What is Renewable Energy?

A lot of people get a bit confused, when they hear about renewable energy. The energy part most people understand, but what is really renewable? The term renewable energy comes as an alternative to finite energy sources also known as petroleum or mineral oil in its wider sense. In the time perspective of the human being the energy that we pump up or extract from the interior of our planet are finite and exhaustible and NOT considered renewable.

So what is renewable energy? If we turn to people already in the market as authorities on this subject in this case Kachan & Co, the inventor of the cleantech term they have recently published their revised definition of renewable energy. They consider renewable energy to consist of the following 11 technologies: 

- Wind

- Solar

- Renewable fuels (biofuels)

- Marine

- Biomass

- Geothermal

- Fuel Cells

- Waste-to-Energy

- Nuclear

- Emerging (osmotic power and kinetic power)

- Measurement and Analytics

In fact Kachan & Co seem to get a bit carried away, maybe because they come with a cleantech perspective. In my objective nuclear cannot be included as a renewable energy source. Nuclear can be argued to be relatively clean, but the source of energy is mined and finite and thus does not fit the definition. Fuel cells also seems a bit out of place. Kachan argues that fuel cells today are not just storage of energy, but also generation of heat and power. However, it seems that Fuel Cells is more a technology that is a special case of one or more of the previous categories. Measurement and Analytics, is also a category that we can safely take away. For some reason Kachan is not mentioning Hydro. I have marked with red the Kachan technologies that I cannot accept in my understanding of renewable energy.

If we cross check with Wikipedia they are a bit more conservative, as they are only listing six different sources of renewable energy: wind, solar, biofuels, biomass, geothermal and hydro. Our last authoritative source of definition is the International Energy Agency that use the same categories as Wikipedia but add a seventh the Marine.

I agree with all of the categories used by the International Energy Association. For the purpose of this blog I shall be using also the emerging as well as the waste-to-energy technologies in my definition. The emerging technologies seem still to be quite exotic, whereas the Waste-to-energy in my opinion is an important source of energy, which it would be wrong not to take into the energy mix.

So my list looks like this, and these will be the subjects that will be considered in more detail in this blog going forward:

- Wind

- Solar

- Renewable fuels (biofuels, liquid and gaseous)

- Marine

- Biomass

- Geothermal

- Hydro

- Waste-to-Energy

- Emerging (osmotic power and kinetic power)

Why Bother with Renewable Energy?

If you ask an economist if renewable energy is good? He will answer you that it depends on the cost of renewable energy and the alternatives. Ever since the first oil crisis in 1973 we have seen a surge in interest for renewable energy. At first it was mainly something that occupied the idealists but gradually as the production costs came down, technologies matured, politicians put in place policies to make renewable energy more competitive and conventional energy prices went up - it gradually dawned on the business people and other rational decision makers that money could be made working with renewable energy.

In Denmark the first large windmill was put up by the socialist school and sect, Tvind in the 1970'ies as an ideological project and a land mark. Later wind mills developed into a political show case with favourable rates for production and subsidies for erection of mills, from this the Denmark developed several global wind mill champions as Vestas, Bonus (bought by Siemens Wind Power in 2004) and NEG Micon (merged with Vestas in 2004), Nordex and Nordtank (merged 1997 with Micon). In 2008 wind mills accounted for 24% of electricity generation capacity in Denmark.

Politicians are interested in renewable energy for several reasons. The first reason and the thing that really chocked the western world during the first oil crisis is that conventional energy can be very expensive. When oil prices go up the price of energy goes up and expensive foreign currency has to be used to import oil and energy. At least this is the case for most countries. High oil prices lead to a negative trade balance and in the old days (1970-1980'ies) it would also lead to high inflation.

Secondly energy is a very strategic thing, as you can't run a modern society without energy in different forms. If you cannot trust our friends in OPEC or in Russia to actually deliver the goods when you need them, then you will have to develop an alternative, although importing energy might otherwise seem quite favourable from a strictly economic point of view.

Thirdly politicians have come to look more closely at what economists call externalities connected with conventional energy. The main externality with fossil fuel is the emission of carbon dioxide or green house gasses (GHG), which is under severe suspect of being the cause of global warming. Without going into the scientific debate, it is sufficient in this context to realise that the concern since the Kyoto agreement in 1997, where the first countries committed themselves to reduce GHG emissions it has become clear that the global climate is getting warmer - quite fast and consequences can be scary - as the recent report in National Geographic of melting of 97% of Greenland's ice in July 2012 showed.

So facing these aspects politicians have tried their best to devise incentive systems in order to promote alternatives to the imported conventional energy. In some cases politicians have become derailed by lobbyists, so they have mixed up things, which I'm sure we will revisit in a later post.

In the current state of world economic crisis many countries have decided to down play their economic support for renewable energies. Understandably governments think they cannot afford the luxury to pay for nice green window dressing when greater and more urgent issues are at the stake.

New Blog Name - New Scope

Today this blog has changed the scope. From being quite company centric the blog has now widened the scope and is now focusing on exploring the wider world of renewable energy. There are several reasons for this.
Firstly the development of my company website has improved so this site now covers to a large degree the subjects that were previously an important part of this blog when it was named the modern by-product blog.
Secondly from a professional point of view I have realised that in order to understand the renewable energy world it is necessary to look at many different technologies, as so far no one winner has materialised.
Thirdly I have not been able so far to find one place which takes a broader look at the whole renewable energy area.

I have made a small survey of other blogs with a similar name to the Renewable Energy Blog and it seems that most of these are currently dormant, so I guess there is a vacant slot here. Part of the purpose of this blog will be to consolidate much of the available information in the area. As we go along I expect the blog to be more clearly defined, as I get to grips with the area. so consider this a work in progress.

My approach will be that of the environmentally conscious economist. I am educated a M.Sc. in forestry as well as a executive MBA, together with my day job as a sales director in recycling and bio fuel company I have a good background for understanding the technical background as well as the need for the numbers to add up in order to different technologies to be competitive.

My starting point for this blog was the biodiesel industry and the bio heating oil industry. This will continue to be my home turf. But new areas of the renewable energy world will now also be included. The aim will be to provide a better overview of the many different technologies that are today relevant in the industry and the many that are still under development and may be relevant in the future.

I welcome your comments and input. I also welcome any potential media partner, who can help bring a larger audience to this blog.

King of Biofuel?

Ever heard about Chemrec? I had heard about them but never really realised what they were doing until today. Today I visited the stand of Chemrec at the World Bioenergy 2012. The exhibition was a bit slow on the afternoon of the last day, and maybe this was the reason that nobody was around at the Chemrec stand to answer all of my questions.

Basically Chemrec is using Haldor Topsøe technology in converting black liquor to BioDME and Biomethanol in the far north of Sweden. I took this illustration from their brochure. It looks nice, I'm going to see if the graphics are more than just good marketing. How much black liquor do you actually get from one hectare?

Some of the questions that I would have liked to ask are: how much black liquor is there actually around? Do you need any modifications to trucks and infrastructure in order to run on DME?

The New Reality

Sometimes when you think you have it all figured out you get surprised. The way that the market behaves in the by-product oil industry continues to come up with new surprises. Currently close to record level Brent oil prices as well as PFAD prices makes it difficult for some to understand why prices of low quality bio oils have fallen 25-30% since the autumn.

In my optics there are two main reason for this unusual situation:

1. The relatively short and mild winter in Europe in 2011-12 resulted in much lower consumption of bio oil for heating than usual. Many contracted volumes were not consumed and are still in stock. With full stocks, demand is currently low and prices low as well.

2. The latest dioxine scandal in animal feed oils in early 2011 (the Harles and Jentzsch scandal) caused a lot of animal feed oil buyers to tighten their requirements for supplier documentation and analyses. A new EU feed regulation will step into force in August 2012 and will make it more expensive and in many cases very difficult to use lower quality oils for animal feed. This has already lead to more of this oil being used to technical applications.

Market changes and changes in legislation have changed the dynamics in the market forcing the oils to flow in new directions. With very high price levels of PFAD companies in the biodiesel and oleochemical industry that can take in the acid oils are benefiting from this. Ability to take high FFA material is all the rage in the biodiesel industry these days.

Combined with the new requirements for certification according to the Renewable Energy Directive (RED) changes are plenty and the need for people and companies that are competent in understanding and navigating in the constantly changing landscape is increasing.

Red Herring Europe 100 finalist

Wow - next week we will be going to the Red Herring Europe 100 Final in Amsterdam, where we are going to present our company MBP Group to a large group enthusiastic entrepreneurs and investors. We are very proud to be invited for this event, even more so as this event typically has a majority of IT and Web centered companies. We are looking forward to the event - I'm convinced we will meet a lot of interesting people and learn a lot.

Neste Oil goes online with 2.000.000 t per year capacity

Neste Oil from Finland has for some years operated a biodiesel plant in Finland employing a unique technology NExBTL. The technology is unlike the normal FAME transesterification and seems to be quite smart. Neste opened in March their new plant in Singapore of 800.000 t/a capacity and a similar plant in Rotterdam is to follow mid 2011. this is on to of the existing almost 400.000 t/a year capacity in Finland.  According to Neste the two new plants are to run on a mix of palm oil, tallow and rape oil. But think about the scale of these plants...

2 M t/a of palm oil and tallow, how much is that? annual production of palm oil from Malaysia and Indonesia, the worlds largest producers by far is around 45 M t/a and world production of tallow is appr. 8 M t/y, so Neste will be taking care of a significant chunk of world production. Remember that palm is also an important source of  food, feed and feedstock for the oleochemical industry (soap and technical applications) and also tallow is an important feedstock for the oleochemical industry. In my opinion Neste is on the wrong track. They are going to significantly affect the world balance of oil raw material, and good feedstock should not be used for biodiesel, when it can be used for and is displacing other more vital and necessary applications. This is clearly not sustainable.. no wonder Neste is busy claiming how sustainable they will be in the future: http://www.nesteoil.com/default.asp?path=1,41,540,2384,7906,16306 But as we know Jatropha oil is nothing but a future mirage so far, and microbial and algae oil is also still hopes at best. So for the foreseeable future I assume they will stick to palm and tallow. It will be interesting to see if they are able to consolidate these volumes and how this will affect world prices.

Greenpeace have their own way of communicating about the same theme: