Large-scale development of biomass power generation is expected



Overview of the biomass power generation industry

Biomass is a variety of organisms formed through photosynthesis, including all plants, animals and microorganisms.

Biomass energy is the form of energy that solar energy stores in organisms through photosynthesis.

Biomass power generation is a form of thermal power generation using agricultural and forestry waste, livestock and poultry manure, sewage sludge, domestic waste and other biomass as fuel. The biomass energy (chemical energy) in the biomass is burned to generate heat energy and converted into high-temperature steam, and the process of promoting the turbine to drive the generator to generate electricity. Biomass power generation belongs to renewable energy power generation, is second only to coal, oil and natural gas, the fourth largest energy, the development potential is huge. It mainly includes five power generation modes: direct combustion power generation, mixed combustion power generation, biogas power generation, gasification power generation and garbage power generation.

Classification of biomass power generation

In recent years, China's biomass power generation has grown steadily, from 2017 to 2022, China's biomass power generation increased from 79.5 billion KWH to 182.4 billion KWH, with an average annual compound growth rate of 18.07%. As of the first quarter of 2023, the country's biomass power generation reached 49 billion KWH, an increase of 8.8%.

Second, the large-scale development of rural biomass power generation is expected to help the development of the county circular economy

Rural biomass power generation ushered in large-scale development opportunities. On February 21, 2021, the No. 1 Central document "Opinions of the CPC Central Committee and The State Council on Comprehensively Promoting Rural Revitalization and Accelerating Agricultural and Rural Modernization" was officially released, clearly proposing the implementation of rural clean energy construction projects. We will strengthen the construction of rural power grids, comprehensively consolidate and improve the level of rural electricity security, and develop rural biomass energy. Since 2022, China has successively issued a series of industry support policies to promote the development of domestic biomass power generation projects. Some provinces and cities have also promoted biomass power generation to participate in electricity market transactions, and the development of public REITs has also provided new financing channels for biomass power generation enterprises. As of 2022, the annual installed capacity of biomass power generation in China has increased by 3.34 million kilowatts, of which 2.57 million kilowatts of household waste incineration power generation, 650,000 kilowatts of agricultural and forestry biomass power generation, and 120,000 kilowatts of biogas power generation.

Compared with 2021, the year-on-year decrease of about 41.33%.

China's biomass power generation industry key policy review

According to the "China biomass power generation industry Development Status research and investment prospects Analysis Report (2023-2030)" released by the research Report network, biomass resources in rural areas mainly come from the waste accompanying the production and life of rural residents, including agricultural waste, forestry waste, livestock and poultry manure, domestic waste and so on. The most ideal mode of energy conversion is to use incineration for energy supply, or to produce biomass gas. At present, only biomass power generation has formed a complete and mature industrial chain, which can treat agricultural and forestry waste and livestock manure on a large scale, and realize the clean utilization of rural energy. Although the overall development of biomass power generation industry in 2022 is slow, the current energy conversion rate of biomass agricultural and forestry waste in rural China is very low, the annual availability of straw in the country is about 400 million tons, the annual availability of forestry residues is about 350 million tons, and about 800 million tons of livestock and poultry manure and 70 million tons of domestic waste in rural areas have not been effectively used. At the same time, China's southwest and northeast regions, forestry biomass resources are relatively rich, limited by multiple factors such as energy use habits, economic level, collection area, transportation conditions, human conditions, information channels, support policies, biomass resources in poor areas have not been effectively developed and utilized, so the future of China's biomass power generation construction space is still very large. In addition, after coal power production capacity, whether it is residential heating or industrial heat load, it has brought a huge market space to biomass power generation, and only biomass thermal power can fill the energy gap after coal power production capacity.

As the policy brings great flexibility to the large-scale development of domestic biomass power generation projects, it is expected that in the future, with the construction and landing of large-scale biomass power generation projects, it is expected to actively help the development of green circular agriculture in poor areas, and will also create a large number of employment opportunities for rural poor family labor, effectively solve the problem of industrial heating in some counties and clean heating for rural residents.

Third, the localization rate of biomass power generation equipment exceeds 90%, and the localization of the whole industrial chain is expected to be realized in the future

Compared with traditional power generation, biomass power generation industry chain is long and complex, the system is mainly divided into research and development, design, manufacturing, installation, operation and maintenance and other links, the domestic industry chain is characterized by the upstream biomass energy resources are relatively rich, incinerators, flue gas purifiers and other power generation equipment, in addition to a few automatic control systems, has all been able to achieve localization, The localization rate can reach more than 90%. In terms of technology, through the introduction, absorption, digestion, innovation, has initially formed a systematic localization technology. For example: Shanghai Electric Group provides host equipment solutions for the world's highest comprehensive parameters of waste incineration power generation project successfully realized operation; The first domestic flywheel energy storage uninterruptible power vehicle independently developed by the national machinery reloading and double equipment was successfully developed; The first domestically produced 1000MW supercritical unit FB2 rotor was successfully shipped. In domestic biomass power generation demonstration projects, there are already some enterprises to achieve equipment localization rate of 100%, such as: Jiangsu New Energy Huaian 2×15 MW biomass power generation project is the first domestic equipment, the use of rice and wheat soft straw power generation project. In the next step, with the promotion of the localization of some imported equipment through more biomass power generation projects, the localization of the whole industrial chain is expected to be realized in the future and the economy of biomass power generation will be improved.

Analysts view: After years of development, China's biomass power generation industry chain has formed a larger scale, better economic benefits of enterprises including National energy, Everbright, China Electronics and so on. However, there are still some enterprises whose performance is flat, especially some enterprises that put into production early, the units are obsolete, the technology is backward, and the comprehensive efficiency is poor, which drags down the development of the industry. It is expected that the next two to three years, the industry may be reshuffled.

Fourth, biomass power generation has a carbon neutral effect and is expected to become a carbon neutral weapon

In response to global climate change, China has put forward the goal of "carbon peak" and "carbon neutrality", which means that China needs to make efforts to support sustainable economic and social development with more efficient resource and energy management. At present, conventional energy sources include natural gas, solar heat, hydrogen energy, and nuclear energy. Among them, natural gas has fast response and high energy density, but there are problems such as insufficient total amount, high cost and carbon emission. The energy density of light and heat can not meet the needs of high energy density users such as large amounts of steam, nor can it ensure the continuous stability of heat used in manufacturing, and it is not competent from a technical point of view. Nuclear energy has advantages for continuous and stable power generation, and can also be used as an alternative for the heating needs of the north, but for the diversified and diversified manufacturing heating needs, its technology and economy are difficult to match. The advantages of hydrogen energy in the field of transportation are emerging, and although there are successful cases for special heating needs such as steelmaking instead of coal, the economy of a wide range of manufacturing heating needs needs time to verify. In addition, even if the above energy types are economical, there is still a common shortcoming - the existing coal-fired energy infrastructure faces abandonment.

In contrast, biomass energy has natural energy storage function, renewable, transportable, in the face of diversified, multi-period heating needs, biomass fuel can be flexibly met, and biomass resources, wide distribution, strong economy, for heating competitiveness is stronger than fossil energy. Therefore, in modern times, agricultural and forestry biomass energy co-exists with coal, oil and natural gas, and has become an important energy to promote social progress. At present, the consumption of agricultural and forestry leftovers in the form of direct combustion power generation and heating is still the most convenient, economical and effective means to optimize natural ecology and improve urban and rural living environment, fulfill the commitment of carbon peak and carbon neutrality, benefit farmers and enrich people and precision poverty alleviation, help rural energy production and consumption revolution, and maintain the efficient use of resources. In the end application field, the complete replacement of fossil energy can be realized.

The role of biomass power generation in three pathways to carbon neutrality

Fifth, the domestic biomass power price subsidy policy is gradually standardized, concrete and standardized

The on-grid price of biomass power generation is a decisive factor to determine the sustainable and healthy development of biomass industry. In the biomass direct combustion power generation cost, the fuel cost accounts for about 50%, and the construction cost accounts for about 35.5%. It can be seen that the fuel price and construction investment are the main factors affecting the on-grid electricity price. At present, biomass power generation is much higher than local thermal power generation, the main reason is that biomass power generation needs mainly agricultural and forestry waste and crop straw, on the one hand, China's agricultural and forestry resources have the characteristics of strong dispersion, low density, large collection and transportation difficulty, coupled with the general rise in labor costs, raw material collection costs are high; On the other hand, rural areas with biomass resources are gradually realizing the value of agro-forestry by-products such as straw.

At present, China's biomass power generation preferential and subsidy policies are relatively lacking, and biomass power plants also lack industry standards that can be followed. The construction cost of biomass power generation is generally close to twice that of thermal power plants, and can only refer to thermal power standards in terms of contract signing, unit energy consumption, emissions, cost, etc., which is difficult to reflect the particularity of biomass power generation, and cannot maintain the interests of biomass power generation enterprises, and enterprises are prone to losses, resulting in the development of biomass power generation industry is subject to inhibitory effects. On March 24, 2022, the National Development and Reform Commission, the National Energy Administration and the Ministry of Finance of the People's Republic of China jointly issued the "Notice on the Self-examination of renewable energy power generation Subsidies", known as "the strictest state subsidy verification in history". In November of the same year, the central Budget and final accounts open platform issued the "Notice of the Ministry of Finance on the local capital budget of 2023 renewable energy price Additional subsidies in advance", of which the biomass power generation subsidy was issued 28.9 million yuan. Strong subsidies even extended to 2023, 2023 biomass power generation subsidies 84.25 million compared with 2022, an increase of nearly 2 times. As the government continues to increase biomass power generation subsidies, different subsidy ratios are set according to different natural resource endowments in different regions. In addition, as the government continues to improve management methods, the degree of subsidy declaration is gradually simplified, and strict control is also implemented in the subsidy review process, providing a good financial guarantee for the development of biomass power generation industry. The biomass power generation industry will also usher in a "blowout" era.

Feed-in price and subsidy policy of biomass power generation in China

From the cost point of view, the fuel cost of biomass power generation accounts for the bulk, so unswervingly adhere to the "nearby biomass fuel resources" this economic price route is the thinking and focus of the relevant enterprises in price control.

Sixth, the biomass power generation industry will develop in the direction of cogeneration, "incineration +" industrial layout and wall sales

Cogeneration: At present, the agricultural and forestry biomass power generation industry still has problems such as a single profit model of pure power generation projects, electricity price subsidy arrears, and imperfect transformation support policies, and cogeneration has good economic and social benefits, is an efficient use of biomass energy, and is the main direction of the transformation and upgrading of biomass power generation projects. In addition, biomass cogeneration can adapt to local conditions, solve the heating problem of industrial parks, nearby urban and rural residents, and alleviate the heating pressure caused by insufficient coal supply. It can also significantly improve the overall efficiency of biomass energy applications and enhance the profitability of enterprises. The "14th Five-Year Plan" Bioeconomy Development Plan proposes to promote the development of bioenergy and bioenvironmental protection industries and actively develop bioenergy. We will develop biomass power generation in an orderly manner and promote the transformation and upgrading to cogeneration. If the agricultural and forestry biomass power generation industry can successfully transform cogeneration, it will effectively stimulate the vitality of the agricultural and forestry biomass power generation industry.

"Incineration +" industrial layout: Waste incineration is one of the important forms of biomass power generation. The construction of an industrial park with garbage disposal as the core and the integration of solid waste, hazardous waste, kitchen waste and other pollutants can realize the comprehensive utilization of resources on the one hand, such as: The use of biomass waste for power generation can also produce byproducts such as biochar and biogas, further improving economic efficiency and resource utilization. On the other hand, it can also hedge the loss of the national subsidy slope, and with the resource endowment and financial support of enterprise development, the business model of mining new energy, recycling and other emerging development tracks has become a new direction of enterprise layout.

Wall sale of electricity: Agricultural and forestry biomass power generation is the only type of power supply that needs to pay cash to buy fuel in all kinds of renewable energy power generation, facing the double squeeze of electricity price subsidy arrears and high fuel costs, enterprises are struggling to survive. The wall sale of electricity is the key to the market-oriented transformation of agricultural and forestry biomass power generation and to solve the urgent problems. On the one hand, wall sales can increase the cash flow of power generation enterprises and reduce the dependence on state electricity price subsidies; On the other hand, it can promote the nearby consumption of new energy, shorten the distance of power transmission, reduce transmission costs, and the consumption of green electricity can not occupy energy consumption indicators, but also speed up the green low-carbon transformation of enterprises, and reduce carbon emissions in the total.

Since 2017, the state began to deploy the "wall sale of electricity" work, but because the wall sale of electricity has impacted the original power grid business model, it is restricted by the grid side manufacturers, and the development progress is slow, until 2020, the first distributed power generation market trading pilot project was successfully put into operation. In August 2022, the Comprehensive Department of the National Energy Administration issued the "National Energy Administration 2022 to deepen the" management service "reform and optimize the business environment key task division Plan" proposed 13 specific measures, among which, in the "wall sale of electricity" pointed out that improve the market trading mechanism, support distributed power generation to participate in market transactions, and promote distributed power generation to participate in green power trading. This means that the participation of biomass power generation in the "wall sale of electricity" can be expected soon, and the industry will usher in new space for development.