Asia remains strongest growth market in solid biomass-to-power industry, says report

Asia remains the strongest growth market in the global solid biomass-to-power industry, according to a new report.

ecoprog, a German consultancy specialising in environmental and energy technology, shared the findings in the 12th edition of its annual Biomass to Power report.

In 2021, the global biomass power plant asset increased by around 120 plants with a combined capacity of almost 2.9 GWel. Following the trend of recent years, Asia is the strongest region with a capacity growth of 1.6 GWel in 2021, followed by South and Central America and Europe.

While Europe will no longer reach the growth rates seen in recent years, according to ecoprog, new opportunities will evolve from a changing heat market. For the forecast period of 2021-2030, ecoprog expects more than 1,500 plants with a combined capacity of approximately 23.2 GWel to become operational worldwide.

Around 1.1 GWel of additional capacity was installed in China and India alone. In both countries, ecoprog expects the growth rates to remain high due to existing support schemes and the agricultural biomass potential.

In India, biomass-to-power also plays a role in fighting against harmful straw paddy burning. In this context, the co-incineration of biomass in coal-fired plants will be supported. China plans to increase the competitiveness in its support scheme, which is why a less dynamic development is expected in the coming years.

Japan is a ‘booming’ market, triggered by the attractive incentive scheme implemented in 2021. For the next five years, a record capacity growth is expected in Japan. In the future, however, the market will undergo similar developments as the European market with a shift to smaller projects, the report highlighted.

Japan depends on biomass imports. In addition to the supply of agricultural biomass through South East Asian countries, US pellet producers enter the market in Japan to meet demand. New sustainability criteria for biomass fuel will also be implemented in the country.

Brazil remains the only dynamic market in South and Central America, as the country with the biggest biomass power plant asset globally at around 15.4 GWel. The country has a strong sugar and ethanol industry where most of the asset is located.

While renewable energy auctions were suspended in 2020 due to Covid, this was balanced by auctions in 2021, where approximately 480 MWe of additional biomass capacity was awarded – the highest since 2014. Additionally, large-scale projects in Brazil and Chile’s pulp industry are being developed.

In Europe, the strong growth rates seen in recent years, mostly due to large-scale projects in the Scandinavian countries and the UK, will no longer be reached, said ecoprog. In general the trend towards more competitive support schemes for renewable energy and ‘cascade use’ of biomass is ongoing in Europe. In line with this, the European Commission aims to make sustainability criteria for biomass fuels stricter in the EU.

However, new opportunities are evolving in Europe through the changing heating market, both in the industrial and district heating segments. Ecoprog noted biomass remains one of the most important ways of moving heat generation away from fossil fuels, even though new large-scale conversions “are mostly a thing of the past”.

In Germany, several projects based on wood waste are underway. In Poland, similar projects are expected to evolve in the future; the country has the second-biggest coal-fired plant asset in Europe, after Germany. Additionally, new conversion or replacement projects are appearing in Portugal, Spain and France.

In the future, ecoprog believes bioenergy could gain importance in the global decarbonisation pathways with the roll-out of new technologies such as hydrogen production or carbon capture and storage. BECCS could become a positive market factor in regions like North America, for example, where biomass potential is high, but subsidies are “not sufficient”.

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