Electricity generation from solid biomass continues to increase all over the world. At the end of 2013, there were around 2,800 plants in operation worldwide burning biomass or using very large quantities of this fuel. These plants had a power generation capacity of around 42 GW. Additionally around 350 fossil fuel plants were operating using biomass co-combustion. In 10 years time, approximately 4,100 plants will be operating with an output in the region of 67 GW. In 2014 alone, approximately 170 new plants were constructed with an aggregate power generation capacity of around 3.6 GW.
Subsidies for renewable energy will continue to be the most important market factor for the development of biomass power generation. Until early 2014, around 140 countries had introduced policies for some type of subsidy, the majority of which also had schemes in place to support power generation from solid biomass. Some 40 countries worldwide have feed-in tariffs for biomass electricity, such as that recently introduced in Vietnam. But there are also other types of support schemes: Colombia has reduced the turnover tax on biomass electricity and Mexico has facilitated access to the grid for this type of power generation.
Europe will continue to be the largest market for power generation from solid biomass over the coming 10 years. At the end of 2013, Europe had around 1,200 active biomass power plants. This number is expected to increase to approximately 1,750 by the end of 2023. The European market, however, is very fragmented and the prerequisites for investments vary widely from country to country. While in the UK and France more plants than ever are being built, Spain, Latvia and the Czech Republic have seen a reduction or even stoppage of their subsidy systems. In comparison to other countries, Germany is still awarding significant subsidies. But the system has lost most of its incentive impact because the most favourable sites have already been developed.
At global level, China, India, Brazil and the USA are leading the way in today’s market. Asia and South America are currently the most dynamic markets for biomass plants. There are still favourable sites to be developed in these regions such as those that benefit from the sugar, rice and wood industries. And even a small subsidy is enough to significantly increase the number of projects in countries such as Indonesia or the Philippines.
The market for electricity generation from solid biomass is often organised on a regional basis. Industries that have a strong affinity for biomass (such as the paper and sugar industries) continue to be the most important customers, followed by the energy sector.
Many plant manufacturers also have a regional focus and there are only a few global players. The strengths and weaknesses of regional technology providers reflect the respective design of the support schemes, such as those that concentrate on the size of the plant or the type of fuel used. For example in Brazil there has been focus on the incineration of sugar cane whereas in Austria, support for small-scale plants is taking place, resulting in the emergence of a higher number of manufacturers in this segment.
Today, international demand is also giving rise to global competition. In the light of a growing number of saturated markets on their own continents, the pressure for internationalised businesses is particularly strong for European manufacturers that enjoy the lion’s share of the global market. There are also an increasing number of Chinese suppliers emerging in foreign markets.
These are the main conclusions that can be drawn from a recent study published by the German consultancy company ecoprog. The “Biomass to Power” study is one of the most extensive of its kind as it is the only analysis based on the evaluation of plants existing throughout the world rather than simply taking into account published statistics.