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    Philippine Bio-Sciences Co., Inc. (PhilBio) and its Clean Development Mechanism subsidiary in Cebu, has told the Central Negros Electric Cooperative (Ceneco) that it will soon open a 10 megawatt biogas plant in Cebu. According to the company, under current conditions electricity generated from biogas is around 20% less costly than that generated from fossil fuels. Philippine Bio-Sciences - August 15, 2007.

    Scientists, economists and policy experts representing government and public institutions from more than 40 countries will exchange the latest information on economic and technology opportunities at the U.S. Department of Agriculture's "Global Conference on Agricultural Biofuels: Research and Economics", to be held Aug. 20-21 in Minneapolis. USDA ARS - August 14, 2007.

    A company owned by the Chinese government has expressed interest in investing up to 500 million US dollars in a biofuel project in Indonesia. The company is planning to use jatropha as its raw material and is targeting an annual output of around 1 million tons. Forbes - August 13, 2007.

    Virgin Atlantic, Boeing and General Electric are within weeks of selecting the biofuel for a flight demonstration in the UK early next year. The conversion of biomass via the Fischer-Tropsch process is no longer amongst the biofuel candidates, because the process has already been demonstrated to work. Ground testing of the chosen fuel in a development engine at GE is expected to begin in October-November. The limited flight-test programme will involve burning biofuel in one GE CF6-80C2 engine on a Virgin Boeing 747-400. Flight Global - August 13, 2007.

    Japan's Economy, Trade and Industry Ministry said Saturday it plans to introduce a new preferential tax system in fiscal 2008 aimed at promoting a wider use of biofuel, which could help curtail greenhouse gas emissions. Under the envisaged plan, biofuel that has been mixed with gasoline will be exempt from the gasoline tax--currently 53.8 yen per liter--in proportion to the amount of biofuel included. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, currently 32.1 yen per liter. Daily Yomiuri - August 13, 2007.

    Japan's Economy, Trade and Industry Ministry said Saturday it plans to introduce a new preferential tax system in fiscal 2008 aimed at promoting a wider use of biofuel, which could help curtail greenhouse gas emissions. Under the envisaged plan, biofuel that has been mixed with gasoline will be exempt from the gasoline tax--currently 53.8 yen per liter--in proportion to the amount of biofuel included. If blended with diesel oil, biofuel will be free from the diesel oil delivery tax, currently 32.1 yen per liter. Daily Yomiuri - August 13, 2007.

    Buenos Aires based ABATEC SA announces the release of a line of small biodiesel plants with modular design, high temperature reaction for the best yield, to produce from 50 to 1000 gal/day (190 to 3785 liter/day) of high quality methylester and valuable glycerol. PRWeb - August 10, 2007.

    Vegetable growers in North Queensland are trying to solve the problem of disposing of polyethylene plastic mulch by using a biodegradable, bioplastic based alternative. Trials are a collaboration of the Queensland Department of Primary Industries with the Bowen District Growers Association. Queensland Country Life - August 8, 2007.

    Hawaii's predominant utility has won approval to build the state's first commercial biofuel plant. It is the first substantial new power generator that Hawaiian Electric Co. has added in 17 years. HECO will build the $142.3 million facility at Campbell Industrial Park on Oahu beginning early next year, and expects to begin commercial operation in mid-2009. It will run exclusively on fuels made from ethanol or biodiesel. Star Bulletin (Honolulu) - August 8, 2007.

    PetroSun Inc. announced today that it conducted its initial algae-to-biofuel program held at Auburn and Opelika, Alabama. The company intends to hold a series of these programs during August and September with biodiesel refiners and firms that are researching the use of algal oil as a potential feedstock for jet fuel production. MarketWire - August 8, 2007.

    To encourage Malaysia's private sector to generate energy from biomass resources, national electricity company Tenaga Nasional Bhd (TNB) has increased the purchase price of electricity produced from palm oil biomass waste to 21 sen per kilowatt hour from 19 sen now. According to Minister of Enegry, Water and Communications, Datuk Seri Dr Lim Keng Yaik the new price structure, under the Renewable Energy Power Purchase Agreement (REPPA), will be implemented immediately. Such projects are eligible for the Clean Development Mechanism. Under the 9th Malaysian Plan, the country's government aims to achieve the installation of 300MW and 50MW of grid-connected electric power from renewable energy sources in Peninsular Malaysia and Sabah, respectively. Bernama - August 7, 2007.

    Aspectrics, which develops encoded photometric infrared and near infrared spectroscopy, will be launching a new range of biofuels analyzers designed to meet the demands of scientists and analysts to carry out biodiesel quality control and analyze biodiesel blend percentages in real time. Bioresearch Online - August 7, 2007.

    Irish start-up Eirzyme has secured a €10m investment from Canadian company Micromill System. The new company will produce low-cost enzymes to convert biological materials such as brewers' grains into bioethanol and biogas. RTE - August 6, 2007.

    Imperium Renewables says it has a deal to provide Royal Caribbean Cruises with biodiesel. The Seattle-based biodiesel maker, which is scheduled to inaugurate its Grays Harbor plant this month, will sell the cruise line 15 million gallons of biodiesel in 2007 and 18 million gallons annually for four years after that. The Miami-based cruise line has four vessels that call in Seattle. It is believed to be the single-largest long-term biodiesel sales contract to an end user in the U.S. Seattle Times - August 5, 2007.

    The J. Craig Venter Institute, leading the synthetic biology revolution, is expanding its Bio-Energy Program, seeking a senior scientist to head the new dedicated department. With ongoing research in biohydrogen, cellulosic ethanol, microbial fuel cells, and bacterial nanowires, the Environmental Genomics and Plant Genomics groups within JCVI are working on active components related to bio-energy. NatureJobs - August 5, 2007.

    Polish power and heat firm Praterm has decided to invest 50 to 100 mln zloty (€13.2-26.4 /US$18.1-36.4 mln) by 2013 in biomass production. The company has already bought Bio-Energia, an operator of four biomass heating plants with a total capacity of 14 MW. Wirtualna Polska - August 5, 2007.

    Brazil and Mexico will sign a cooperation agreement to collaborate on the production of ethanol from sugarcane, Gonzalo Mourão of the Brazilian chancellory's Departamento do México, América Central e Caribe said. Brazil's President Lula is on a tour of Central America and is currently in Mexico, after which he will visit Honduras, Nicaragua, Jamaica and Panama. He is set to sign several bilateral agreements on energy and biofuels with these countries. Reuters Brasil - August 4, 2007.

    Evergreen Pulp Inc. announced that it and Diversified Energy Corp. have been selected by the state of California for a $500,000, 36-month renewable energy project that aims to dramatically reduce natural-gas-use residue and natural gas at its Samoa mill. The Public Interest Energy Research Natural Gas Program, a part of the California Energy Commission, awarded four contracts for research, development and demonstration of technologies to replace natural gas with renewable resources, to four applicants from among a pool of 25. The state’s focus for the contracts was for biomass-to-gas and/or hybrid projects specifically addressing industrial and commercial process heating or combined heat and power needs. Eureka Reporter - August 4, 2007.

    Greenline Industries, which designs and builds biodiesel production facilities, and ULEROM, one of Romania's largest agri-business corporations, today announced the formal opening of their largest facility in Vaslui, Romania. The plant will produce some 26.5 million liters (7 mio gallons) per year. The Romanian facility is the 17th example of Greenline's technology featuring waterless wash, computerized, continuous flow and modular construction. PRNewswire - August 1, 2007.

    US Renewables Holdings announced today that it has successfully closed on $475 million of third party capital commitments in its most recent private equity fund, USRG Power & Biofuels Fund II, LP and related vehicles (collectively, "Fund II"), ahead of the fund's original target of $250 million. PRNewswire - August 1, 2007.

    Malaysian palm oil company Kim Loong Resources Bhd has secured European energy trading group Vitol as buyer for all its carbon credits from its planned biogas plant in Kota Tinggi. The biogas facility generates methane from palm oil mill effluent, a waste product. The project is expected to generate over RM2 million (€423,000/US$579,000) of earnings annually. The methane capture and power generation project was registered and approved by the Clean Development Mechanism. The Edge Daily - July 31, 2007.

    GreenHunter Energy, Inc. announces that its wholly-owned subsidiary, GreenHunter BioFuels, Inc., located in Houston, Texas has successfully acquired Air Emission Permits from TCEQ (Texas Commission of Environmental Quality) under TCEQ's Permit by Rule (PBR) programs. These permits open the way for construction of a 105 million gallon per year (mgy) biodiesel facility including a separate but related methanol distillation facility. PRNewswire - July 30, 2007.

    Together with Chemical & Engineering News' Stephen K. Ritter, the journal Environmental Science & Technology sent Erika D. Engelhaupt to Brazil from where she wrote daily dispatches of news and observations about biofuels research. In particular she focuses on a bioenerrgy research partnership between the American Chemical Society, the Brazilian Chemical Society, and the Brazilian Agricultural Research Corporation (EMBRAPA). Check out her blog. Dipatches from Brazil - July 28, 2007.

    Consultation is under way on a £50 million (€74/US$101million) renewable energy plant planned for the South Wales Valleys. Anglo-Dutch company Express Power plans to build a wood-fuelled biomass plant on Rassau Industrial Estate in Blaenau Gwent. The plant will generate an annual 160,000 MWh (Mega Watt hours) of green electricity for Wales from forestry, recycled wood and wood derivatives. ICWales - July 27, 2007.

    The price of New York crude leapt to 77.24 dollar a barrel on Thursday, marking the highest level since August 9, 2006, as keen global demand and tight supplies fuelled speculative buying, traders said. On Wednesday, the US government had revealed that inventories of American crude fell by 1.1 million barrels last week. France24 - July 26, 2007.

    Arriva, one of Europe's largest transport groups is trialling B20 biodiesel for the first time on 75 of its buses. The company is aiming to reduce total carbon emissions by around 14 per cent by using biodiesel as a 20 per cent blend (predominantly be a mixture of sustainable soya products, along with used cooking oil and tallow). The 75 buses in the innovative trial will carry around 130,000 passengers every week. Minimal engineering changes will be required to the fleet as part of the scheme. Arriva - July 26, 2007.

    Marathon Oil Corporation announces that it has completed two more projects adding biodiesel blended fuel at its Robinson and Champaign terminals in Illinois. The terminals now feature in-line ratio blending in order to provide soy-based B-2 (two percent biodiesel) and B-11 (eleven percent biodiesel). Marathon Oil - July 25, 2007.

    Norway-based renewable energy firm Global Green One has agreed to set up a € 101.6 million bioethanol plant in Békéscsaba (southeast Hungary), with more facilities planned for Kalocsa, Szombathely and Kõszeg, the latter of which was already a target for a €25 million plant in May this year. The Békéscsaba plant would process 200,000 tonnes of maize per year, employing around 100 people. The logistics part of the facility would also create 100 jobs. The company expects the factory to generate €65 million in revenues each year. Portfolio - July 25, 2007.

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Wednesday, August 15, 2007

Biomass 'reserve' to reduce risk of uranium shortage - perspectives from Belgium

An interesting debate on the long-term future of nuclear energy comes from Belgium, where a new government is currently being formed. Biopact is collaborating with parties there to propose a strong alternative to nuclear electricity: the creation of a (virtual) green reserve of biomass to be established in the Democratic Republic of Congo. This biomass, transformed into biofuels with a high energy density, will be imported and used in dedicated, highly efficient cogeneration plants. The plan is backed by the social-democrats and by the former chief of Greenpeace Belgium. It represents a first concrete example of a genuine 'biopact' - a win-win strategy that brings development to the South, and energy security and climate-friendly electricity to the North.

The dilemma
Belgium's previous center-left government had agreed to close down the country's 7 nuclear reactors over the coming decades. Other European countries will be doing the same, most notably Germany and Sweden. The gap would be filled up by renewables such as wind, solar, and imported biomass. Nuclear power currently provides 56% of Belgium's domestically produced electricity.

However, during the recent election campaign, the fate of Belgium's nuclear power plants took central stage again and the phase-out policy was up for discussion. The left and the greens defended the case for the end to nuclear, citing classic objections: there is no solution to the waste problem, the industry presents security risks, is responsible for nuclear proliferation, and keeping power plants open will mean investments in renewables keep getting delayed.

The center and right-wing parties were in favor of keeping the plants open because, they said, investing in renewables today would be too expensive and cannot guarantee the security of energy supplies. Moreover, keeping the existing reactors working for two more decades will bring in an estimated €8 billion - money that can be invested in renewables later on. Nuclear power from existing plants is inexpensive and cuts CO2 emissions today, so the argument went.

The right wing won the elections and during the ongoing negotiations for the formation of a new government, an agreement was reached to get rid of the phase-out plans, and to keep the bulk of the country's nuclear power plants open to 2035-2045.

However, an entirely new but simple factor has changed the equation, and may eventually lead to a victory for the left-wing after all. The problem: nuclear fuel - uranium - has become excessively expensive and long-term projections show prices may stay high over the coming decades. The fact that nuclear power makes use of a finite resource the price of which is determined by global market forces, has come to dominate the most recent discussions once again. In this context, the left wing rightly argues that sunshine and wind do not cost money. Uranium on the contrary is set to get ever more costly. Belgium now faces a dilemma.

Price explosion
For decades uranium was extremely cheap, but in recent years, prices have skyrocketed. In 2000, a pound cost US$10, in 2007 uranium costs around US$135 - an increase of 1300 percent:
:: :: :: :: :: :: :: :: :: ::

The costs of nuclear electricity are only mildly determined by the price of uranium. Fuel costs make up around 20 percent of the total costs. Compared to oil and gas power plants, operation and maintenance costs as well as the costs for the nuclear infrastructure are more important than fuel costs. According to the IEA, a doubling of the uranium price leads to an increase of 6 percent in the end price of nuclear electricity. The OECD puts the figure at 10 percent. For a coal plant, a doubling results in an increase of 40 percent, whereas for a natural gas plant, electricity becomes 75 percent more expensive each time fuel prices double.

But this doesn't make nuclear power less expensive. Oil and gas prices have increased by about 150 percent compared to 2000. This means electricity from gas today costs around 115 percent more. During the same period, uranium prices increased by 1300 percent, making nuclear electricy 78 to 130 percent more costly (depending on IEA or OECD norms).

250 new nuclear power plants
There are two main reasons for this price explosion. On the one hand there is rapidly growing demand, on the other, supplies cannot keep up. Because of the serious price increases for oil and gas and growing awareness of the need to mitigate climate change, nuclear has become an attractive option. Several countries are investing heavily in the technology. According to the World Nuclear Association, 28 new plants are currently under construction, construction plans for 64 others have been approved and another 158 are planned for the near future. The bulk of these projects can be found in China, Russia and India.

In total some 250 new plants are in the pipeline, against the 440 that currently dot the planet. When these plants come online in the next decade, demand for uranium will grow even further. Current prices already take this scenario partly into account. According to the IEA, annual demand for uranium will grow from 68,000 tons in 2005 to 100,000 tons in 2030.

On the supply side difficulties can be observed as well. Traditional uranium mines only deliver around 55 to 65 percent of all nuclear fuel. The rest is obtained from 'secondary sources', mainly from Russian (and to a lesser extent American) nuclear weapons. However, by 2015 this resource will be depleted. This means that from the second half of the next decade onwards, 100 percent of all supplies will have to come from 'virgin' uranium. And this will prove to be extremely difficult.

Last year, the IEA called for the introduction of more nuclear energy in the global electricity mix, but it added a clear precondition: massive investments are needed in uranium mines and in enrichment facilities. If these investments are not made, many of the plant reactors will simply have to lay idle, the IEA warned. During the past 20 years, mines and enrichtment plants have been plagued by underinvestments. This is rapidly changing, with all major players announcing increased investments. But projections show the pace is still too low.

According to the IEA, all existing and recently planned facilities can merely supply 65 percent of the projected demand in 2030. From 2020 onwards a physical shortage may already plague the nuclear power industry - Belgium's reactors only start their 'extra time' in that year.

Moreover, the expansion of the mining sector is not going smoothly. Last year, the vast new mine of Cameco, the world's largest, flooded. The opening of this mine, which is supposed to meet 15 percent of global demand, has been delayed by two years.

Risky gamble
Even if the traditional objections to nuclear power - the waste problem, potential nuclear disasters, the democratisation of nuclear energy and the risk of proliferation - are left out of the debate, nuclear electricity remains a questionable option.

So-called fourth-generation reactors that recycle their own waste streams, do not solve the Belgian dilemma either. Belgium's nuclear electricity is currently quite inexpensive but this is merely so because of the fact that the reactors have already been built and capital costs have been amortized. New reactors of the fourth-generation will pump up the price because of the simple fact that they still have to be build and developed. If the first of these is build in 2040, it may begin to yield affordable electricity two decades later, at the soonest.

For Belgium, the decision to keep the existing plants open comes down to a very risky gamble. The projected savings of €8 billion were based on scenarios with relatively low uranium prices. And the number is the result of a give and take calculus: €13 billion in income minus €4.4 billion in extra costs needed to keep the plants open.

If, in 2020, the reactors have to fight for uranium supplies because global production does not meet demand, then society is set to carry the costs. In such a case, the choice is narrowed down to one that nobody wants to make: either much costlier nuclear electricity, or closing down the plants alltogether with the risks of a serious energy supply gap. If, by then, Belgium has not made major efforts to invest in renewables, the country may face a true powerdown.

Green reserve
Meanwhile, Biopact has joined the left wing (the social-democrats, SP.a) to create a set of scenarios that prove biomass can replace nuclear power in a cost-effective, sustainable and efficient manner. The scenarios are based on the establishment of a virtual green reserve of biomass to be located in Africa (more particularly the Democratic Republic of Congo). The reserve is 'virtual' because of the uncertainties over uranium price trends and because of the highly complex nature of phase-out plans.

Resistance to renewables as feasible alternatives to nuclear is most often based on the fact that solar and wind power can not deliver electricity continuously. Biomass, which works in more traditional power systems, elegantly overcomes this problem.

The substance of the plan is relatively simple. Biomass grown on a mere 200,000 hectares and co-fired with coal, and later used in dedicated biomass cogeneration power plants, can replace all of Belgium's current nuclear capacity. Congo has vast potential to produce a wide range of such energy crops - grasses, trees, and more established crops - which can be grown in a highly efficient, sustainable and cost-effective manner. This biomass can be transformed into fuels with a higher energy density (e.g. bio-oil, bio-coal) and then exported to Antwerp, the port which is gradually turning itself into a 'bioport'. Analyses of the logistical chain show that transformation and transportation costs are reasonable.

Congo was selected because of Belgium's deep relations with the country, because of its vast agro-energy potential and its need for economic investments and job creation. Moreover, a major advantage is the fact that synergies can be created between local biofuel production and the projected availability of hydroelectricity. Investments are being made into Congo's Inga Dams, which can grow out to become the world's largest hydro-electric complex (44,000 MW, or roughly twice the capacity of the Three Gorges Dam).

The technical potential has been established and projections on the economics show that importing biomass from Congo on a large scale provides the least costly renewable energy option for Belgium. In a next phase, Biopact develops a set of decision sequences that will determine the most opportune moments to invest in the actual establishment of plantations, under different scenarios.

Congoforum: Wendel Trio (sp.a): "België moet in Congo in palmolie investeren" - June 8, 2007.

Wendel Trio: SP.a lanceert biomassa-actieplan voor Afrika - the Africa biomass plan at the website of the energy expert of the social-democrats. Wendel Trio is the former chief of Greenpeace Belgium.

The social-democrats and their plan to phase-out nuclear is presented at a dedicated website [*Dutch].

A good overview of the debates on nuclear power in Belgium can be found here [*Dutch].

Uranium Information Centre: Nuclear Power in Belgium - Briefing Paper # 94, June 2007 - a good overview of Belgium's capacity and policies.

For more information on Biopact's 'green reserve' studies, contact us.


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