Biomass is likely to have a crucial role in Europe's ability to meet its targets for renewable use by 2020, according to a new report, ' Strategic Assessment for European Biomass Energy Markets' from Frost & Sullivan. Biomass, says the report, is the largest renewable resource in use and offers cost effective and sustainable opportunities that can meet the rising energy demand in Europe. In fact it forms almost two-thirds of all renewables in the fast growing renewable sector, owing to its competitive prices.

Perhaps equally importantly, continues the report, it also meets requirements of reducing carbon emissions and provides power, heat, fuel as well as alternative feed stocks. It accounts for around 5 per cent of total energy consumption and in countries such as Finland, Sweden and Austria its contribution reaches about 15-20 per cent as biomass is supported with specific policies. It is primarily used for both production of electricity and heat in cogeneration plants and as a fuel in municipal district heating facilities and the utilisation offers a variety of energy services derived from biomass resulting in clean and efficient use of bio energy.

"Soaring oil prices, combined with the lack of secure supplies of oil and natural gas, have heightened the benefit of producing power locally," note Frost & Sullivan analysts who conducted the research. "A balanced energy portfolio with renewable, distributed generation coupled with the benefits of cogeneration is essential for a healthy energy market in Europe. These trends will underline the case for biomass-based energy generation."

However, the high capital costs involved in establishing biomass power plants are a major deterrent to investment. Substantial outlays make project development complex for potential end users, including both small and medium enterprises. This challenge is partly assuaged by incentives in some countries.

"Cost reduction is an important factor of production and transaction expenditures involved during the initial stages that require evaluation and appropriate modifications," explain Frost & Sullivan analysts. "Transaction costs can be reduced, subject to technical and operation solutions, and will ensure higher productivity at more cost-effective rates."

Fuel quality is also a problem with biomass fuels as they are often bulky and have a high moisture content that leads to variable quality. Standardisation techniques for fuel upgrading will ensure fuel quality.

"Moreover, biomass is still referred to as a 'fuel of the past,' owing to its historically low efficiency and high emissions," remark researchers. "Proper installation of clean burning combustors that meet modern air emission standards solves concerns related to health problems and levels of particulate emission. Ensuring acceptable cost, quality and adequate supply of biomass fuel will be critical to the successful implementation of bio-energy projects."