Biomass power capital spend to total $18 million
Posted: 29 June 2004
“Over the next decade we forecast that some $18 billion of capital investment will be made in large scale biomass power plants. Large-scale thermal (in excess of 10MW) will account for nearly $14 billion, landfill gas $2.7 billion and anaerobic digestion systems $1.6 billion.
“In 2000, the commercial biomass market attracted an annual expenditure of $863 million. This will rise to $1.3 billion by the end of 2004, and to $2.1 billion at the end of the period in 2013.” These are amongst the findings of The World Biomass Energy Report 2004-2013, a new study published by energy analysts Douglas-Westwood.
Oil Price Drivers
The commercial biomass market is a dynamic one that is forecast to show significant growth over the next decade, as the present environmental drivers for renewable energy will be increasingly supported by fundamental commercial ones.
According to Douglas-Westwood MD John Westwood, “the most significant change is likely to come from the growth in energy prices as oil shortages and rising demand increase the costs of conventional energy supplies and improve the competitive position of biomass as a power source. As more of the world's oil supplies are sourced from politically unstable areas, security of energy supplies will also be an issue increasingly favouring investment in biomass.
“In addition, the move towards renewable energy evident in many European countries is manifesting itself in a major growth in investment in windpower. However, windpower is an intermittent source whereas biomass can provide a stable power supply.
“Large thermal plants are already operating, burning a wide variety of waste materials from chicken litter to straw, to forestry and wood-processing residues, but increasingly we will see a move towards specially-grown energy crops.”
Energy Crops
“ West Europe and North America by virtue of their economic status are the most important regions for all biomass systems. But it is Asia that has most potential for both wood and agricultural materials, both crop-based and livestock” said study author and agro-economics expert Bruce Knight .
“Lack of consistent availability of biomass feedstock, on a long term basis, is a perceived disadvantage for the energy industry. For economically successful projects, the feedstock needs to be close to the power plants and in a form that is convenient to handle. This is one of the reasons why dedicated energy crops are favoured.
“The considerable R&D effort into dedicated energy crops has yet to yield major results internationally, but work is ongoing and should bring benefits over the next decade.
“Agricultural policies world-wide are primarily geared to food security and increasingly environmental land management. Particularly in the developed countries, farmers have become used to responding to policy changes and quickly. By contrast the energy industry requires certainty of feedstock availability for many years.
“In order to overcome this barrier continued development of flexible conversion plants, such as co-fired thermal systems, which can use both biomass and fossil fuel feedstock, will be important. More fundamentally, for biomass energy generation to reach its potential there needs to be better understanding between the energy industry and the agricultural and forestry industries. This will require closer liaison at all levels and strong encouragement from governments.”
Large Thermal to Lead
Large Thermal – the report concludes that large thermal will account for 77% of the installed commercial biomass capacity in the period to 2013. The average plant size is expected to increase markedly over the period, which helps market share when compared to the much smaller average size of anaerobic digestion and landfill gas based plants. A Capex of $13.9 billion is forecast, accounting for a total new capacity of 9.9 GW.
Anaerobic Digestion – over 400 MW of AD capacity is forecast for installation over the decade, attracting a capital spend of $1.6 billion. Western Europe is the major player with 50% of these installations. Total installed capacity will more than triple in the next ten years, although it begins at a low level.
Landfill Gas – whilst there will be some growth and installation rates of above 150 MW each year to 2013, the market is sluggish. 1,700 MW is forecast to come online within the next ten years, representing a total spend of $2.8 billion. Annually installed capacity additions may peak in 2006, and by the next decade be below current levels. This is due to existing landfill sites being increasing tapped and new landfill sites facing environmental objections. However, many individual regions such as Asia will see steady installation rates.
“The World Biomass Report 2004-2013” contains 224 pages, 60 figures and 121 tables. It is published by energy analysts Douglas-Westwood and is part of a series used by over 200 organisations in 32 countries worldwide.
For more information see www.dw-1.com
Posted by Richard Price,
Editor Pipeline Magazine
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