more efficient processes

– Provide a simple and effective information stream

• Regionally to

– Interpret the targets to the region

– Identify the regional infrastructure that is needed to support renewables

– Deliver the information and advice to industry

– Ensure that the planning policy meets these needs

• Locally to

– Integrate the use of biomass into local business and regional plans

– Lead debates about the real issues that underpin the options available

– Set examples with the use of renewables in the buildings that are publically

owned

– Deliver the integrated planning policy showing leadership

Reducing Renewable Energy

Costs

What can we do?

• Recognise the problem and the issues

• Develop a meaningful strategy that can meet the needs of food,

energy and the environment

• Debate the wider implications with the wider society to remove the

blockages based on ignorance of the reality

• Understand that efficiency of production and increasing

productivity is critical not only in meeting the needs of future food

supplies but also in reducing the ―carbon‖ footprint of food

production

• Adapt our structures so that all in the food and energy chain can

seek to benefit from the radically changes dynamics of the market

place that is set to evolve by the creation of real partnerships

• Think positively in a world that is all too often dominated by doom

and gloom17/12/2008 15:03 31

3rd prize in World Health & Safety

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2nd prize in World Health & Safety

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And The Winner is

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