About this report
Policies to support bioenergy power development are improving around the world, but stronger efforts will be needed to ensure that policy goals are reached and the pace of generation growth is maintained. As ambitions for bioenergy in the Net Zero Emissions by 2050 Scenario are higher than the Sustainable Development Scenario’s, its status has been changed from “on track” to “more efforts needed”.
Bioenergy power generation increased 8% in 2020, exceeding modelled Net Zero growth of 7% through 2030. Nevertheless, deployment has been inconsistent in the past, with average annual generation growth in the last five years being below the necessary level.
Bioenergy capacity has expanded an average of 8 GW per year in the last five years, stimulated by national support policies such as feed-in-tariffs. It also weathered the Covid-19 crisis well, with global forestry activity and international trade continuing to maintain biomass supplies for power generation during the pandemic.
However, while the Net Zero Scenario models average annual deployment of 15 GW of new capacity between 2020 and 2030, actual additions in 2020 were only 9 GW. Furthermore, no significant increases in capacity deployment are expected in upcoming years because it is challenging to scale up power generation from bioenergy quickly and sustainably, and long-term, dedicated and overarching policies are crucial for its development.
Attaining the Net Zero trajectory will require effective implementation of existing and planned policies, as well as the development of new ones, to systematically accelerate capacity and generation expansion. Because the Net Zero ambition for bioenergy power generation in 2030 is significantly higher than the Sustainable Development Scenario’s of last year, and because growth expectations have not improved substantially, tracking status in this area has been changed from “on track” to “more efforts needed”.
Renewable policy changes in leading bioenergy countries in recent years have made it difficult to accelerate capacity and generation growth. China, Japan, Germany and the United Kingdom have transitioned from fixed feed-in-tariffs and certificates to competitive auction frameworks. Bioenergy fares poorly in these schemes, since it is less competitive with wind and solar on a cost-per-unit-of-energy basis, leading to lower deployment forecasts for these countries.
However, while biomass generation is less competitive with wind and solar on a cost basis, it offers other benefits that national renewable energy deployment policies could capitalise on. For example, biomass generation is dispatchable. Being able to provide electricity when needed, it can complement intermittent wind and solar resources, particularly during peak hours. It can also help reduce waste when feedstocks come from forest and agricultural residues or municipal solid waste. Finally, biomass offers a transitional solution for coal plants that still have a long economic lifetime. In this case, it is particularly important that biomass resources be sustainably supplied and that lifecycle GHG emissions be carefully accounted for.
Several important policy developments of the past year will influence bioenergy growth and the types of bioenergy used. In July 2021, Indonesia announced that it plans to make co-firing mandatory at its coal facilities, although dates and targets have yet to be released. It has tested co-firing with waste and wood chips at 114 coal plants and has started commercial co-firing at 17 plants with a total 189 MW of bioenergy capacity. Given Indonesia’s large coal fleet, this co-firing requirement could lead to significantly higher bioenergy use.
In May 2021, India announced a National Mission on the Use of Biomass in Coal-Based Thermal Power Plants to expand co-firing in coal power plants to 5-10%, using primarily agricultural residues. If effectively implemented, the new policy could raise biomass power generation considerably.
In Europe, the Renewable Energy Directive’s sustainability requirements have been extended to all bioenergy used in European nations, from both domestic and imported supplies. Countries are to incorporate this change into their national laws in 2021. Although raising sustainability standards is crucial to ensure bioenergy’s positive climate impact and to increase investor confidence, implementing policies and other regulations to guarantee feedstock sustainability will also be necessary to ensure continued bioenergy power generation growth in Europe.
To keep bioenergy on track, support policies should acknowledge its unique benefits, promote the use of wastes and residues, and ensure supplies are sustainable and lifecycle GHG emissions are accounted for.
Like competitive auctions, policies should highlight the benefits of bioenergy beyond its low generation costs – for instance, its dispatchability and its usefulness in meeting broader policy objectives such as waste management, rural development and increasing grid reliability.
Countries can capitalise on these benefits by designing renewable power auctions suited to specific grid and demand profiles (when power is needed at different times of the day and year). For example, in 2017 Thailand launched an auction for 300 MW of renewable energy with specific production requirements for peak hours. In this auction, biomass systems made up 14 of the 17 winning projects.
Improving waste collection and sorting is necessary to expand energy-from-waste (EfW) capacity. In Europe, policies that discourage sending waste to landfills (such as landfill bans or taxation) have prompted higher EfW development.
EfW should be employed only in accordance with the wider waste management hierarchy, which categorises waste management options according to which are best from an environmental perspective and advises that materials be reused and recycled prior to energy recovery.
Robust sustainability frameworks are essential for bioenergy growth. Only bioenergy that reduces lifecycle GHG emissions while avoiding unacceptable social, environmental and economic impacts can contribute to energy system decarbonisation. Strong sustainability governance and enforcement must therefore be a central pillar of any bioenergy support policy.