Biomass is the organic material of recently living plants, such as trees, grasses and agricultural crops. Biomass feedstocks are very heterogeneous and the chemical composition is highly dependent on the plant species. Ash content, density, and particle size and moisture content are all critical issues for the biomass feedstock. These factors have an impact on the cost of this feedstock per unit of energy, its transportation, pre-treatment and storage costs, as well as the appropriateness of different conversion technologies. Moreover, heterogeneity in quality can also be a problem for the conversion process, since some combustion technologies require much more homogeneous feedstocks to operate. This can add complexity to the planning and economic viability of biomass-based power plants.
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Thus, unlike wind, solar and hydro, the economics of biomass power generation are dependent upon the availability of a predictable, sustainably sourced, low-cost and long-term adequate feedstock supply. The range of costs for feedstocks is highly variable, too. Waste produced due to industrial processes can have a zero or even negative cost if it is waste that would otherwise have incurred disposal charges, such as black liquor at pulp and paper mills. Yet there can also be potentially high prices for dedicated energy crops, if productivity is low and transport costs are high.
More modest costs are incurred for agricultural and forestry residues that can be collected and transported over short distances, or are available at processing plants as a by-product. Transport costs add a significant amount to the costs of feedstocks, if the density of the feedstock is lower and the distances become large. Transforming wet biomass into higher-density forms will help reduce transportation costs per unit of energy, but the transformation costs must also be taken into account. There is often a trade-off between the volume of low-cost feedstock available to a bioenergy power plant as collection radius grows, this can be offset if more cost-effective bulk freight deliveries can be made by rail or water.
Feedstocks typically account for between 20-50%
of the final cost of electricity from biomass technologies. Agricultural residues, such as straw and sugarcane bagasse, tend to be the least expensive feedstocks, as they are a harvest or processing by-product. They are, however, correlated with the price of the primary commodity from which they are derived and have registered increased costs from 2000 to 2011 as indicated in the World Bank agricultural commodities index (World Bank, 2017). However, the cost of agricultural commodities has edged down, after the peak observed in 2011, with prices down by 28% in 2016 compared to 2011. Biomass power generation plants that are exposed to feedstocks that are derived from traded commodities are therefore exposed to volatile commodity prices, unless they have secure supplies or have acquired a long-term contract for their feedstock needs (see IRENA, 2015, for a more detailed discussion of feedstock costs).
7.2 INSTALLED COST TRENDS
Technology options largely determine the cost and efficiency of biomass power generation equip-ment, although equipment costs for individual technologies can vary significantly. Factors affect-ing this depend on the region, feedstock type and availability, and how much feedstock preparation or conversion happens on site.
Planning, engineering and construction costs, fuel handling and preparation machinery, and other equipment (e.g. the prime mover and fuel conversion system) represent the major categories of total investment costs of a biomass power plant.
Additional costs are derived from grid connection and infrastructure (e.g. roads). Combined heat and power (CHP) biomass installations have higher capital costs, but the higher overall efficiency (around 80%-85%) and the ability to produce heat and/or steam for industrial processes, or for space and water heating through district heating networks, can significantly improve the economics.
Biomass power plants in emerging economies
can have significantly lower investment costs than the cost ranges for OECD-based projects, due to lower local content costs and the cheaper equipment allowed, in some cases, by less stringent environmental regulations.
Figure 7.1 and Figure 7.2 highlight the relatively low installed cost of biomass combustion technologies for projects in Asia and South America, while more expensive projects occur mostly in Europe and North America. Although small-scale
The wide range of
bioenergy-fired power generation technologies translates into a broad range of observed
installed costs
projects can have higher capital costs, most large projects have total installed costs in the range of USD 450 to 2 500/kW. The lower range can be achieved when additional capacity is added to an existing project, as the economics of electricity generation improve. The data to which IRENA has access is dominated by steam cycle boiler systems, although in many cases the technology is not disclosed. Biomass projects using steam cycle boilers appear to have the lowest costs, clustering between USD 500 and USD 2 000/kW, while fixed bed gasifiers deployed in Europe and North America are between USD 2 000 and USD 7 000/kW.
Most of the projects in the IRENA Renewable Cost Database have not, however, disclosed
China and India OECD Rest of the world
2016 USD/kW
0
0 5 10 15 20 25 30 35 40 45 50 55
2 000 4 000 6 000 8 000
Capacity MW
Figure 7.1 Total installed costs of biomass-fired generation technologies by country/region and project capacity
Source: IRENA Renewable Cost Database.
the technology, and tend to cluster between USD 500 and USD 8 000/kW. The less expensive projects are in Asia and South America, while the more expensive ones are in Europe.
Figure 7.2 presents the total installed cost range of biomass fired power in several regional groupings.
Biomass installed costs in India are the lowest, ranging from USD 450 to USD 2 600/kW, while in China they range from USD 450 USD 3 600/kW.
Installed cost ranges are wider in Europe, North America and the rest of the world category, as the technological options used to develop projects are more heterogeneous and on average more expensive.
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7.3 OPERATION AND MAINTENANCE COSTS Fixed operations and maintenance (O&M) costs for bioenergy power plants typically range from 2-6%
of total installed costs per year, while variable O&M costs are typically relatively low, at around 0.005/KWh. Fixed O&M costs include labour, scheduled maintenance, routine component/
equipment replacement (for boilers, gasifiers, feedstock handling equipment, etc.), insurance, etc. The fixed O&M costs of larger plants are lower per kW due to economies of scale, especially for labour. Variable O&M costs are determined by the output of the system and are usually expressed as USD/kWh. Non-biomass fuel costs, such as ash disposal, unplanned maintenance, equipment
replacement and incremental serving costs are the main components of variable O&M costs.
Unfortunately, the available data often merges fixed and variable O&M costs into one number, thus rendering impossible a breakdown between fixed and variable O&M costs. Table 7.1 provides data for the fixed and variable O&M costs for selected bioenergy for power technologies.
7.4 CAPACITY FACTORS AND EFFICIENCY