on one hand, the global biomass industry is booming. Investment is growing and so are the number of plants coming online. In Asia, Africa and South America billions of households already depend on biomass as a domestic fuel source, while in Europe it is well established as a primary source of power generation.
Yet the boom could also pose a threat for the established European market, as emerging nations raise their game and build their own biomass co-firing plants.
Many also fear that for investors in the renewables family biomass will always be the bridesmaid and never the bride - compared with wind and solar - largely because of uncertainty over the reliability of its feedstocks.
Last year, world biomass generation capacity stood at 58 GW, according to US firm Pike Research. By 2021 capacity is forecast to easily reach 86 GW, representing a total investment of $ 104 billion from 2008 to 2021. But Pike also plots a more aggressive growth scenario under which capacity hits 1 15 GW, representing $138 billion in cumulative investment, based on the assumption that governments will incentivise renewable power such as biomass to enhance energy security, cut carbon emissions and boost economic development.
"The biopower industry is continuing to add capacity worldwide as governments look to develop low-cost, baseload renewable energy sources," says Pike senior analyst Mackinnon Lawrence.
"The combination of a burgeoning international trade in biomass pellets, implementation of emission regulations and increased utilisation of co-firing strategies is expected to accelerate global scale-up efforts over the next decade."
The appeal of biomass is easy to see. Its theoretically inexhaustible feedstocks are found in abundance around the world. Biomass supplies an estimated 14 per cent of global primary energy. Traditional products like firewood, charcoal, manure and crop residues still provide the main source of household energy for 2-3 billion people worldwide.
BIOMASS TAKES OFF GLOBALLY
The sector is also growing in all world regions. Africa, where bio-feedstocks provide energy to almost 80 per cent of households, is now looking to build a wave of biomass power plants. Tower Power, a private electricity producer, will break new ground this month for Kenya's first commercial biomass plant - a $208 million, 1 1.5 MW facility in Marigat fed by the Prosopisjuliflora tree.
In India as many as 836 million people still rely on traditional biomass for energy, according to a report released in February 2012 by the Worldwatch Institute. The Chinese government now targets 1 3 GW of biomass fired capacity by 2015 and 30 GW by 2020.
Europe had 23.6 GW of biomass capacity in 2010 - up from 15.7 GW in 2005 - of which Germany provided almost 6.5 GW, followed by Sweden, the UK, Finland and Italy.
In the UK, the world's largest biomass fuelled power plant is poised to come online. Run by Germany's RWE, Tilbury power station was last year converted from firing coal to run on 100 per cent biomass using wood pellets from the US and Canada. When fully operational, the 750 MW plant could produce 10 per cent of the UK's renewable energy, while its life-cycle C02 emissions are expected to be about 80 per cent less than for a similar sized coal fired power station.
RVVE's fellow German energy firm E.ON will next year begin converting its coal fired plant at Ironbridge into a biomass facility.
DP CleanTech, a biomass firm with bases in China, Thailand and the UK, last month opened a new headquarters in Copenhagen in Denmark, reflecting its belief in further growth in Europe's mature biomass markets.
Laust Knudsen, global head of servicing at DP CleanTech, said the company is seeing a huge growth in demand for its maintenance services in Scandinavia, where the market is already well established. "Many of the biomass and waste-to-energy power plants have been in operation for many years, and advances in technology mean plant owners are looking to benefit from higher efficiencies and better plant availability."
The company still sees considerable growth potential in Europe -particularly Eastern Europe - but its largest market is in China and it expects the Asia-Pacific to see the greatest capacity increase. Many emerging markets have very large untapped waste residues that are ideal for biomass power, said chief executive Simon Parker. "Biomass is a relatively cheap option for emerging markets to boost their renewables portfolio and has also proven to be very effective in rural electrification and the creation of new jobs. Therefore, many governments such as those in India, Malaysia, the Philippines and Indonesia are implementing new incentives to mitigate C02 emissions and reduce dependence on fossil fuels."
BARRIERS TO GROWTH
But Pike Research's Mackinnon Lawrence warns of "significant headwinds" for the sector. "Currently, power generation from biomass is hamstrung by policy uncertainty and the high costs of feedstock relative to fossil fuels," he says.
In the Asia market, Simon Parker acknowledges significant challenges, not least due to the region's many and varied biomass feedstocks, which are generally not subject to seasonality but lack a formal infrastructure for collection and processing. "There is demand for both larger and smaller facilities than in Europe and, in general, there is greater price sensitivity in this relatively immature market," he adds.
Globally, he sees the greatest market obstacles as uncertain government policy; the availability, sustainability and cost of feedstocks; and the cost and availability of financing. "These obstacles are impacted to a greater or lesser extent by public perception and attitudes in the more mature markets, and infrastructural shortcomings in emerging markets. Challenges around the stability of feedstock collection, fuel logistics and power distribution are more acute in emerging markets but have been successfully overcome in relatively undeveloped countries like China."
While many challenges are "proven to be surmountable", he sees "a timelag effect" on take-up and growth rates for biomass power solutions. "In more mature markets, such as Denmark, where 80 per cent of agricultural residues are used for energy production, the challenge will be in maintaining reliable access to feedstocks and increasing the cost efficiency of feedstock provision. Maintaining or increasing the efficiency of existing plants will also be a key factor in ensuring that biomass power remains a key contributor to renewable energy targets."
Europe differs from Asia in sourcing feedstock from the production of wood and pulped paper. But these sectors are not expected to grow in the next decade, unlike Europe's biomass capacity if it is to meet its renewable energy targets. This leaves a large supply shortfall to be filled by the already significant import of wood pellets, the primary fuel for many biomass plants.
Some 2.5 million tonnes of wood pellets were imported into the EU in 2010, a substantial rise on the 2009 figure of 1.8 million tonnes. Most of these imports came from the US, Russia and, particularly, Canada, where vast wood pellet reserves result from the large availability of wood from dead and diseased trees. In the near future, South America is expected to pin these countries as a major exporter to Europe.
UNCERTAINTY OVER EUROPE'S LONG-TERM FUEL SUPPLY
The EU accepts that it lacks its own feedstocks for biomass plants and will become yet more dependent on these imports, even though a potential - if not probable - complication could be competing demand if biomass plants emerge in countries in South America and Asia. But by 2020 it is probable that biomass co-firing with coal will start to be promoted in much of the rest of the world, particularly as a means of curbing carbon emissions. Demand for co-firing in Asia, Africa and the Middle East is predicted to rocket by 2020 and these countries will utilise their own substantial feedstocks. Will there be enough feedstock to power biomass plants in these countries and also export enough to Europe? Yes and no, according to Eurelectric, an association representing the electricity industry across Europe. While the EU's demand could be met, "it would put supply chains under significant pressure and greatly increase market prices. This should be borne in mind when placing reliance on importing biomass into the EU from world markets."
In its report Biomass 2020, published towards the end of last year, Eurelectric called for an EU-wide action plan to ensure that biomass is attractive to investors as a robust and proven form of renewable energy and can also meet the demands many expect to be placed upon it to help meet European carbon targets.
Eurelectric fears the lack of a European biomass blueprint will result in "the development of separate national sustainability schemes that will create inefficiencies, increase costs and result in a lack of transparency. They will impede biomass trade and deter investment in biomass cultivation and biomass-powered electricity and heat generation, as well as in biogas, because of uncertainty over long-term fuel supply in a changing regulatory environment."
Eurelectric recognises that some Member States that are established biomass users would oppose EU regulation on the grounds that it would create further paperwork, but suggests that any harmonised criteria "should take into account existing national legislation on forestry covering susta inability, and a 'fast track' compliance system should be investigated for biomass producers adhering to such legislation to minimise administrative burdens".
The biomass industry is one of light and shade. It is clear that the sector as a whole will grow, but by how much and where is more of a grey area. Europe has high hopes for greater biomass growth, but these plans will be affected by the bio-expansion of those emerging nations on which Europe currently depends for imports. It is not a case of winners and losers - just that some will be winning the bio-lottery while others will be winning but not giving up the day job.