With rapid development of renewable energy in China, the World Bank recently released a new “Fuel Supply Handbook for Biomass-Fired Power Projects” to provide new investors in the sector with guidance on how to manage their fuel supply risk during the planning and preparation stage of biomass-fired power projects.

A wide variety of raw materials can be used to produce biomass fuels for power generation，including forestry residues, energy crops, agricultural residues, food waste, and industrial waste and products. China has tremendously rich biomass resources and great potential for development. The government has taken incentive policies to encourage development of biomass energy. Total installed biomass-fired generating capacity in China reached four gigawatt (GW) by the end of 2009. The government announced an increase in feed-in tariff to 0.75 yuan per kilowatt hour (kWh) in July this year, making biomass energy more economically viable. China currently has a target to achieve total installed biomass-fired generating capacity of 30 GW by 2020, though adjustment of the target is under consideration in the new energy plan.

The handbook aims to provide the reader a comprehensive overview of the relevant issues to consider when planning and preparing an investment in a biomass power plant. It covers (a) a thorough introduction of the relevant topics; (b) best practices and case studies from China and from leading overseas countries, showcasing international experience; and (c) lessons learned, practical tips, and suggestions for candidate investors in biomass energy plants. In particular, the report describes the experience of Scandinavian countries as an illustration of best practices. Denmark is a world leader in large-scale energy production from straw, and Finland and Sweden are world leaders in large-scale energy production from forestry residues.

This handbook covers a wide range of topics related to biomass fuel supply risk in the planning and preparation stages for a biomass-fired power plant. Chapter Two introduces the use of biomass as an energy source, including fuel selection considerations and the fuel standards and specifications required to match a particular fuel supply to a power generation system. Chapter Tree describes the use of biomass resource assessments at the project planning stage. Chapters Four and Five give insight into the biomass supply from straw and forestry residues, respectively. Fuel supply management is covered in Chapter six, which addresses the topics to be considered both at the plant planning stage and at the operational stage. It describes a methodological approach for fuel inspection and quality control, as well as an instrument for assessing fuel supply risks and developing mitigation strategies.

(China Development Gateway October 27, 2010)