Measuring the Environmental Impact of Wood Pellet Electricity: A case study of Enviva
Executive Summary
As electric utilities increasingly move away from fossil fuels to meet international emission reduction commitments, all sources of renewable energy resources have experienced considerable growth. While solar photovoltaics and wind turbines are often the first technologies that come to mind, it is bioenergy that the International Energy Agency predicts will contribute the most renewable production over the next five years and account for more than 30% of growth. Specifically, wood pellet-based biomass is expected to grow by 9.2% CAGR up until 2025, reaching a 15.47 billion USD market. This growth is driven in large part by the attractive alternative of converting coal electricity generation facilities to use wood pellets. Converting an existing coal power plant is cheaper than building new power plants, provides continuous power to support grid reliability, and avoids the siting issues that can plague distributed renewable energy projects. At the same time, research publications and popular press articles have questioned the greenhouse gas benefits of wood-powered bioelectricity relative to coal. Biomass electricity production can be controversial, with environmental outcomes highly dependent on forest management and wood sourcing practices. The resulting confusion may confound policymakers who seek to develop sound, acceptable, and effective energy strategies that lower greenhouse gas emissions.
This report attempts to clarify the increasingly important role that sustainably produced wood pellets play in advancing urgent decarbonization efforts. Enviva is the world’s largest producer of wood pellets, offering electric utilities a fuel to replace coal, and enabling them to generate power without interruption while reducing their greenhouse gas emissions. Enviva engaged Boundless Impact Investing (Boundless) to conduct an objective third party environmental assessment of electricity production in the UK using wood pellet-based biomass. Boundless measured the impact using Life Cycle Assessment (LCA) practices. The goals of this research were to:
Substantiate the requirements needed to deem practices “sustainable”;
Quantify the carbon intensity, and other environmental impacts, for wood pellet electricity relative to alternative generation technologies; and
Evaluate the market impacts when wood pellet electricity is deployed at power plants, thereby reducing the grid’s reliance on fossil fuels.
To meet the first objective, this report includes a nuanced discussion around the practices that contribute to sustainable forest management and includes efforts to ensure sustainable practices are achieved and perpetuated for the Southeast U.S. fuels and European power markets. Undoubtedly, the environmental impact of biomass production depends upon case-specific practices, and this study concludes that poorly conceived systems could negatively impact ecosystems and climate objectives. In contrast, well-designed supply chains can not only deliver beneficial reductions in emissions, but also contribute to sustaining forest ecological functions through careful forest management.
Our study found that on one hand, Enviva (which does not own forest) is fully certified by the Sustainable Biomass Program (SBP) – a woody feedstock supply chain certification program, but only 23% of the wood Enviva sourced for pellet production was produced on forests that were certified to the more rigorous SFI, FSC, or ATFS certification schemes in 2018. These latter programs certify actual forest acres to rigorous on-the-ground certification standards, and between 8 and 25% of the forest land in the states where Enviva operates is certified overall. Forest volumes in the Southeastern U.S. have grown steadily while environmental quality has been managed and monitored as a result of increasingly efficient regulations, land management practices, and third-party certification processes.
Our research further considered the controversy surrounding “carbon neutrality”. In this case study, wood pellet-based fuel is comprised of biogenic carbon derived from working forests that continuously recycle carbon from the atmosphere to trees then back to the atmosphere. By contrast, traditional fossil fuels are essentially a one-way trip from geologic storage of carbon to the atmosphere. Findings indicated that wood pellet electricity provides GHG emission benefits relative to coal electricity under the conditions examined. For these reasons, Boundless asserts that only by examining specific case studies can the environmental impact of wood pellet-based electricity be reliably understood.
To meet the second objective, a case study of wood pellet production using feedstock from the Southeast U.S. to supply power plants in the U.K was performed. This research demonstrated that well-designed wood pellet-based biomass electricity systems can yield far lower GHG emissions than traditional natural gas and coal-powered electricity. Carbon intensity and other environmental metrics were developed in order to compare U.K. wood pellet electricity against power generation sources such as coal, natural gas, solar photovoltaic, and wind. Wood pellet-based biomass life cycle GHG emissions were higher than for wind and solar, however, each was far below the emission rates for coal and natural gas. A 1:1 replacement of coal electricity was estimated to yield an 87% emission reduction using wood pellets, a 92% reduction using solar electricity, and a 97% reduction using wind turbine generation.
Finally, the market impacts when wood pellet electricity is deployed at power plants were evaluated, reducing the grid’s overall reliance on fossil fuels and their associated GHG emissions. Power sector modeling for three regions was conducted, with expanding use of wood pellet fuel for the U.K., Germany, and Japan. Scenarios were modeled with variable contributions from wood pellet electricity, within the context of each country’s efforts to expand renewable and nuclear contributions commensurate with their emission goals. In each case it was found that wood pellets significantly contributed to steep GHG reductions, as part of diverse generation portfolios that also expanded other renewable and nuclear supply. The nature of large complex power grids makes all of the above approaches to GHG mitigation compelling, by taking advantage of the unique attributes of each low carbon technology. For example, biomass generation can dynamically respond to balance the variable power supply from other intermittent renewable resources, thereby helping system operators prevent power disruption. While natural gas power often has excellent load balancing capabilities, its associated GHG intensity is significant. In summary, when sustainably designed wood biofuel supply chains yield low carbon intensity, wood pellet electricity holds exceptionally strategic value for decarbonization efforts in the countries evaluated. But wood biofuel should not be presumed GHG neutral in a holistic life-cycle sense without case-specific determinations to consider all inputs, sources, and sinks including land-use change issues, which are discussed in some detail below.