Friday, May 24, 2013

No. 81: Japan’s largest biomass generation plant scheduled for 2016 (May 25, 2013)

Business trend:
Sumitomo Forestry decided to participate in the biomass generation business and construct a biomass generation plant toward 2016 with an investment about 14 billion yen. The plant has a generation capacity of 50,000 kW, exceeding the currently largest plant that has a capacity of 33,000 kW. All generated electricity will be sold to Hokkaido Electric Power. The company reckons that about 200,000 tons of wood and thinned wood will be available annually for generation in the company-owned forest where the plant is to be constructed. The company expects sales of several billon yen per year. It has company-owned forests across the country with a combined area of 42,000 ha, and the area it owns is the fourth largest in Japan, following Oji Paper whose forests total more than 100,000 ha, Nippon Paper, and Mitsui and Co.

Fuel cost accounts for 60% in biomass generation. Procuring fuel at a low price is a critical factor for the success of biomass generation. Sumitomo Forestry plans to import sucked orange of palm oil from Indonesia and Malaysia when the plant is in short of fuel. At the same time, it plans to use coal for 25% of all fuel. Even if coal is used for 25%, the carbon dioxide emissions can be reduced by 75%, the company reckons. In Japan, photovoltaic generation has a capacity of about 6,700,000 kW, wind generation 2,500,000 kW, and biomass generation 2,100,000 kW. However, photovoltaic generation is increasing its share lately because its sells for 4 yen higher per hour than biomass generation. Actually, photovoltaic generation has a capacity of 1,330,000 kW out of 1,400,000 kW that started operation between April 2012 and January 2013. It has become necessary to develop the diversification of renewable energy because photovoltaic generation greatly depends on weather.

A biomass generation plant

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