Brazil to overtake U.S. in biopower market

November 13, 2014 | By Barbara Vergetis Lundin

Brazil will overtake the United States as the world's leading biopower market, as its installed capacity rises from 11.51 GW in 2013 to 17.10 GW by 2018. That is the prediction from research and consulting firm GlobalData.

The U.S. had the world's largest biopower installed capacity in 2013, with 15.43 GW, notes GlobalData, but this will only rise to 16.49 GW by 2018 due to its large existing capacity, which has saturated the market.

"A major share of the U.S.' biopower capacity was installed in the 1980s and 1990s, meaning the country already had 12.82 GW by 2006, while Brazil only had 3.59 GW by that time," said Harshavardhan Reddy Nagatham, GlobalData's alternative energy analyst. "The nascent Brazilian market is being driven by the government, which has made it necessary for local utility service providers to obtain at least 2 GW of installed biomass capacity through auctions annually, for 10 years from 2007."

While there is a possibility of feedstock supply interruptions due to increased deforestation in certain areas, the rise in sugarcane plantations is expected to compensate.

"The abundance of sugarcane in Brazil makes the installation of biomass technology a very viable option for power generation," Nagatham explained. "Biomass projects will also generate electricity from both sugarcane waste and non-food energy crops, such as eucalyptus and pine trees."

Biopower does face competition from other sectors, such as hydropower, natural gas and wind.

"The biggest challenge to bioenergy will be Brazilian utility companies' inclination towards wind power and the large drop in wind energy capital expenditure," Nagatham said. "Furthermore, Brazilian Development Bank, which provides low-interest loans for renewable projects, does not give biomass ventures free access to finance, and instead shows preference towards wind power."

Despite this, GlobalData forecasts a positive outlook for biopower, with an installed capacity of 25.22 GW by 2025.

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http://www.fierceenergy.com/story/brazil-overtake-us-biopower-market/2014-11-13