Wood Pellet is the favorite fuel

 Wood Pellet (Wood Pellet, WP) is currently the favorite fuel (BB), especially in a country that has 4 seasons as a substitute fuel for coal (partially / completely) in coal-fired power plants, heating, biomass stoves, and drying in laundry services. Meanwhile, the marketing of taxpayers in the country is regulated on a one-package model with a stove or burner for household use (a substitute for LPG), food processing factories such as chicken, tofu, warm Jogja, restaurants / food stalls, tea / tobacco / tobacco drying stoves. corn / fish, fried food entrepreneur, etc.

The high demand for taxpayers in foreign countries is due to the fact that coal export destination countries (South Korea, Japan, China and India) are slowly shifting to good quality, environmentally friendly, and renewable taxpayers (as evidenced by the rapidly increasing demand for wood pellets in the international market). On the other hand, China has also gradually started banning the use of (low calorie) coal for its citizens (due to pollution and high sulfur emissions). Australia and the US are minimizing coal use. Indonesia is also slowly replacing the use of coal with wood pellets. (SNI 8021: 2014).

Reference coal price chart

source:https://www.minerba.esdm.go.id/harga_acuan

 

The increase in coal prices due to the 2016 tightening of production, caused the Indonesian Reference Coal Price (HBA) in the international market (November 2016) to begin to creep up to US $ 84.89 / ton previously, (October 2016) US $ 69.07 / ton, even breaking through USD100 / ton in December 2016, namely to US $ 101.69 / ton. In 2018, the HBA can be seen in the image (6322kcal / kg, FOB vessel). DN production in 2020 was around 485 million tons, fulfillment of DN (DMO, Domestic Market Obligation) 114 million tons, export quota of around 371 million tons.

On the other hand, around 50 companies partnered with PT PJB to build a mine mouth power plant (MT) (total 6GW) with sub-critical environmentally friendly technology on their boilers in order to reduce the number of exports (which in turn would raise prices) as well as accelerate the 35,000 electric power realization program. MW. Example: PLTU MT Jambi (2x300MW); Riau (2x300MW); South Sumatra 1, 6 (2x300MW, Tanjung Enim, 3 million tonnes of coal / year, 2026), 8 (2x260MW, Huadian Bukit Asam Power 45% + China Huadian 55%, Muara Enim, 5.4 million tonnes of coal / year); Kaselteng 3, 4, 5; Kaltim 3, 5 (200MW), 6, Muara Jawa; and United Tractors (2x15MW, Kalteng).

 One of the uses of coal is converting it into syngas (synthetic gas) through gasification technology (plasma gasification) to convert syngas into electricity, or other substances such as methanol, DME, ammonia, etc.

There are several reasons coal will be blown away by wood pellets:

•        Wood pellets are renewable (always present, and can replace coal in the future), and are environmentally friendly, while coal is non-renewable (exhausted) and less environmentally friendly. Therefore, the use of coal at the international level is gradually decreasing. So, there is an opportunity to increase the national electricity supply via BB wood pellets.

•        Wood pellet calories are equivalent to low coal calories.

•        Lower carbon production than coal.

•        The cost of electricity produced by coal-substituted wood pellets is the same as that produced by natural gas, which of course is cheaper than coal.

•        More staff required for the wood pellet power plant (including the preparation of wood pellet infrastructure) (increasing employment), namely around 3,480 people, while the coal power plant with the same power requires a staff of around 2,540 people.

•        The long-term demand for sustainable wood pellets motivates stakeholders to conserve and improve forest management, as well as develop critical land (ex-coal mines, gold, tin, nickel, etc.) into industrial forest plantations specifically for wood pellets (for example Kaliandra Merah wood (KM ), Mahang / Macaranga Gigantean, Karamunting / Melastoma Malabatricum)

•        Demand for wood pellets from all over the world continues to arrive in Indonesia. This should be used to increase people's income

•        Indonesia is actually capable of producing ~ 49.8 GW of biomass electricity (Indonesia only needs an additional 35 GW of national electricity). Indonesia's biomass potential is around 146.7 million tonnes / year from rice residue (150GJ / year), rubber wood (120 GJ / year), sugar residue (78 GJ / year), palm oil residue (67 GJ / year), and other organic waste (20GJ / yr).

As shown in the chart, future demand in the UK and EU is expected to plateau by 2021. However, major growth is expected in Japan2 and South Korea until 2024. From 2010 to 2025, the average annual increase in demand for industrial wood pellets is estimated at about 2.3 million metric tonnes per year.

 

This forecast, as noted above, is under current policy. Policies are likely to evolve as the impacts of climate change accelerate. FutureMetrics expects even the U.S. to have a policy for carbon emissions reduction by the mid-2020s. Using pellets as a coal substitute in utility- scale pulverized coal power stations has been proven to be a reliable and economical solution for lowering CO2 emissions

Although the countries that use WP are able to produce themselves, they are still not able to meet the needs of their WP DN (must be imported), because timber growth in sub-tropical countries is slower than in tropical countries.

World WP production is close to 28 million tonnes (2015, for heat 15 million, industry 13 million). Meanwhile, global WP marketing for electricity and heat generation continues to grow at around 14.1% per year. In 2020, the demand for taxpayers is estimated to soar to 80 million tons.

Since 2012, South Korea has targeted the use of Renewable Energy to be at least 2%, and in 2022 the use of biomass must enter 10%, of which 60% comes from WP. In February 2015, the South Korean market needed to supply more than 280,000 tons for household needs and the food & beverage industry. About 70.3% of South Korean WP are imported pellets (Indonesia only supplies> 6,2% to South Korea, to be precise about 8,940 tons from 122,447 tons in 2018, and the rest is imported from Russia, Thailand, Canada, Malaysia, and Vietnam).

At that time, Indonesia's CIF WP price was the cheapest (US $ 131 / ton, below Vietnam's US $ 144 / ton, and Malaysia's US $ 141 / ton). Imports from Indonesia were continued with the presence of the South Korean company Depian Co. Ltd. with state-owned company PT Inhutani III (developing 5000-8000Ha industrial plantations in Pelaihari, South Kalimantan via PT SL Agri to export WPs of up to 100,000 tons, 2015). In the future, several South Korean companies have explored the possibility to import WP from Australia, Vietnam, Indonesia, the Philippines, Malaysia, Thailand, Canada and the US. South Korea requires its PLTU to use WP.

South Korea itself imports WP at a price of around (109-135) Euro / ton (2015). At that time, Vietnam had exported around 63,8 % of WP to South Korea.

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