Global Investment in Biomass Power Generation Will Total $104 Billion Through 2021

January 10, 2012

Later this month, the world’s largest biomass-fueled power plant will come online in the United Kingdom, generating an estimated 750 megawatts (MW) of base load renewable power.  The Tilbury, England facility represents a significant step forward for the biomass power generation sector, which is expected to expand rapidly in the coming decade.  Defined as the generation of electricity and heat from biomass resources, biopower is one of the only base load renewable energy sources with widespread availability of fuel resources.  Theoretically inexhaustible and found in abundance around the world, biomass feedstocks currently supply an estimated 14% of global primary energy.  Traditional biomass products like firewood, charcoal, manure, and crop residues still provide the main source of household energy use for some two to three billion people worldwide.  As global energy demand escalates and efforts to curb greenhouse gas emissions intensify, an increasing number of countries are turning to biomass resources as fuel for commercial-scale electricity production.  According to a new report from Pike Research, worldwide biomass power generation capacity will grow to at least 86 gigawatts (GW) by 2021, from 58 GW in 2011. That represents a total investment of $104 billion from 2008 to 2021.

Under a more aggressive growth scenario, capacity could reach 115 GW, representing $138 billion in cumulative investment as governments incentivize renewable power sources that can alleviate concerns around energy security, reduce carbon emissions, and stimulate economic development.

“Although facing significant headwinds, the biopower industry is continuing to add capacity worldwide as governments look to develop low-cost, base load renewable energy sources,” says senior analyst Mackinnon Lawrence.  “Currently, power generation from biomass is hamstrung by policy uncertainty and the high costs of feedstock relative to fossil fuels, but the combination of a burgeoning international trade in biomass pellets, implementation of emission regulations, and increased utilization of co-firing strategies is expected to accelerate global scale-up efforts over the next decade.”

Encompassing varied organic matter like grass, leaves, wood, wood chips, rice husks, peanut shells, sugarcane fiber, and waste, the biomass supply chain is complex and rapidly evolving.  Limited by local biomass supply constraints, most dedicated biopower facilities today are less than 50 MW.  With larger (100 MW) facilities coming online and commercial power producers increasingly turning to co-firing biomass with coal as a low-cost strategy for reducing emissions, efforts to expand the geographic footprint of supply chains are underway.  Pike Research estimates that demand for biomass resources will reach at least 1 billion tons per year, with an expanding trade in biomass pellets a key indicator of growth over the next decade.

Pike Research’s report, “Biopower Markets and Technologies”, analyzes the global market opportunity for electricity production from dedicated, co-fired, and CHP biopower sources.  The study includes a comprehensive examination of market drivers, existing and emerging technologies, feedstock opportunities, the public policy and regulatory landscape, and key industry players.  Market forecasts for installed power generation capacity, cumulative investments, and pellet production and consumption are segmented by geography and key countries through 2021.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@navigantresearch.com

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