Clean-up operation: biomass power generation

9 December 2013

With worldwide energy demand soaring and environmental targets coming more sharply into focus, pressure is mounting to generate more power and to do it more cleanly. As conventional fossil fuels are at a distinct disadvantage when trying to meet this combined need, renewable power has its chance to shine, and, as GlobalData reports, biomass generation is emerging as a strong player in the market.

The global power industry is characterised by heavy dependence on thermal fuel sources for power generation, as major power-generating countries such as the US, China, Japan, Russia and India have abundant coal reserves. In recent years, significant economic development in China and India and the expansion of the usage of coal resources have driven the rapid growth of thermal production.

Just as energy demand continues to increase, supplies of the main fossil fuels used in power generation are becoming more expensive and more difficult to extract. In contrast to the insecurity surrounding supplies of conventional fuels and volatile prices, renewable energy is a massive indigenous power source that is permanently available in virtually every country in the world.

The need to achieve energy stability, security of supply and energy independence, combined with the need to minimise carbon footprints, is driving countries across the world to explore different renewable energy technologies such as wind, solar and biopower.

Many countries have implemented mandates supporting the production of renewable power. The EU, as part of its directive signed by 27 partner countries, aims to increase the share of energy sourced from renewables to 20% by 2020.

On the governmental agenda

Renewable energy sources will play a much greater role in the global energy supply this century than ever before. Expansion is being driven by government policies that include a range of financial incentives - such as investment grants, premium tariffs and renewable energy targets - with the aim of reducing greenhouse gas emissions.

These ambitious targets push for even stronger support mechanisms and funding programmes that include incentives such as soft loans, tax benefits, and subsidies such as feed-in tariffs and green certificates.

Nevertheless, the renewable industry in the next few years must face up to a number of technical challenges if it is to compete directly with conventional power-generation technologies.

The global renewable power market witnessed rapid growth during the 2001-2012 period, reaching 582,431MW in 2012 from 124,726MW in 2001, at a compound annual growth rate (CAGR) of 16.5%. It is projected to see rapid growth and reach a cumulative installed capacity of just over 1.9 million MW by 2025 at a CAGR of 8.5% from 2012.

Green power globally

Biomass is one of the major renewable sources of energy and is widely used to generate clean power globally. Biomass power uses various kinds of feedstock, such as agricultural waste, animal waste, energy crops, industrial waste and municipal solid waste.

Governments worldwide are investing heavily in biomass technologies to increase their energy security. The financial incentives and governmental support, coupled with awareness spreading globally about biomass as a carbon-neutral technology, will continue to drive installations worldwide.

The cumulative installed capacity of biomass power has increased from 28,657MW in 2001 to 68,783MW in 2012 at a CAGR of 8.3%. It is projected to have moderate growth and reach a cumulative installed capacity of 141,825MW by 2025 at a CAGR of 5.7% during period 2012-2025. See Figure 1.

Chinese market expected to double-up

China's renewable power market grew from 27,810MW in the year 2001 to 156,059MW by the end of 2012 at a CAGR of 17%. On the basis of 2012 cumulative installed power capacity, the market share of the renewable power sources was 13%. This share is expected to nearly double to around 25% by the year 2025 (see Figure 2). The subsidies and incentives launched by the Chinese Government at the national and state levels are expected to boost the renewable power capacity in the future.

The biomass power market in China witnessed strong growth during the period 2001-2012. It reached 7,701MW in 2012 from 1,654MW in 2001 at a CAGR of 19.2%. It is projected to have a rapid growth and reach a cumulative installed capacity of 25,478MW by 2025, at a CAGR of 9.6% for the period 2012-2025.

India - providing the perfect blend

The Indian renewable power market has an optimum mix of different renewable technologies. There are 28,933MW of renewable installations in India, as of the year end 2012, that are expected to almost triple in the years to come, reaching 88,649MW as of the year end 2025, with a CAGR of 9% for the period 2012-2025.

The major reason for such massive installations in India can be attributed to onshore wind and solar installations. Onshore wind accounts for 65.85% of the total renewable installations and solar accounts for 6.26% as of the year end 2012.

Solar installations are fourth in terms of installation percentage as of the year end 2012, and by the year end 2025, the sector is expected to have robust growth, leading to solar seizing second spot in terms of installations, behind onshore wind power. Solar has grown at a CAGR of 90.4% for the period 2001-2012 in the Indian market and is expected to grow further at a CAGR of 16% for the period 2012-2025.

The cumulative biomass installed capacity in the Indian power market grew from 423MW in 2001 to 4,285MW in 2012 at a CAGR of 23.4%. The Indian biomass market is expected to reach around 9.5GW by 2025. Around 30 biomass power projects, aggregating to about 350MW of generation capacity, are at various stages of implementation. Around 70 cogeneration projects, with capacity aggregating to 800MW, are also being implemented.

India's Ministry of New and Renewable Energy (MRNE) is encouraging the development of the biopower market through provision of fiscal as well as financial incentives, such as capital duty waivers, concessions on customs duty for the import of machinery and components, exemptions on excise duty, and preferential tariffs for the sale of biopower.

Recently, the MNRE announced a plan to generate 10,000MW of biopower from forest and agricultural waste over the next ten years.

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