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Biomass for electricity in the EU-27: Potential demand, CO2 abatements and breakeven prices for co-firing

Vincent Bertrand (), Benjamin Dequiedt and Elodie Le Cadre

Energy Policy, 2014, vol. 73, issue C, 631-644

Abstract: This paper analyses the potential of biomass-based electricity in the EU-27 countries, and interactions with climate policy and the EU ETS. We estimate the potential biomass demand from the existing power plants, and we match our estimates with the potential biomass supply in Europe. Furthermore, we compute the CO2 abatement associated with the co-firing opportunities in European coal plants. We find that the biomass demand from the power sector may be very high compared with potential supply. We also identify that co-firing can produce high volumes of CO2 abatements, which may be two times larger than that of the coal-to-gas fuel switching. We also compute biomass and CO2 breakeven prices for co-firing. Results indicate that biomass-based electricity remains profitable with high biomass prices, when the carbon price is high: a Euros 16–24 (25–35, respectively) biomass price (per MWhprim) for a Euros 20 (50, respectively) carbon price. Hence, the carbon price appears as an important driver, which can make profitable a high share of the potential biomass demand from the power sector, even with high biomass prices. This aims to gain insights on how biomass market may be impacted by the EU ETS and others climate policies.

Keywords: Biomass; Electricity; EU ETS (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.enpol.2014.06.007

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