3 Nov 2016

Bioenergy sector concedes heat still left in coal industry

8:17 am on 3 November 2016

Bioenergy industry players have conceded that a revived coal industry will continue to provide energy for industry for years to come, especially in the South Island.

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Photo: 123RF

Their comments came at the Bioenergy Association of New Zealand's annual conference in Wellington, two days after a Bathurst Resources-led consortium bought out collapsed Solid Energy's main coal mines for $46 million.

Bioenergy consultant John Gifford said there were about 2000 heat plants across New Zealand - 400 of which still used coal - that produced heat for factories, schools, hospitals and other big institutions.

Four companies suppled wood chips for burning in boilers, mainly from radiata pine and Douglas fir.

Azwood Energy sales manager Brook Brewerton said his company's focus was on smaller-scale customers.

"We can displace coal in the under-300-megawatt boiler capacity," he said.

"Above that it might take some time and it may be that wood is not the answer to that - it might be some other kind of renewable energy, such as electricity."

The largest energy users, such as Fonterra, would continue to need coal for their large-scale boilers in the meantime, he said.

Scientists have long recognised the advantage of burning wood chips is that the carbon dioxide emitted during combustion is balanced out by carbon dioxide absorption while a tree is growing.

By contrast, coal is a net emitter, since its carbon dioxide was previously stored safely underground.

However, coal contains less moisture and so produces more heat relative to its size, so is cheaper to store.

The Bioenergy Association has argued that its dried wood products have comparable moisture levels to low-grade coal, such as the variety that is commonly produced in Southland.

Association executive officer Brian Cox said the wood industry was producing three-and-a-half megawatts more energy each year.

"Long term, we want to take over completely from coal - we are looking to 2030 and we have plans out to 2030," he said.

Energy Minister Simon Bridges said coal had plenty of life in it yet.

"Coal will still be required for a considerable amount of time."

There was considerable potential in biomass, though, he said.

"The concerns we hear are really about the security of supply and the ability to supply those woody chips for boilers not just for six months, not even for six years, but for the lifecycle of those boilers."