Frost: Steady Growth Predicted in Europe's Biomass Power Plant Markets
June 22, 2006
"The parallel needs of emission reduction and energy generation have increased the focus on renewable energy sources," said Frost & Sullivan industry manager Rajat Kumar. "As more policies and frameworks start pointing in this direction, the challenge will be to capitalize on the attendant growth opportunities generated."
As the market progresses, a major concern will be to ensure feedstock availability, said analysts. This will be of particular concern to countries already dependent on imports to meet their domestic energy demands. While bio-energy will balance these insufficiencies, if pursued in accordance with the long-term benefits to the region, the key will be to secure adequate feedstock supplies to meet surging demand.
One of the primary factors hindering market growth will be the location of biomass power plants, which will typically need to be proximate to feedstock sites. Analysts said this will limit the maximum size of these power plants to around 30 MW electric, even as biomass sourcing continues to be a challenge.
"Biomass power plants are normally established close to locations where there is feedstock availability and, in cases where plants cannot be established in such locations, an effective logistics as well as fuel supply chain will be mandatory," said Kumar. "The lack of an efficient logistics system will be a crucial factor in determining plant location, thereby limiting the options on site selection."
Since location will be a critical factor to maintaining plant operations, analysts said a feasibility analysis that links planned energy generation with the amount of feedstock that could be sourced at any instance (irrespective of other external factors) will reassure potential investors that they will be protected from high risk. On the other hand, they would have to invest heavily in the feedstock supply chain to sustain plant functioning.
Source: Frost & Sullivan.