Switching to biomass co-firing in European coal power plants: Estimating the biomass and CO2 breakeven prices
Vincent Bertrand ()
Working Papers from Chaire Economie du climat
This paper investigates the cost of biomass co-firing in European coal power stations. We propose a tractable and original method, that enables us to get expressions of biomass and CO2 breakeven points for co-firing in different types of coal plants. We call them carbon switching price and biomass switching price. They correspond to carbon and biomass prices that make coal plants equally attractive under co-firing or classical conditions (i.e. when coal is the only input). The carbon switching price is the carbon price from which it becomes profitable to include biomass in coal plants (i.e. if the actual carbon price is higher than the carbon switching price, co-firing is profitable). The biomass switching price is the biomass price beyond which including biomass in coal plants is no longer profitable (i.e. if the actual biomass price is lower than the biomass switching price, co-firing is profitable). We also run some sensitivity analyses to investigate the effect of modifying quantity and quality of biomass entering in boilers of coal plants. Results show that the carbon switching price associated with using biomass in lignite plants is always cheaper than that of hard-coal, due to higher lignite price. Additionally, we find that the biomass switching price has higher values with lignite plants. This reflects the greater benefits associated with including biomass in lignite plants, due to greater coal cost savings with higher lignite price. Results also indicate that the carbon switching price increases, and the biomass switching price decreases, when the biomass quality decreases, due to greater losses in conversion efficiency. However, we observe no significant influence when varying the incorporation rate, reflecting the quantity of biomass in coal plants.
Keywords: Biomass; Electricity Production; Co-Firing; Switching Price; EU ETS (search for similar items in EconPapers)
Pages: 16 pages
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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... iomass-switching.pdf First version, 2013 (application/pdf)
Journal Article: Switching to biomass co-firing in European coal power plants: Estimating the biomass and CO2 breakeven prices (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cec:wpaper:1306
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