Biomass More Attractive to Investors Than Renewables

A KPMG annual survey on global renewable energy mergers and acquisitions worldwide found that 37% of respondents plan to invest in biomass, 36% plan to invest in solar and 35% in wind energy. Here’s the link to the survey, Powering Ahead: 2010 – an outlook for renewable energy M&A

Survey respondents indicate they prefer biomass plants because of their potential to yield much higher returns than other renewable technologies. 

"A well-executed biomass plant can deliver substantially greater economies of scale than wind, and the heat generated from incineration can supply neighbouring buildings, creating another revenue stream," explained Andy Cox of KPMG.

Large companies, such as the utilities, are looking for the next global trend and biomass looks like it will be the "new wind", he said. 

Biomass can operate as base load power which has obvious advantages over intermittent technologies such as wind and solar. Long term fuel supply and pricing are challenges, but companies are moving ahead as a complement to wind and solar portfolios.

Meanwhile, forest advocacy groups warn that bioenergy poses a threat to forests and indigenous peoples. Increased demand for burning wood as an energy source has "massively increasing" logging and expansion of tree plantations in the US, Ghana, the Congo, Brazil and West Papua.

The report, Wood-based Bioenergy: The Green Lie, calls for an immediate end to wood subsidies and incentives for industrial bioenergy.

The US Department of Agriculture (USDA) recently decided to allow planting of genetically modified eucalyptus trees in the US South, despite global opposition to GM trees, which can contaminate native forests.

Wood is a major energy source in Europe, and is expected to be the largest renewable energy source in the US. The study points to Britain, where bioenergy is expected to rise from a half million tons to 35 million tons. 

Obviously, it’s not just sawmill and other waste that are being for bioenergy, and tree stumps, twigs and needles are vital for soil fertility, biodiversity and soil carbon.