Ross Hampton
Foresters say wood waste should earn renewable energy credits to help plug a huge gap in the Renewable Energy Target. But the industry says the law needs to be changed to allow credits under the Renewable Energy Target (RET) scheme for direct heat generation from wood waste. Source: Australian Financial Review
Only a fraction of the 5 gigawatts of new renewable capacity required to meet Australia’s Renewable Energy Target by 2020 is under construction as lenders shy away from financing new wind and large-scale solar farms in a surplus electricity market.
However, a report by consultancy Energetics says direct heat generation from wood waste and other “biomass” products plays a big role in Europe and could help plug the looming RET gap in Australia.
“There is a massive opportunity for us to increase the amount of renewable energy in the national energy mix and at the same time support the move by individual pulp and paper and saw mills away from traditional carbon intensive energy sources to cleaner, greener energy,” said Ross Hampton, chief executive of the Australian Forest Products Association.
The report says Europe produces a massive 1046 terawatt hours of energy for heating in Europe. Bioheat is eligible for carbon credits and other support measures in several European countries and combined with bioelectricity turned over €33 billion ($50 billion) in 2012 and employed 375,000.
By contrast Australia’s bioenergy sector generates just 2.4 terawatt hours of energy and heat and employs just 2500 people, the report, commissioned by Forest & Wood Products Australia, says.
Australia produces just 0.9% of its electricity from biomass, compared with 2.4% for all rich nations.
The Clean Energy Finance Corporation estimates bioenergy and waste energy is a $3.5 billion to $5 billion opportunity out to 2020.
Energetics says inclusion of direct heat from biomass would be consistent with RET goals of encouraging more renewable electricity and reducing emissions of greenhouse gases.
Sawmills and pulp mills produce large volumes of wood waste which can be used to produce electricity or heat, the carbon dioxide from which is absorbed then the forest grows again.
“A policy gap is identified with no adequate measures to support heat generation from biomass in Australia,” the report says.
It says renewable energy certificates – RET credits – from heat and electricity generation should be interchangeable. Britain, Sweden, Norway, Finland, France, Italy and the north-eastern US states of Connecticut, Maine, New Hampshire and Massachusetts all allow direct heat generation from biomass to earn carbon credits.
Australian needs to produce an additional 15 terawatt hours of electricity annually by 2020 to meet the 33 terawatt hours RET, which would requite an additional 5 gigawatts of renewable energy capacity at a cost of about $12 billion.
But projects planned to be in service by 2020 would only create about 2.5 gigawatts of capacity, according to the Australian Energy Market operator, leaving a huge shortfall.
“A significant acceleration in the construction of renewable energy projects is required if the 2020 RET is to be met,” the report says.
