Biomass may ensure 13 percent of power generation in the country

Projections show that in 2020 power generation by biomass may reach 20.1 GW of installed capacity, but this increase is depending on the definition of long-term policies for the area

In December 2013, the National Agency of Electric Power (Aneel) carried out in São Paulo (SP) the Auction of Energy A-5 for electric power contracting of new hydroelectric, wind, solar and thermal (coal, biomass or natural gas in combined cycle) power plants, for supply to be started in May 1st, 2018. In the auction, 3.5 thousand MW were contracted from 119 new plants at an average price of R$ 109.93 per megawatt-hour.

Wind energy had most winners (97), followed by small power plants (PCHs), with 16 winners. Biomass was placed in the last position, with five winners. The average sale price was of R$ 109.93/MWh – a reduction of 8.67 percent in the initial average top price. Resources to be invested in the construction of plants located in the states of Bahia, Ceará, Pernambuco, Pauí, Rio Grande do Norte, Rio Grande do Sul, Santa Catarina, Goiás, Minas Gerais, Mato Grosso do Sul, Mato Grosso, Pará and São Paulo will reach R$ 12.8 billion.

“The auction attended completely the demand presented by the distributors, which will sign buying contracts with the plant owners. These contracts will be effective for 20 years (for wind energy), 25 years (for thermal and biomass) or 30 years (for São Manoel and small plants)”, as informed by the Energy Research Company (EPE).

In a collective conference carried out after the auction, the president of EPE, Mauricio Tolmasquim, considered the auction successful in several aspects, such as the diversified and exclusive contracting of renewable sources and the return of PCHs to the portfolio of new generation projects.

Biomass has ways to grow

Based on the results of the auction carried out in December, the expectation is that sugar cane plants—which produce power burning sugar cane bagasse (biomass)—will invest R$ 1.4 billion to ensure their production until 2018, according to calculations carried out by the Union of Sugar Cane Industry (Unica). Adding the total volume sold in the auction of December with that sold in last August, we have a total of about 203 average MW of bioelecricity. With the billionaire investment foreseen, the expectation is that—starting from 2018—the annual income of the area will get R$ 243 billion during the 25 years of contract.

Still according to Unica, biomass represented only 4 percent of the energy contracted in 2013. The entity—that represents producers of the Center-South region of the country—estimates that the production is far below from the potential of the industry. An increase in this participation depends on improvement of the auction model and on a long-term policy for renewable sources of energy.

Currently, biomass is one of the great alternatives to produce clean and renewable energy. Only the sugar cane bagasse has potential to generate more than 1.5 million kilowatts per year. Figures show a higher potential if we consider that—from the 440 sugar cane plants operating in Brazil—only 100 are producing power for the national electric system. According to the Instituto Acende Brasil, sugar cane plantations existing in Brazil could generate approximately 14 million kilowatts per year.

Besides sugar cane, solid residues also have great potential through energy obtained from biogas. It is foreseen that the technologies of biomass gasification will become competitive in the next years, according to the National Plan of Energy for 2030, developed by the National Council of Energy Policy. This plan establishes the start of biomass gasification systems in the sugar-ethanol industry, what will generate 5 percent of the energy available in the country. For 2030, the forecast is of an increase of 13 percent in this participation.

In the case of wood biomass, studies show that this source produces currently 8.7 percent of the world energetic matrix and 13.9 percent of the Brazilian matrix. The supply of forest biomass comes from residues (forestry, industrial or urban) or by plantation of forests for power generation purposes. Forest and industrial residues are the best short-term opportunity and the supply coming from energetic plantations is still low but has a huge potential for long-term development, especially in Brazil.

Unica points errors in power auction

The first power auction of the year—coming from new generation projects called A-3—will be carried out in June 6. But according to Unica, this auction will repeat a structure that does not produce good results, especially for the bioelectricity generated from sugar cane. The entity points that this new auction will allow the participation of generation projects using water, wind, biomass and natural gas at the same time.

Unica remembers that in the A-3 auction carried out in November, 2013, bioelectricity and natural gas were not able to sell their energy. Only wind power was succeeded, selling 380 average MW that were coming from 39 generation areas. Bioelectricity recorded 15 projects and natural gas recorded other two projects but the direct competition with wind power generators—taking not into account the particular aspects of each source—resulted in the contracting of only one source: wind.

For the bioelectricity manager of the entity, Zilmar de Souza, this format—that mixes non-comparable sources of energy—has to be reviewed. “Bioelectricity has particularities that demand at least the presence of one thermal product in the auction, as occurred in the A-5 auctions carried out in 2013 when bioelectricity competed with coal and natural gas. It is fundamental that a policy turned to bioelectricity would be carried out, with auctions by source or region. The presence of a thermal product was an advance but it is necessary to maintain this path of improvement,” pointed him.