IN BURGOS, TAMPERE, POMURJE, CENTRAL HUNGARY ... · Burgos This study is confined to the province...

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Study of Detection of Business Opportunities for Entrepreneurs and SMEs in Biomass Sector 1 (88) DETECTION OF BUSINESS OPPORTUNITIES FOR ENTREPRENEURS AND SMES IN BIOMASS SECTOR IN BURGOS, TAMPERE, POMURJE, CENTRAL HUNGARY, NORDTHUERINGEN AND BRANDENBURG REGIONS

Transcript of IN BURGOS, TAMPERE, POMURJE, CENTRAL HUNGARY ... · Burgos This study is confined to the province...

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DETECTION OF BUSINESS OPPORTUNITIES FOR ENTREPRENEURS AND SMES IN BIOMASS SECTOR

IN BURGOS, TAMPERE, POMURJE, CENTRAL HUNGARY, NORDTHUERINGEN AND BRANDENBURG REGIONS

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CONTENTS 1 INTRODUCTION …....……………………………………………………………………………………... 6 1.1 BACKGROUND ...……………………..……………………………………………………………… 6 1.2 INTRODUCTIONS OF THE REGIONS …………………….………..……………….……………..…… 6 2 DESCRIPTION OF MARKET GAPS …………...……………………………………..………………….. 11

2.1 MARKET GAPS IN BURGOS ……………….………………………………………………………. 11 2.1.1 BIOMASS RESOURCES …………………….………………………………………………………. 11 2.1.2 CONVERSION TECHNOLOGIES ……………………….……………………………………………. 11 2.1.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS .…….….. 11 2.1.4 NETWORKS …….……………………………………………………………………………..….… 12 2.1.5 SUMMARY ……..………………………………………………………………………………..…. 12 2.2 MARKET GAPS IN TAMPERE REGION …………………………………………………………….. 12 2.2.1 BIOMASS RESOURCES …………………………………………………………………………….. 12 2.2.2 CONVERSION TECHNOLOGIES …………………………………………………………………….. 13 2.2.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS …….…… 17 2.2.4 NETWORKS ………………………………………………………………………………………… 18 2.2.5 SUMMARY ………………………………………………………………………………………….. 18 2.3 MARKET GAPS IN POMURJE REGION ……………………………………………………………... 19 2.3.1 BIOMASS RESOURCES …………………………………………………………………………….. 19 2.3.2 CONVERSION TECHNOLOGIES …………………………………………………………………….. 22 2.3.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS …....…… 24 2.3.4 NETWORKS ………………………………………………………………………………………... 25 2.3.5 SUMMARY …………………………………………………………………………………….……. 26 2.4 MARKET GAPS IN CENTRAL HUNGARY …………………………………………………………… 26 2.4.1 BIOMASS RESOURCES …………………………………………………………………………….. 26 2.4.2 CONVERSION TECHNOLOGIES …………………………………………………………………….. 28 2.4.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS ………… 30 2.4.4 NETWORKS ………………………………………………………………………………………… 32 2.4.5 SUMMARY ………………………………………………………………………………………….. 32 2.5 MARKET GAPS IN NORDTHUERINGEN …………………………………………………………….. 32 2.5.1 BIOMASS RESOURCES …………………………………………………………………………….. 34 2.5.2 CONVERSION TECHNOLOGIES …………………………………………………………………….. 37 2.5.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS ………… 38 2.5.4 NETWORKS ………………………………………………………………………………………… 40 2.5.5 SUMMARY ………………………………………………………………………………………….. 41 2.6 MARKET GAPS IN BRANDENBURG ………………………………………………………………... 41 2.6.1 BIOMASS RESOURCES …………………………………………………………………………….. 41 2.6.2 CONVERSION TECHNOLOGIES …………………………………………………………………….. 42 2.6.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS ………… 43 2.6.4 NETWORKS ………………………………………………………………………………………… 45 2.6.5 SUMMARY …………………………………………………………………………………………. 45

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3 ANALYSIS OF THE FEASIBILITY OF OPPORTUNITIES …..…………………………………………… 45 3.1 FEASIBILITY OF OPPORTUNITIES IN BURGOS …………………………………………………….. 45 3.1.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 45 3.1.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 46 3.1.3 COSTS ................................................................................................................................ 46 3.1.4 RESEARCH AND DEVELOPMENT ............................................................................................. 47 3.1.5 INFRASTRUCTURE AND LOGISTICS .......................................................................................... 47 3.1.6 SUMMARY ............................................................................................................................ 47 3.2 FEASIBILITY OF OPPORTUNITIES IN TAMPERE REGION …………………………………………... 47 3.2.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 47 3.2.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 48 3.2.3 COSTS, EFFICIENCY, BARRIERS TO DEVELOPMENT ................................................................ 48 3.2.4 EFFICIENCY ......................................................................................................................... 48 3.2.5 RESEARCH AND DEVELOPMENT ............................................................................................. 49 3.2.6 INFRASTRUCTURE ................................................................................................................. 49 3.2.7 BARRIERS AND DEVELOPMENT .............................................................................................. 50 3.2.8 LOGISTICS ............................................................................................................................ 50 3.2.9 SUMMARY ............................................................................................................................ 50 3.3 FEASIBILITY OF OPPORTUNITIES IN POMURJE REGION ………………………………………….. 51 3.3.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 51 3.3.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 51 3.3.3 COSTS ................................................................................................................................ 52 3.3.4 EFFICIENCY ......................................................................................................................... 52 3.3.5 RESEARCH AND DEVELOPMENT ............................................................................................. 52 3.3.6 INFRASTRUCTURE ................................................................................................................. 52 3.3.7 BARRIERS AND DEVELOPMENT .............................................................................................. 53 3.3.8 LOGISTICS ........................................................................................................................... 53 3.3.9 SUMMARY ............................................................................................................................ 53 3.4 FEASIBILITY OF OPPORTUNITIES IN CENTRAL HUNGARY ………………………………………… 53 3.4.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 53 3.4.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 54 3.4.3 COSTS ................................................................................................................................ 54 3.4.4 EFFICIENCY ......................................................................................................................... 59 3.4.5 RESEARCH AND DEVELOPMENT ............................................................................................. 59 3.4.6 INFRASTRUCTURE ................................................................................................................. 59 3.4.7 BARRIERS AND DEVELOPMENT .............................................................................................. 60 3.4.8 LOGISTICS ............................................................................................................................ 60 3.4.9 SUMMARY ............................................................................................................................ 60 3.5 FEASIBILITY OF OPPORTUNITIES IN NORDTHUERINGEN ………………………………………….. 60 3.5.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 60 3.5.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 61 3.5.3 COSTS ................................................................................................................................. 61 3.5.4 EFFICIENCY .......................................................................................................................... 65 3.5.5 RESEARCH AND DEVELOPMENT ............................................................................................. 65 3.5.6 INFRASTRUCTURE ................................................................................................................. 65 3.5.7 BARRIERS AND DEVELOPMENT .............................................................................................. 66

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3.5.8 LOGISTICS ........................................................................................................................... 67 3.5.9 SUMMARY ............................................................................................................................ 67 3.6 FEASIBILITY OF OPPORTUNITIES IN BRANDENBURG ……………………………………………… 67 3.6.1 REGIONAL USAGE AND DEVELOPMENT ................................................................................... 67 3.6.2 TECHNOLOGIES AND TRANSFORMATION ................................................................................. 68 3.6.3 COSTS ................................................................................................................................. 68 3.6.4 EFFICIENCY .......................................................................................................................... 69 3.6.5 RESEARCH AND DEVELOPMENT ............................................................................................. 69 3.6.6 INFRASTRUCTURE ................................................................................................................. 71 3.6.7 BARRIERS AND DEVELOPMENT .............................................................................................. 71 3.6.8 LOGISTICS ........................................................................................................................... 72 3.6.9 SUMMARY ............................................................................................................................ 72

4 SELECTION OF MARKET OPPORTUNITIES ……………………….………………………..……….. 72

4.1 MARKET OPPORTUNITIES IN BURGOS ……………………………………………………………. 72 4.1.1 CULTIVATION AND PROCESSING ………………………………………………………………….. 72 4.1.2 EXPLOITATION ………………………………………………….………………………………….. 72 4.1.3 LOGISTICS …………………………………………………………………………………………. 73 4.1.4 CONSULTING/PLANNING …………………………………………………………………………… 73 4.1.5 TRAINING/COACHING ……………………………………………………………………………… 73 4.1.6 OTHERS ……………………………………………………………………………………………. 73 4.1.7 SUMMARY ………………………………………………………………………………………….. 73 4.2 MARKET OPPORTUNITIES IN TAMPERE REGION ………………………………………………….. 73 4.2.1 CULTIVATION AND PROCESSING …………………………………………………………………... 73 4.2.2 EXPLOITATION ………………………………………………………………………………………73 4.2.3 LOGISTICS …………………………………………………………………………………………. 74 4.2.4 CONSULTING/PLANNING …………………………………………………………………………… 74 4.2.5 TRAINING/COACHING ……………………………………………………………………………… 74 4.2.6 OTHERS ……………………………………………………………………………………………. 74 4.2.7 SUMMARY ………………………………………………………………………………………….. 74 4.3 MARKET OPPORTUNITIES IN POMURJE REGION ………………………………………………….. 75 4.3.1 CULTIVATION AND PROCESSING …………………………………………………………………... 75 4.3.2 EXPLOITATION …………………………………………………………………………………….. 75 4.3.3 LOGISTICS …………………………………………………………………………………………. 75 4.3.4 CONSULTING/PLANNING …………………………………………………………………………… 75 4.3.5 TRAINING/COACHING ……………………………………………………………………………… 76 4.3.6 OTHERS ……………………………………………………………………………………………. 76 4.3.7 SUMMARY ………………………………………………………………………………………….. 76 4.4 MARKET OPPORTUNITIES IN CENTRAL HUNGARY ……………………………………………….. 77 4.4.1 CULTIVATION AND PROCESSING ………………………………………………………………….. 77 4.4.2 EXPLOITATION …………………………………………………………….……………………….. 77 4.4.3 LOGISTICS …………………………………………………………………………………………. 77 4.4.4 CONSULTING/PLANNING …………………………………………………………………………… 77 4.4.5 TRAINING/COACHING ……………………………………………………………………………… 77 4.4.6 OTHERS ……………………………………………………………………………………………. 78 4.4.7 SUMMARY ………………………………………………………………………………………….. 78

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4.5 MARKET OPPORTUNITIES IN NORDTHUERINGEN …………………………………………………. 79 4.5.1 CULTIVATION AND PROCESSING ………………………………………………….……………….. 79 4.5.2 EXPLOITATION …………………………………………………………………….……………….. 79 4.5.3 LOGISTICS …………………………………………………………………………………………. 79 4.5.4 CONSULTING/PLANNING …………………………………………………………………………… 79 4.5.5 TRAINING/COACHING ……………………………………………………………………………… 79 4.5.6 OTHERS ……………………………………………………………………………………………. 79 4.5.7 SUMMARY ………………………………………………………………………………………….. 79 4.6 MARKET OPPORTUNITIES IN BRANDENBURG …………………………………………………….. 80 4.6.1 CULTIVATION AND PROCESSING …………………………………………………………………... 80 4.6.2 EXPLOITATION ……………………………………………………………………………………... 80 4.6.3 LOGISTICS …………………………………………………………………………………………. 81 4.6.4 CONSULTING/PLANNING …………………………………………………………………………… 81 4.6.5 TRAINING/COACHING ……………………………………………………………………………… 82 4.6.6 OTHERS ……………………………………………………………………………………………. 83 4.6.7 SUMMARY ………………………………………………………………………………………….. 83

5 BIBLIOGRAPHY …………………………………………………..……………………….………………. 84 5.1 BIBLIOGRAPHY IN BURGOS ………………………………………………….……………………. 84 5.2 BIBLIOGRAPHY IN TAMPERE REGION …………………………………….……………………….. 84 5.3 BIBLIOGRAPHY IN POMURJE REGION …………………………………………………………….. 85 5.4 BIBLIOGRAPHY IN CENTRAL HUNGERY …………………………………………………………… 86 5.5 BIBLIOGRAPHY IN NORDTHUERINGEN …………………………………………………………….. 86 5.6 BIBLIOGRAPHY IN BRANDENBURG ………………………………………………………………... 87

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1 INTRODUCTION 1.1 BACKGROUND Purpose of the report is to provide opportunities for SMEs in biomass related business, the market gaps, feasibility of the regional opportunities and the market opportunities. The objectives are an analysis of the information gathered in order to detect market and technology gaps, an analysis of the feasibility of the business opportunities selected according to market and cost criteria, a definition of new opportunities for start-up SMEs and new activities for development of existing companies. Field work, workshops and dialogue between partners and members of EBN-BIC network and others were used to detect opportunities for SMEs in the partner regions. Interviews of key actors of the sector were executed in order to find out the barriers for full development of the biomass sector. Interviews offered information about market gaps of the biomass sector in the partner regions. The feasibility and the market opportunities related to the biomass sector were analyzed based on the results of the partner regions research. Previous analysis of the deliverables D6 "Report on trends in biomass related enterprises” and D7 "Report on best practices" from other regions in order to get some ideas that could be implemented in our own regions The most relevant detected business opportunities of the five involved partner regions Burgos (Spain), Tampere region (Finland), Pomurje region (Slovenia), Central Hungary, Nordthueringen (Germany) and Brandenburg (Germany) are summarized in this study. 1.2 INTRODUCTION OF THE REGIONS Burgos

This study is confined to the province of Burgos in the region of Castilla y Leon, Spain. The objective of the study is to detect and define most relevant business opportunities for entrepreneurs and SMEs in biomass sector, all along its value chain, in Burgos. Both primary and secondary sources have been used and include: - Primary sources: Key companies of the sector have been selected in the area under analysis

and their respective representatives have been interviewed. The following interviews were conducted:

. FRICATEC s.c: Installation of boilers. . COMACAL: Installation and maintenance of boilers. . APEX: Turnkey installer and engineering support (Boilers, regulations…). . Instalaciones Campo: Commercialization and distribution of pellets boilers, including maintenance and

feeding. . Maderas El Enebral: Commercialization and distribution of wood pellets and chips from recycling. . INGEA: Engineering and Renewable Energy (Biomass) projects design. . Interbon: Wood wastes and chips, bark and sanding wastes for thermal and electric use. . Molygrasa: Pellets made from straw for thermal and animal food industry. . Nicolas Correa Services: Biomass small power installations ( 120 electric Kw). . RIBSA: Production of pellets made from pine sawdust (DIN Plus pellets for domestic use). . Tecnicas Reunidas de Automocion: Fabrication of low power (≤ 15 Kw) biomass boilers.

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. Soliclima: Installers and technical support of GUNTAMATIC (Austrian boilers and equipments) and other Austrian trade brands.

. Triturados Montero: Biomass chips – Production, transportation and distribution. Further direct information has been collected through the collaboration of the project partner, AGENBUR (Provincial Energy Agency of Burgos).

- Secondary sources: The principal documentary and Internet sources of information available

have been consulted. More specifically, the information available from the following entities has been consulted: IDAE (Institute for Energy Diversification and Saving), ENER (Regional Energy Entity of Castilla y Leon), Association of Renewable Energy Producers, ADABE (Association for the Diffusion and Use of Biomasa in Spain), CIEMAT (Energy, Environmental and Technological Research Centre), CENER (National Centre of Renewable Energies), CEDER (Renewable Energy Development Centre), AVEBIOM (Spanish Association for Biomass Energy Valuation), AEBIOM (European Biomasa Association), CDTI (Centre for the Development of Industrial Technology), CNE (National Energy Commission), EUBIONET (European Bioenergy Network), Eurobserv’ER (European Observatory of Renewable Energies), IEA Bioenergy (Biomass and Biofuels Division of the International Energy Agency).

The Renewable Energy Plan in Spain for 2005-2010 (Ministry of Industry, Tourism an Commerce-IDAE) and the Energy Balance of the province of Burgos, elaborated by AGENBUR have also been analysed, focusing mainly on the biomass and biogas areas.

Tampere Region Field work, workshops and dialogue between partners and members of EBN-BIC network and others were used to detect opportunities for SMEs in the Tampere region. Interviews of key actors of the sector were executed in order to find out the barriers for full development of the biomass sector. Furthermore, interviews offered information about market gaps of the biomass sector in the Tampere region. The feasibility and the market opportunities related to the biomass sector were analyzed based on the results of the Tampere region research.

The objectives of this report are an analysis of the information gathered in order to detect market and technology gaps, analysis of the feasibility of the business opportunities selected according to market and cost criteria, a definition of new opportunities for start-up SMEs and new activities for development of existing companies.

Pomurje Region The main idea of this report is to represent the opportunities of small- and medium-sized enterprises in biomass sector in Pomurje via detection and examining of the market and technology gaps in the region, with analysis of the feasibility of the business and a definition of new market opportunities for SMEs and for their further development. For this research we have involved the previous analyses of the following reports: “Energy analysis of the Pomurje region”, “Inventory of resources: assessment of the biomass resources in the communities”, “Trends in biomass related enterprises creation and development in biomass sector”, “Trends of biomass development, business opportunities” as well as we supplied the local competent articles, annual reports, different surveys, local state-of-the-art authority’s regulations and initiatives, statistical databases, internet links and the dialogues with the key actors of the biomass sector in the Pomurje region.

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Central Hungary The main objective of this report is to introduce the reader with the opportunities of small- and medium-sized enterprises in biomass production and utilization. The document will examine the issue from different angles, taking into consideration the interests and opportunities of the enterprises and the regulations, actions, initiatives and long-term strategies determined by relevant policy making authorities. The most important renewable energy source in Hungary is arable land. In terms of energetic considerations it can be stated that arable lands in the country have enormous potentials while Hungary is very poor in fossil fuel base materials which results directly in import dependence. Studying and assessing opportunities and companies that have the potentials to exploit renewable energy resources are therefore of the greatest of importance for the national economy. The main methods of information collection were desktop research and interview with relevant players. Basic information was extracted from the surveys conducted earlier on biomass resources and biomass related enterprise creation. Further academic studies on biomass opportunities in the region and in the whole area of the country were used as sources of information while companies were also interviewed on the questions in concern. Articles, essays, reports, surveys published in professional magazines and RE related publications were also made use of during the preparation of this report.

Nordthueringen The EU’s binding target of 20% share of renewable energies in overall EU energy consumption (electricity, heating and cooling, fuels) by 2020 means the German expansion targets must be adopted accordingly. Current scenarios indicate that renewable energies can increase their 14,2%-share and feasibly make a 25-30% contribution to gross electricity consumption in Germany by 2020.

Contribution of renewable energy sources to Germany's energy supply

2.14.8

3.5

0.23.1

6.7

14.2

6.6 6.98.5

0

5

10

15

20

25

30

35

Share of RE in Total PrimaryEnergy Consumption

Share of RE in Total GrossElectricity Consumption

Share of RE in Total FinalEnergy Consumption for

Heat

Share of RE in FuelConsumption for Road

Traffic

Share of RE in Total FinalEnergy Consumption

(electricity, heat, fuels)

[%]

1998 2000 2002 2004

2006 2007 2020

3)

1 )The Integrated Energy and Climate Programme of the German Government, 12.05.2007; 2) Directive o f the Euopean Parlament and of the Council on the promotion o f the use of energy from renewable sources, 12.03.2008;3) For calculating the share o f primary energy consumption (PEC), the (o fficial) physical energy content method has been used. Acc. to the substitution method: 9.1 % RE - renewable energies, Source: BM U according to Working Group on Renewable Energies / Statistics (AGEE-Stat); Version: M arch 2008; all figures provisional

182)

141)

German Government Targets 25% - 30%1)

German Government Targets

For sure this ambitious goal and its steady expansion after 2020 will need a lot of work and effort to achieve. But especially with the help of Ecological Tax and Renewable Energy Sources Act (EEG) and

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the detection and prompt exploitation of market opportunities by entrepreneurs and SMEs this seems possible. Electricity from biomass remunerated under the EEG has shown dynamic growth since the new Act entered into force in 2004. Electricity generation increased from 5.2 billion kWh in 2004 to around 10.9 billion kWh in 2006. This is due primarily to the strong increase in Biogas systems, whose total electricity output almost quadrupled between 2004 and 2006 to 1.000 MWel.. The development of electricity form solid biomass has been relatively stable since 2000, with total installed capacity of 1.100 MWel. at the end of 2006. Due to the incentives effects of the NaWaRo (use of cultivated biomass), technology and CHP bonuses, there is a noticeable trend towards small and medium-capacity plants up to and including 500 kWel. (EEG Progress Report 2007, p. 12; Development of Renewable Energies in Germany in 2007, p. 3).

Especially, for Nordthueringen the development in Biomass sector is very promising, because the region has a strong history, present and future in Biogas technology sector. Potential market opportunities for existing companies and entrepreneurs are identified in fields of planning, construction and operating new, high efficient Biogas plants, introduction and expansion of Biogas technology vs. composting in municipal Bio-waste process, professional consulting of farmers and operators and better monitoring of Biogas plants.

Brandenburg The bases for this composition are interviews with experts, research concerning publications as well as results of workshops. Data concerning the region of Brandenburg as well as the whole of Germany were incorporated, where deemed beneficial for the study. The State Government of Brandenburg wishes to support the development of renewable energies until the year 2020. According to a current strategy concept, the Department of Trade and Industry wishes to focus on

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brown coal and renewable energies. This concept expresses the desire to increase the energy production for the primary energy consumption in Brandenburg almost threefold, from the present 7 percent up to 20 percent. The contribution of Biomass is supposed to increase from 25,60 PJ to 33,50 PJ, and that of other energy carriers like landfill gas and gas from purification plants, geothermic and heat pumps is to increase from 1,90 PJ to 19,30 PJ in the year 2020. The CO2 emissions of Brandenburg are supposed to decrease by 40 percent until 2020, amounting to. 36.4 mio tons, compared to the year 1990. Presently the State of Brandenburg is ranked first in the use of biomass for means of primary energy consumption per inhabitant in Germany:

Primary energy consumption of biomass State total in terajoule gigajoule per

inhabitant Brandenburg 25638 9,98

Bavaria 73415 5,90 Lower Saxony 33855 4,23

Baden-Wuerttemberg 32652 3,04 Tab. 1: Primary energy consumption per inhabitant in the State of Brandenburg (Source: Länderarbeitskreis Energiebilanzen, 2004) The prognoses of the state government of Brandenburg expect a development for the use of biomass in the State of Brandenburg until the year 2020 as follows:

Use of Potential GWH/a electrically thermically

Landfill gas 156 84

Gas from purification plants 57 83

Usage of solid biomass

Power plants / combined heat and power station (CHP)

6672 2780

Heating systems 806 Use of gaseous biomass Biogas facilities 723 278

The German biogas industry obtained a turnover of about 650 million Euro in the year 2007. The producers earned about 150 million Euro in other countries. The exports of some companies already amount to almost 30 percent. German biogas technology is well received throughout the world. No other country possesses as many agricultural biogas facilities. This leading position allows German communities to use the safest and most advanced technologies. Biogas facilities are an important part of a promising and innovative branch.

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2 DESCRIPTION OF MARKET GAPS 2.1 MARKET GAPS IN BURGOS 2.1.1 BIOMASS RESOURCES In accordance with previous study on biomass resources availability, the following resources can be highlighted: - Forest biomass: 463.711 Ha 179.198 Ton/Year 82.151 Tep/Year - Agricultural biomass: Woody crops: 17.344 Ha 5.203 Tm/Year 1.563 Tep/Year Herbaceous corps: 468.534 Ha 587.364 Tm/Year 216.202 Tep/Year 2.1.2 CONVERSION TECHNOLOGIES

(direct use, transformation, electricity generation, gasification, paralysis, charcoal production, modular systems)

The high potential existing in the province of Burgos for development both from the point of view of existing resources and the subsequent business development has already been analysed, bearing in mind, most of all, the starting point where we are now. Within this framework the principal possibilities of application of bio energy resources for the province of Burgos have been selected as follows:

1.- Thermal application of forest waste in medium power boilers. 2.- Electrical generation from agricultural and/or forest waste. 3.- Pellet manufacturing plants using agricultural and/or forest waste. 4.- Generation of biogas for thermoelectric use from cattle waste. 5.- Thermal application of agro-food industry waste. 6.- Generation of biogas for thermoelectric use from the organic fraction of urban solid waste.

2.1.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS As it has been stated in the study of trends in biomass related enterprises creation and development, the whole sector, all along the whole value chain is in the very start – up phase. In fact, currently there are a total of 15 companies engaged in the biomass sector and two biogas plants, an urban solid waste mechanised plant and a manure treatment plant. The majority of these companies are small and medium and they do not work exclusively in the biomass sector. Of these 15 companies, 4 are industrial and the rest are installers/designers. All of the industrial companies are in the wood sector, with the following characteristics:

- Interbon: Self-consumption and marketing of wood sawdust and shavings. - Maderas el Enebral: Production and supply of wood-chip. - Triturados Montero: Production and supply of shavings/forest biomass. - Molygrasa: Production of straw pellet.

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2.1.4 NETWORKS In Burgos province there are still not any specific network or professional association gathering the companies from biomass related sector. No cluster detected so far. However there are a national association AVEBIOM, Spanish Association for Biomass Energy Valuation, which have companies from all over Spain associated (None from Burgos). 2.1.5 SUMMARY According to this and at this stage it is hard to define separate gaps, since actually the whole market needs to be built both from the demand and offer side at the same time. So that there are gaps and opportunities along all value chain 2.2 MARKET GAPS IN TAMPERE REGION Market gaps of the biomass sector in the Tampere region are described in this section of the report. Market gaps are analysed in the field of biomass resources and conversion technologies. In addition, networks and the biomass value chain of the region are assessed. 2.2.1 BIOMASS RESOURCES Market gaps in the field of biomass resources are analyzed in this section of the report. Biomass recourses are selected to be assessed according to the results of interviews and other sources; where is seen gaps and development potential. 2.2.1.1 Forest Biomass According to the forest program of Tampere region there is 1 million hectare of forestry industry ground in the region, which is 77% of the whole land surface of the region. As it was analyzed in the “Inventory of Biomass Resources” –report, 350 GWh more of wood chips could be used annually in Tampere region without any additional investments. The economical potential of wood energy in the region is 1100 GWh annually, from which approximately 480 GWh is utilized. Thus 600 GWh of economical wood energy potential stays in the forests every year. The full utilization of this potential would require building new solid fuel boilers and development of logistics and harvesting technologies. Unutilized forest biomass resources creates a market gap and furthermore, in case of full usage demand of boilers and technologies will increase. (23) (24) 2.2.1.2 Energy Wood According to the “Inventory of Biomass Resources”–report, most of the energy wood resources are located in Upper-Tampere region. This region has economical potential of 186 000 m³, which is as much as forest energy was used as total in Tampere region in 2005. When comparing the usage and potential in the forests, usage is not even close to the potential. (23) (24) Market gaps were detected in harvesting and processing the energy wood. According to the interviews there is a need for more developed technology for harvesting wood stumps and brushwood from the forest as well as processing them on the spot. (4) 2.2.1.3 Field Energy “According to the “Inventory of Biomass Resources” –report, there are about 5105 farms in the Tampere region and 13 % of the total area of Tampere region is field and garden. It would be possible to use field energy much more than it is used currently, even 140 times more, without additional investments in equipment.(23).

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Vast exploitation of field energy would mean greater utilization of agricultural biomass, forest biomass and peat together because agricultural biomass can not be burned separately in efficient way even though there have been some experiments on that. One problem here is to find out the most feasible mixture. When burning field energy ash is formed in big amounts and furthermore, when the ash melts it causes dysfunctions of the burner and additional work. (4) (27) Long transportation distances cause high costs and that is why current transportation methods restrict the usage of field energy. In addition, heating plant’s possibilities to receive field energy effects on the market opportunities. Increasing interest towards field energy creates market opportunities. Power plants which belong to the emission trade area have possibility to lower the emissions by using field energy. (27) 2.2.1.4 Peat Tampere region’s surface consists of 20 % peat ground. Technically usable swamp surface for peat production is 440 000 hectares and the demand for peat has been estimated to double by the year 2020. Proportion of peat in Finland’s electricity production is 5-8 %. It is mainly used combined with other burning material e.g. wood fuel for producing heat and electricity. Only 1% of Finland’s peat ground is utilized for the use of peat industry. In the Tampere region the peat production is slight compared to usage. Here can be seen a market gap. (7) (23) Demand of peat is predicted to grow due to legislation approved in the year 2007 by the Finnish government. The government has approved new legislation of peat warehousing and electricity input tariff produced by peat. (11) According to the OSKE Centre of Expertise Programme, Cluster Programme for Energy Technology 2007 -2013 prospects for utilization of peat are positive also because European Union has set the goal for alternative fuels at 20% in the year 2020. Peat can be used also in combination with wood fuel in increasing amounts. This increases usage possibilities and market opportunities. (3) 2.2.2 CONVERSION TECHNOLOGIES Consumption of energy is increasing all the time, but at the same time environmental protection regulations concerning electricity are tighter due to global warming. This creates good opportunities for Finnish energy technology industry. According to Finnish Funding Agency for Technology and Innovation especially in the markets of green energy and climate change restraint are possibilities to benefit rapid growth of worlds markets. Huge gap in conversion technologies are seen according to the interviews and concentration from biomass resources should be turned to technology development. (3) (4) 2.2.2.1 Direct use Direct use of pellets – end users 450 tonnes of pellets are produced in Finland but 70% of them are exported. Utilization of this amount in domestic markets would create huge market gap for pellet heating system manufacturers and providers. (1) Whole package solutions for pellet heating systems are offered in the markets. Still several problems in usage are faced. Many consumers buy only the boiler and pellet burner and furthermore, build the warehouse and install the equipments by themselves. Whether there is no knowledge about adequate space and other equipment the heater is not working properly or it can be dangerous. Even though pellet heating providers install the whole package system in the household, there still can be problems. It is remarkably precise work

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that the pellet heating system gets to work. Here is seen a market gap for educated and professional pellet heating system installers. Market opportunities are seen in increasing amounts of end users of pellet in addition to power plants. Increase of oil price and climate change preventing efforts creates market gaps for pellet heating systems. There is big potential in oil heated houses, for example interviewed company representative estimates their target markets to have 1500 houses and the energy need of each is 2000 kW. Moreover, this is not the total potential. Also other new and renovated houses and power plants creates potential for pellet markets. (4)

Firewood (chunk wood) The proportion of firewood used in small premises such as farms, single-family houses and summer cottages is remarkable when it comes to total consumption of solid wood fuels in Finland. As other forest resources there is potential to utilize more. (23) 2.2.2.2 Transformation Transforming wood biomass to pellets Pellets are produced from cutter dust, grinding dust and saw dust. Pellets can be made also from agricultural

biomass e.g. cattle, chicken waste. When pressuring wood biomass to pellets the raw material has to be absolutely dry. Proper dryer technology and adequate places in the forests to dry the harvested wood properly are lacking. (4) (23)

Biogas – gasification Technology for gasification is developed. There is quite highly developed technology in Finland offered by some companies. Still this technology demands more development in order to increase efficiency and lower usage costs. Research and development projects would demand monetary investments. Here is a problem as many other research and development targets: inadequate investment subsidy. Opportunities for technological development, new business and work places in the field are seen. (3) (26) 2.2.2.3. Electricity Generation

Electricity production by energy sources in Finland, source of the picture http://www.stat.fi/til/salatuo/2006/salatuo_2006_2007-10-18_kuv_004_en.html

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The picture above presents the sources from which electricity is generated. Market gaps in conversion technologies and energy sources for electricity generation are covered in the paragraphs 2.2.2.4.; 2.2.2.5.; 2.2.2.6.; 2.2.2.7. 2.2.2.4. Charcoal Production Charcoal is most used fuel around the world for producing electricity. The third of the worlds electricity production and fifth of the whole energy demand is covered by coal. In Finland char coal is used mainly in large condensation and district heat power plants. There is also minor usage in industry’s electricity and heat production. (5) Charcoal is not produced that much in Tampere region or in whole Finland. This is because it is not used that much for energy production in Finland. Still the proportion of primary energy is over 10% and in Finland the proportion of charcoal is 60 to 70% in usage of condensation power production. (4) (5) Development views of charcoal Operating costs of charcoal usage has risen remarkably after emissions trading started. Its competitive position compared to e.g. natural gas has weakened and this might lead to decrease of charcoal usage. Still opportunities are seen whether charcoal usage can be developed more environmental friendly. Carbon dioxide emissions caused by charcoal usage can be reduced by technical ways such like increasing efficiency co-efficient of the plants. Efficiency co-efficient can be improved by new plant technology and by burning coal which has high heat value. In this way it is possible to produce more energy with same amount or less of carbon dioxide emissions. There has also been research about salvaging the carbon dioxide emissions, but problem is that the technique is electricity consuming and not developed enough. (5) There is not demand for charcoal in Finland, but there are possibilities for production and exporting it. Technology for producing light wage charcoal which has remarkably higher heating value exists and there is demand in global markets for that. This new technology is used to produce a light wage charcoal briquette with biomass derived tar and pitch as a binder. The technology is under development by Finnish company which does not want to release the invention for public. (4) (6) 2.2.2.5 Biogas There are 62 biogas plants in Finland. From these 62 plants 15 are municipal waste water treatment plants, 3 industrial waste water treatment plants, 7 farm plants, co-digestion plants (Biovakka, Laihia, Stormossen) and 33 landmills. In Tampere region biogas is collected from municipal wastes while putrefying (20 %), dumping areas (78 %) and agriculture (2 %). (11) (12) (23)

Utilization of biogas has been minor in Finland but interest towards technology has increased due to tighter environmental requirements. Opportunities for development, new entrepreneurship and increase of work places and exporting possibilities are remarkable in this field. Managing the business models of biogas production chain requires combination of several expertise as well as co-operation between different sectors. (3)

Resources to produce biogas are vast. Traffic fuel directive set by European Union to every member country to acquire that at least 5, 75% of the fuel used in traffic has to be biofuel by the year 2010. Biogas can be used in a same way as natural gas; well purified biogas can be used in motors which are meant to use natural gas and bio gas can be refuelled in a same way as natural gas. Moreover, efficiency rate of biogas motors is the same as natural gas motors. Biogas is seen possible traffic fuel which creates good market opportunities for biogas as a fuel and for biogas motors.(15) (22) (17)

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Biogas production Bio gas is formed in oxygen free space through bio chemical and micro biological decay. Biogas includes 60-70 % methane, 30-40 % carbon dioxide and less than 1% hydrocarbon. Raw materials for bio gas production are proteins and carbons e.g. kitchen waste, agricultural waste, wood etc. Bio gas process has four phases mainly: hydrolysis, acidic fermentation/ decaying, asetogenesis and methane formulation. There are some variable depending on that whether the bio gas is produced in farm or plant. Biogas can be converted to energy by burning it to heat in gas burner or gas motor or turbine. The gas motor can be connected to generator. Here the electricity and heat can be utilized. (10) (14) (22)

Bio gas can be produced in controlled way by reactors or pumping it from landfills and recovering that. In addition to the biogas the process produces biomass for fertilization and carbon dioxide can be utilized in greenhouses. (14)

Farm Scale Anaerobic Digestion is bio gas mills which processes silt manure from one farm and these mills can co-digestive field plants or other organic materials. Centralized Anaerobic Digestion is bio gas mill which processes wastes from several farms. There are not that many kinds of farms in Finland. There are less than 10 biogas plants operating in Finland (2006) which are using the waste from livestock. Approximately tens more plants are under planning stage. Market gap can be seen because of unutilized biomass resources for biogas production; as it was mentioned before, there are approximately 5105 farms in Tampere region. (14)

2.2.2.6 Hydrogen economy Hydrogen is not primary energy form compared to raw oil and coal because it exists only as a part of other constituents. Hydrogen economy usually means the phase where hydrogen has replaced liquid energy carriers and possibly part of the natural gas. Hydrogen has to be always manufactured and this consumes energy. It can be made e.g. with decomposing/reforming hydrocarbon and natural gas. Hydrogen can also be made by gasification of biomass and with help of electrolysis. (10)

There are strong efforts made to hydrogen economy around the world and fuel cells are seen as future’s energy source for renewable electricity and heat. In Finland there has been made research and development work for hydrogen technology over 20 years. Market possibilities are seen for e.g. fuel cells, material solutions, system components, system integration and applications. Transforming to hydrogen economy requires strong co-operation between gas like energy carriers (natural gas, biogas, wood gas and hydrogen). Projects have been started, which are aiming to foster the development of hydrogen technology and improve the conditions for entrepreneurship with support of Satakunta region, Tampere region, Southern Ostrobothnia region, municipalities and companies. (3)

2.2.2.7 Converting bio- and wood gas to electricity Technology for gasification is developed as well as for converting the gas to electricity. Still this technology demands more development in order to increase efficiency and lower usage costs. Market gap is seen because of more tight environmental regulations, waste disposal regulations and possible input tariff in Finland. Whether the input tariff for biogas electricity becomes real in Finland it has remarkable effects in the markets. According to the Finnish Energy Industries the input tariff should not be implemented because it would become very complicated and expensive for electricity customers. On the other hand Finnish Energy Industries wants to contribute renewable energy and suggests concentration on current taxation and subsidy of biogas. (4) (16) (22) Finnish Biogas Association supports the possible input tariff for biogas electricity because benefit of the total energy got from help with biogas; electricity production is one third but economically most significant. The input tariff would also forward use of biogasification as a method of organic waste disposal. Possible input tariff

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should not be too complicated but common because of many kind of biogas production resources and plants. (25) 2.2.3 ANALYSIS OF THE VALUE CHAIN: COMPANIES, MARKET AND GAPS/NEEDS Energy sector in Tampere region has few large enterprises and many small ones. Knowledge and expertise in the whole energy chain is covered. Vast variety of university level education for the sector is offered quite well. Education for some ad hoc areas is lacking in the level of academy as well as second degree education. Examples are gasification technologies, where practically very little education exists in universities and pellet heating system installations. These problems have been solved by enterprises and associations by providing education by them selves or co-operation with educational institutions. (24) 2.2.3.1. Market gaps and needs Estimated 2 to 3 new biomass related companies are established every year. There is need for new business activities in e.g. installation services, bio fuel supply, bio energy production, development of waste energy usage, consultancy and service sector in general. Also more growth oriented companies are needed in order to develop the sector. Also development needs are seen in research and development project funding, internationalization, growth and renewing of the enterprises, as well as in product management and licensing. (24) (4) There is a goal to create 10 new energy technology related companies into the Tampere region by the year 2010 and 13 by year 2013. Growth expectations are in production and refinement of bio fuel; bio energy and burning techniques; bio gas technology; wind, sun and other decentralised energy production; hydrogen technology; forestry industry energy usage; energy industry material technologies; electricity and heat production technologies and energy production of industry, basis energies of future; energy markets, electricity distribution and ICT in electricity technique; electricity usages and magnet technology. There are also seen remarkable amount of new business opportunities in product life-cycle services. (3) Heating and electricity There are big possibilities for additional use of bioenergy in small as well as medium size class. In Finland there are approximately 20 TWh heating markets where source of heat is other than district heat or firewood. Development of the business requires expertise in all parts of the chain: fuel production, purchase, processing, warehousing and sales. In addition, other end demands know-how in planning heating system, choosing the heating equipments, installation, usage and maintenance. The goal of the OSKE Centre of Expertise Programme, Cluster Programme for Energy Technology 2007-2013 (members of the energy cluster programme: Merinova Technology Centre, Joensuu Science Park, Prizztech Oy, Jyväskylä Innovation Oy, Technology Centre Hermia) is to develop new business concepts for different parts of the energy chain as for companies which aim to manage the whole chain. Development of the business will lead to incremental demand and more over need for new products in the whole chains machine manufacturing. (3)

Field energy Reed canary grass has ascertained to be the best energy plant which is suitable for Finnish climate. Finnish Bioenergy Association has set the target for reed canary grass production and usage 4.5 TWh by the year 2020. The Ministry of Agriculture and Forestry has set a farming target of 100 000 hectares by the year 2015 for reed canary grass. Farming is supported according to the EU’s renewable fuel contribution program. Nowadays reed canary grass farming is supported with surface area subsidies and in the future energy plant subsidy. Market gap is seen in exploitation of field energy. Boilers made for field energy usage, e.g. reed canary grass, crop and straws should be developed. There is a market gap for research and development of

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this boiler technology. Even though experiments are done, full usage of the field energy potential needs for more efficient technology. (20) (4) Education There is no second degree education for biomass sector. There is need for educated professionals in pellet heating system installation. Currently some companies have co-operation with vocational schools where they educate people for this profession, however, this is the only opportunity to have educated work force for the field. Certified installers would guarantee the quality and safety of installed pellet heating systems. Registry of certified installers could be used by authorities and insurance companies. This would contribute the business field of pellet heating. (4) 2.2.4 NETWORKS There are different kind of associations and organisations which have common operations e.g. in the field of research and development. There are associations dealing with a definite field such as Pellet Energy Association, International Peat Society, Peat Industry Association, and Finnish Forest Association. Organizations which are operating for several kind of industries are usually government owned. These organisations are e.g. VTT Technical Research Centre of Finland, Finnish Funding Agency for Technology and Innovation (Tekes), Employment and Economic Development Centres (TE-keskus) and Finnvera which is Finnish state owned financing company. These organisations help start-up companies by supporting and funding research and development operations, financing establishment of company and supporting internationalization projects. As it can be seen there is quite good network at least for the most common fields as well as for general support and financing. Key actors of biomass sector in Tampere Region are introduced more thorough in Inventory of Biomass Resources –report.

One of the most remarkable key actors in the biomass field is Sentre Network, which is network for business, research and education developing sustainable solutions for sustainable energy. Sentre is a strong developer network in the field of energy and they cooperate to produce development projects for the promotion of sustainable energy production, distribution and use, based on the competence and business of the members.

According to the interviews there is a need for common databank for new technology innovations. Although different associations act as databanks also, they are not seen as adequate system. (4) 2.2.5 SUMMARY There are lots of unutilized biomass resources in forests and fields. Concentration on technologies were emphasised in the interviews. Full utilization of resources demand development in harvesting and drying technologies, conversion technologies and boiler technologies.

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2.3 MARKET GAPS IN POMURJE REGION 2.3.1 BIOMASS RESOURCES 490 million liters of light heating oil (Source: report “Trends of biomass development, business opportunities”, d.i.s. spec. Jožef Maučec, 2008).

In Pomurje, 42,5% of energy from the total region energy usage is produced from biomass resources: wood biomass, biogas, agricultural (organic + animal) wastes and other industrial wastes (Source: Energy Analysis of the Pomurje region, LEA Pomurje, 2006).

The state of the energy usage produced of biomass in Pomurje

Whole biomass 652,7 GWh

42%

Other energy sources 883,2

GWh58%

Whole biomass 652,7 GWh Other energy sources 883,2 GWh

a) Wood biomass The forest cover of the Pomurje region according to the Slovenian Forest Service database (Source: SFS Database, 2005) is 41.021 ha. But in fact the area, covered with over than 20 years old trees (beech, coniferous and deciduous trees) is actually higher. The share of total area, grown with trees, is thus over 30 % in Pomurje. The yearly growing stock of woods in Pomurje is 223 m3/ha. According to the forest planning only 62 % of increment was available for cutting. However, the existent cutting rate is lower than allowed. Only or 82% of the possible cutting has actually been realized in 2004 (Source: Inventory of resources: assessment of the biomass resources in the communities, DA Sinergija, 2007). According to the Forestry Institute opinion the reason for such a difference between possible and actual cuttings is to be found in dispersed private ownership (75 %). If all 100 % of the annual available cutting was exploited, the sustainability of woods in Pomurje wouldn’t be so endangered.

The important sources of wood biomass in the Pomurje region is not only forest, but also sawn waste, secondary wood processing, wood construction and industrial wastes (Source: Energy Analysis of the Pomurje region, LEA Pomurje, 2006).

Total energy potential of all the wood biomass in Pomurje region was 308 GWh. As for unexploited cutting possibilities and with regard to regional development is the energy value of potential wood biomass supply in Pomurje estimated to about 351,6 GWh. But the availability of the potential is subject to demand for wood biomass in thus its price.

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Potential of wood biomass in Pomurje is increasing due to weak exploitation of its increment. The question therefore would not be whether wood biomass in the region is sufficient, but how to exploit it in the best and efficient possible way, so that exploitation rate will reach the available cut rate and increase the market supply. b) Agricultural biomass Important source of wood biomass is also wood from non-forest areas, which is not identified in the land register. Due to its ruralise there are agricultural (fruit trees, vineyards, bushes and brushwood) and urban areas overgrowing in Pomurje. Wood agricultural biomass from non-forest areas makes a pretty high potential on the supply market in Pomurje, namely 26.674 m3 (Source: Statistical Bureau of the RS, 2005). The potential is so far not exploited, which is evidenced by yearly increasing forest areas due to overgrowing in non-forest areas. There are more reasons for that, but the main reason could be the demographic and the economic factors (luck of the relevant machinery) of the region. Potential of wood biomass from non-forest areas in Pomurje

Code number of the culture

The culture Area of the culture in Pomurje

(ha)

Wood stock (m3/ha)

Increment m3/ha per year

Potential of wood biomass (m3)

1100 Fields and gardens 60.578 3,0 0,10 6.058 1221 Intensive orchards 329 3,1 1,12 368 1222 Extensive orchards 1.646 32,1 1,14 1.843 1310 Intensive pasture 6.326 8,5 0,28 1.771 1322 Extensive pasture 7.980 19,5 0,67 5.347 1410 Overgrowing agricultural areas 1.726 57,4 2,16 3.728 1500 Heterogeneous usage 901 94,6 3,30 2.973 3000 Urban areas 8.992 15,6 0,51 4.586 Total 26.674

The land surface of the Pomurje region is 133.700 ha, of which 77.000 ha is the fertile soil. There are about 11.780 family farms owning the agricultural area of 57.622 ha. (Source: Statistical Bureau, Census of areas in use, 2005). Taking into account that we get about 6 GWh of energy on 100 ha, it is obvious that a lot of energy is lost, if the agricultural areas are partly suspended in the future due to bad policy. 3.501,4 ha of fields according to the data (Statistical Source of the Sugar Factory, Ormož, 2006) were used under white beet in the Pomurje region. Unfortunately, harvesting white beet for sugar production at the Sugar Factory came to its end in 2006, because the Factory was closed. 8,14 % of the fields has left free for cultivating of some other optional energy crops on those areas. In the table below are listed the following cultures and crops used to grow in our region and favourable for the potential biomass utilization and energy needs (Source: Statistical Bereau, Census of Agriculture 2005).

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The surface of cultures and crops in the Pomurje region

Intended use

Surface (ha)

Fields and gardens 43.001,66

Production of cereals 31.626,55

Industrial plants 5.365,69

Feed plants 4.415,55

Vegetables 321,61

Pasture 11.530,34

Cultures / crops

Surface (ha)

Wheat 13.805,47

Barley 3.447,23

Corn for grains 12.691,01

Corn for silage (feed) 3.252,17

Potatoes 1.032,26

Pumpkin for oil 1.400,57

Beet 3.911,01

There are also 42.824 heads of cattle, responding to 30.278 of the livestock units (LU) in Pomurje (Source: Slovenian Forest Service, Census of cattle and feeding balance of Pomurje). About 251.000 t of corn is needed for feeding them, but currently, considering that we get 45 t of output per ha, we produce / cultivate only 146.000 t of it. About 3.500 ha of fields were under corn for silage in 2006. The reason could be found in the obligated rotation of crops for those farmers who are looking for the subsidies from the state. The second problem causes the corn beetle, who attacks the fields of corn every year. Pomurje region has got about 146.343 of pigs, responding to 17.614 of the livestock units (LU). We need about 91.000 tons of corn for feeding the pigs (Source: Slovenian Forest Service, Census of pigs and feeding balance of Pomurje). c) Industrial wood waste The official statistical data about wood manufacture trades in the region, collected from the Annual Evidences of the Chambers of Crafts of Pomurje, says that there are active about 24 saw-mills, about 94 joiner’s workshops and other small or medium-size private enterprises, some of them even not officially registered in Pomurje. Another source of wood biomass, which should not be negligible, comes from construction and merchandising sector (discarded wood packaging, discarded articles of wood, wood waste from construction and green cuts from avenues planted with trees, from gardens and alike). The wood wastes from the activities make the additional wood biomass source for heating and construction needs in the Pomurje region. Industrial waste from meat processing industry Panivita Group, KG Rakičan – EKOTEH d.o.o. (http://www.panvita.eu) has joined its unified management from all the animal plants within the Group, and is collecting and processing the end wastes from their activities. A side product from the meat processing industries of Mir d.d. and Agromerkur (also under umbrella of the Panvita Group), category II. and III. wastes are emerging, sterilized in the Mir d.d. to the form, which could be used as an input for a biogas plant. On account of knowledge that also corn silage, mixed with slurry (harvesting from their private fields), is an excellent input for electricity production, the Panivita Group has built their own Nemščak biogas plant in Ižakovci.

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2.3.2. CONVERSION TECHNOLOGIES In the Pomurje region the most promising biomass utilization forms for the production of heat and electricity are direct burning, biogas, biodiesel (Intercorn Trading Jožef Jerič s.p.). a) Direct burning The survey made by LEA Pomurje (Source: Energy Analysis of the Pomurje region, LEA Pomurje, 2006) showed that wood used to be the most important energy source in our region (603.868 MWh/year) for heating needs, while the fossil fuel is a little bit behind (589.682 MWh/year). In fact, wood biomass is becoming more and more important in Pomurje thanks to its availability and price competitiveness to fossil fuel, when using it for energy needs or for development of related technologies. In the Pomurje region there are some district heating systems utilizing solely wood biomass (wood-chips) through the direct burning:

Location Nominal boiler’s capacity Beltinci-municipality 150 kW Beltinci-private 110 kW Cankova-municipality 840 kW Cankova-private 80 kW Martjanci-Smart House (private) 100 kW

In spite of that, the results from the interviews has also proved the fact that 35 % of boilers (ca. 25-50 kW) in private small households in Pomurje were installed before 1990 and have a low utility rate, as the owners by purchasing boilers on the market are usually investing into the cheapest boilers, but not into more efficient expensive ones. 44% of boilers on solid fuels were installed between 1991 and 2000. So, the efficiency of those ‘older’ boilers is poor, and therefore wood biomass is not used efficiently. b) Transformation Primary transformation of wood into wood biomass source As we have already mentioned above there are active about 24 saw-mills in the Pomurje region. They cut wood from the region, but some of them import the wood either from other regions of Slovenia (Pohorje, Koroška, Kočevje) or even from neighbouring countries (Hungary, Bosnia), because of the cheaper prices of the wood items and lack of the relative technology. They buy logs of conifers and make pillars for roof constructions. The waste from the sawns regional activity and from the ‘imported’ wood for heating and construction needs is the additional wood biomass source. The Local Energy Agency Pomurje has made a survey of all the saw-mills in the region. As a result the information about the quantity of yearly cut, about origin of wood used in the plants, about import of the cut wood from other regions of Slovenia or from other countries, the quantity of bulky sawn waste and sawdust was acquired. Due to different energy value of single wood sort, the data is gathered extra for hard deciduous trees (TL), for soft deciduous trees (ML) and for conifers (IGL). Results of the analysis are presented in the following table.

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Quantity of sawn waste from saw-mills of Pomurje and their energy value

IGL ML TL Total Cut a year (m3) 45.000 3.000 29.800 77.800

• From that wood imported to the region (m3) 16.340 0 15.000 31.340 • From that wood of the region (m3) 28.660 3.000 14.800 46.460

Bulky sawn waste (m3) 9.780 6.705 16.486 Sawndust (m3) 4.602 2.235 6.837 Calorific value by air humidity (kWh/m3) 2.100 3.000 Calorific value of sawn waste in GWh 30,20 26,82 57,02

Secondary transformation of wood into wood biomass source Another source of wood biomass is also wood waste from wood processing plants, timber industry and building sector. There are more or less 94 joiner’s workshops and other small or medium-size private enterprises (Source: Annual Evidences of the Chambers of Crafts of Pomurje, 2007). By the estimation that one wood processing plant processes yearly about 80 m3 of cut wood, and considering there is 30% of wood waste with the process, this would represent 1.500 m3 of dry wood biomass, with calorific value of about 3,75 GWh. There is also a larger industrial plant “Murales” operating in the region, which manufactures solid furniture. The plant yearly spends 10.000 m3 of cut wood. Considering now again the 30% of wood waste with it, this represents additional 3.000 m3 of dry wood with calorific value of 10,5 GWh. Wood biomass in construction and merchandising The regional communal service Saubermacher is regularly collecting wood waste, such as discarded wood packaging, discarded articles of wood, construction waste and the results from the trees cutting at avenues, gardens and alike all over Pomurje. Under assumption that the four larger cities in the region, i.e. Murska Sobota, Lendava, Gornja Radgona, Ljutomer and its settlements produce (and collect) 2.000 m 3 or 4,2 GWh of wood waste a year. This amount is usually enough for private heating in individual boilers. c) Electricity generation Biogas plants In the period of summer vegetation, plants accumulate 5 to 6 kWh of energy (which is accumulated in plant fat, carbohydrates and proteins) on 1 m2 of the agricultural area. By anaerobic decay of green biomass, the energy is transformed into biogas as an engine fuel and the holder of energy in biogas is methane (CH4). In recent years Pomurje region has witnessed a fast and a high development of biogas plants, as there is a new market niche for biogas energy exploitation for heating and electricity production. Great impact on this fact is given by favourable redemptory price for generated green electricity, transmitted to the public grid net. Currently, there are three biogas plants operating in Pomurje: the biogas plant in Logarovci (2006) – is operated by a sole proprietor Kolar Marjan, another one, the biogas plant »Nemščak« (2006) is in Ižakovci (operated by Matjaž Durič). There is also a pig farm and a purifying plant (2002) nearby in Ižakovci. All of the »Nemščak« devices are managed by Panvita Group, KG Rakičan – EKOTEH d.o.o. The 3rd biogas plant has just started operating in Lendava in the beginning of June managing by ECOS d.o.o. (Jože Pavlinjek), which is going to be one of the biggest in Europe. Here are some facts and figures on the biogas plants database in the Pomurje region:

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biogas plant »Kolar« (Logarovci)

PURIFYING PLANT »Nemščak«

(Ižakovci)

biogas plant »Nemščak« (Ižakovci)

biogas plant »Pavlinjek« (Lendava)

Capacity 1 MW 109 kW 1,7 MW 4.23 MW Yearly electricity production

8.000 MWh about 700 MWh 9.800 MWh 28.760 MWh

Yearly heat production:

11.000 MWh about 1000 MWh 11.000 MWh 32.300 MWh

Reactor volume 8.800 m3 No data 2 x 3.200 m3 4 x 5000 m3 Costs of the investment

~ 5.000.000 € No data ~ 7.083.000 € 14.000.000 €

»Fuel«

organic wastes pork manure pork manure, organic and associated

animal wastes

organic silage and other field products only

Nowadays, there is one more biogas plant in Motvarjevci village under the construction process, however its establishing has run into a big inhibitor coming from the side of the local inhabitants. Their main reasons for the negative attitude are the following: the biogas plant will pollute the atmosphere within the village; the very building procedure will definitely cause a lot of noise and transport circulation around, which is going to stress the everyday life in Motvarjevci. Instead they suggest moving the biogas plant construction out of the village, what on the other hand can increase the logistic costs for the investors. d) Wood gasification boilers

Totally new and effective biomass innovation is currently introducing in Slovenia – wood gasification boilers with capacity up to 25, 30, 35 in 40 kW. Unfortunately, we don’t have any data about the users of the wood gasification boilers as far as there are plenty of companies supplying the boilers on biomass on the Slovenian market and the evidence is not under the control. 2.3.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKET AND GAPS/NEEDS Analyzing the current situation in the biomass sector we have discovered a lot of market gaps and needs in the biomass value chain in Pomurje. Taking into account the small size of the Pomurje region (1336 km2), there is about 1 biogas plant created annually. Nowadays there are 3 biogas plants operating here and we should admit that this existing market is fully covered, so there is no room for the other biogas plants in Pomurje. Even by setting up of a brand new and the biggest biogas plant in Lendava this June (look the section 2 c.) the investors have accepted a big risk for its further fruitful activity. As for the wood biomass sector, we can number at least 4-5 wood biomass related enterprises created annually (Source: Annual Evidences of the Chambers of Crafts of Pomurje). In terms of the discovered sufficient potential of wood biomass in the region we may state that there is a big demand for new business activities in Pomurje, such as: municipal enterprise for cleaning the forests of the increments and redundant wood wastes, wood-chips and wood-pellets production enterprises, a regional storehouse establishing for keeping the wood waste left from non-forest, agricultural and industrial activities, as well as a big demand of consultancy and heating boilers installation service sector in Pomurje.

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The economic importance of wood is increasing in Pomurje region. The larger wood possession is the more family farms prepared to manage it by themselves or leave the leading role to qualified managers from biomass related enterprises, in fact. When owning small, narrow and dispersed wood parcels, the owners are less motivated to manage, to thin forests by themselves as it increasing the logistic, production costs and decreasing already low profit (Source: Energy Analysis of the Pomurje region, 2006), especially if they live far from their wood parcels or even in the city block houses, where they don’t need to think about any heating at all. Therefore the wood exploitation rate is 18 % below possible cut. The actual supply of wood biomass in Pomurje region is therefore below the potential supply. And as a result, there appears another market gap - the relevant share of wood biomass for heating and construction needs is still imported to the Pomurje region either from the other parts of Slovenia (Pohorje, Koroška, Kočevje) or even from foreign neighbouring countries (Hungary, Bosnia, Austria) because of the cheaper prices of the wood biomass end-items and lack of the relevant technology. To solve these gaps we badly need a municipal enterprise for thinning the forests of the increments and redundant wood wastes, at next step setting up the regional storehouse and as final target to establish at least one wood-chips / wood-pellets production enterprise of the regional importance. The problem of the last one is lack of the supply system. We have never had a sufficient critical mass demand for wood-chips or pellets as there is not so much heating boilers on wood biomass installed in the Pomurje region (Source: Energy Analysis of the Pomurje region, 2006). On the other hand, there will turn up a necessity for installation of more heating / wood gasification boilers in the region and as a result the demand for advisory and service centre in the field of RES and RUE will be satisfied in Pomurje. In the agricultural sector in Pomurje there is a big potential for the fields has left vacant from the white beet - for cultivating other optional crops on those areas (look the section 2 b.) favourable for the further biomass utilization energy purposes or satisfaction with cereal food within the region. It will also contribute to increasing of more new working units in Pomurje, which is also worth to be mentioned. In spite of the fertile soils potential there is another gap in the value supply chain – Pomurje is still importing cereals products from other parts of Slovenia. The reason is clear, all the capacity of cereals that was harvested in our region does not satisfied for providing of all the population in Pomurje. The obstacles are the obligated rotation of crops for the sake of the state subsidies and higher purchasing price as the final point. The Local Energy Agency Pomurje is responsible for promotion and fostering of continual improvement of energy efficiency and accelerated introduction of RES exploitation in our region, focusing on maximization of local energy self-sufficiency and strengthening of wealth of its inhabitants, following the Kyoto protocol requirements and EU directives in the sphere of energetic. LEA’s vision is to develop new business concepts for different parts of the energy value chain in Pomurje, which is successfully executing day by day. 2.3.4 NETWORKS There are a variety of organizations or associations in the sphere of biomass sector, RES and RUE exploitation and in the field of research and development mostly on the national level. Slovenian Biomass Association (SLOBIOM): promotion of renewable energy, rational use of energy, energy saving, eco-agriculture, food quality and clean transport. GLOBE Slovenia: monitors, promotes and coordinates cooperation and activities in relation to sustainable development, management and protection of the environment and nature, the adoption of the relevant

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legislation, and the correct implementation thereof. It facilitates the interactions among state authorities and institutions, expert and scientific institutions, NGOs acting in environment protection, and the public concerned, and aims at improving mutual cooperation and understanding, timely information, and the exchange of opinions and motions to achieve sustainable development and environment protection. Agricultural Economics Chamber of Slovenia (KGZS): represents the interests of rural economy, forestry and fishery, individual and corporate consulting and education within its activities, promoting of environment friendly farming, forestry and fishery. Slovenian Forest Service (regional unit Murska Sobota): a public institution, established by the Republic of Slovenia, which performs the public forestry service in all Slovenian forests, irrespective to ownership. The mission of the institution is the preservation and close-to-nature development of Slovenian forests and of all their functions for its sustainable and good management, education of the wood owners, as well as nature conservation for future generations. Forest and Timber Economy joint stock company, Murska Sobota: the largest company in Pomurje, dealing with management of wood resources (redemption and sale). Energy Efficiency Center (Institute of Jožef Štefan): center for energy efficiency covers the field of RUE and RES education, consulting, long-term planning and activities for the greenhouse gas emissions reduction and environment protection. Energy, Ecology and Technology Research Institute (IREET): engages in the fields of energy, ecology, economy and technology, providing a wide range of consulting, management and technical services to governmental and private sector institutions. Slovenian E-forum: Society for energy economics and environment is dealing with experts for energy politics, environment protection, energy systems planning, energy process management on the fields of RES and RUE, energy and environment education itc. ENSVET: Energy advisory network about RES and RUE for individuals and other enterprises from biomass sector included. Pomurje Energy Network (PEN): the network for facilitation of increasing the use of renewable energy sources (RES) and energy efficiency (RUE), for fruitful collaboration and promotion of services of the companies and experts included in PEM on local, national and international levels. 2.3.5 SUMMARY There are lots of unutilized wood and agricultural biomass resources in the Pomurje region. Concentration on technologies development were emphasised in this chapter. Full exploitation of the appointed resources will demand purchasing or development of harvesting technologies, conversion technologies and boiler technologies positively. 2.4 DESCRIPTION OF MARKET GAPS IN CENTRAL HUNGARY 2.4.1. BIOMASS RESOURCES Agricultural characteristics of the region.

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The size of land in the region is 745 000 hectares of which 563 000 is arable. The size of plough land is 54.3 hectares. The rest is kitchen garden, orchard, vineyard, grass and forest (27%) In terms of the size of area with main plantation, wheat was produced on an area of 65 thousand hectares, and corn was produced on an area of 57 thousand hectares in 2006. Sugar beet is grown on 2 000 hectares, sunflower on 33 thousand hectares and potato on 5 000 hectares. If we look at the product quantity: 261 000 tons of wheat was produced in the region in 2006, 15 000 tons of rye, 380 thousand tons of corn, 104 thousand tons of sugar beet, 68 thousand tons of sunflower and 110 000 tons of potato. Average yield per hectare in 2006: wheat – 4.1 tons; barley – 3.3 tons; corn – 7 tons; sugar beet – 54 tons; sunflower – 2.1 tons; potato – 21.8 tons As far as livestock is concerned with regards to biomass production it has to be noted that Central Hungary has no real importance in comparison to other regions in the country. The number of cattle in the region in 2006 hardly reached 60 000, while the number of pigs was put at around 180 000 and that of sheep at around 80 000. Country level If we look at the base material level in the country we can see that the potential for biomass utilization is very favourable. Dry material content Plant cultivation: 4 – 4.5 million tons Animal husbandry: 1.8 – 2.3 million tons Food industry: 150 – 200 thousand tons Forestry: 3 - 4 million tons of wood material Community waste: 25 – 30 million tons (of which 7 – 8 million m3 is solid waste) In spite of the existing potential (made up mainly of by-products, annual energy plants and perennial energy plants) the utilization of biomass resources is very limited at the moment. The first biomass plant greenfield investment is yet to be completed for example. None of the currently functional plants that can utilize biomass is purely biomass fuelled; instead, they were modified from coal burning. As far as biogas plants are concerned, so far only a handful of them have been established and operating with the purpose of electricity/heat production on a higher volume. At the moment a very small percentage of the above detailed raw material base is used for energy production. The share of renewable resources in the domestic energy utilization is only 3 – 3.5% of which 2.5% is biomass (mainly firewood). With regard to the operating plants, it can be stated that only a minority of them can claim to be successful, the rest could be described as ‘having some perspective’. Potential opportunities: A number of power plants have already made modifications in order to prepare for the utilization of biomass for energy purposes. The market is saturated; there is little room for further players in the foreseen future. There are suitable technologies available for the full utilization of unused biomass production (pellet press, wood gasification boilers, biogas plants) but these technologies often treat materials inadequately or as waste, thus losing valuable energy base materials. Companies with proper technology and adequate treating methods obviously have an advantage in terms of a more effective utilization level. In the previous years a number of new investments started to take place for the utilization of biomass resources:

- Mixed fuel powered plants - Construction of straw-fired power plants

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- Bio-ethanol factory establishments - Biogas plants construction

Modification of coal-burning plants: some of the largest coal-fired power plants have been modified in the previous years to make them suitable for the burning of biomass. As it happens, however, none of these plants operate in the Central-Hungarian region. Straw-fired plants: besides the positive effects (job opportunities, catchment area development, supplier chain, etc.) investments often meet with strong resistance from part of the locals living near the planned plant or along the main routes of base material transport. The problem with these plants is that they collect base material from a considerably large area inflicting heavy burden on the nearby roads and populated areas and posing logistical difficulties to the operating organizations. Due to the availability of base material, this utilization of biomass is a viable solution, only there is a risk of objection from the public and environmentalist groups. Another problem is that the planned high-performance plants (40-50 MW) would operate with a large amount of wasted heat energy which reduces the efficiency of the facility significantly. Bio-ethanol production: Hungary has great geographic and agricultural potentials for bio-ethanol production. This fact sufficed for dozens of bio-ethanol investments to be launched in the last few years. Most of these plans, however, never reached an implementation phase because of the risks involved in such investments. As long as there is no decision at EU level on the utilization of ethanol there will be no major investments made in the country. This situation is further aggregated by the rising price of corn and the growing conflict between the food industry and bio-ethanol producers. So, although Hungary has great potential, bio-ethanol investments are halted at the moment. Biogas production: Hungary has great potentials for biogas production from animal tenure, dumpsite waste and agricultural by-products. The quantity of fermentable row material has risen in the past years to an extent that now it could, in theory, ensure a significant percentage of the domestic energy demand. This is dominantly animal and communal waste material. The estimated quantity of these materials is at present around 8.7 Mt, while its electricity value stands at around 4.5 – 5 GWh. As a result, investors, municipalities (farmers to a lesser extent) and SME groupings have started to invest in the creation of biogas plants. In spite of the fact that the government supports biogas initiatives there are still questions with regard to state commitment and a long-term regulation environment that slows down investments. None the less, biogas production is a viable solution for companies involved in the biomass industry. 2.4.2 CONVERSION TECHNOLOGIES (direct use, transformation, electricity generation, gasification, paralysis, charcoal production, modular systems) By-products, annual energy plants and perennial energy plants are used for the production of heat, electricity or fuel in a number of ways. In Hungary the most promising utilization forms are (1) direct burning (gasification), (2) bio-briquette (fire pellet), (3) biogas, (4) biodiesel and bio ethanol. At present biomass is used in Hungary mainly for the production of heat and electricity through direct burning. Solid material is burnt and the generated steam, hot water and smoke gas is used for heat or electricity provision or for cogeneration purposes. Smaller households use 25-50 kW wood and mixed burning boilers while plants use 5-50 MW units. Some of the plants burn biomass together with other fossil fuels (lignite, coal, etc.) in the same boiler. With the exception of a few, it is typical of these technologies that they are of low efficiency. This is true to the small boilers used in the households as well as those used in plants where former, low-efficiency coal fired blocks were turned into wood burning which resulted in environmentally friendlier operation but with an intact efficiency.

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Power plants utilizing biomass through direct burning of firewood: The Association of Biomass Plants

• Pannonpower Holding Plc. • Bakonyi Plant Plc. • AES Group • Vértesi Plant Plc.

Apart from energy provision, the association has an active role in influencing the formulation of national strategies and policies, legal regulations, in the information of the public and in contributing to the definition of the support systems for the planting and production of biomass resources. The activities of the association cover the whole area of the country. Some of the earliest local initiatives for the utilization of biomass resources

Location Type Capacity Annual wood demand Szigetvár District heating 2 MW 2.200 tons

Mátészalka District heating 5 MW 6.000 tons

Tata District heating 5 MW 6.000 tons

Papkeszi Industrial heating 5 MW 10.000 tons

Körmend District heating 5 MW 6.000 tons

Szombathely District heating 7 MW 8.000 tons

Balassagyarmat District heating + electricity

2 MW 12.000 tons

Szentendre District heating + electricity

9 MW + 1.4 MW 20.000 tons

High-performance biomass fuelled power plants

Location Capacity Annual wood demand Pécs 49 MW 330.000 tons

Kazincbarcika 30 MW 200.000 tons

Ajka 20 MW 192.000 tons

Vértes XX MW ~100.000 tons

Around 40% of the domestic forests are publicly owned. This contributes to the situation that the power plants have to import 30% of their wood demand.

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Biogas plants utilizing animal manure, waste and agricultural by-products

Location Capacity Base material Utilization Kenderes 7 GWh / year 42.000 tons of agricultural material

(of which 28.000 tons is liquid pig manure), slaughterhouse meat pulp

Electricity is bought by EON Heat: 30% for the plant; the rest will go for nearby future investments

Pálhalma 1.7 MW 90.000 tons of organic manure and agricultural by-products

Electricity is sold CO2 quota is bought by Austria Heat: used at the local facilities

Nyírbátor 2.5 MW Liquid manure of nearby cattle farm, waste from the poultry processing factory, agricultural main products and agricultural waste: 75.000 – 100.000 tons

Electricity production and heating

Klárafalva 526 KW Agricultural products: sorghum, corn 9 thousand tons of liquid pig manure

Electricity production

* The remnants of the biomass in the case of biogas production in most cases are used as fertilizer. It usually goes onto the fields adjacent to the biogas plant.

Apart from these only a few, smaller plants operate in the country. If we compare the Hungarian data with that of the other EU Member States we find that Hungary is the last in terms of biogas production (per 1000 people). Although the potential would allow for larger scale production, there is no stimulation force in the present state-introduced support systems. Nyírbátor biogas plant:

– 2 mixers – 6 38 °C mezofil fermenter – 6 55 °C termofil fermenter – 4 liquid manure storage – 2 gas sacks – 3 gas motors

2.4.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKET AND GAPS/NEEDS In the frame of 1-2 sample projects modern, high-efficiency 5-10 MW plants were established but their future doubtful, the least to say, under the present domestic energy market conditions. This means that in spite of the existing potential, there are very few real investments that would present opportunities for local companies to join in the value chain.

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One of the major problems in the value chain is that the supply system of the base material has not yet been organized in an efficient way. Therefore, in spite of the fact that many households have already installed mix material fuelled boilers, or would readily do so, it is not surprising that many households experience difficulties in converting their heating fully (e.g.) pellet fuelled. One of the reasons for the inadequate supply might be attributed to the fact that, although there is a growing number of households utilizing biomass, demand is rather dispersed geographically rendering any focused resource provision unfeasible and unprofitable. Companies involved in the production and/or utilization of biomass are dominantly farmers and/or suppliers of larger plants. Due to the fact that this (existing) market is basically covered, there is no real room for further players at the moment. Also, as long as the current system changes, newcomers have to accept the high risks involved in biomass related investments. There is a constant debate concerning the justification and long-term sustainability of the dominance of biomass resources in RE production and utilization. What is certain is that biomass potential is only a fragment of that of solar energy and represents about half the reserve potential in wind energy. In spite of the fact that the volume of resource utilization should be based on regional level – taking into consideration local characteristics – at the moment there is a country wide preference towards biomass utilization (with a certain level of disregard to local potential). Although these findings point to the direction of emphasised biomass investments, the ongoing debate and the standpoint of the government (direction of direct support) will greatly influence the position and opportunities of the concerned companies Market Concerning biomass in general it can be stated that it has no developed market in Hungary yet. The formulation of the demands can result in the turning of certain by-products into wood products but, altogether, the energy sector today utilizes a negligible proportion of agricultural by-products for energy production purposes and, on the basis of current trends, it does not seem to alter in the long term. Instead, energy purpose cultivation of plants will gradually gain ground. In 2004 widespread power plant development started with a focus on firewood and other forestry by-product utilization. Firewood, unlike other type of biomass, already had a developed market in the country therefore the power-plants-increased demand had a great effect on the existing demand-supply relations. Consumers of the firewood market: population, agriculture, communal consumers, wood industry, exporters, energy sector. Analysis of the market is made difficult by the often contradictory data coming from technical literature on the one hand and statistics on the other. The reason for the differing data is that certain statistics work with nominal data based on the information received from the households while others use data from public forestry and official markets. The first is too exaggerated while the second does not contain the quantity of sold firewood of private forestry and the illegal wood market.

*Firewood utilization in Hungary (Energy Centre)

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2.4.4 NETWORKS Hungarian Biomass Association: the main objective of the association is to facilitate the energetical and industrial utilization of biomass in Hungary. Development, introduction and promotion of biomass production and utilization technologies. Establishment of a professional information forum for research institutions, distributors, manufacturers operating in the sector. Facilitation and coordination of relevant, biomass-related national innovation programmes and initiatives. Hungarian Biomass Cluster: The Hungarian Biomass Cluster was created by ten founding-members, each being a relevant player of the national biomass sector, who have recognized the benefits of a joint representation of interests. The main objective of the cluster is to facilitate the utilization of Hungary’s biomass potential Hungarian Biogas Association: The Hungarian Biogas Association was formed with the hopes that it would provide an informal forum of the exchange of scientifically based information about biogas. It aims to bring together research laboratories, planning and development institutes, agricultural and industrial organizations, developers, researchers, technical and financial experts, politicians and any other citizens interested in the future of our society. Hungarian Renewable Energy Association: the association is an independent entity with the aim of facilitating an increased utilization of renewable energies in the country in order to reduce its dependency on foreign energy resources. Association of Biomass Plants: the association was created in December 2004 with the union of the three largest power plants that utilized biomass as energy source: Pannonpower Holding Rt., AES Borsodi Energetikai Termelő és Szolgáltató Kft. and Bakony Power Station Plc. Apart from energy provision, the association has an active role in influencing the formulation of national strategies and policies, legal regulations, in the information of the public and in contributing to the definition of the support systems for the planting and production of biomass resources. 2.4.5 SUMMARY 2.5 DESCRIPTION OF MARKET AND TECHNOLOGY GAPS IN NORDTHUERINGEN The economic scale of the development in Biomass sector still increases. The share will steadily rise, but also the demand of increasing efficiency, implementing new services, products and work approaches and penetrating new markets will occur in Europe, in Germany and of course in Nordthueringen region.

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Total Turnover with renewable energy sourcesin Germany in 2007

Wind energy: EUR 5,699 m

(23.1%)

Solar energy2: EUR 7,255 m

(29.5%)

Hydropower: EUR 1,200 m (4.9%)

Total: approx. € 24.6 bn

1 Large plants an heat pumps2 Photovoltaics and solar thermal energyVersion: March 2008; all f igures provisionalSource: Centre for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW)

Biomass: EUR 9,871 m

(40.1%)

Geothermal energy1:

EUR 601 m (2.4%)

At this point there is the danger that not enough adequate work force is available for SMEs in Biomass sector in Nordthueringen to participate in growth of the whole sector. The problem of lack of qualified staff becomes even more dramatic if the age structure in the companies is assessed. Therefore the “talent shortage” can be identified as the most important market gap under future aspects in Nordthueringen region! With an already good density of existing companies in Biomass sector and since the original Biomass resources are already sold, utilized or under protection to a high degree there is not a big market gap towards the establishment of new firms and entrepreneurs. Those would need to focus on special niches or find and adapt technologies currently outside Biomass sector focus to penetrate and survive long term in a mature market. Of course, focuses change and technology moves forward new market gaps will appear, waiting for entrepreneurs and existing companies to overtake. In Nordthueringen there is a strong believe that the exploitation of current market and technology gaps OUTSIDE the region is more profitable at the moment. For this reason an information deficit about remote or foreign markets can be assessed. This lack of knowledge about markets, players, prices etc. is an obstacle for the more sales, development and growth of local Biomass oriented companies and whole sector. Many technical gaps are identified yet, some of them can be solved by SMEs, but often manpower and Know-how restraints limit single companies and networks. For this reason University of applied science Nordhausen provides August-Kramer-Institute and tailor-made study courses “Regenerative Energy Technics”, “Environment and Recycling Technics” and soon “Bioenergy systems” with Research and Development capacities. In details common Energy storage, cleaning Biogas for feed in local Natural gas grids, CHP-Power plants, logistic and odour concepts are known technical gaps in our area. Furthermore deficits can still be noted in the use of slurry from local alcohol production’s company Nordbrand GmbH and the utilization of waste heat from biogas plants. Many opportunities to exploit the energy potential of these fields of interest still remain untapped.

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2.5.1 BIOMASS RESOURCES In Germany the agricultural use by renewable resources is still growing. Figure 2.5.1.a shows a prediction for this made by the “Wuppertal Institut für Klima, Umwelt, Energie GmbH”. According to decrease in fossil fuels the floor space required will rise permanently. Thereby it is not impossible that the prediction for the year 2030 could rise up to 4 or 5 million ha. Such a cultivation endangers not only the alimentary generation.

Figure 2.5.1a : Prediction for the use of agriculture area for cultivating renewable resources (http://www.ingenieure-thueringen.de/45facha/docs/seifert_chancen_landwirtschaft.pdf)

The Freestate of Thuringia is one of the outriders for a sustainable development on federal level. Nearly 12 % of the prime energy demands were met by renewable energy sources like solar energy, biomass or wind power today. Biomass has a part of 87 % in renewable energies. In addition to liquid fuels wood is primarily used for generating heat and electricity. Thereby the wood comes prior from sustainable forest use. Thuringia consists of a forest area of 546,725 ha. These are 38 % of the whole area. In the “Thüringer Bioenergieprogramm” (from the year 2006) one assessed the possible biomass potentials for Thuringia up to 16 % of the prime energy demands by the year 2015. In doing so, the biggest expansion rate will be given by the energetic use of wood and straw as well as biogas coming from liquid manure and energy plants. Because of road-building and industrial settlement permanently less agriculture area is available. The cultivation of renewable primary products/energy plants has to be a balanced ratio to the agriculture of food and to the production of feeding stuff. About 54 % of the whole area of Thuringia is used for agriculture. Therefrom are approximately 614,000 ha agricultural crop land and 176,000 ha grassland. In the year 2006 72,800 ha (12 % of the agricultural crop land) were tilled with renewable primary products for energetic substantial use. Without endangering the security of supply for food and feeding stuff it would be possible to cultivate energy plants on up to 30 % of the agricultural crop land (http://www.thueringen.de/imperia/md/content/tmlnu/aktuelles/positionspapier_bioenergie_fbnr.pdf). Still going on not all resources have been made available for generating energy. According to the “Thüringer Bioenergieprogramm” (http://www.thueringen.de/de/publikationen/pic/pubdownload790.pdf) the pure theoretic

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potential of by-products coming from agriculture and forestry as well as from industry is 5.7 % of the prime energy demands of Thuringia. The North of Thuringia consists of 1,035.1 km². With a forest area of 44,587 ha it is relative well wooded. Currently about 103,000 ha were used for agriculture and 44,587 ha of them are grassland. Figure 2.5.1.b shows the designation of land use and figure 2.5.1.c shows the part of agriculture area according to the land area of all administrative districts in Thuringia.

Forest area

Agriculture area Areas with

other use

Areas for regeneration

Plant areas

Verkehrsfläche

Building area and open space

Expanse of water

Figure 2.5.1.b: Land use designation in the North of Thuringia (reference: TLS)

Figure 2.5.1.c: Parts of agriculture area according to the land area in the Free State of Thuringia (date 2006) (http://www.tll.de/agb07/pdf/agb07.pdf)

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Today in the administrative district Kyffhäuser approximately 10.6 % of the land area is grass land. In comparison to the other administrative districts of Thuringia (Figure 2.5.1.d) is this number relative low. In agriculture the cultivation of grain is dominating. Winter rape takes the biggest part of oilseed.

Kyffhäuserkreis Thuringia

1995 2003 1995 2003

Agriculture area at large 60.091 61.251 625.943 616.117

Grain 36.234 40.657 361.058 377.745

Winter rape 7.039 9.044 80.390 100.499

Silo maize 2.583 1.242 46.834 39.211

Forage plants 1.695 1.796 19.156 20.476

Sugar-beet 1.971 1.790 13.451 10.756

Potatoes 383 157 5.417 2.584

Table 2.5.1.a: Amount of cultivation for selected crops in ha (http://www.tlug-jena.de/uw_raum/umweltregional/kyf/index.html?kyf06.html)

Figure 2.5.1.d: Parts of grass land in the Free State of Thuringia (date 2006) (http://www.tll.de/agb07/pdf/agb07.pdf)

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The grass land part of the administrative district Nordhausen is with 16.6 % also relative low (Figure 2.5.1.d). Just as in the administrative district Kyffhäuser the cultivation of grain is dominating and winter rape takes the biggest part of oilseed.

Landkreis Nordhausen Thuringia

1995 2003 1995 2003

Agriculture area at large 30.673 30.769 625.943 616.117

Grain 18.410 19.776 361.058 377.745

Winter rape 4.065 5.541 80.390 100.499

Silo maize 1.659 1.362 46.834 39.211

Forage plants 587 537 19.156 20.476

Sugar-beet 575 475 13.451 10.756

Potatoes 217 60 5.417 2.584

Table 2.5.1.b: Amount of cultivation for selected crops in ha (http://www.tlug-jena.de/uw_raum/umweltregional/kyf/index.html?kyf06.html) 2.5.2 CONVERSION TECHNOLOGIES In Germany all kinds of market-ready conversation technologies are available on the market. For heating with biomass there are biomass heat plants between 500 kW and 30 MW all over Germany for heating multi-family houses, schools, swimming baths and smaller businesses. Others are connected to a district heating grid. Combustibles are mostly wood chips from forestry or industrial waste wood, which are cheap and make the installation profitable. Especially in rural regions there are a lot of small combustion boilers in one family houses. First of all they use split logs and pellets because of its comfortable storage. Modern split log boilers have a range of performance between 5 kW and 100 kW. They were loaded manually. Pellet boilers are often used in one-family houses because of less needed storage space for pellets. The pellets are industrial made from saw mill waste and strand. They are standardised to have a constant quality. Other possibilities are Combustion boilers for straw and crop. For higher range of performance some combustion boilers burns whole bales of straw, bales in solution or cigars. An interesting alternative to this are pellets made from straw or halms. The combustion of these pellets is already practiced in small amount. For the conversion of fast burning materials for generating electricity from wood and straw Steam power stations are available on the market. Modern steam power stations have steam parameters of 250 bar and 560°C with a degree of efficiency of more than 43 %. The thermal capacity of the power plants can be up to 1,000 MW and more. The combustion material is mostly waste wood. All the other fast biomass is burned in smaller, less complex power station units with lower steam parameters. An efficiency alternative for local power plants is combined heat and power which uses electricity and heat together..

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Also there exist some alternative conversion technologies for generating electricity. For example the Organic-Rankine-Cycle (ORC) process uses organic working mediums which have better evaporation characteristic than water. Silicon oil for example is able to transport high amounts of energy during low temperatures and low pressures. The generating of electricity is realised by a modified steam engine. ORC plants were installed with an electrical capacity from 100 kW and higher. Other possibilities are steam engines and Stirling engines. On the sector of Thermodynamically gasification since more than 80 years engineers and scientists try to avoid the handicaps during burning particulate materials by thermodynamically gasification. Today it is possible to transmit about 70 to 80 % of the combustible energy into the produced gas. Between electrical capacities of about 2 MW up to 5 MW one tests packing bed gasifiers. For higher capacities one prefers fluidised bed gasifiers. In the future bigger plants with more than 20 MW thermal which gasify under a pressure of 20 up to 100 bars could be relevant. With an electrical degree of performance of circa 30 % the gasification is an interesting possibility to generate power from biomass. By Integrated Gasification Combustion Cycles (IGCC) one hopes to get more than 40 %. Also the use of fuel cells promises good result in long term. The electrical degree of performance could rise up to more than 50 % by using this technique. But still the thermodynamically gasification is not state of the technology. Problems are the quality of the produced gas as well as the poor stability of the gasification process. However it is possible in medium term, that the thermodynamically gasification is a useful alternative for producing electricity from biomass. For producing biogas fermentation plants with several capacities starting in kW-range up to multiple MW are available on the German market. At first liquid manure and dung from cattle, swine or chicken were the most important ingredients in agricultural biogas plants. Today more and more biomass is added. Beside organic waste materials from food industry or organic waste one use primarily cultivated energy plants (for example maize) to get extra high biogas production. To chaff and to ensilage the energy plants make a tailored input possible. Also grass silage, beets or ensilaged grain were fermented in biogas plants. An intensive use of biomass is foreseen and has to be organised. Scientists are working to establish new energy plants and cropping systems which are ecological and economical compatible. Today bio fuels are the only renewable alternative to get sustainable mobility. An electric motor that is driven by a fuel cell is not due in the near future. That’s why one focuses still on combustion engines. So it is necessary that bio fuels are similar to benzine or diesel and are useable without larger adaptations. Bio diesel (fatty acid methyl ester (FAME), rape oil methyl ester (RME)) is one of them. But also pure vegetable oils or ethanol from plants with sugar or amylum were used. Synthetic or BtL-fuels (biomass-to-liquid) are in developing. Most bio fuels are liquid and so easy transportable. They are CO2 neutral and readily biodegradable. According to accidents they are not or only low hazardous to waters. 2.5.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS In comparison to other regions where still the organic waste is brought on composing plants the biomass value chain of the North of Thuringia is relative good. The central waste disposal site for both administrative districts Kyffhäuser and Nordhausen is the “Kreisabfalldeponie Nentzelsrode” (see figure 2.5.3.a and figure 2.5.3.b).

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Figure 2.5.3.a: Waste disposal sites in the Free State of Thuringia (date 2006) (http://www.tlug-jena.de/uw_raum/umweltregional/ndh/index.html?ndh13.html)

Figure 2.5.3.b: Kreisabfalldeponie Nentzelsrode Kreisabfalldeponie Nentzelsrode consists of an integrated biogas plant. So an optimal exploitation of bio waste and an environmental friendly generating of energy are possible. Furthermore a wind park and a photovoltaic plant are integrated.

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Like already shown in Chapter 2.5.1 the North of Thuringia consists of very large agriculture and forest areas with high potentials of biomass. Figure 2.5.3.c shows an outlook of the structure of using biomass for energetic applications. In the year 2010 the expected biggest part will make the cultivated energy plants with 46 %. Logging remains with 18 % and biogas with 12 % will be two other main energy providers. To realise an energy supply by using biomass it is necessary that all parties (farmers, foresters, energy supplier, energy consultants, agencies, supplier of products generating renewable energies, and so on) work together. To achieve these networks has to be initialised. Today not enough networks are situating in the North of Thuringia (See chapter 2.5.4).

Figure 2.5.3.c: Structure of energetic usable biomass in the year 2010 (http://lsa-st23.sachsen-anhalt.de/llg/konaro/vortraege/bioenergietag_060925/bmt3_vetter.pdf) In the future the skill shortages as a result of the age structure of small and medium-sized businesses will be a very big problem in the North of Thuringia. To work against this the University of Applied Sciences in Nordhausen offers following courses of study:

- Renewable Energy Engineering (Bachelor) - Environmental and Recycling Engineering (Bachelor) - Master of Systems Engineering (starts in winter term 2008/2009)

2.5.4 NETWORKS Since September 2004 up to 2005 the “Netzwerk Biogas” was established in the North of Thuringia. Managed by the University of Applied Sciences in Nordhausen the network promoted the further development of techniques along the Supply Chain for biogas. Such are for example:

- Opening of new energy sources - Development of necessary monitoring and process control systems

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- Heightening of the gas production - Cleaning of the biogas - Opening of new application areas

The project was benefited within the framework of the program “Interregionale Allianzen für die Märkte von morgen” of the “Bundesministerium für Bildung und Forschung” (BMBF). The involved businesses and research establishments wantede to work together with nationwide partners to bundle their competences and strengthened their own competitiveness. Purpose was a bettering of the economical chance of success by using renewable resources coming from biomass. The North of Thuringia should become nationwide acknowledged biogas location. A still existing network in the region is the “Netzwerk in Nordthueringen” that is based in BIC Nordthüringen GmbH, Nordhausen. In the strict sense it is no network for biomass but it supports founders of new innovative businesses. So it supports founders for biomass businesses, too. Now the BIC Nordthüringen GmbH has applied for the network project “Bioenergie-Regionen” that is benefited by the Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz (BMELV). The aim of the competition is to build local networks in the sector of bio energy. According to the atrophied biomass structure in the North of Thuringia we are hoping to get the aid for this project. 2.5.5 SUMMARY In Nordthueringen region the crucial problems are often soft skills like lack of manpower, attraction of the job for young people and students, increasing competitiveness due to educated personnel and market knowledge, creation of consortia or networks of SMEs working together to solve market and technical problems and apply for larger work orders. In reality technical gaps exist in many ways, e.g. transport, odour, monitoring problems, but nowadays come second after the solution for manpower problems. 2.6. MARKET GAPS IN BRANDENBURG 2.6.1 BIOMASS RESOURCES The cultivation of renewable resources gained of importance in Brandenburg due to the green energy boom during the past years. 2007 energy crop plants were cultivated on an area of 200.000 ha. This is equivalent to 19 % of the agricultural area of the State, and a doubling compared to the year 2006. According to the farmers association, the potential is exhausted. Further increases of the produced raw material can only be reached if the yields on this area are increased. In Brandenburg, rye and rape-seed cultivation dominate. Corn carries a less dominant role with about 10.700 ha in 2007. About 10% of the energy crops are cultivated on set-aside land (19.700 ha). Cultivation of rye increased steadily until the year of 2006. This potential, however, seems to be exhausted as well due to restrictions concerning soil quality and crop rotation. The increase of prices of crops on the world market increased the economic interest in the cultivation of crops after years of declining or stagnating prices. It is still unclear, how the attractiveness of energy crop cultivation will turn out for the farmers. Higher yields per area may be reached with the cultivation of new species. This includes several species of millet, which are target of research in order to gain information about their potential use in biogas facilities. The agricultural research also focuses on the short rotation and fast growing plantations of cottonwood and willows. Since the resource wood is actually scarce in the forests of Germany and Europe, an interesting

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alternative for the wood producing industry might be the cultivation on plantations. Cultivation, choice of species, yields as well as questions regarding plantation, keeping and harvesting are topics of this research. The placement of short rotation plantations, with the use of willows, cottonwood or robinia, takes place with the planting of cuttings. The cuttings should have a length of 20 cm without roots, or longer with the roots attached. Dry years carry the risk that the cuttings might dry out and might not take root without artificial watering. After four to five years of proper cultivation the trees can be harvested for the first time. The plants will grow again from the rootstocks, and will be harvested every four to five years. In Brandenburg such plantations were created mainly in the Lausitz on former mining areas (> 100 ha). Smaller areas (< 10 ha) do exist in other parts of the state. The Institute for Research of Former Mining Areas (Forschungsinstitut für Bergbaufolgelandschaften (FIB) e.V.) in Finsterwalde published a handbook for the creation of such short rotation plantations in 2007. 2.6.2 CONVERSION TECHNOLOGIES Usage of solid biofuels in Brandenburg Brandenburg possesses 20 combined heat and power stations (CHP) using Biomass with an installed power of160 MWel and 700 MWth with a demand of fuel of 1,3 mio. t atro/a as well as 22 Heating stations with a power of more than 1 MWth each. Those use about 200.000 t atro/a. Those power plants mostly use old and remaining wood from the timber industry, as well as wood from forests. Biomass and waste material gasification Gasification is a procedure which transforms solid biomass into burnable gas almost completely with high temperatures. The organic components of the biomass are broken down into burnable compounds with the help of an oxygen containing fumigant, and remaining carbon is partially burned towards CO. This requires a high amount of process heat, which is actually provided by burning parts of the biomass. The processes of biomass gasification are not available on a large scale, yet. The last years did see the development and further advancement of different gasification techniques. The following techniques are worked on, currently:

- Solid burn gasification - Fluidized bed gasification - Vapor flow gasification - Multilevel or combined procedures

The produced gas can be used to produce heat in a burner, electricity along with heat in a gas motor (in a CHP), or transformed into a fluid fuel via chemical procedures such as the Fischer-Tropsch-Synthesis. Biogas Biogas is created through anaerobic (lacking the presence of oxygen) fermentation of organic material. Used may be material such as bio waste or sludge as well as agricultural side products such as manure or dung and specially cultivated energy crops.

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Tab 2. Development of the number of biogas facilities in Brandenburg Most facilities use combined heat and power stations to convert the biomass into electricity which is then fed into the power grid. Most of the generated heat remains unused. Rural infrastructure and lack of industry offer no possibility of usage for the heat. This does decrease the economic as well as energetic efficiency of such facilities. 2.6.3 ANALYSIS OF THE BIOMASS VALUE CHAIN: COMPANIES, MARKETS AND GAPS/NEEDS The potential for the energy generation using biomass from waste in the whole of Germany evaluated as follows:

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Tab 3: Technical fuel potential from biomass in Germany Energy crops, which are cultivated for one or several years for the sole use as energy source, may be added to this figure. The available area should amount to 2 mio ha. The declared biomass (energy crops or stalk plants) may only be used once (thermo-chemically, bio chemically or physically-chemically). The total fuel potential would amount to 1.000 to 1.300 PJ/a (about 8% of the current German primary energy consumption). The presented organic material may be transformed into solid, fluid and gaseous (bio)energy carriers by thermo-chemical, biochemical and physical-chemical means in order to produce energy or heat. Exclusive burning When burned, biogenic solid fuel is used in furnaces in order to provide heat or electricity. Heat generation is using well established technology and has been used for decades. Electricity generation with biomass power plants using the conventional steam processes (turbines) is established as well, and has gained in significance. Thermo-chemical transformation: The thermo-chemical transformation is used to gain solid, liquid or gaseous energy carriers from solid fuel. Goal of carbonization as a variant of thermo-chemical transformation is to gain a high yield of solid fuel, which will be used for the generation of heat (charcoal), or materially (Activated carbon). Charcoal as an energy carrier does not hold any significance in the energy industry, though. Pyrolyse, another thermo-chemical transformation, is used to gain a high yield of fluid components (Pyrolysis oils). In spite of various endeavours, such processes are still in research and development stages. Gasification, another option, targets the transformation into gaseous components. This gas will then be used in engines, turbines and fuel cells in order to generate energy or transformed into fluid or gaseous energy

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carriers. The high effectiveness of this procedure is a reason, why this procedure will play a major role in the fuel and energy production of the future. Physical-chemical transformation: Oils and fats, produced by physical and chemical procedure (compression and extraction) may be used in stationary and mobile diesel engines. The necessary technique has been available for many years. By means of transesterification into plant oil fatty acid methyl ester the plant oil may gain properties similar to those of fossil diesel fuel, which allows the use in mobile and stationary diesel engines, even intermixed with regular fossil diesel fuel. This technology works well with other oil such as canola oil as well, and is already established. Biochemical-transformation: The biomass is transformed by means of micro organisms in a biological manner. Alcoholic fermentation and anaerobic cultivation may be distinguished from each other. Alcoholic fermentation transforms sugar, starch and cellulose containing biomass into ethanol, which can then be extracted and used as a fuel in engines or furnaces in order to generate heat, electricity and power. The necessary technology is available on a large scale, but still shows potential for further optimization. The anaerobic fermentation of organic material in aqueous solution creates biogas, which is composed of two thirds of methane. This works especially well with organic matter, which is already diluted or contains large amounts of water (manure, organic waste from communities, sludge). The generated biogas may be used – after purification, if necessary-, in engines in order to create heat, electricity or power. 2.6.4 NETWORKS 2.6.5 SUMMARY 3. ANALYSIS OF THE FEASIBILITY OF OPPORTUNITIES 3.1 FEASIBILITY OF OPPORTUNITIES IN BURGOS 3.1.1 REGIONAL USAGE AND DEVELOPMENT

According to the study of potential of biomass resources elaborated for the province of Burgos, almost all the potential is not being used. The surface potential to be used of forest biomass is 460.000 ha (foliage cover higher than 40% and gradient lower than 30%). The areas with a higher development of forest biomass are La Demanda and Merindades, where with a radio of 30 km it is available 30.000-70.000 tons of biomass annually. The total production of biomass in the province is 157.000 tons per year which in energetic terms are 72.000 toe/year. The term of agricultural biomass is used for the part of cultivation which is not the harvest. In this sense, in the province of Burgos there are residues from fruit trees and vineyards (17.344 ha of fruit trees and vineyards which would generate 1.563 toe/year. The herbaceous crops suitable for energy production are in 587.000 ha, 60% of them are cereals. This means a energetic potential of 216.000 toe/year (Supposing that 100% of the residues would be address to energetic use. The areas more developed within Burgos province are Burgos, Odra and La Bureba.

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3.1.2 TECHNOLOGIES AND TRANSFORMATION

Until now the biomass sector in the province of Burgos has experienced a lower development in relative terms with respect to other renewable energies, especially wind energy, which have received significant investment in the last five years in Burgos. This situation, no doubt was conditioned by the former legislative framework relating to the Special System set forth in the Royal Decree 436/2004 in which the production of electrical energy originating from biomass was disadvantaged with respect to other sources. This, however has changed with the Royal Decree 661/2007 of 25 May 2007 which regulates the activity of electrical energy production under a Special System, and which replaces the previous law and which contemplates much more attractive premiums for electricity generated by biomass than the former legislative framework. It is assumed that this measure will generate highly positive short-term results in the development of the biomass sector. The application of biomass in the thermoelectric field has led to the opening of new markets with a strong growth potential, enhanced by the incipient venture in energy crops. In the province of Burgos there has been a need for a significant boost in this sector given the need for the installation of new power generation plants. As a thermal source, biomass has experienced little growth in its level of applications, although new segments are emerging in the domestic market, which are very interesting. The obtaining of biogas, on the other hand, has experienced steady growth with market diversification, which is evident in the province of Burgos with a new methanization facility in the municipal dump. 3.1.3 COSTS, EFFICIENCY, BARRIERS TO DEVELOPMENT According to the interviews carried out during January and February 2008 which allowed to get feed back from 13 companies of Burgos hey pointed the following: The economical barriers detected by the companies of the province of Burgos are the following: High volume of investments, very high prices of domestic boilers (more than two times of regular ones –gas, oil…- and other equipments, needs of more and higher grants and subsidies (low grant level in comparison with other regions of Spain, feasibility doubts for forestry waste collection and low financial support to thermal kW. In order to face the economical barriers, the companies proposed the increase of the price of the electric kW/biomass in comparison with other RE, promote a market transformation in biomass sector in order to reduce the price of boilers, increase the incentives to install biomass boilers for general public and increasing financial support to thermal kW, reduction of prices of machinery and equipments (Public Administrations grant) and grants and subsidies, especially those oriented to forest cleaning. The social barriers detected by the companies of the province of Burgos are the following: uncertainty about the demand of general public, lack of information among general public about biomass and biomass fuel supply and most people do not consider wood as a waste. In order to face the social barriers, the companies proposed to promote the use of biomass boilers among general public, inform general public about the advantages of use biomass boilers, institutional promotion and joint promotion along with pellets’ producers. The legislative barriers detected by the companies of the province of Burgos are the following: the red tape, the regulations related to biomass are less favourable than other RE such us solar thermal energy, need of a clear and global definition of the “biomass” concept, deficient regulations related to forest cleaning and waste collection and discriminatory subsidies.

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In order to face the legislative barriers, the companies proposed to simplify the bureaucracy of biomass installations, introduce positive modifications in the RITE (Thermal Installations Regulation) related to biomass, clarify a homogeneous definition of the “biomass” concept for all institutions, new and positive regulations related to forests cleaning and waste collection issued by Public Administrations and no legislative discrimination among different wood and biomass related business. Most of the interviewed companies detected commercial barriers in this field. Companies do not find significant demand of pellet boilers besides there are important competitors in other countries such us Austria or Finland, for this reason companies proposed to increase the competitiveness via prices. 3.1.4 RESEARCH AND DEVELOPMENT

Apart from the R&D developed by a certain numbers of companies, there are four technological institutes in Castilla y Leon: CIDAUT, CARTIF, CEDER and ITCL (Burgos). There are also another institute specialized in wood and biomass (CESEFOR).

3.1.5 INFRASTRUCTURE AND LOGISTICS

As the market is in the very start-up phase, infrastructures and logistics are at the same stage.

3.1.6 SUMMARY It has been detected mainly some economical, technological and legislative barriers for the correct develop-ment of biomass sector in Burgos. As a result of the studies and interviews carried out so far, it should be stated that the whole market needs to be built up, stimulating the demand and optimising and adjusting the offer both essentially at the same time. 3.2 FEASIBILITY OF OPPORTUNITIES IN TAMPERE REGION 3.2.1 REGIONAL USAGE AND DEVELOPMENT Total energy consumption in the Tampere region is approximately 23 TWh and it is increasing. 35% of consumed energy comes from natural gas. (23) Biogas Biogas can be used instead of natural gas. As it was mentioned above natural gas is the most used energy source in Tampere region. All biogas produced energy in Tampere region (17 GWH/year) is also used. Tampere region has vast opportunities to produce biogas only in farm scale and in addition there are e.g. landfills. (12) (16) (23) Forest and agricultural biomass, field energy There are lots of unutilized resources in the region. Energy consumption in the region is increasing and also that creates possibilities for businesses operating with energy sources. Usage of forest biomass and field energy are seen most feasible options because of their efficiency, possibilities to reduce emissions by the usage and available resources. (2) (4) (27)

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3.2.2 TECHNOLOGIES AND TRANSFORMATION There is a need for technology development in the field in the basic level. Many enterprises have had to act as pioneers and count on their own ability to adapt. Moreover, there have not been any ready made technology for many different fields in biomass sector. (4) Forest biomass Technology for wood stump crushing on the spot (in the forest) is lacking. Also harvesting technologies should be developed in order to utilize the full potential of resources. Lots of research and development work is done in the companies. (4) Technology for drying raw material for pellet production When producing pellets, raw material has to be absolutely dry. There is huge demand in the markets for big and efficient dryers. Often the saw dust from which pellets are pressured from is left too wet and this has an impact on the quality of the end product. There is market gap for dryers and the potential is good because pellets are produced in Finland and in the Tampere region vastly. 3.2.3 COSTS New technologies are invented in the companies but they are expensive to implement without adequate subsidies from government through Finnish Funding Agency for Technology and Innovation or other actors. Supportive actions, mainly subsidy procedures, demand high amount of bureaucracy, which make them slow and besides of that monetary support might not be enough. (4) Biogas plant (farm) Fixed costs of the biogas plant in farm include capital investments, insurance, maintenance and repair costs. Variable costs includes energy production, energy consumption of the bio gas mill, electricity taxes and own work. Bought energy has to be used in the starting stage, during the period of non-use or if the mill is producing only heat electricity has to be bought elsewhere. Otherwise the mill can produce the energy for itself. Costs depend on about the size of the mill and level of automation. There is presented a model by Hagström etc. for yearly usage costs for farm size mill to be 1000€ + 1€/MWh. (14) Hydrogen economy Transforming to the hydrogen economy demands big financial investment, political will and developing and building of distribution channels. Hydrogen can be transformed directly to electricity and heat with fuel cell. There is technology existing but not cost-efficient enough to implement. Fuel cell and hybrid power plants are promising technologies in the next 10 years in small scale electricity production. (3) Field energy As it was mentioned before, 140 times more field energy could be utilized without any additional investments. This fact makes the utilization of field energy very feasible in addition to that increased usage would create work places in the field of cultivation, boiler manufacturing, etc. (4) (20) (23) 3.2.4 EFFICIENCY Peat Remarkably amounts of peat can be stored up. Warehousing is important because of different seasons in Finland. In winter time need for heating is higher when also fuel is needed. Peat resources are evaluated to be

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sufficient for next 200 years. Because of increasing amounts of usage possibilities of peat it is efficient to produce. (11) Bio gas Operating efficiency is 85% when electricity and heat is produced. If only heat is produced operating efficiency is 90% and if only electricity is produced 35%. “If a biogas plant uses all the produced biogas for joint production of energy and heat, the amount of energy produced during a day will total 10.94 MWh”. (Finnish Biogas Association) Bio gas plant can use its own produced energy and that increases the efficiency. (25) (14)

Energy produced in bio gas process can be sold to electricity network, traffic fuel usage, as gas by transfer line or district heat. More over farms can utilize the energy for themselves and fertilize fields with bio mass. Also waste disposal fee is collected when receiving the waste. When selling heat, energy invoicing principle can be amount of kWh produced. Other invoicing principle can be the amount of sold bio gas. Produced electricity energy can be sold to electric company or straight to the end user. (14)

Field energy Reed canary grass is the best energy plant suitable for cultivation in Finland. Cultivation of reed canary grass can deploy the fields which have been in usage of food and agriculture cultivation or peat production. Reed canary grass can be cultivated with the same technology as regular sward cultivation in farms. These facts in addition to that incremental usage would not demand any additional investments make the utilization of field energy remarkably efficient. (20) 3.2.5 RESEARCH AND DEVELOPMENT In Finland new energy production techniques have been researched and developed for a long time including innovative solutions like hydrogen economy and salvaging carbon dioxide. There are research and development centres well represented in Finland. These centres are presented in “Inventory of Biomass Resources” –report. Research and development operations play major role in the sector. A lot of development in the field of technology is needed to utilize the resources in feasible and efficient way. Technology can be seen as strength of the Finland and remarkable solutions are very likely going to be developed. (4) 3.2.6 INFRASTRUCTURE Hydrogen economy Transforming to the hydrogen economy would demand big infrastructural changes and that way monetary investment. Hydrogen economy offers energy transmission and warehousing method totally independent from fossil fuels. This evidently means that hydrogen economy would demand remarkable changes and investments in people’s every day life. Forest biomass usage Mainly problems in the field are faced because there are no adequate roads into the forests. Also one problem is that e.g. wood chips have to be transported through population centres and this causes dissatisfaction among residents. Furthermore this leads to bad attitudes towards forest biomass usage. Still forest biomass usage can be seen feasible because of adequate resources, production possibilities and demand.

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3.2.7 BARRIERS AND DEVELOPMENT 3.2.7.1 Subsidy procedures Subsidy procedures cause barriers for development because complexity of the system slows down the development. In addition to that, funding procedures as well are slow and inadequately structured that many technological innovations are left without any development efforts. According to the Technology Manager of the VTT Technical Research Centre of Finland, subsidisation of renewable energy in Finland is so slow that bio energy resources are exported in increasing amounts. This could lead to that Finland is not able to reach EU set goals for adding the usage of renewable energy. Impact of this problem is seen in the pellet production business, where over 70% is exported. Because pellets are exported that heavily government has decided not to support the pellet production any more. (21) 3.2.7.2 General knowledge General knowledge of end users is seen to be low. Even though nowadays information about alternative energy resources is available extensively, use of electricity and oil is the easier option. Lack of knowledge among different authorities, investors and end users is seen as a big barrier. (4) Pellet Energy Association also claims that the production could be raised to 1 million tons by the year 2010. According to associations predictions there are also domestic markets for this amount. With that amount there is possibility to replace half of the used heating oil and decrease greenhouse gas emissions in real estate heating by 2 million carbon dioxide tons. (1) 3.2.7.3 Taxation Taxation of fossil energy sources do not attract end users to turn on to renewable energy sources. E.g. increases of value added tax of oil and electricity in Finland are particularly low compared to Sweden, Norway and Denmark. This does not support the contribution of renewable energy sources. Prices of oil and electricity have not increased with that phase they should have. Moreover, those increases are that small that it has concretely no impact, e.g. in practise tax increases raised the heating prices for electric heated houses 28 Euros per year and for oil heated houses 33,50 Euros per year. (1) 3.2.7.4 Directives Waste burning directive causes difficulties or even bankruptcies for small plants because of strict rules and orders to yearly measures. Measurements are expensive and small plants can not afford that. Regulations of different countries are not common and that makes exporting business in the sector difficult. E.g. boilers manufactured in Finland do not fulfil requirements in Germany. (4) 3.2.8 LOGISTICS Logistics and transportation are seen to be expensive but efficient in Finland. According to the interviews the field of char coal production sees logistics as a big problem due to international markets. There is not that high demand in Finland and charcoal has to be exported in order to make profitable business. 3.2.9 SUMMARY

Feasibility of the possible market opportunities were measured mainly on the basis of efficiency of the usage, cost and existing technology. Most feasible market opportunities are presented in the following section.

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3.3 FEASIBILITY OF OPPORTUNITIES IN POMURJE REGION 3.3.1 REGIONAL USAGE AND DEVELOPMENT According to several analyses, the Pomurje region has counted a tendency of decreased use of non-renewable energy sources (fuel oil) due to the increased price on oil derivatives, and enlarged use of renewable energy sources, mainly wood biomass (Source: Energy analysis of the Pomurje region, 2006). As we have already mentioned above, 42,5% of energy (from the total region energy usage) is produced out of biomass. The share of wood biomass within this structure makes 90,49 %. In connection with that, in private sector of Pomurje between 1981 and 1999 has been found and made a small step forward by exchanging the out-of-date heating boilers on wood biomass into contemporary ones, as well as the switch from the fuel oil heating into wood biomass heating for about 30 % (Source: Specialities of supply and demand of wood biomass in Pomurje). After the year 2002 there were 21 % more new boilers installed on wood biomass. In 2004 the first wood district heating has been located in Pomurje, Cankova municipality. Nowadays, there are counted 5 BDH in Pomurje (look the section 2 a.). However, the biggest problem still represents the rest 70 % of out-of-date low efficiency boilers and other heating devices left in households of Pomurje as well as the energy wasteful buildings, such as schools, kindergartens, local authorities’ and municipalities’ structures, where energy efficiency is still at embryos level. The active part towards the promotion of BDH installations in our region have been made by the Ministry of Environment and Spatial Planning of the Republic of Slovenia (MOP RS), when they have published in May a public call (tender) for purchasing the brand new up-to-date boilers on wood biomass (The allocation of subsidies between individuals for energy efficiency and renewable energy sources use in buildings N 3600-1/2008-1). Another important project implemented by MOP RS was »Eliminating of the gaps for enlarged use of biomass as energy source 2002-2007«, which has been spread and implemented all over Slovenia, except Pomurje, by the reason of the sufficient coefficient for biomass utilization in the region. 3.3.2 TECHNOLOGIES AND TRANSFORMATION The technology in recent 17 years has exceedingly changed since the Republic of Slovenia became independent from Yugoslavia in 1991. We are witnessed the positive development of technology within small and medium-sized devices extent, which is recently has been formatted mostly on the local / national level. Just a few years ago there were no any biogas plants in the Pomurje region, but nowadays we may count already 4 of them (one of them is the purifying plant). The same statement is relevant to district heating systems on wood biomass – 5 BDH systems (look the section 2 a. and 2 c.). These two examples by all means are proving their important continuous market research both of raw materials and methodology improvement. Thanks to the fact that Slovenia became a member of the EU in 2006 the new biomass related technology is available for every enterprise or individual by its open importing (from Austria, Germany). The only obstacle on this way is the financial support by purchasing the relevant technology. The Agromerkur chicken farm (directed by Panvita Group) in Gornji Petrovci in 2006 has started to produce the briquettes out of the chicken faeces for heating purposes. The idea belonged to the manager of the farm, Anton Tanacek, who wanted from one side to settle the problem of the redundant chicken faeces, and from the other side to use the final product for the heating needs. For this purpose he has invented his own briquettes producer, which has costed him 14 times less then in the market. The manager itself is regularly using those

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chicken briquettes in combination with firewood (as well as some other employees of the farm) for heating of his own house, what helps him and the other employees to save up on the heating expenses. We can certainly name the example of the machine for briquettes production out of chicken faeces as a new successful innovation that have not been commercialized in Pomurje yet, but we can state it as a feasible opportunity in our region. 3.3.3 COSTS As we have already mentioned in the paragraph 3.1., there is a tendency of the enlarged exploitation of wood biomass (firewood, wood chips and pellets) for heating energy needs in Pomurje for the sake of the global increased prices on fuel oil. The use of wood biomass in the public and private sectors has significant rose up to 20 % since last 2 years, where the price for a wood item is currently estimated to 60 € per 1 m3, as for the fuel oil – approx. 1 € per liter. According to the National Energy Programme (NEP), the Slovenian government gives incentives for production of electricity from renewable energy sources to stimulate and increase production of “green” energy. The incentive is defined in the Decision on prices and premiums for the purchaser of electricity from qualified electricity producers (Source: Official Journal of the Republic of Slovenia 75/2006). The biogas plants, being qualified “green” electricity producers, can sell the electricity to public supply grid by redemptory price – 0,42 € / kWh, while the national electricity companies are selling the electricity by the average price – 0,08 € / kWh. The price difference is settling by government, who is practically covering the difference and encouraging the biogas plants increasing the production of “green” energy.

3.3.4 EFFICIENCY In Pomurje households / districts for heating and technology needs is still remain heating boilers. The share of those on wood biomass is increasing with every year according to the analyses we have already mentioned above. The efficiency of the ordinary boiler on wood biomass estimated from 50-90 % (Source: Energy Analysis of the Pomurje region, LEA Pomurje, 2006). As for the efficiency of biogas plants within our region, we may estimate 35 % - the share of electricity and 45 % for heating needs. The fact of setting up a new biggest biogas plant in Lendava this year has just proved the actual efficiency of this division in the biomass domain in Pomurje. 3.3.5 RESEARCH AND DEVELOPMENT At the moment the research and development in the field of biomass in the Pomurje region show a big deficiency. R & D on larger scale, in Slovenia, take place mainly at Energy, Ecology and Technology Research Institute, HSE offices, E-Zavod and at few small research centres or by a number of enterprises. Research and development carried out at these institutions and companies are normally focused on specific aspects of biomass utilization or production, but not at the production technologies and innovations. More direct finance support from public funds and many-sided assistance from local authorities could provide the success towards requisite researches favourable to feasible and efficient exploitation of the regional biomass resources. 3.3.6 INFRASTRUCTURE The infrastructure in wood biomass sector in Pomurje is not very developed. According to the fact, that the prices on fuel oil recently have been pretty satisfying there were no demand on cheaper means of heating. However, after rising of prices on all oil derivatives it has immediately aroused a question of another

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alternative source – wood and its relative price for customers. Unfortunately, according to the rural character of our region, the roads leading to public and private forests are untidy and in pretty bad conditions, sometimes even absent indeed. The reason is that the woods have not used to be thinned (dispersed parcels) and take care so much, so the roads were not necessary to be made or be renovated, as they also required additional investments. Nowadays, the situation is changing, as the wood biomass exploitation is foreseen as a pretty feasible opportunity being in great demand in Pomurje region. 3.3.7 BARRIERS AND DEVELOPMENT There are several barriers keeping the biomass sector in Pomurje behind in the development we may list below:

- Various administrative and legal obstacles by establishing of new biomass enterprises in the region (bureaucracy, environmental, electro-technical ordinances);

- Lack of demand on business upgrading – insufficient critical mass; - Lack of the public subsidies; - Necessity for income tax relief for investments into biomass infrastructure; - Lack of adjustable directives from public authorities; - Lack of a transport-logistic centre.

If at least half of the above-mentioned barriers are overcame, there biomass sector in Pomurje would have the material base for the feasible market fruitful opportunities to develop. 3.3.8 LOGISTICS There is no transport-logistic centre in Pomurje yet as soon as there is no demand, which is characterized by insufficient operating works within the biomass sector in our region. 3.3.9 SUMMARY Feasibility of the possible market opportunities we have estimated mainly on the basis of the regional usage analysis, available technologies, efficiency of the usage, costs and infrastructure in Pomurje. The other foreseen market opportunities are presented in the following section 4. 3.4 FEASIBILITY OF OPPORTUNITIES IN CENTRAL HUNGARY 3.4.1 REGIONAL USAGE AND DEVELOPMENT In terms of potential, the region has very favourable conditions for biomass utilization for the generation of heat energy for the urban gas provision. This would require a high level of sewage water plant biogas production which also has great potentials in the region, as well as the production of dumping field gas. This is the most urbanized region in the country; therefore there is great potential in utilizing sewage and dumpsites for biogas production. Central-Hungary is not typically an agricultural region, which can be attributed largely to the fact that it hosts the capital city of Budapest (with a population of over 2 million people) and the surrounding industrial areas. Biomass production and utilization in the region therefore is limited and of no significant importance. Biomass related research and development actions take place at the relevant research centres and agricultural and technological universities. SMEs usually do not have the capacity and the financial background to carry out

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major development activities but there are certain state supports and EU opportunities (especially under FP7) which partially finance their such efforts. 3.4.2 TECHNOLOGIES AND TRANSFORMATION At present, the major part of renewable energy utilization is the energy utilization from biomass resources. Within this typically direct burning and co-burning technologies are used dominantly for electricity and, to a small part, heat production. The biomass based heat- and electricity production occupies 90% of the total renewable energy portfolio. 57% of this is firewood, which is used to a great extent by the population – generally in low-performance boilers, the rest is other vegetable by-product. For further details see point 2.2.

Percentage of RE resources in RE production (2005)

Biogas; 1%

Solar thermal; 0%

Geo-thermal; 8%

Wind generated energy; 0%

Hydroelectric energy; 2%

Firewood; 57%

Biomass; 32%

3.4.3 COSTS Due to the power-plant-generated increased demand the price of firewood has risen considerably in the previous years. This rise is perceivable in the public, the industrial and energy sectors as well. The price of firewood in the public sector (communities) rose 60% by the beginning of 2007. Due to the increase in the price of base materials the power plant sector has also observed a significant rise in 1 GJ energy generated (from 600 HUF to 1.300 HUF).

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- Firewood retail price - Electric power (taken over) from biomass - Natural gas (1.500 – 3.000 m3)

Ft = HUF (Hungarian Forint) As the chart depicts the price of the firewood tends to move together with the price of natural gas and not with the increasing production of plants. With the growing price of natural gas, more and more households turn back to using their former mixed fuel-fired boilers which generates a growth in demand on the firewood market. As power plants have already deposited a demand for the large part of firewood the resulting shortage raises the prices. There is also a growing concern among the representatives of the wood- and paper industry that the increasing demand (generated by the plants) will affect the market of the industrial quality wood as well. The starting costs of biomass investments are high, and the risks involved (lack of clear long-term commitment) hinder many initiatives ever being implemented. The involved players require a defined long-term strategy which would provide guarantees that the investments will not go avail. Within renewable energy sources, the sales of electricity generated from biomass increased slower than the average, by 4.2% (46.2 GWh) in 2007 relative to the previous year In harmony with EU directives a compulsory feed-in tariff system (see following pages) has been introduced defined by the Electricity Act. Electricity providers are obliged by the Act to purchase the electricity produced in their area of operation at a higher price than that of the market. The difference between the market and the feed-in tariff is then compensated by Mavir Zrt. (MAVIR Hungarian Transmission System Operator Company Ltd).

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Electricity sold in the framework of feed-in obligation and the amount of the associating KÁP1

Electricity sold, GWh KÁP millionHUF Specific KÁP HUF/kWh Category 2006 2007 Change 2006 2007 Change 2006 2007

Renewable, total 1 186 .4

1 302 .3

+ 9 .8%

13 984

13 784

- 1 .4%

11 .79

10 .58

Including: biomass, biogas

1 102 .2

1 148 .4

+ 4 .2%

12 993

12 127

- 6 .7%

11 .79

10 .56 Wind 38 .8 106 .8 + 175 .2% 471 1 184 +151 .5% 12 .13 11 .09 Hydro 43 .9 39 .8 - 9 .2% 501 393 - 21 .6% 11 .43 9 .87

Waste gas 0 .0

5 .7

--

0

61

--

10 .33

10 .73

Sewage gas 1 .6

1 .6

+ 3 .9%

19

18

- 7 .0%

12 .05

10 .77

From waste deposit 131 .6

133 .9

+ 1 .7%

948

846

- 10 .8%

7 .20

6 .32

Gas pump station 4 .2

3 .4

- 19 .9%

31

21

- 30 .3%

7 .29

6 .35

Co-generated 3 067 .2 3 382 .2 + 10 .3% 32 274 33 548 + 3 .9% 10 .52 9 .92 including:

below 6 MW

1 891 .5

1 936 .7

+ 2 .4%

19 871

19 538

- 1 .7%

10 .51

10 .09

6 – 50 MW 1 175 .7 1 445 .5 +23 .0% 12 403 14 010 + 13 .0% 10 .55 9 .69

Total

4 389 .4

4 821 .9

+ 9 .9%

47 237

48 199

+ 2 .0%

10 .76

10 .00

1 A fund for compensation purposes associating with the feed-in obligation of electricity, which is the due of those who are obliged to take over the electricity

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Electricity feed-in tariffs as of 1st January 2008 (without VAT), HUF/kWh1 From 1st January 2008

Peak2 Valley2 Deep valley2 Solar 26,46 26,4626,46

Wind 26,46 26,46 26,46Based on resolution of Hungarian Energy Office (HEO) adopted before 01. 01. 2008. [except hydro power station units (PSU) >5 MW] Other than solar and wind 29,56 26,46 10,80

Produced by PSU of 20 MW or less (except solar) 29,56 26,46 10,80

Produced by PSU of >20 MW - max. 50 MW 23,56 21,17 8,63 Based on resolution of HEO6 adopted after 01. 01. 2008. (except hydro PSU >5 MW,

other PSU > 50 MW)

Produced by PSU comprising used equipment3 18,39 11,77 11,77

Produced from renewable energy sources

Produced by hydro PSU > 5 MW, other power unit >50 MW 18,39 11,77 11,77

Produced from waste

27,73 19,11 9,97

if the PSU - legally4 sold electricity, or - has got production licence

and the investment process has started before 01. 01. 2008

32,59 20,82 3,00 - if the nominal capacity of the PSU <50 MWe and the useful heat from CHP is sold for district heating purpose or - if the nominal capacity of the PSU <6 MWe and the useful heat from CHP is sold for non-district heating purpose - if the PSU was entitled to feed-in-tariffs after 01. 01. 2008.

or - it has got production licence before 01. 01. 2008. but the investment process started after 01. 01. 2008.

27,32 18,73 3,00

- if the nominal capacity of the PSU is between 50 - 100 MWe and the useful heat from CHP is sold for district heating purpose or for selected organisations5, or - if the nominal capacity of the PSU is max. 20 MWe and the useful heat from CHP is sold not for district heating purpose or selected organisations5 if the PSU got production licence after 01. 01. 2008. and comprises used equipment3

18,64 11,64 3,00

Produced by CHP process

- if the electricity is produced at specific electricity production index 0,38 during the heating season by PSU which started commercial operation before 01. 01. 2008. and - if the useful heat from CHP is sold for district heating purpose or for selected organisations5, and - the nominal capacity of the PSU is between 50-140 MWe

28,58 17,97 3,00

Notes:

1 - Based on 389/2007. (XII. 23.) Gov. decree (GD) about obligatory takeover and feed-in tariffs of electricity produced from renewable energy sources or waste, and CHP

2 - Duration of parts of the day (time zones) on working days according to GD - by the (Central European) time being in force (hereafter referred to winter time) - by the summer time set by a special rule

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is as follows:

Part of the day Winter time Summer time

Peak 06:00 – 22:00 07:00 – 23:00

22:00 – 01:30 and 23:00 – 02:30 and

Valley 05:00 – 06:00 06:00 – 07:00

Deep valley 01:30 – 05:00 02:30 – 06:00

On non-working days:

Part of the day Winter time Summer time

Valley 06:00 – 01:30 07:00 – 02:30

Deep valley 01:30 – 06:00 02:30 – 07:00

Parts of the day on 3 different territories of the country equivalent to licensed territories of 3 supplier's group (two supplier in a group) are slipped by 30 minutes relating to each other (comparing to 1st group presented here, detailly see in Suppl. No. 3 of GD)

3 - By paragraph No. 2 of Gov. decree 273/2007. (X. 19.) about enforcement of instructions of Electricity Act LXXXVI. 2007. the equipment is qualified as used if it was produced 5 years earlier than the production licence application.

4 - According to decree 56/2002. (XII. 29.) GKM about obligatory takeover of electricity and rules of its price setting.

5 - Upon the subpoint k) of point (1) of paragraph 2. of GD: "selected organisations: central budget organisation, budget organisation of local municipalities, local governments, other non-profit, non-property organisations fulfiling public obligations with specific state support.

6 - After 1st January 2008 wind generators can sell electricity in the framework of obligatory takeover on the criteria of a tender if they win

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3.4.4 EFFICIENCY As mentioned earlier the major part of biomass utilization, firewood burning basically, takes place in power plants converted from coal firing to wood firing. The average efficiency of the converted plants is no more than 27%. The plant in Pécs for example operates at 33% while the one in Kazincbarcika only at 25%. Efficiency is increased in cases when a combined production of heat and electricity takes place but the efficiency of electricity production does not exceed 35-40% even in this case. This is true not only to wood chip fuelled but also to other direct solid biomass (e.g. straw) fuelled plants. The low efficiency operation of the plants raises the question if they are worth at all the allocation of funding and the yearly burning of around 1 million tons of wood; especially if we consider that there are more efficient technologies both in the case of cogeneration and heat production. At present heat produced from biomass does not receive as much financial support in Hungary as electricity production from the same resource. Therefore power plants are not motivated to utilize heat. In addition, the regulation concerning the fixed take over price of renewable energy does not specifies the level of efficiency at the moment. Certain generators (Bakonyi erőművek, Borsodi Hőerőmű) used the available allowance to a greater extent than in the previous year (although still at a low level compared to the possible one). The use of biomass has been stopped at Tiszapalkonya since February 2007 partly due to economical and partly due to technical reasons. With regard to Vértes Power Plant, the allowance has been increased compared to the previous year. The generation of the Mátra Power Plant also grew up to the extent that was provided by the allowance that was increased from the previous year’s level. 3.4.5 RESEARCH AND DEVELOPMENT It can be stated in general that research and development in Hungary is lacking fundamental support which results in a reducing number of patents and utilized research results. The biomass sector is no exception. R&D on larger scales takes place dominantly at agricultural (Szent Istvan University; Karoly Robert College) and technological universities (Budapest University of Technology and Economics, etc.), a few research centres and by a number of enterprises. Research and development carried out at these institutions and companies are normally focused on specific aspects of biomass utilization or production (such as developing a new type of energy grass, etc.). As for the commitment of the local authorities, more and more direct support, from different funding sources, are made available to project owners engaged in the utilization of biomass resources. 3.4.6 INFRASTRUCTURE Although the research and use of biomass for energy purposes has been going on for over 20 years by now, it cannot be said that a suitable infrastructure for its utilization has been set up and available throughout the country. If we look at biogas production, for example, the technology is in its infancy in Hungary at present. There are no real good examples in the country, therefore companies, municipalities, co-operatives, etc with the intention of biogas production usually turn to foreign support. Farmers are forced to by foreign technology as well which increases costs significantly on the one hand, and slows down development at national level on the other. It must also be mentioned, however, that there various state offered funding schemes which finance biomass related infrastructural investments. These schemes are made available within regional or national funding programmes (such as the Regional Operational Programme) to small, medium and large companies and other organizations. Some of the larger coal-firing plants have been modified so that they can burn biomass as well but it is not typical that individual cities, municipalities, smaller communities create an appropriate infrastructure for the utilization of biomass.

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All in all, it can be said that geographic and agricultural conditions would enable a considerably greater utilization level of biomass, the required infrastructure, for a number of reasons, however, is not available yet, in many cases. 3.4.7 BARRIERS AND DEVELOPMENT In spite of the fact that Hungary has great advantages and potential, biomass is utilized to a very small extent (except for firewood burning in the modified power plants) at present. Domestic players show reluctance to co-operate with each other, instead, they often enforce their interests on the expense of their counterparts. For example universities often don’t collaborate with each other or with research institutions, it is often the case that they take the side of one of the major players (bio-ethanol versus bio-diesel) and refute the claims and findings of the others. Furthermore there is no strategic alliance between agricultural, environmentalist and energy players which hinders development and general improvement of the sector. There are strong debates about the utilization of biomass resources and the distribution of state provided support. The market is not united, a small number of actors dominate and influence the industry. The fact that there are great differences at EU level does not ease the situation either. Developments and investments are often halted because of the unclear regulatory environment, the lack of long-term governmental commitment and imprudent support system. Investments need a large starting capital and the return is not seen as guaranteed at the moment, at least not in the short term. Administrative and legal barriers slow down the development and the monopoly of the Hungarian Power Companies Ltd. also discourages certain investments to take place in the energy sector. The lobby power of the gas providers also put obstacles in the increased utilization of biomass hindering development and investment. Due to the undefined regulatory system, a clear and definite EU stand, the often problematic funding schemes, the rising price of resources and base materials, the cost of starting biomass utilization businesses, etc. investment in the biomass sector remains a risky undertaking. In terms of base material supply, there is a growing concern among ecologists and energetistic experts that we cannot burden our forests any longer, instead we should satisfy further demands from other RE resources, such as energy plants. 3.4.8 LOGISTICS 3.4.9 SUMMARY

3.5 FEASIBILITY OF OPPORTUNITIES IN NORDTHUERINGEN

3.5.1 REGIONAL USAGE AND DEVELOPMENT

Since it is the vital core of all future activities, it is necessary to concentrate in this report on the potential market opportunities for entrepreneurs and SMEs in Biomass sector re. soft skills problems. Market opportunities are selected on the basis of information of interviews with active players, sources and prospects in Biomass sector. Agriculture and forestry have a part of approximately 2 % of the whole economic value chain in the Free State of Thuringia. But its macroeconomic relevance is not limited on its direct contribution to the gross domestic product. The sector is the primary provider of advance performance for food industry. Even the food industry

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has been growing dynamically in the last years. With 13 % of the turnover and 11.9 % of the employees the food industry is the most important branch of industry in Thuringia. According to the study “Schwerpunkte und Ziele des Entwicklungsprogramms für den ländlichen Raum des Freistaats Thüringen in der Förderperiode 2007 bis 2013” (http://www.thueringen.de/de/publikationen/pic/pubdownload772.pdf) by the TMLNU the agriculture in Thuringia posses overall good natural condition regarding locations. The initial situation of the companies is beneficial according to area configuration and premises. Structures with high capacity are situated particularly in the fruit market part. In contrast to this people-intensive branches of production like livestock farming are only less existing. A very big problem in agriculture is the poor equity base of the companies. Because of high annual fluctuations of the profitability in agriculture the equity base is a very important risk buffer. But many agriculture companies in Thuringia haven’t it. In addition to this unavailable own capital resources damp the investment potency. The situation of forestry in the Free State of Thuringia is indicated by a high usable resource capacity. In the last years many investments in powerful wood harvest technologies occurred. On the other side the wood in Thuringia has a high damage level. The overall concept for forest cultivation is a near-natural wealthy structured forest with low sensitivity against abiotic and biotic dancers. The forest is farmed according to the German “Waldbaugrundsätze”. Silvicutural trade target on preservation and bettering of the production power on natural placements. Thereby the crop should be as high as possible and of course sustainable. Harmful for the economic use is the complexity of forest owner ship. Petit and midget area ownerships are widely spread. Bigger connected holding complexes are rare. 3.5.2 TECHNOLOGIES AND TRANSFORMATION 3.5.3 COSTS The costs for biomass are very different according to the kind of biomass. In June 2008 the average price for wood pellets was all inclusive 184.44 €/t if 5 t of wood pellets were delivered in a radius of 50 km (reference: http://www.carmen-ev.de). Translated into heating oil the price for the same power would be 37.64 ct/l. In the second quarter of 2008 the average price for 80 piled cubic meter wood chips with a water content of 35 % was all inclusive 71.77 € if they were delivered in a radius of 20 km. One litre heating oil of analogous amount would cost 23.24 Cents. Figure 3.5.3.a shows the changes in prices during 2005 to 2008. In spite of some fluctuations by wood chips (blue line) and pellets (green line) they are mostly less expensive than heating oil (red line) and natural gas (yellow line). A price comparison of split logs (light green), pellets (green), heating oil (light grey) and natural gas (grey) heating systems for single family houses is shown in figure 3.5.3.b.

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Figure 3.5.3.a: Price development for wood chips (blue), wood pellets (green), heating oil (red) and natural gas (yellow) (prices inclusive value-added taxes, references: prices for wood chips and pellets: C.A.R.M.E.N. e.V.; prices for oil and gas: Statistisches Bundesamt), (http://www.carmen-ev.de/dt/energie/bezugsquellen/hackschnipreisverg.html)

Figure 3.5.3.b: Price comparison of heating systems for single family houses (http://www.ier.uni-stuttgart.de/publikationen/VortragNuernberg/Nuernberg_2006_04.pdf)

The price increase for rape oil on German filling stations since the year 2006 can be followed on the basis of figure 3.5.3.c.

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Figure 3.5.3.c: Filling station price index for rape oil (http://www.carmen-ev.de/dt/energie/bezugsquellen/pflaoelpreise.html#1; http://www.carmen-ev.de/dt/energie/bezugsquellen/pflaoelpreise2004.html)

The costs of bio fuels vary according to complexity of generating. Figure 3.5.3.d gives a general overview.

Figure 3.5.3.d: Costs for fuels generated from biomass (http://www.ier.uni-stuttgart.de/publikationen/VortragNuernberg/Nuernberg_2006_04.pdf)

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The production costs for electricity generated from biomass depends on the dimension of the installations (Figure 3.5.3.e). Big installations are always popular-priced.

Figure 3.5.3.e: Electricity production costs for generating electricity by burning wood: power plants, combined heat and power plants and block heat power plants (http://www.ier.uni-stuttgart.de/publikationen/VortragNuernberg/Nuernberg_2006_04.pdf)

Figure 3.5.3.f compares the electricity generation costs by using different energy sources.

Figure 3.5.3.f: Generation costs (blue), external diseconomies (red) and back-up costs (green) for generating current (http://www.ier.uni-stuttgart.de/publikationen/VortragNuernberg/Nuernberg_2006_04.pdf)

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3.5.4 EFFICIENCY How efficient it is to use biomass for generating power depends primarily on:

- the properties of the materials - the development of the technologies - a local and need-specific supply - the price for fossil fuels as well as the price for the biomass - the capacity of the plant - EEG subsidies, benefits, rate of interest, taxation - the capacity of the installation - the using of the waste heat.

Because biomass mostly has to be prepared to make it useable for generating power it is more costly in terms of technique than burning oil or gas. According to its low specific thermal capacity biomass should be used near to the production place. Otherwise high transport costs will degrade the total energy balance. So higher construction efforts as well as higher preparation costs influences the efficiency of biomass negatively. In general it is more efficiency to produce heat from biomass than electricity. In the heating sector tested techniques are available. Generating electricity is normally only with particularly favourable basic conditions and together with subsidies (EEG, aided projects, etc.) profitable. Supplying with current produced by burning biogas can be profitable because of the EEG payments. Also it is a possibility to dispose biogenic waste reasonable. In general the specific investment costs per kW installed electrical capacity decline with rising plant capacity. 3.5.5 RESEARCH AND DEVELOPMENT Talent shortage The supply or better lack of motivated and educated personnel as well as life ling learning becomes mayor question and barrier for the development of all industries and sectors in Nordthueringen region. Especially, the technology driven branches already suffer and discover business and survival risks. Therefore it is important to raise awareness among children and students already in kinder gardens, schools and grammar schools in order to create interest and pre-select potential students, who might continue studying at University in fields of Renewable Energies. In Nordhausen, biggest town in Nordthueringen, there is one of only two Universities in Germany with a centre of gravity in desired study directions. But the starting point has to be earlier in school. There are initiatives in local schools, e.g. Regelschule Bleicherode, with teams and working groups “Renewable Energies” as well as whole new school concepts towards “Bioenergy School” e.g. in Salzagymnasium Bad Langensalza. Of course, teachers cannot professionally go into detail re. Biomass issues. So entrepreneurs and companies can overtake counseling, consultancy, occupational orientation and awareness campaigns in (grammar) schools. Another duty would be to link and coordinate all institutions of education with primary sector and industry for improved Know-how transfer, support parents, assessment of job potentials in SMEs, integration of students with innovative Master thesis, stimulation of entrepreneurship and expert monitoring, organization of in and out-service trainings etc. 3.5.6 INFRASTRUCTURE The Free State of Thuringia is situated in the centre of Germany and has a state-of-the-art traffic infrastructure (See figure 3.5.6.a). So it is a cut surface between established markets and the growing economy area in

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Eastern Europe. More than 280 million consumers are living in a circle of 800 km. In less than eight hours arrive freight vehicles in every German city.

Figure 3.5.6.a: Infrastructure of the Free State of Thuringia (http://www.solarthueringen.de/index.php?id=3374) The motorways A4 and A9 cross Thuringia in west-east and north-south direction. Both are six-lane motorways or will be completed for this. The A71/73, the new motorway across the Thüringer Wald, offers a rapid connection to Southern and South-western Germany. The motorway A38 connects the North of Thuringia still comfortable to the two commercial centres Rhein-Ruhr and Halle/Leipzig. Thuringia consists in comparison to its dimension and population figure the biggest rail traffic net in Germany. At this time the active used route system has 1,750 km. Thuringia is connected to the ICE-net and to the IC-traffic. Frankfurt/Main is reachable in two and the federal capital Berlin in two and a half hours. The turnstile of the Thuringia air traffic is the international airport Erfurt. From there scheduled flights start all days to Berlin, Dortmund, Düsseldorf, Hamburg, Köln-Bonn and München. All destinations have not more than one hour flying time. The route connection to München offers the possibility of a reservation in the world wide net of the German Lufthansa AG. Charter flights start from Erfurt to the main holyday destinations in Europe and Northern Africa. In the North of Thuringia Nordhausen is the most important junction for nationwide roads and railways and the economic centre of the region. 3.5.7 BARRIERS AND DEVELOPMENT External market information deficits Information deficits, insufficient language and intercultural skills are also barriers for Biomass companies’ growth and lead to less market overview and competitiveness.

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Here it might be possible for entrepreneurs and SMEs to enter the market with specialized Know-how in other regions and foreign countries. Language skills are one of the main problems, so not yet Biomass focused companies have still the chance to adapt their language skills towards market needs. 3.5.8 LOGISTICS How already shown in chapter 3.5.6 the Free State of Thuringia and the North of Thuringia have a very good lined infrastructure. That allows fast transports not only of biomass to several places in Germany and beyond. But today the enormous price increases for fuels are a very big problem. Formations of the logistic and transport branch warn against the lost of ten thousands of jobs in Germany. The Bundesverband Güterverkehr Logistik und Entsorgung (BGL) thinks that 30,000 of 600,000 workplaces are in danger. However logistic is the most important service industry for industry and trading in the Free State of Thuringia. Today more than 9,000 employees are working for approximately 250 companies situated in that region. Since 16 June 2008 the logistic companies in Thuringia have combined themselves to the network “Logistik Netzwerk Thüringen e. V.”. The network is situated in Erfurt and is supported by the Bildungswerk der Thüringer Wirtschaft e. V.. By this way they want to better cooperation, information and communication between economy research and education. 3.5.9 SUMMARY 3.6 FEASIBILITY OF OPPORTUNITIES IN BRANDENBURG 3.6.1 REGIONAL USAGE AND DEVELOPMENT Solid bio fuel Already in 2006 a study concerning the availability of wood in Brandenburg stated the fact, that the amount of forest wood is not enough to cover the needs for the timber industry and energy production on a long term. This mobilised the research to use other, unclaimed resources of the forests. Concerning the possibility of the import of wood chips from the Baltic countries a study was made by the ETI in 2006, which claimed that the import of said wood chips is no acceptable alternative in energetic or economic ways. Other possibilities for the energetic usage of solid bio fuels are:

Production of mixed pellets from different biogenic materials Energetic usage of straw

Biomass and waste utilization The gasification of biomass and subsequent burning in CHPs presents an interesting alternative to the traditional methods of burning biomass in power plants. Reasons are the high efficiency concerning the produced electricity as well as low amounts of emissions. The main problem of biomass gasification is the lack of gas quality, especially high amounts of tar and dust, which lower the lifespan of the facilities. Technologies for this method are subject of heavy research. An example is the Carbo-V© method, which was developed by the CHOREN group. Other, small scale methods of up to 1 MWth are already being used or under development 1 MWth. An example is the Indian ANKUR gasification facility in Sonnewalde (southern Brandenburg) is providing 500 kWth.

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The traditional raw material for biomass gasification is wood (Wood chips of predetermined size and water content), but in theory all solid biomass might undergo gasification. Especially straw, organic leftovers and certain waste (even plastic) might be qualified. Biogas The increased feed-in compensation declared in an amendment of the new renewable energy act (Erneuerbare Energien Gesetzes (EEG)) of 2004 created a boom of new biogas facilities in Brandenburg and Germany, which reached its peak in 2006/2007. Especially agricultural biogas facilities, which use cultivated resources in order to produce energy, increased in number. The rising prices of agricultural raw material in the second half of 2007 stopped this tendency. In September of 2007 80 biogas facilities with an installed electric power of 55 MW were situated in Brandenburg. The future of such facilities lies with advanced concepts for the usage of the generated heat as well as gas conditioning and feeding. Biogas conditioning and feeding In Rathenow in the Havelland one of Germany’s first biogas facilities with the ability to condition biogas to have natural gas like qualities will be built with the support of the State of Brandenburg. The produced gas will be fed into the natural gas grid. Builder of this facility is the GreenGas Produktionsanlage Rathenow GmbH & Co. KG, whose associates are project developer bpg, a company of the ALENSYS-group, and the natural gas supplier EMB. 3.6.2 TECHNOLOGIES AND TRANSFORMATION The present usage of biomass in Brandenburg can be categorized as follows:

- Burning in order to create heat in small or medium sized units for small scale heating grids - Burning, in combination with power generation using turbines (CHP) - Gasification into synthetic gas to be used in engines and turbines (CHPs) - Gasification into biogas to be used in CHPs and engines - Gasification and procession into bio fuel

The use of CHP did increase the efficiency, since the generated heat is used along the electric power. The actual demand for both energies usually does diverge, though. Both grids suffer from strong fluctuation. The new renewable energy act helps with this situation, since it allows the electricity to be fed into the grid for a fixed price regardless of actual demand. 3.6.3 COSTS The costs of the different uses of biomass are diverse, and will be presented by the following example of corn usage and a biogas facility. Cost structure of biomass provision using the example of corn

Considering the whole provision chain of corn (cultivation up to the delivery), the actual cultivation and general costs make up more than three quarters of the production costs. The last quarter is split into harvesting processes, transport and treatment in the silo. Already at a distance of more than 4 kilometres between plantation and biogas facility, the transport amounts to more than 40% of the harvesting costs.

Especially the mass intensive harvesting procedures for the production of silo corn have a large impact on the required equipment and labour expenditures. The development of large scale harvesting machines and

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transportation units led to a decrease of time investment and specific equipment related costs. Labor expenditures could be decreased by more than 30%.

Biogas facility

Biogas facilities without usage of generated heat will not be sustainable for at substrate prices of 35 ct/m3 CH4. According to a self made model calculation, a common biogas facility with a power output of 500 kWel, annual workload of 7.500 full load hours, an electrical efficiency cofactor of the power plant of 39 % and an annual substrate demand of 9.000 t silo corn and 10.000 t manure with a commissioning in 2007 and building expenditures of 3.500 EUR/kWel the refinement value of the corn silage without usage of heat amounts to 28 EUR/t FM or 0,29 EUR/m3 CH4. Assuming, that in another calculation the biogas facility is able to create a heating grid for 1,1 mill. EUR and can thus sell 45% of the generated heat for 9 ct/kWh, the refinement value increase to 35 EUR/t or 37 ct/m3 CH4. Compared to the current market price of 35 ct/m3 CH4, it shows that most bio facilities are not able to work in a cost-covering way. Electricity producing biogas facilities are thus forced to increase the efficiency by providing a better use of the generated heat in order to remain competitive.

The increased prices for grain and rape-seed did decrease the competitiveness of bioenergy facilities. With higher costs for the fermentation substrates the biogas facilities try to cover their demands. If grain prices increase further – which is not unlikely -, biogas facilities will not be able to meet the required prices and might stop production. ( Source Prof. Friedrich Kuhlmann, Dr. Thore Toews Justus-Liebig-University Gießen) 3.6.4 EFFICIENCY A well thought out concepts is efficient, if the used energy resources are transformed into the required usable energy with a high amount of efficiency and low financial costs. Current power plants only meet these demands in a limited way. Costs for raw material amount to 40 to 60 % of all expenditures for biogas facilities. Thus, low raw material prices are a prerequisite for economically efficient biogas production. Production technology for the provision of biogas plants are highly developed and cost optimized. High transportation costs may be circumvented by decentralized energy production (and use of the fermentation waste). Analysis of all possible fermentation substrates show, that for most of Germany no alternatives exist to the use of silo corn. There is demand for the development for more diverse crop rotations with equal or higher methane/ha yields than silo corn. Not only is the efficiency of biomass transformation important, however, but also the effectiveness of cultivation techniques, which differ heavily between different kinds of cultivated products. 3.6.5 RESEARCH AND DEVELOPMENT The State of Brandenburg harbours a large number of colleges and non-university research facilities, which do research in the area of energy strategy and related areas with international fame and the development of innovative technologies. The Brandenburgische Technische Universität Cottbus (BTU) has been looking into the development of efficient and low-emission energy transformation technology for several years.

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The development of pressure loaded fluidized bed furnaces and pre-drying of still mine-damp brown coal created procedures which might add a significant part towards lowering the CO2-emissions. Especially universities become involved into the area of technology transfer with small and medium sized businesses. This leads to the development of several efficient solutions which go in line with the market. With help of the CEBra (Research, e. V. and GmbH) the different focus on energy technology at the BTU Cottbus was increased furthermore, and the location could gain in attractiveness for the energy industry. The following Research facilities and university practice work in the field of energy and environmental research: :

Alfred-Wegener-Institute für Polar- und Meeresforschung (AWI), Brandenburgische Technische Universität Cottbus (BTU), Fachhochschule Brandenburg (FHB) Fachhochschule Eberswalde (FHE), Fachhochschule Lausitz (FHL), GeoForschungsZentrum Potsdam (GFZ), IHP GmbH Innovations for High Performance Microelectronics/Institut für innovative Mikroelektronik, Frankfurt (Oder) (IHP), Institut für Gemüse- und Zierpflanzenbau e.V., Großbeeren (IGZ), Institut für Regionalentwicklung und Strukturplanung, Erkner (IRS), Leibniz-Institut für Agrartechnik Bornim e.V. (ATB), Leibniz-Zentrum für Agrarlandschaftsforschung e.V., Müncheberg (ZALF), Max-Planck-Institut für Kolloid- und Grenzflächenforschung, Golm (MPIKG), Max-Planck-Institut für molekulare Pflanzenphysiologie, Golm (MPI-MP), Potsdam-Institut für Klimafolgenforschung e.V. (PIK), Technische Fachhochschule Wildau (TFHW), Universität Potsdam (UNIP)

The joint research project D E N D R O M, which is supported by the department of education and research for a sum of 2 Mio Euro, unites 17 institutions of scientific and practical experience. The goal is to work on united strategies and concepts in order to ensure a sustainable provision with wood for a direct and indirect energetic use. The most important areas of research for the program of the department of education and research are the following:

1) The growth and development of biomass demands, the coverage by activation of additional wood

reserves in forests and plantations of fast growing woods are put in context and action alternatives are compared.

2) The influence of different circumstances, forest cultivation methods is to be measured empirically in

different model regions in the State of Brandenburg. 3) Research on the energetic value chain of wood based production of bio fuels and the consequences

on the traditional timber industry and agricultural supply chains, as well as the search for long lasting solutions.

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3.6.6 INFRASTRUCTURE In Brandenburg an internationally active energy company (facilitation of brown coal and conversion into electricity), regional grid operators and distributors for electricity and natural gas, communal enterprises (power and heat generation, distribution grid operation) as well as a mineral oil company are active. The expansion of renewable resources did create the foundation of many new companies which generate power from wind energy, biomass or waterpower. Especially for the generation of energy from biomass, regional circuits dealing with the cultivation up to the use of the plants have to be strengthened. This is especially true dealing with biogas facilities incorporated into agricultural companies. Focus has to lie on an increased use of manure and waste, as well as CHP and feeding of biogas into the natural gas grid. Distribution grids are currently only able to carry the produced power in a limited way. All energy producing facilities (conventional, renewable energies as well as CHP facilities) are subject to a feeding management (system safety or grid security management) if a grid overload is expected, and the feeding into the grid is limited temporarily. 3.6.7 BARRIERS AND DEVELOPMENT The greatest barrier for a higher share on the energy market for renewable energies is the actual connection to the power grid. The operators of such facilities have to consider many aspects concerning connection to the infrastructure and access to the power grid, which puts them into a dilemma. If the facilities do not have proper access to the power grid, they cannot produce and work economically. As long as the production capacity is not large enough, however, the investments into the extension of the power grid are not profitable. The transmission and distribution grids in the State of Brandenburg are only able to transmit the generated power in a limited way, and transport it to the consumers as described in section 3.6. To ensure a faultless operation of the power grid, the expansion of renewable energies and combined heat and power facilities have to be accompanied with upgrades to the power grid. Access to the necessary capital is another barrier for market entrance as well, according to a study of the IEA. Production costs for “green energy” imply the following three components:

- The expenditures for the construction of the facility and access to the power grid - Running costs, including maintenance of the facility and, in case of a biomass facility, costs

for the burning material - Financial charges for the investments

Investments for renewable energy facilities do have some special properties: Since the producers of renewable energy are often small and medium sized businesses, financial institutions can only check on the credit worthiness with high effort, especially when compared to large companies such as oil refineries. This means, that transaction costs for such “green” facilities are higher than those of conventional ones, which does increase the original expenditures for the operator. Secondly, the profitableness of such facilities is highly unsure, since many are still in early stages of the development process – for example, tidal and wave energy power plants. Many Banks incorporate this risk into the process of granting a credit, meaning that operators

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will have to pay an additional “risk” charge. Thirdly all these renewable energy projects do have higher costs concerning the starting investments. The government does have to support the development of renewable energy sources as well, in order to improve the technologies and ensure a risk free environment for investors. The projection of the development of fuel prices are naturally very imprecise, and do create a high risk for the calculations regarding cost effectiveness for the operators of the facilities, since fuel prices are playing an important role in this area. 3.6.8 LOGISTICS 3.6.9 SUMMARY 4. SELECTION OF MARKET OPPORTUNITIES 4.1 MARKET OPPORTUNITIES IN BURGOS As mentioned before there are big opportunities along the whole value chain of the sector, taking into account the state of development of the sector. However the more remarkable ones are the following:

4.1.1 CULTIVATION AND PROCESSING

There are many opportunities both agricultural and forest in special in Merindades, La Demanda and La Bureba areas. Apart from forest wastes and cereal straw other possibilities would be the high – yield crops, including ligneous ones (CEDER institute is currently working on it) and the harvesting of stumps.

4.1.2 EXPLOITATION

Different market gaps and possibilities along the value chain.

- Production and transformation:

- Conversion of urban solid wastes, manure and meat wastes into biogas. - Production of wood and straw pellets. In Burgos area there are several alfalfa dehydrators which

machinery and technology could be easily adapted for this purpose. - Wood chips. - Production of chicken faeces briquettes for heating purposes.

- Machinery and equipments - Fabrication of harvesting machinery, boilers and other equipments. - Fluidised bed boilers.

- Installations - Qualified installers of equipments.

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4.1.3 LOGISTICS - Specific transport machinery. - Logistic and storage centres. - Integral logistic services.

4.1.4 CONSULTING/PLANNING . Marketing and consultancy services. . Engineering and design.

4.1.5 TRAINING/COACHING . Biomass projects management. . Qualification of installers. . Technology. . Business management. . Normalisation.

4.1.6 OTHERS . Transformation of coal and wood merchants into bio fuels merchants. . Promotion of clusters and association of companies. . Promotion of civilian clubs. . Financing and business angels.

4.1.7 SUMMARY As a result of the studies and interviews carried out so far, and after the description of main market gaps it should be stated that the whole market needs to be built up, stimulating the demand and optimising and adjusting the offer both essentially at the same time. 4.2 MARKET OPPORTUNITIES IN TAMPERE REGION 4.2.1 CULTIVATION AND PROCESSING Field energy Cultivation of reed canary grass is seen the most efficient way to utilize the field surface in order to benefit from that. As it has previously ascertained that cultivation of reed canary grass is feasible due to existing cultivation method, resources and conditions for cultivation and processing as well as there is no need for additional investments. Field energy potential is seen one of the most important biomass resources. (4)

4.2.2 EXPLOITATION Technology for exploitation of field energy As it has mentioned before there are lots of unutilized resources of field energy and big potential is seen. There is a market opportunity in manufacturing boilers for burning the reed canary grass and other field energy. Burning crop by itself has been in experiment level in Finland but there have been successes. Now crops and reed canary grass have been used in mixed fuel with e.g. peat.

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4.2.3 LOGISTICS 4.2.4 CONSULTING/PLANNING 4.2.5 TRAINING/COACHING Pellet heating system installation As it has mentioned previously, there is no education for installation of pellet heating systems in adequate amounts. Remarkable market opportunities are seen in the field of pellet heating business. Educated professionals would foster the development of the business and create more possibilities. (4)

4.2.6 OTHERS

4.2.6.1 Technology for drying the forest biomass There is seen a market gap in technology of drying the forest biomass. Demand for big driers in Finland is high and there are no Finnish suppliers for the technology. (4) 4.2.6.2 Harvesting technology Harvesting small trees, brushwood and wood stumps from the forest is complex process and there is big need for more efficient technology. Also technology fro wood stump crushing on the spot (in the forest) is lacking. Transporting whole stumps from the forest causes costs as when one third of the space in the truck is taken by the stumps. Whether stumps could be crushed already in the forest third times more material could be transported. Here is seen remarkable market gap for this technology. (4) 4.2.6.3 Gas motors There is a market opportunity in manufacturing gas motors which use bio and wood gas. There are no manufacturers in Finland and when considering positive future prospects of the biogas, demand for gas motors will probably increase. In addition more tight emission directives and goals to decrease the emissions of traffic create positive opportunities and need for gas motors. (4) 4.2.6.4 Manufacturing of pellet heating systems There are several suppliers for pellet heating whole packages in Finland but no manufacturers. Boilers are manufactured in Finland but other parts of the heating system are supplied from other countries. Here is a market opportunity because supplying parts of the system from abroad increases costs remarkably. Also consumers prefer domestic products. Previously it has mentioned that pellets are produced big amounts in Finland but major part is exported. Furthermore, there are resources to provide pellets for mass usage in Finland, at least if the produced amount is utilised domestically and not exported. On the other hand, variations of opinions were detected when discussing about the mass usage of pellets. Resources for pellet production in case of mass usage mostly were predicted to be sufficient. Few interviewed key actors evaluated the resources to be finished whether pellets become vastly used heating fuel. (4) 4.2.7 SUMMARY Market opportunities were selected on the basis of information from sources, interviews and prospects of the long time experience possessing key actors in the field. Reasons for selection have been presented in different sections of the report.

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4.3. Market Opportunities in Pomurje Region There are pretty much differentiated opportunities in the biomass sector in Pomurje. The direction of the individual market opportunity is impossible to locate into some big potential supply and demand, but it makes sense to speak about development of enterprises’ idea / occasions with added value in the region. By all means the choice depends on the investment’s interest, which is oriented at achievement of the higher profits and less risks. However, the announced and published subsidies should be exposed in this way, which make impact on development and exploitation of market opportunities in the biomass sector. 4.3.1 Cultivation and processing The most important market opportunity in the biomass sector in our region is establishing of the Regional Warehouse for Wood Biomass, which is going to influence not only on the very biomass sector, but also on the entire region, i.e.:

- simple and assured delivery of waste biomass, thinning the regional forests and overgrown with increment areas;

- delivery of waste wood biomass from saw-mills, joiner‘s workshops and others; - easy supply of the regional wood-chips and pellets – long-term agreements with regular

customers; - assurance for more new employments.

This market opportunity is not realized yet, because of the high primary investments, complicated and too pretentious logistics as well as the minor demand for wood-chips and pellets from the larger customers / clients in Pomurje – all of them have long-term contracts for wood-chips / pellets supply. 4.3.2 Exploitation There is not enough of capacity for the regional products development and output, as for labour so for finance shortage in the Pomurje region. Nevertheless, we may state a development of initiative – upgraded construction of the special camera-boiler on wood biomass / steam chest with work-of-the-art burning. The idea belongs to a regional entrepreneur, who is nearly to complete his invention. 4.3.3 LOGISTICS There is no transport-logistic center in Pomurje yet, but there is a project targeted to development of our principal city Murska Sobota, as a cross-border of the regional transport-logistic and distribution center (TLDC) as well as establishing another transport-logistic center in Beltinci municipality for the sake of its favourable location (cross-country highway and railway station existence). Both of them are going to deal with different spheres of activities, with feasible opportunity also for biomass domain (the future logistic center could be connected with the regional biomass warehouse, intended for the local supply with the regional products). 4.3.4 CONSULTING/PLANNING As we have already mentioned in the chapter 2, section 2.4., there are a lot of consulting and advisory companies in Slovenia in the sphere of RES and RUE exploitation, including biomass resources (Energy Efficiency Center, ENSVET, IREET, Slovenian E-forum, PEM and many others). The growing number of such consultant services, providing the expert assistance in the biomass sector for farmers, foresters, biomass related enterprises and SMEs, investors and other decision makers was characterized by the growing volume of biomass production and exploitation in this structure in general.

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The consulting and planning in the Pomurje region definitely should be stressed on the best practices from the regions suppliers of the biomass technology (Austria, Germany, Sweden). Undertaking of the activities, the coordination first of all, make sense for the organization with the international cooperation experience and dealing with the regional energetic at once (LEA Pomurje, for instance). 4.3.5 TRAINING/COACHING Education and coaching in the field of renewable energy sources is performing by a number of institutions, mostly located in the central part of Slovenia. For example, Slovenian Forest Service, Slovenian Chamber of Agriculture and Forestry, Agricultural Advisory Service and Institute of Forestry are responsible for qualification of foresters and farmers in the sphere of contemporary ways of wood biomass exploitation within the biomass related enterprises. The trainings subjected to biomass production, cultivation, processing and usage are organized by Regional advisory services mostly during winter times. The number of such trainings depends on the harvest, innovations and the weather. Those who are attending the educational trainings on regular base are legitimated to subventions for fertilization or different plants production. The important part in education belongs to Energy Efficiency Center (Institute of Jožef Štefan) training mostly on national level in the field of RES and RUE programmes implementation. Local Energy Agency Pomurje and partly Development Agency Sinergija on regional level are also preparing a number of workshops/training sessions/seminars subjected to training, promotion and incentiveness of RES/RUE exploitation with means of generation and implementation of project ideas, energy efficient solutions, market opportunities, networking appliances (e-learning). However, more training programmes for biomass related enterprises and SMEs are in great demand in the Pomurje region, such as: tailor-made trainings / workshops about BDH system operating, heating boilers installation and maintaining, wood manufacturing machinery processing - intended as for enterprises, so for individual users. The existent and foreseen training and coaching definitely will foster the further development of the biomass sector and will contribute to creation of more working opportunities in the region. 4.3.6 OTHERS 4.3.7 SUMMARY On the base of the relevant information from statistical and internet sources, interviews on “Business opportunities in biomass sector for SMEs”, communication with the key actors related to biomass sector we managed to select the vision of the future market opportunities in the Pomurje region. We also have detected the most particular obstacles and feasible market opportunities for entrepreneurs and SMEs typical for this sphere of activity, which we have explicated and illustrated in different sections of this report. As a result, we have defined that the most important market niche in the Pomurje region is the Regional Warehouse for the wood biomass, which on the base of the Energy Analysis of Pomurje and the Energy Vision of Pomurje introduce the prior direction and meeting expectation target in the programme period 2007-2013.

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4.4 MARKET OPPORTUNITIES IN CENTRAL HUNGARY 4.4.1 CULTIVATION AND PROCESSING Until recently the utilization of the renewable energy sources had hardly reached a ratio of 3,6%. By now, renewable energy sources have been attached an increasingly important role in the national energy-policy. By the year of 2010, 3,6% of electric power and 6-7% of the total energy is planned to come from renewable resources. (At present the ratio of renewable-origin electric power is 0,7%). Based on current trends and opportunities, a dominant part of the required increase will be secured from the growing utilization of biomass resources. Biomass opportunities

• Hungary has a significant potential for sustainable production of biomass, with 5 M hectares of productive farmland and 3 M hectares of forest – increasing the area of available lands for the production of biomass

• Since 2000 rapid utilisation of solid biomass in electricity generation: round-wood is co-fired in old coal-fired power stations, but with very low efficiency – development of increased efficiency technologies

• Further increase in supply is only possible by increased use of waste wood, or the introduction of ‘energy crops’ – research and cultivation of energy crops

4.4.2 EXPLOITATION In response to EU determination to increase the utilization of biomass resources the government of Hungary has developed long-term strategies for the improved and more effective exploitation of local opportunities. The New Hungary Development has introduced funding schemes via its Operational Programmes which facilitate the exploitation of renewable energy resources, with biomass among them. Biomass for Transport

• Reflecting the structure of agriculture, focus is on bio-ethanol from cereal plant, and on bio-diesel from sunflower seeds and rapeseed – cultivation of biofuel plants

4.4.3 LOGISTICS

4.4.4 CONSULTING/PLANNING The growing volume of biomass resources production and exploitation requires highly-trained and experienced professionals who can offer consultancy services to farmers, investors, decision makers, biomass companies and, virtually, anybody interested in biomass related activities. This need is responded by a growing number of consultants and consultancies opening up to provide expert assistance in the biomass sector. The exact number of these consultants and consultancies is unknown. 4.4.5 TRAINING/COACHING Renewable energy related education and training is offered at some of the prominent universities in the region, such as Szent istvan University or the Budapest University of Technology and Economics. The former one has set up a Biomass Economics Research Team at the Department of Regional Economics and Rural Development. The team was created with the aim of facilitating international research co-operations to tackle environment related problems (economical, social and environmental relations). The team is directly connected to the Hungarian Academy of Sciences. Naturally, education on renewable energy utilization is not

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limited to these two universities, there are other institutions and companies that offer training and/or coaching to enterprises. Such is the Renewable Energy Competence Centre which was established in the region to help small and medium enterprises engaged in the utilization of renewable energies with networking, co-operation, technology application, energy efficient solutions, market opportunities, generation and implementation of project ideas, etc. Besides these an increasing number of consultancies provide tailor-made coaching to enterprises in the field of biomass production and utilization. 4.4.6 OTHERS

4.4.7 SUMMARY The underlying observation this research has made is that there is great unexploited potential for biomass production and utilization in Hungary (the Central-Hungarian Region is not a typically advantageous area for production). Based on data from the European Environment Agency (EEA 2006), the biomass based renewable energy potential of the country reaches 150 PJ of which 50,2 PJ comes from agriculture, 8,3 PJ from forestry and 87 PJ from waste management. Also, based on the potentials, Hungary believed to have the opportunity to become a bio-ethanol power by 2010. Unfortunately, the original enthusiasm soon gave way to realism and many large-scale investments were abandoned at the end of 2007 and the beginning of 2008. At the moment no one can tell whether such investments will be profitable in the long-term, therefore there is a rather cautious and sceptical attitude in the market. The low efficiency of biomass burning, which represents over two-third of the domestic renewable energy utilization, is economically, environmentally and socially unsustainable in the long-term, therefore its support is unreasonable. The current feed-in support does not differentiate between the technologies on the basis of efficiency or base material used. Based on the current conditions and circumstances it is claimed that extensive plant cultivation and ecological farming should be preferred to intensive plant cultivation. Against all this there is still unused biomass potential in Hungary, especially in the form of by-products. Probably the best way for their utilization presents itself in biogas production and utilization. In spite of the fact that biogas production is negligible at the moment compared to biofuels and solid biomass burning, it carries probably one of the greatest potential in the country for companies. In Summary it can be said that there is still unused potential for biomass utilization in Hungary for the companies in many areas. It must also be said, however, that there are a lot of unanswered questions and unsolved issues that can divert many enterprises and investors to engage in biomass related activities. Ecological farming, extensive plant cultivation, biogas production, biomass-related consultancy, etc. all provide possible opportunities to companies to enter the biomass market. With proper regulatory environment, commitment, support and clear long-term strategies and calculable risks it is expected that the biomass sector will experience a significant development in the near future. Due to the characteristics of the Central-Hungarian Region, however, it can still be predicted that this area will continue to have an ‘inferior’ role to that of other more suitable regions concerning biomass production and utilization.

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4.5 MARKET OPPORTUNITIES IN NORDTHUERINGEN 4.5.1 CULTIVATION AND PROCESSING 4.5.2 EXPLOITATION In the North of Thuringia the exploitation of biomass is relative good. How already shown in chapter 2.5.3 (Analysis of the biomass value chain) the organic waste is not brought on composting plants. On the disposal site Nentzelsrode the bio waste is putted into a fermenter to produce biogas. Afterwards the biogas is burned in a combined heat and power plant for generating energy. Chapter 2.5.1 (Biomass resources) has already identified high potentials for biomass in the form of large agriculture and forest areas. The forest is farmed sustainable as well as possible. The large-scaled energetic exploitation of the wood takes place in the combined heat and power plant “Biomasse-Heizkraftwerk Bischofferode/Holungen” (http://www.bauportal-deutschland.de/referenzobjektdetails_Biomasse-Heizkraftwerk_Bischofferode_Holungen_37345_Bischofferode_Holungen__id_1895.html) that is situated in the neighboring administrative district Eichsfeld. The agriculture area in the North of Thuringia is primarily used for cultivating grain, maize and rape. Other energy plants or quick turnover plantation are very rare. The Thüringer Landesanstalt für Landwirtschaft in Dornburg/Saale (Thuringia administrative district Saale-Holzland-Kreis) searches especially in this sector. 4.5.3 LOGISTICS 4.5.4 CONSULTING/PLANNING 4.5.5 TRAINING/COACHING Training and coaching in almost all fields of interest in Biomass sector seem a profitable business opportunity for entrepreneurs, because existing SMEs and upcoming entrepreneurs face manpower, technology and budget restraints they usually cannot solve in adequate time frame. The key for success will be the technological niche or specialization on certain regions, cultures and languages in the world and collaboration in different networks. New players with enough know-how should identify new markets and synergies abroad. The mature market allows no more easy competition, but with an up-to-date education infrastructure in Nordthueringen it delivers decent spillover effects in knowledge transfer and allows prepared companies to invest in other parts of the world in Biomass sector. Going abroad is therefore a potential and necessary market opportunity. 4.5.6 OTHERS 4.5.7 SUMMARY An entrepreneur or SME, who find the answer to regional gaps like talent shortage and information deficit re. Biomass sector in Nordthueringen region will have enough work for ages in order to create a sustainable and stable development for themselves. Most improvements in technology gaps are made with small steps inside existing companies, today no disruptive technology cut is foreseen in the region, of course there is a small chance with young scientists and well-educated staff coming from university.

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4.6 MARKET OPPORTUNITIES IN BRANDENBURG 4.6.1 CULTIVATION AND PROCESSING Concerning the development of the use of biomass, biogas generation and energetic use of biogenic waste are to be mentioned. The cultivation of renewable resources for energy and fuel generation actually reached a limit in the region. Local companies already import resources in order to use their facilities to capacity. Rising prices in the agricultural sector are indicators for a problem, which has to be countered with new cultivation and procession techniques. According to German law, organic waste may not be disposed since the year 2006. This obligation towards an energetic use of the waste led to the development of several projects dealing with heat and power generation on base of this kind of fuel. The existing and planned capacities already exceed the availability on alternative fuel in the state. Especially for the generation of energy from biomass, regional circuits dealing with the cultivation up to the use of the plants have to be strengthened. This is especially true dealing with biogas facilities incorporated into agricultural companies. Focus has to lie on an increased use of manure and waste, as well as CHP and feeding of biogas into the natural gas grid. 4.6.2 EXPLOITATION According to data from the Federal Federation for Bioenergy, the following developments are registered: Economic data Biomass-energy in Germany Employees in 2006: 91.900 Pers. (+41% to 2005) New investments in 2006: 2.87 bil. € (+ 63 % to 2004) Turnover facility operation: 2006: 5,26 bil. € (+ 59 % % to 2005) Total turnover in 2006: 8.13 bil. € (+ 32 % to 2005) CO2-conservation in 2006: 45.23 mio. t (+ 24 % to 2005) CO2-conservation in 2007: 53.44 mio. t (+ 18 % to 2006) Export quota in 2006: ca. 10 % (tendency increasing) Development of the biogenic energy market and market potential in Germany Market share-biomass-energy in 2004: 1,6 % Market share-biomass-energy in 2005: 2,2 % Market share-biomass-energy in 2006: 2,9 % Market share-biomass-energy in 2007: 3,9 % CO2-conservation through biomass-energy in 2007: 21,16 mio. t Possible Market share-biomass-energy until 2010: 4,4 % Possible Market share-biomass-energy until 2020: 9,5 % Possible Market share-biomass-energy until 2030: 17,7 % Development of the bioheat market in Germany: Market share - bioheat in 2004: 3,9 % Market share - bioheat in 2005: 5,1 % Market share - bioheat in 2006: 5,8 % Market share - bioheat in 2007: 6,0 % CO2-conservation through bioheat in 2007: 18,46 mio. t

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Possible Market share bioheat until 2020: 10,0 % Possible Market share bioheat until 2030: 15,0 % Development of the biogenic heat market in Germany

- 2,6 mio. chimney ovens, sales market for logs, - 2,5 mio. chimneys „old fashioned“ heating with wood“, additive - 1,8 mio. tiled stoves, growing market - - 70.000 pellet facilities in 2006 Market potential until 2015: - 90.000 pellet facilities in 2007 600.000 facilities - More than 1.100 biomass > 500 kW with district heating

4.6.3 LOGISTICS The project „BioLog“, initiated by the BMELV on the 1.08.2006 with help of the FNR with 8 partners, assumes that the harvest and silage are occurring with the whole plants. The juice is removed from the silage with a special press. The extracted fluid contains all vegetable nutrients as well as proteins, sugar and starch. This juice can be used in a biogas facility. The energy stored in the gas is used by a gas engine in order to generate electricity and heat, which may be sold or used to dry the additional solid remains. Using further energy the solid remains are further drained and shaped until they express the qualities pellets. The agriculturist may then sell the fuel in open trade or to large scale facilities. Special interests lie in the Biomass-to-liquid facilities, since most households still use traditional wood as burning material. Since the procession of biomass is the base for the improvement of the logistics chain, the project is called BioLog. Source material is storable silage from whole plants from plants that are typical for that use in Germany, such as corn, rye and grass. A new study included barley as substrate. The experiments take place in laboratory- and technical institutions of the partners as well as commercial soilage dry facilities. Concerning the optimal use of biomass provision, silages from the two-culture-use might play an important role. Along with established techniques, the method of electrophoresis is used in conjunction with silage for the first time in the research center of Karlsruhe. The FH Eberswalde is working on a project dealing with the optimization of logistics concerning biomass. Geo data is used to visualize the optimal production locations and crop rotations for energy plants. Goals of this analysis using geographic information systems (GIS) are :

Determination of potential locations for central or decentralized bioenergy facilities by means of visualizing the accruing biomass, optimizing the cultivation of biomass and its processing concerning economical and ecological aspects, as well as visualizing the competition between bioenergy locations and connected logistics.

4.6.4 CONSULTING/PLANNING For the consultation and support of biomass usage in order to generate energy, many experts are available in the State of Brandenburg:

Brandenburgische Ingenieurkammer (chamber of engineers), Fachverband der Energieberater Berlin/Brandenburg (association of energy consultants), Handwerkskammern Brandenburg (chamber of crafts), Industrie- und Handelskammern Brandenburg (chamber of commerce),

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Kommunale Spitzenverbände des Landes Brandenburg (communal umbrella organization), Landesbauernverband Brandenburg (association of agriculturists) Mieterbund Land Brandenburg (leaseholder association) Verband Berlin-Brandenburgischer Wohnungsunternehmen (organization of housing associations) Vereinigung der Unternehmerverbände in Berlin und Brandenburg (Association of entrepreneurs) Verbraucherzentralen, (consumer advice centers) Waldbesitzerverband Brandenburg ( Association of forest owners)

The activities concerning use of biomass are coordinated by the Energy-Technology-Initative Brandenburg, ETI. ETI Meetings regularly discuss innovative technologies, processes and projects as well as scientific research results. ETI-leading-projects support and present innovative projects in the area of renewable energies and energy efficiency. The ETI allows companies to gain entrance to the market. They are able to present new products and discuss with experts as well as users during the meetings. They are also offered the possibility to present their products on an international and national level on a shared booth. This initiative is not limited to the State of Brandenburg. The ETI supports the further interweavement of the Brandenburg economy with the adjacent states, as well as the export of Brandenburg products into other countries. Especially emerging and developing nations are in high need of efficient and cost effective new technologies in the area of energy generation and transformation. This potential is used by the ETI by means of travel, special events and cooperation exchange. 4.6.5 TRAINING/COACHING The Biogas of the ETI has already supported the expansion of biogas use in Brandenburg significantly. The workgroup serves as an established platform for the biogas industry in the state in order to exchange information between researchers, developers, constructors, investors and users. The workgroup organizes seminars, meetings and visitations. In 2007 alone, two large congresses were held. A congress dealing with the production of biogas plants and wood on the 12th and 13th Of June at the chamber of commerce in Potsdam, and a congress dealing with the connection of gas feed-in law and biogas as an alternative to natural gas was held later that year. The workgroup also published the brochure „Biogas and agriculture: A compendium for agriculturists and investors“. This compendium is one of the best in Germany, and is now available in the third, updated printing. In cooperation with the professional association the „Supplier catalogue biogas for Brandenburg and Berlin“, was created, which lists several companies of the branch. The workgroup “solid bio fuels” of the ETI has been supporting the use of solid bio fuel for quite a while. Innovative projects in the area of new technology as well as generation of biomass and logistics were already implemented. The workgroup furthers the extension of energetic biomass usage by hosting seminars, congresses or visitations, and by mediation between investors and official agencies. 20 larger biomass power plants >1 MW and several smaller facilities already produce energy and heat from renewable, solid bio fuel. The workgroup realized the importance of the coverage of raw material in conjunction with investments into energy projects, and accompanies the promotion of the use of biomass with

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the opening of new reserves. The ETI supports several projects, for example those dealing with the cost effectiveness of forest wood using modern harvest techniques, the setup of innovative sales channels by forest-wood contracting, and research on the effectiveness and potential of fast growing plantations on agricultural areas. This workgroup serves as a contact point for investors interested in biomass energy systems in Brandenburg. 4.6.6 OTHERS 4.6.7 SUMMARY Transportation plays a major role for the economic as well as energetic efficiency of energy crop production. Current transport and logistics concepts suggest to prefer a decentralized biogas production. National economy and agricultural interests show a need for better strategies in the use of pasture. The recently started, nationwide competition “Bioenergy regions” is supposed to interest rural communities in the use of bioenergy by promising support of up to 400.000 Euro. If the German government wishes to use bioenergy in order to practice climate protection politics, it has to focus on bioenergy carries which offer a CO2-conservation cost of less than 50 Euro per ton of CO2. Examples include the use of biogas produced by liquid manure in conjunction with the CHP concept, as well as generating energy from wood chips gained from timber leftovers and straw. This also means that the facilities have to be of small size, decentralized, close to communities and industrial areas, since the demand for the generated heat only exists there to be used for heating or cooling. The worldwide scarceness of agricultural areas, in conjunction with growing oil prices leads to leading costs for bioenergy as well as increasing prices for all agricultural products. This means, that the prices for the necessary substrates increase as well. The lack of agricultural areas leads to the use of formerly non- cultivated areas, or an intensified use of existing ones. This causes higher CO2 and N2O emissions with the consequence, that an increased production of bioenergy might be counterproductive concerning the protection of the environment in some cases. Primary spheres of action for the State of Brandenburg will be:

- research, development and broad application of efficient energy technologies and procedures - research, advancement and application of technologies allowing the use of renewable energies, and

the integration into the energy grid - establishment of promising transmission and distribution grids in order to ensure the integration of

produced power and gas, use of CHP technology, with focus on an extension on the power grid - especially in the Uckermark -, connections to adjacent grid operators, development of feeding-compounds (virtual power plants), and control of the electricity demand (Demand Side Management)

- research, development and application of environmentally benign power plant technologies (therefore a precipitation and safe storage of CO2) and increased efficiency.

Complex goals of the State of Brandenburg conforming Strategy 2020

The research, development, production and use of innovative energy technology in the own country as well as its export shall contribute to:

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- a fortification of the science- and economy location of Brandenburg - supporting and expanding an efficient and sustainable energy industry in order to provide the state

itself as well as exports - lowering the CO2 emissions from the energy industry by 40% in the year 2020 compared to the year

1990, as well as an intended further 35% reduction by the year 2030. 5 BIBLIOGRAPHY 5.1 BIBLIOGRAPHY IN BURGOS 1. IDAE (Institute for Energy Diversification and Saving). 2. ENER (Regional Energy Entity of Castilla y Leon). 3. CIEMAT (Energy, Environmental and Technological Research Centre). 4. CEDER (Renewable Energy Development Centre). 5. AVEBIOM (Spanish Association for Biomass Energy Valuation). 6. CNE (National Energy Commission). 7. The Renewable Energy Plan in Spain for 2005-2010. 8. Energy Balance of the province of Burgos. 5.2 BIBLIOGRAPHY IN TAMPERE REGION 1. Reine Piippo, Suomen Pellettiyhdistys, 2008, Pellettijärjestelmät öljy- ja sähkölämmityksen korvaajina -

Mutta mikä hidastaa? Information only in Finnish. 2. Pirkanmaan Liitto, 2007. Pirkanmaan Energiaohjelma, Pirkanmaan Liiton julkaisu D 87. Information only in

Finnish. Jyrki Raitila, Pirkanmaan Metsäkeskus, 2006. Pirkanmaan puuenergiaselvitys.

3. OSKE Centre of Expertise Programme, Cluster Programme for Energy Technology 2007 -2013 4. Interviews of key actors of the sector 5. Energiateollisuus Ry, http://www.energia.fi/fi/sahko/sahkontuotanto/kivihiili, Information 6. gathered in 15th

of April, 2008. Information only in Finnish. 6. International Biofuels Ltd, 2008, http://www.internationalbiofuels.fi/products3.html. Information gathered in

2nd of April, 2008. 7. Energiateollisuus Ry, http://www.energia.fi/fi/sahko/sahkontuotanto/turve, Information gathered in 15th of

April, 2008. Information only in Finnish. 8. Energiateollisuus Ry, http://www.energia.fi/fi/sahko/sahkontuotanto, Information gathered in 15th of April,

2008. Information only in Finnish. 9. Energiateollisuus Ry,

http://www.energia.fi/fi/sahko/sahkontuotanto/uudetenergiantuotantotekniikat/vetytalous, Information gathered in 15th of April, 2008. Information only in Finnish.

10. Sentre Network for business, research and education developing sustainable solutions for sustainable energy, Biokaasu jäteveden käsittelyssä, 2005, http://www.sentre.fi/mp/db/file_library/x/IMG/14230/file/jatevesilietteen_anaerobinen_kasittely_ja_biokaasun_hyotykaytto.pdf. Information gathered in 15th of April, 2008. Information only in Finnish.

11. Peat Industry Association, http://www.turveteollisuusliitto.fi/user_files/files/Turveteollisuusliitto_%20ry_%20toimintakertomus_2006.pdf, Information gathered in 16th of April, 2008.

12. Simo Leinonen, Finnish Biogas Association, 2006, Biogas Production in Finland (word) 13. Sentre Network for business, research and education developing sustainable solutions for sustainable

energy, http://www.sentre.fi/english/. Information gathered in 21st of May, 2008.

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14. Joona Kalmari, University of Helsinki, 2006, Maatilakohtaisen biokaasulaitoksen kannattavuus suomalaisella sikatilalla. Information only in Finnish.

15. Biokaasu foorumi, Utilization of biogas, http://www.biokaasufoorumi.fi/index.asp?init=1&initID=18163. Information gathered in 5th of May, 2008.

16. Energiateollisuus Ry, Biokaasulla tuotettavan sähkön syöttötariffi Suomessa –Perusteita järjestelmän toteuttamiselle, 2008, http://www.energia.fi/fi/ajankohtaista/lausunnot/biokaasulla%20tuotettavan%20s%c3%a4hk%c3%b6n%20sy%c3%b6tt%c3%b6tariffi%20suomessa%20-%20perusteita%20j%c3%a4rjestelm%c3%a4n%20toteuttamiselle.pdf. Information gathered in 5th of May, 2008. Information only in Finnish.

17. Motiva, 2007, Biogas, http://www.motiva.fi/fi/yjay/kuljetusala/polttoainevaihtoehdot/biokaasu.html. Information gathered in 7th of May, 2008.

19. Turveruukki, 2005, http://www.turveruukki.fi/index.php?371. Information gathered in 7th of May 2008. 20. Vapo, Renewable Energy from The Land,

http://www.vapo.fi/fin/yhtio/vapo_paikalliset_polttoaineet/peltoenergia/?id=175. Information gathered in 7th of May 2008.

21. Kauppalehti, 2008, http://www.kauppalehti.fi/5/i/talous/uutiset/etusivu/uutinen.jsp?oid=11484. Information gathered in 23th of April. Information only in Finnish.

22. PuhdasEnergia Oy, Wood gas, http://www.puhdasenergia.com/html/products.html. Information gathered in 12th of May, 2008.

23. BioBusiness-project, Inventory of Resources, 2007, http://www.euro-biomass.com/Documents/Inventory%20of%20resources%20final%20version.pdf

24. BioBusiness-project, Study of Trends, 2007, http://www.euro-biomass.com/Documents/Study%20of%20trends%20Final.pdf

25. Finnish Biogas Association, 2007, Input tariff for biogas electricity, http://www.kolumbus.fi/suomen.biokaasukeskus/docs/lausunto050112007.pdf. Information gathered in 20th of May, 2008.

26. BioBusiness-project, Study of best practises, 2007, http://www.euro-biomass.com/Documents/best-practices-biobusiness.PDF

27. Esiselvitys peltoenergian hyötykäytöstä 2006, http://www.sentre.fi/mp/db/file_library/x/IMG/15672/file/Peltoenergiaselvitys2007.pdf, Information gathered in 20th of May, 2008. Information only in Finnish.

5.3 BIBLIOGRAPHY IN POMURJE REGION

1. Energy Analysis of the Pomurje region, LEA Pomurje, 2006. 2. Energy vision of the Pomurje region, LEA Pomurje, 2006. 3. Inventory of resources: assessment of the biomass resources in the communities, DA Sinergija, 2007. 4. Trends in biomass related enterprises creation and development in biomass sector, DA Sinergija, 2007. 5. Jožef Maučec d.i.s. spec., report “Trends of biomass development, business opportunities”, 2008. 6. Slovenian Forest Service database, 2005. 7. Statistical Bureau of the RS, 2005. 8. Statistical source of the Sugar factory, Ormož, 2006. 9. Kovač Š. Specialities of supply and demand of wood biomass in Pomurje, Faculty of Business Economy

(Maribor, 2005). 10. Renewable Energy Sources – Opportunity of Pomurje, Sinergija, MOP RS, 2005. 11. The more efficient wood biomass usage in Pomurje, MOP RS, 2006. 12. Annual Report of the Panvita Group, KG Rakičan – EKOTEH d.o.o., 2006. 13. Annual Evidences of the Chambers of Crafts of Pomurje, 2008. 14. Interviews with entrepreneurs and investors from biomass sector of Pomurje.

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15. www.rra-mura.si 16. www.gov.si/aure, 17. http:/europa.eu 18. http://www.zgs.gov. http://www.zgs.gov.si/biomasa1/index.php?p=les19. http://www.slobiom-zveza.si 20. si/biomasa1/index.php?p=les 21. http://www.stat.si/novica_prikazi.aspx?id=445 22. http://www. panvita.eu 23. http://www.sigov.si/zgs/biomasa1/index.php?p=potenciali 5.4 BIBLIOGRAPHY IN CENTRAL HUNGERY Renewable Energy Sources Act (EEG): Progress Report 2007: 2007, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.erneuerbare-energien.de/inhalt/40638/ Electricity from renewable energy sources. What does it cost? 2008, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.bmu.de/english/publication/publ/41426.php Development of Renewable Energies in Germany in 2007: 2008, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.erneuerbare-energien.de/inhalt/41085/36356/ Interviews with active players, list WP4/ D9 5.5 BIBLIOGRAPHY IN NORDTHUERINGEN Renewable Energy Sources Act (EEG): Progress Report 2007: 2007, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.erneuerbare-energien.de/inhalt/40638/ Electricity from renewable energy sources. What does it cost? 2008, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.bmu.de/english/publication/publ/41426.php Development of Renewable Energies in Germany in 2007: 2008, Published by Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) http://www.erneuerbare-energien.de/inhalt/41085/36356/ Interviews with active players, list WP4/ D9 Leitfaden Bioenergie http://fnr-server.de/cms35/fileadmin/biz/pdf/leitfaden/datensammlung/ Publications of the Ingenieurkammer Thüringen http://www.ingenieure-thueringen.de/ Publications of the Free State of Thuringia http://www.thueringen.de/ “Thüringer Bioenergieprogramm” (http://www.thueringen.de/de/publikationen/pic/pubdownload790.pdf) Publications of the Thüringer Landesamt für Statistik http://www.tls.thueringen.de/seite.asp Publications of the Thüringer Landesanstalt für Landwirtschaft http://www.tll.de/ Publications of the Thüringer Landesanstalt für Umwelt und Geologie http://www.tlug-jena.de/ Publications of the Landesanstalt für Landwirtschaft, Forsten und Gartenbau Sachsen-Anhalt http://lsa-st23.sachsen-anhalt.de/ “Schwerpunkte und Ziele des Entwicklungsprogramms für den ländlichen Raum des Freistaats Thüringen in der Förderperiode 2007 bis 2013” (http://www.thueringen.de/de/publikationen/pic/pubdownload772.pdf) Publications of the Centrales Agrar-Rohstoff-Marketing- und Entwicklungs-Netzwerk e.V. http://www.carmen-ev.de Publications of the Institut für Energiewirtschaft und Rationelle Energieanwendung http://www.ier.uni-stuttgart.de/publikationen/

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Publications of the LEG Thüringen http://www.solarthueringen.de/ 5.6 BIBLIOGRAPHY IN BRANDENBURG Report of the State Government: „Energiestrategie 2020 des Landes Brandenburg“ Grundlagen für die Fortschreibung der Energiestrategie Brandenburg, Prognos AG: Endbericht ,Berlin, Dezember 2007 Bioenergie – Marktzahlen 2007 Dipl.-Volkswirt Bernd Geisen Aktueller Situation der Biogasbranche -Diskussionsstand zur EEG Novelle Dr. Claudius da Costa Gomez,FA Gasförmige Bioenergieträger des BBE 23.10.2007, Symposium Energiepflanzen 2007, Schriftenreihe „Nachwachsende Rohstoffe“ Band 31 Entwicklung, Erprobung und Demonstration neuer Logistikkonzepte für Biobrennstoffe Dr. Stefan Vodegel,Clausthaler Umwelttechnik-Institut GmbH – CUTEC Ökonomische Bewertung verschiedener Anbausysteme Prof. Friedrich Kuhlmann, Dr. Thore Toews,Justus-Liebig-Universität Gießen Agroforstsysteme als Option der Biomasserzeugung Dr. Bernd Uwe Schneider,Brandenburgische Technische Universität Cottbus BUNDESAMT FÜR NATURSCHUTZ – BFN (Hrsg. 2007): Naturschutz und Landwirtschaft im Dialog: „Biomasseproduktion – ein Segen für die Land(wirt)schaft?“, BfN-Skripten 211, Bonn. Bioenergie und Biogasförderung nach dem neuen EEG und ihre Auswirkungen auf Natur und Landschaft, PÖLKING, A.; STIEPEL, B.; PREMKE-KRAUS, M.; WILL, J.; LÜDTKE, S; OPPERMANN, R. & BAUMANN, A. (2006): agroplan, Wolfenbüttel. Energieroggen als Substrat für Biogasanlagen. Seggl, A. und T. Miedaner, 2007: Getreide Magazin 4/2007, 241-243. FNR (2007): Verbundvorhaben „Entwicklung und Vergleich von optimierten Anbausystemen für die landwirtschaftliche Produktion von Energiepflanzen unter den verschiedenen Standortbedingungen Deutschlands“ (Gesamtkoordination TLL Jena). Teilprojekt 6 „Systemversuch zum Zweikultur-Nutzungssytem auf sechs Standorten im Bundesgebiet“ FNR (2006): Handreichung Biogasgewinnung und Nutzung. Hrsg.: Fachagentur Nachwachsende Rohstoffe e.V. (FNR), Gülzow Entwicklung und Vergleich von optimiertenAnbausystemen für die Produktion von Energiepflanzen

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Dr. Armin Vetter,Thüringer Landesanstalt für Landwirtschaft Energieholzproduktion in der Landwirtschaft, Hofmann, Martin:,Fachagentur Nachwachsende Rohstoffe e.V. (Herausg.), Gülzow 2007 Stand und Potenziale der Biomassenutzung in Deutschland Prof. Martin Kaltschmitt,Institut für Energetik und Umwelt (IE), Institut für Umwelttechnik und Energiewirtschaft(IUE), Technische Universität Hamburg-Harburg (TUHH) www.fnr.de/energiepflanzen2007 http://fnr-server.de/cms35/fileadmin/allgemein/pdf/veranstaltungen/agroforst_2006/agroforst.html www.nachwachsende-rohstoffe.de www.energiepflanzen.info www.btl-plattform.de www.eti-brandenburg.de