Agricultural risk

As outlined above, the technological risk associated with biomass power generation is relatively low and predictable. However biomass power generation requires both power plants and fuel; the fuel end of the equation poses a much higher level of risk.

A successful biomass power project will have to become closely integrated with the agricultural production of the fuel. However there is, today, no agricultural industry devoted to the raising of energy crops. Crop raising expertise, harvesting expertise and a transport infrastructure must all be established. Yet these cannot be established until there is a power industry to buy the crop they produce. Here lies the difficulty.

If this vicious circle is to be broken, some form of subsidy will almost certainly be necessary. Small programmes already exist in countries such as the UK but other and larger programmes will be needed. Subsidies are themselves unpredictable, capable of being withdrawn or phased out at short notice. Thus the risk of fuel supply failure must be considered high.

Over the longer term the energy crop industry will be in a position to offer long-term fuel supply contracts to power plant owners. Until that happens, each project will have to work closely with a fuel supplier to ensure it has a viable future.

Biomass waste fuels remain as a standby but supplies of these can be unpredictable and if demand outstrips supply, fuel costs can escalate. Such a situation occurred in California during the 1990s, forcing a number of biomass power plants to shut down operations. So until an energy crop industry has been established, fuel will remain the weak link in the biomass power supply chain.

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