PELLETS 8PPEQFMMFUMPTJOHDPNQFUJUJWFOFTTJO,PSFBONBSLFU CMT’s annual Biomass Pellets Trade & Power was once again co-hosted with EnerOne in mid-September in Seoul, South Korea. About one hundred professionals attended this the 6th edition, fewer than previous years reflecting the current price trend in the Korean pellet market. Figures over South Korean wood pellet imports and prices (courtesy EnerOne). Bioenergy Internat ional No 82, 6-2015 23 THE DRAMATIC SURGE in South Korean wood pellet imports since 2012, when the renewable portfolio standard (RPS) was introduced, declined significantly both in volume and prices in the first and second quarter this year. The drop in crude oil and natural gas prices, and the shift in policies has led to wood pellet losing its competitiveness in the South Korean market. – Considering the economic feasibility, the electricity production fuel cost for coal is KRW 37.98 ≈US$0.033 per kWh, while for wood pellet is KRW 84.75 ≈US$0.074 per kWh. So the cost of coal is less than half of wood pellets, commented Ho-sung Jang, Korean Southern Power Co. According to EnerOne’s data, the price of wood pellet in South Korea has dropped from over US$170/tonne CIF in 2014 to a more recent US$120/tonne CIF. Imports from the first half of 2015 amounted to 610 000 tonnes, compared to 670 000 tonnes in the same period last year. The 2014 annual total was 1.85 million tonnes. Vietnam is the biggest wood pellet exporter to South Korea and due to oversupply, Vietnamese producers are pushing prices down. Wood pellet preference For the Korean Gencos, wood pellet is preferred over palm based biomass fuel from South-East Asian countries, such as empty fruit branches (EFB) pellet and palm kernel shell (PKS). This is because EFB has a high chlorine (Cl) and ash content and low initial deformation temperature (IDT), while PKS is high in chromium (Cr) and Cl and has a low volume mass. EFB pellets and PKS are only suitable in fluidised bed type boilers whereas wood pellets can be used both in pulverised coal and fluidised bed type boilers. Producer consolidation This creates a big challenge for EFB pellet producers from South-East Asian countries. When they started to invest in EFB pellets plants in 2012, they expected the export of EFB pellets to Korea would increase steadily as the RPS obligation ratio increases year by year. As a result of lower demand and prices, both wood and EFB pellet producers in South East Asia are struggling to survive sparking a wave of consolidation and curtailment. Many have stopped operation and small family firms are leaving the business. Only those with high quality control and big players can survive. –There were over 180 pellets producers in Vietnam previously. Now there are about 80, but the production amount remains similar. Vietnam will remain as biggest and cheapest supplier in Asia. For Cellmark, we look forward to the long-term development. We have invested in a 120 000 tonne-perannum wood pellet plant in Borneo, Sarawak, Malaysia, said Nguyen Tan, Sales Manager, Cell- Mark, Vietnam. Look to China As the world’s second largest energy market, China is searching for ways to increase its portfolio of renewable energy, and biomass utilisation, such as supplementing its coal usage with biomass pellets, is one of the country’s priorities. –While the market is currently in its infancy with minimal import volume, the potential of the Chinese appetite is massive, commented Zhang Qingqiang, Vice President, Beijing Windbell Technology Co.,Ltd. The company is currently setting up biocoal plants in Malaysia using residues from the palm oil industry for export to China. –We are intensively cooperating with academic institutes. The cofiring with coal test result shows it is possible to use up to 5 percent palm pellet without slagging. We will focus on industrial boiler to replace from coal to biomass, and low temperature boiler operating The panel of Korean power utilities (Genco’s) commenting the pellet market. below 900 °C. The coal ban in China opens new opportunity in palm pellet production, said Md Arfizal Md Ariffin, Executive Director, for Detik Aturan Sdn Bhd, a Malaysian producer of EFB pellets. Text & photos: Xinyi Shen BI82/5041/AS (Above) Malaysian producers look to China, Md Arfizal Md Ariffin, Detik Aturan Sdn Bhd, with EFB pellets. (Below) Cellmark have a 120 ktpa wood pellet plant told Nqyuyen Tan. Zhang Weidong, Programme Manager, United Nations Development Programme (UNDP), spoke on regulatory policy development in biomass use in the region.
Bioenergy no 6 October 2015
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