Co-firing Coal with Biomass under Mandatory Obligation for Renewable Electricity: Implication for the Electricity Mix

Abstract

This paper analyses the effect of recognizing co-firing coal with biomass as renewable electricity. We provide simulations for the French and German electricity mix. Results indicate that, if co-firing is recognized as a renewable, coal may crowd-out traditional renewables with increased generation and additional investments. Regarding CO 2 emissions, we find surges when co-firing is recognized as a renewable. The rise is more significant in Germany due to greater coal capacity. In France, the magnitude depends on the share of nuclear with a lower increase when old nuclear plants are prolonged. Finally, we find that recognizing co-firing as a renewable reduces the overall costs for electricity. We balance the cost saving with the increased social cost from higher CO 2 emissions. Results show that the cost saving is lower than the increased carbon cost for society with carbon valuation around 100 Euros/tCO 2 , except in France when old nuclear plants are not decommissioned.

Coal-Biomass Co-firing within Renewable Portfolio Standards: Strategic Adoption by Heterogeneous Firms and Emissions Implications

“…We assume a target for the biomass carve-out that can be met by roughly half of the total capacity of the group of candidate plants in each case study to ensure feasibility. We intentionally model a carve-out to control for competition from other renewable sources, which was shown to occur in Bertrand (2019).…”

“…Specifically, this version retains the demand-supply balance constraint for each hour but omits all constraints that couple consecutive hours. The second variant, "No Strategic Behavior", performs a centralized cost-minimization to select the candidates to adopt biomass co-firing; this is the approach used in, e.g., Lintunen and Kangas (2010) and Bertrand (2019). This second variant retains the Unit Commitment model to simulate the market clearing to determine generator schedules and the price feedbacks between the electric and biomass markets as in GT-UC but omits the strategic adoption decisions by individual firms.…”

“…well as subsidies for the technology. In contrast, the study by Bertrand (2019) simulated the power systems of Germany and France with renewable energy standards that did or did not include coal biomass co-firing under the standard. Their results showed that CO 2 emissions increase when biomass co-firing is eligible under the RES.…”

“…We build on and complement Bertrand (2019) and Lintunen and Kangas (2010), by demonstrating the dependence of co-firing adoption decisions by firms on strategic behavior in a realistic electricity market setting. Bertrand's (2019) important contribution was to show that allowing coal-biomass co-firing within a broader renewable energy target could increase emissions by displacing investment in zero carbon technologies.…”

The future of bioenergy

“…While, in principle, pellets produced from waste biomass could provide net climate benefits compared to the use of fossil fuels, in practice the growing demand for biomass is rapidly exceeding the availability of waste biomass. The use of pellets, whether from waste or land-intensive bioenergy, is also extending the life of coal-fired power plants through cofiring (Bertrand, 2019), and there is a significant risk that the current trend toward coal-to-biomass conversions plus new biomass facilities will lock-in large-scale use of biomass for decades to come.…”