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Introduction

A wide range of biomass sources are used to produce Biopower in a variety of forms. For instance, food, fiber and wood process residues from the industrial sector; energy and short rotation crops as well as agricultural wastes from the agricultural sector, and forest residues, agro forest residues and short rotation coppice from the forestry sector can all be utilized to generate electricity, heat, combined heat and power, and other forms of Biopower. Traditional biomass sources including fuel wood, charcoal and animal dung. Governments worldwide are investing heavily in Biopower technologies to increase their energy security and reduce the fossil-fuel carbon emissions and pollution.

Bioenergy accounts for around 10-11% of the world’s total primary energy supply, most of which is used in the residential sector (for heating and cooking) and is produced locally. It is estimated that around 97% of Biofuels are made of solid biomass, 71% of which is used in the residential sector. The worldwide cumulative Biopower production capacity stands at around 50 GW. The major countries involved in bio-power production worldwide include the U.S.  Brazil, Finland and France.

The U.S. Biopower Market

The U.S. is the leading Biopower nation with cumulative installed Biopower capacity of around 11 GW. The land base for Biopower in the U.S. is 2.2 billion acres, and about half of this base can be used for growing biomass. Despite such high potential, Biopower capacity in the U.S. has been growing marginally over the years. Cumulative installed Biopower capacity in the U.S. in 2001 was 9,658.3 MW which increased meagerly to around 10,288 MW by the year 2008 at a CAGR of 0.9% (Figure 1). Other renewables like Wind and Solar PV, for the same period in the U.S.  have grown at a much faster pace.

One big reason for the slowing down of the development of the Biopower industry in the U.S. has been high feedstock costs due to inadequate infrastructure and lack of accounting for the positive environmental attributes of biomass in the marketplace.

The Road Ahead

The pertinent question here is - Is the U.S. Biopower industry poised for a surge in investment opportunity? We have already seen that there is huge land base available for biomass development in the U.S. in a previous section of this article. Therefore, potential is not an issue. What needs to be debated is - Will this potential be largely exploited in the near future?

The U.S. happens to be one of the largest emitter of greenhouse gases. It has been reported that the U.S.  with about five percent of the world’s population, already produces roughly one quarter of all global greenhouse gas emissions. Moreover, these emissions are continuously increasing due to increased energy use. According to the U.S. Energy Information Administration (EIA), total greenhouse gas emissions in 2007 in the U.S. were 1.4 percent above the 2006 total. Most of this was in the form of carbon dioxide. The increase in carbon dioxide emissions in 2007 resulted primarily from two factors: unfavourable weather conditions, which increased demand for heating and cooling in buildings; and a drop in hydropower availability that led to greater reliance on fossil energy sources (coal and natural gas) for electricity generation, increasing the carbon intensity of the power supply. In this backdrop, the U.S. is looking at reducing its carbon footprint and as a result the country is exploring various renewable energy options so as to move ahead on the path of sustainable development.

Moreover, the U.S. government is looking towards reducing its dependence on imported fossil fuels. Given this strategy in background, renewables are expected to gain an increased presence in the country’s power generation basket. However, renewable energy sources are not as cost effective and efficient when compared to conventional fossil fuels. Moreover, huge investments in R&D for renewable technologies have to be continuously provided for the development of the same over time. However, the U.S. is combating the issue of financial crisis at present. As a result, the availability of credit and finance availability to this sector is expected to be constrained in the near future.

In this backdrop, development of relatively new renewable technologies like solar PV, offshore wind, geothermal etc would be difficult. In such a situation, Biopower can prove to be the promising option because the technology has already reached a maturity level with years of experience. Most Biopower plants today are based on the mature, direct combustion boiler/steam turbine technology. Average Biopower plants are in the 20 MW size range with average biomass-to-electricity efficiency of 20%. Moreover, the industry is expected to dramatically improve process efficiency through the use of cofiring of biomass in existing coal-based plants. Introduction of high efficiency gasification combined cycle systems; and efficiency improvements in direct combustion systems through the addition of dryers and more rigorous steam cycles at larger scales of operation are also expected to improve production capacity and profitability. Technologies, such as Whole Tree Energy^TM, integrated gasification fuel cell systems, and modular systems, which are at the R&D level, are expected to further boost the industry competitiveness. Further, a renewed growth of Biopower industry in the U.S. is possible because of the fact that conventional fossil fuel plants can be converted easily to Biopower plants.

Moreover, the downward trend in the oil prices at present is expected to divert investment in Biofuel technology. As a result, the demand for feedstock is expected to decline thus resulting in decreased prices of the same. This is again expected to provide an impetus to the growth of the Biopower industry in the US.

There is already a growing realization in the U.S. that the development of the Biopower industry will have multiple benefits. According to the DOE, “developing a strong biomass industry in the United States will have tremendous economic benefits including trade deficit reduction, job creation, and strengthening of agricultural markets. Growth of the biomass industries can create new markets and employment for farmers and foresters, many of whom currently face economic hardship. Growing biomass energy crops provides new uses for agricultural land currently out of production which can help conserve farm land for future generations. Biomass usage can spur the development of new processing, distribution, and service industries in rural communities. Additionally, using biomass residues rather than disposing of them in landfills can also reduce a major land use problem.”

Biopower also has a great potential for distributed applications (small electricity sources attached to the electrical grid and close to the point of use) in industrialized regions. Small modular biomass power systems have the potential to supply electricity to more than 2.5 billion people who presently live without it. These modular systems are factory built with power capacities in the range of 5 kW to 5 MW. The U.S. Department of Energy’s (DOE) Small Modular Systems Project works with industry players to develop efficient and clean small Biopower systems.

The DOE has established a Biopower Program, originally called the Biomass Power Program, and is sponsoring efforts to increase the productivity of dedicated energy crops. The Program aims to double biomass conversion efficiencies, thus reducing biomass power generation costs. These efforts will promote industrial and agricultural growth, improve the environment, create jobs, increase U.S. energy security, and provide new export markets. Government support has also come in the form of mandatory policies.

Renewable Portfolio Standards (RPS) are government policies that influence development of renewable energy industries in the US. In 2007, four states established new RPS policies, 11 states significantly revised pre-existing RPS programs, and three states created no binding RPS goals. Assuming that full compliance is achieved, current mandatory state RPS policies will require the addition of roughly 60 GW of new renewables capacity by 2025, equivalent to 4.7% of projected 2025 electricity generation in the U.S.  and 15% of projected electricity demand growth. According to the Oak Ridge National Laboratory (ORNL) and Department of Energy (DOE), total RPS capacity available for Biopower in 2012 is to the tune of 25 GW.

In this backdrop, the Biopower industry in the U.S. is expected to gain the growth momentum in the coming years.

Conclusion

The Biopower industry has great potential in the U. S. The current situation, both globally and within the State  will favor the development of Biopower. The importance of this industry is expected to be more observable in the near future. Increased presence of Biopower in the energy market will allow the U.S. to address global concerns regarding global warming, while also catering to growth in demand for energy by business and industry.

Relevant report link

“The U.S. Biodiesel Market Analysis and Forecasts to 2013″ - Published by GlobalData - Feb-09