Biomass Sector Expands, Due to Subsidies Clarification

Biomass draws out a field of activity with a lot of potential. In a few years, appropriate subsidies can make the entire market bloom. Uncertainty slowed down the development of biomass, just like it did in the case of solar and wind power projects.

However, once the government shows its commitment to support this domain, the banks will start exploiting the entire potential of biomass.

Experts say biomass reached a tipping point and it is mature enough to exceed solar and wind power. It can become an affordable, popular resource within a few years.

Relying on this belief, the Irish developer Kedco decided to invest £9.44m, coming from Ulster Bank, to build and implement such a manufacturing facility, a 4MW biomass power plant located in Newry, Northern Ireland, offering both heat and electricity, reports Business Green.

For the company's officials, obtaining the money represents the most important achievement, since most of the enterprises struggle to get financial support for their projects, with no visible results.

The project represents a huge step towards increasing the popularity of biomass facilities. If this example highlights an innovative, green way of displaying growing profit margins, the path would become familiar to many more such enterprises in the near future.

The power plant will start functioning next year, but the company isn't wasting any time since it has already established partnerships with four suppliers that are going to provide the necessary amount of wood.

Also, the company plans to expand its strategy by opening £45m gasification plant in Enfield, located north of London. The facility will provide up to 12MW of electricity and 10MW once it is fully functional.

All in all, representatives from the enterprise think they hold the key to success: small facilities located in appropriate areas where the presence of feedstock does not represent an issue.

The main challenge appears to be the financial support for such operations that do not benefit from a strong legal framework at this point in time. Efficient regulations have the power to make the biomass industry stronger and more appealing to creditors.

Officials from the companies operating in this line of business have put all their hopes in the long-expected Renewable Heat Incentive (RHI) and the Renewables Obligation.

At this point in time, it is almost safe to say that Brussels supports the development of biomass, since it established lower costs for biomass installations over 1MW, from the initial 2.7p per kilowatt hour (kWh) to only 1p/kWh.

Even if progress is not certain, it is definitely expected. Since biomass is included in the list of 8 key innovative technologies (Renewables Roadmap), the investors will most likely choose to invest in biomass, rather than in other sectors.

The road might be rocky, but it certainly leads to sustainability.