“Accelerated Electrification” Misses the Mark on Process Heat

Posted 21 August 2019 by Richard Gardiner

Most of us now agree that climate change is all too real and we therefore all need to do something about it, sooner rather than later.

However, some impulsive political changes in the past 18 months, like unilaterally banning all new offshore oil and gas exploration, can be environmentally counter-productive. For example, NZ coal usage in 2018 was the highest for a decade! Undoubtedly, this is a decision our political leaders didnt want to see happen.

Wood biomass however is a great renewable resource and therefore represents an important and growing energy solution.

At this time, NZ needs a genuine cross-party accord on the best way to tackle climate change, much like the superannuation accord back in the 1990’s. The superannuation accord worked well and served to de-politicise a potentially highly contentious area. A similar approach is needed now.

Richard Gardiner – Managing Director of Total Utilities

The policy advice preoccupation with electrification in process heat is not aligned with experts or industry trends, because in many cases it is simply not economically viable. In some high temperature hot water and steam production scenarios, wood energy (biomass) is about one quarter of the cost of electricity, yet the major recommendations for process heat from the ICCC report is “reducing regulatory barriers relating to electrification”.

We are seeing New Zealand’s largest companies, and multinationals operating in New Zealand trending towards and investing in biomass projects, it seems the breaks need to be applied when it comes to accelerating the electrification of high temperature process heat.

Jonathan McKeown – Bulk Wood Fuels Business Development and Marketing Manager, Azwood Energy

The following was a recent press release from Azwood Energy. biomass

Azwood Energy welcomes the Interim Climate Change Committee’s “Accelerated Electrification” report, which investigated the potential of electricity in greenhouse gas reduction.  Azwood Energy agrees with the Committee’s view: “The challenge is clear – it is not so much about reducing emissions from the generation of electricity in a narrow sense, but it is about using low or zero-emissions energy to fuel the economy.”[1]

Whilst we find its investigation into electrifying our vehicle fleet commendable, we question whether the Committee’s reliance on the wholesale electrification of process heat is an outcome that truly promotes carbon neutrality and greenhouse gas emission reduction.

Azwood Energy is of the view that the increased utilization of woody biomass, a renewable, carbon-neutral energy source, in the transition from fossil fuel use in process heat makes sense, both economically and environmentally.

Energy expert, Dr. Martin Atkins,[2] has noted that “Biomass will play a vital role in providing process heat, particularly in producing process steam for medium to high process temperature demands. Biomass will be the lowest cost fuel switching option by a large margin when compared to electricity.”[3] He notes that complete electrification of process heat demand is not economically feasible.

Process heat needs are highly-situationally dependent and site-specific. However, from an operational and Capex perspective, high temperature hot water and steam requirements are best met using biomass as a fuel source in place of coal or diesel.

It seems big players in the industry agree. A video was released for the Climate Leaders Coalition showcasing Fonterra Brightwater’s switch to co-firing with biomass.[4] Speaking, in May, at the New Zealand Minerals Forum, Tony Oosten, Fonterra’s Energy Manager, noted that capital outlay and fuel costs for new wood versus coal boilers are now the same, and the viability of wood fuel has been proven in their Brightwater pilot.[5]

He explained Fonterra’s cheese plants use lower temperatures and can be run on electric technologies. Oosten says milk-drying plants prove more complex, (given their mixed high-heat requirements), but indicated new plants will be designed to meet their low heat energy requirements with electricity, allowing biomass-fueled boilers to be used for higher temperature requirements. Oosten says electrode boilers may be used for peak loads as they are more responsive than wood boilers, but they are twice as expensive to run as current systems.

Oosten raised issues of wood fuel supply, however, stating, based on the locally available supply in each region, Fonterra could access 15 megawatts of wood into each of its 32 manufacturing sites. Given Fonterra has now put a stop to installing any new coal boilers or increasing capacity to burn coal,[6] their energy requirements, 40% of which is currently met by coal, are set to supercharge demand for wood fuel.

More recently, French multinational food-products corporation Danone announced they would invest $40 million to convert their Balclutha milk drying plant to 100% biomass, cutting CO2 emissions by 96% or 20,000 tones per year.[7]

Brook Brewerton, General Manager of Azwood Energy, welcomes this, stating that the current constraint in demand is at the heart of stated perceptions of constrained supply. He says there is ample forestry residue left unutilized on hillsides and the commercially unproven fixation on industrial electrification is hampering the switch to biomass fuel and confusing the low-emission messaging.

Azwood Energy sees key areas of this report’s findings as an exacerbation of the problem. The ICCC should encourage thermal heat plant users to firstly reduce energy demand, secondly reduce the low-temperature heat demand on boilers and then encourage the feasibility of fuel switching to biomass for high-temperature water and steam.

Biomass for high-temperature water and steam is the most cost-effective option, at about one-quarter of the cost to produce steam, when compared with electricity, and does not require a huge investment in electrical networks and infrastructure.

Until increased demand ramps up the supply chain logistics, however, the perception of scarcity will continue. Azwood Energy is poised to scale their operations at viable sites across New Zealand and has been commercially supplying biomass to large heat plant systems for almost 20 years. 

Scion has reported that there is sufficient biomass in New Zealand to replace in the order of 15PJ of coal consumption with its associated GHG emissions reductions.[8] The Bioenergy Association states there is potentially enough biomass available from plantation forestry to replace 60% of coal used in existing heat plant over the next 30 years. It notes that the biomass fuel market is under-developed because the current demand for wood fuel is low, but that “there are enough suppliers with commercial and technical capability to expand supply if demand for wood fuel increases consistently and in an orderly manner”. [9]

Brewerton notes that the recoverability of wood energy in the scenarios underpinning the Scion and Bioenergy Association data is conservative, and not based on 17 years of residue recovery and methodology improvement. “There is far more out there if the market is willing to pay for it. Recoverability modeling is on the low side, but it is a good place to start.”

Azwood Energy eagerly awaits the PHiNZ report due to be released later this year by MBIE, which addresses process heat directly. It is hoped the regulatory and policy settings changes it advocates will provide the priority for wood fuel it deserves, as a proven, economically viable local energy source with both up and downstream environmental benefits.


[1] “Accelerated electrification” at p 13. https://www.iccc.mfe.govt.nz/assets/PDF_Library/daed426432/FINAL-ICCC-Electricity-report.pdf

[2] Dr Martin Atkins, Senior Research Fellow with Waikato University’s Energy Research Group, has advised some of New Zealand’s most iconic companies on their path towards lower emissions, from dairy giant, Fonterra, to pulp and paper processor, Oji.

[3] Dr. Martin Atkins submission to the Productivity Commission’s Low-emissions economy, https://productivity.govt.nz/sites/default/files/sub-low-emissions-361-martin-atkins.pdf

[4] CLC story – Fonterra Brightwater Biomass Burner https://www.youtube.com/watch?v=DgVc18nE-AA

[5] http://www.scoop.co.nz/stories/BU1905/S00909/plan-needed-for-competing-wood-demands-fonterra.htm

[6] https://www.fonterra.com/nz/en/our-stories/media/no-new-coal-boilers-for-fonterra.html

[7] https://www.stuff.co.nz/business/farming/114603715/danone-to-cut-carbon-emissions-at-balclutha-plant-to-zero

[8] Scion submission to the Productivity Commission’s Low-emissions economy,  https://productivity.govt.nz/sites/default/files/sub-low-emissions-67-scion-446Kb.pdf

[9] https://www.bioenergy.org.nz/documents/resource/Information-Sheets/IS32-GHG-reduction-using-wood-energy.pdf

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