Biomass Industry

03 June 2013 03:06 PM | #Market Research

The term “biomass” refers to biological matter in the form of plants or animals. The processing of biomass can yield a variety of useful end products such as fuel, electricity, heat, renewable construction materials and plant based pharmaceuticals.

Depending on the type of biomass being used, a variety of processes can be used to yield these end products including:

Biomass can be sourced from:

For heat and electricity production, coal has traditionally been preferred to biomass due to its greater efficiency in providing energy. However, the use of biomass is quickly gaining momentum as it is considered to be a low carbon solution to climate change. Globally, biomass represents the largest source of renewable/low carbon energy. Experts suggest that more than a third of current electricity demand can be supplied by biomass technology currently available.

Investing in Biomass

Biomass is one of the fastest growing sectors within the renewable energy industry. According to a report by the United Nations Environment Program (UNEP) and New Energy Finance, global investment in biomass and waste-to-energy projects grew by 432% in 2007. Experts predict that the biomass industry can be one of the most profitable within the renewable energy sector, mainly due to the relatively high efficiency with which most biomass developments can run. After a slowdown in 2008 ($8.4 billion with $0.7 billion new equity investments) due to the recession, investment in biomass projects reached record levels in Q2 2009, although equity investments in businesses fell.

The UK biomass industry is currently exploding, with significant investments going into a variety of biomass projects. In 2007, the UK government approved what is to be the world’s largest biomass plant in Wales with a capacity of 350MW, on the condition that the biomass was sustainably sourced. Additionally, a number of biomass projects have either been recently established or are in the planning pipeline, such as Drax and Siemens’ plan to invest £2 billion in biomass power plants in the UK and Tesco commissioning a 295MW plant to power their distribution centre, suggesting investor confidence and a long term outlook on the technology despite the current financial crisis.

According to Merrill Lynch, biomass’ global projected 10 year growth rate is 5%, with most market opportunities expected specifically in gasification. Although this predicted growth rate is relatively low in comparison to other renewable and low carbon energy technologies, the UK has the necessary characteristics to take full advantage of the potential that biomass offers. With the viability of biomass being proven in other European countries, the UK’s abundant supply of biomass and encouraging signs of acceptance, biomass is poised to become a major player in providing low carbon solutions to a variety of sectors in the UK. Experts also state that the biogas market in the UK is 10 years behind that of the rest of Europe, where biogas is quickly becoming firmly established.

Industry Drivers

The biomass industry spans a range of sectors due to the variety of possible end uses. As a result, the industry is highly important in the UK.

Policy Drivers

UK Regulatory Drivers

Financial Drivers