South Korean state-controlled electricity producer Korea East-West Power (EWP) is increasing its use of domestic biomass fuel sources, including new types of feedstock, continuing a trend that may diminish the country's demand for imported wood pellet and wood chips.

EWP aims to use 17,000t of wood pellets made from domestic forest biomass this year, after completing successful tests of the fuel in 2018. The company is asking its main supplier of the pellets, Jin Eneotek, to boost output. Jin Eneotek will supply about 14,000t of wood pellets to EWP this year.

The same firm is supplying EWP with biofuel pellets made from dried wastewater sludge. EWP's purchases of the sludge pellets by value more than doubled last year to 5.9bn won ($4.9mn), with volumes continuing to increase.

EWP also has a project under way to develop mushroom culture biomass pellets. Testing of the pellets, which are molded from sawdust and vegetable residue used in growing and propagating mushrooms, is scheduled to be completed this year. The company said full-scale production is on track to begin in 2020.

EWP earlier this year signed an agreement with farming organisations and other partners that will be involved in supplying spent mushroom-growing cultures for the new pellet business.

The company is using domestic pellet sources to feed its 30MW 100pc biomass-fired power plant in the northeast port city of Donghae. Other South Korean power producers, such as state-run Korea Southern Power (Kospo), are similarly looking to boost domestic fuel sourcing. Kospo earlier this year signed a contract to buy 100,000 t/yr of wood pellets made from domestic forest waste.

But these efforts so far represent a relatively small dent in demand for a country that plans to remain a leading biomass importer, as power producers rely on wood pellets to help comply with government renewable energy mandates. The conversion of the 200MW Yeongdong No.2 power unit to biomass from coal by state-owned Korea South-East Power (Koen) will add 900,000 t/yr of demand for wood pellets next year. Koen will burn an estimated 1.45mn t of pellets in 2020.

Government policy is boosting demand for unused wood biomass, which refers to woody forest biomass in South Korea that would otherwise not be used in any industrial function. Koen was the first of the state-controlled utilities to tender for unused wood biomass in July 2018.

The unused wood biomass commands a premium price because utilities can earn 1.5 renewable energy certificates for every megawatt hour produced by co-firing and 2 RECs/MWh when the product is used in dedicated biomass power plants. This compares with 1 REC/MWh awarded for co-firing with imported wood pellets, palm kernel shells or woody solid recovered fuel pellets.

Biofuel pellets made from dried wastewater sludge or mushroom culture will be unlikely to qualify as unused woody biomass, which the government is promoting to improve forest management. Waste wood in forests is dry and flammable and needs to be removed, although the labour costs for this are high.

The government also wants to prompt such collections because the national institute of forest science has established that instead of fumigating dying insect-infested trees, the diseased wood can be chopped into small pieces less than 1.5cm, which kills the insects, and used as unused woody biomass for power generation.