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02 MARKET AND INDUSTRY TRENDS
Bio-power Markets
Bio-power capacity increased by an estimated 5% in 2015, to
106.4 GW, and generation rose by 8% to 464 TWh; the rise in
generation was due in part to increased use of existing capacity. 31
The leading countries for electricity generation from biomass in
2015 were the United States (69 TWh), Germany (50 TWh), China
(48 TWh), Brazil (40 TWh) and Japan (36 TWh) followed by the
United Kingdom and India. 32 (p See Figure 8.)
By country, the United States is the largest producer of electricity
from biomass sources. In 2015, US biopower capacity in operation
increased by 4% to 16.7 GW; generation in 2015 was close to the
2014 level of 69.3 TWh. 33 There are signs that some existing bioelectricity
in the United States is not financially competitive with
low-cost generation from natural gas and with generation from
other lower-cost renewables. 34
In China, bio-power capacity reached 10.3 GW in 2015, an increase
of 0.8 GW over the year. 41 Generation was up 16% over 2014, to
an estimated 48.3 TWh. 42 The country’s 2010–2015 Five-Year
Plan aimed to reach 13 GW by 2015, with a target of 30 GW by
2030. Factors that have restricted progress include high feedstock
prices, poor co-ordination among projects and technical operating
difficulties. 43
Elsewhere in Asia, Japan’s efforts to stimulate growth in renewables
following the Fukushima nuclear disaster have led to increased
use of bio-power. Capacity reached a total of 4.8 GW in 2015,
and generation reached some 36 TWh. The growing market is
based largely on imported fuels such as wood pellets (principally
from Canada), wood chips and palm kernel shells. 44 In India, biopower
capacity saw relatively small gains in 2015: on-grid capacity
increased by 144 MW (up 0.3%) to 4.67 GW, and off-grid capacity
rose by 18.9 MW (up 2%) to 927 MW. 45
In Brazil, bio-power production relies primarily on sugarcane
residues, such as bagasse, as fuel. Capacity increased 250 MW
over the period 2013–2015, to 9.7 GW at end-2015. Growth was
relatively slow because wind power dominated the country’s
renewable energy auctions over this period. Even so, some biopower
projects were selected in the three auctions held in 2013
and 2015, and several PPAs were awarded during 2015 for new
and existing bio-power plants. 46
Transport Biofuel Markets
In 2015, global biofuels production increased by around 3%
compared to 2014, reaching 133 billion litres. 47 This increase was
due to good harvests in key ethanol-producing countries – maize
in the United States and sugar cane in Brazil – but was abated by
a slight reduction in biodiesel production. Demand was consistent
due to blending mandates, which sheltered markets from the
potential impacts of comparatively low global gasoline and diesel
fuel prices.
Bio-power production, from both solid biomass and biogas,
continued to grow in Europe. 35 Germany remains Europe’s largest
producer, and total bio-power capacity in the country remained
constant at 7.1 GW in 2015. Much of this capacity (4.8 GW) relates
to biogas-fuelled installations based on energy crops. Germany
has the largest biogas-powered generation capacity in Europe. 36
However, biogas power capacity growth was limited in 2015 due
to reductions in financial support for biogas plants. 37 Bioelectricity
production was up by 2% over 2014, to 50 TWh.
Elsewhere in Europe, both bio-power capacity and generation
increased significantly in the United Kingdom during 2015 (by
12% and 27%, respectively), making the country the world’s
sixth largest user of biomass for electricity generation. 38 These
increases were due largely to activities at Drax, previously the
United Kingdom’s largest coal-fired power station, where two
large generation units have been converted to biomass firing,
with a third currently undergoing conversion. 39 Around 4% of
UK electricity is generated from biomass at the site. The biogas
market also grew strongly in the United Kingdom, with the fastest
growth of any country in Europe, stimulated by an attractive feedin-tariff
rate. 40
Global production of biofuels was dominated by the United States
and Brazil – these two countries produce 72% of all biofuels –
followed by Germany, Argentina and Indonesia. An estimated 67%
of biofuel production (in energy terms) was fuel ethanol, 33% was
biodiesel, and a small but increasing share was hydrogenated
vegetable oils (HVO) and other advanced biofuels (with existing
capacity of around 0.5 billion litres/year). 48 (p See Figure 9.)
Global production of fuel ethanol increased by some 4% between
2014 and 2015, to 98.3 billion litres. The United States and Brazil
accounted for 86% of global ethanol production in 2015. China,
Canada and Thailand were the next largest producers. 49
US ethanol production rose 3.8% to 56.1 billion litres during the
year. 50 Domestic demand was supported by the US Environmental
Production Agency’s (US EPA) final Renewable Fuel Standard
(RFS 2) allocations for annual volume requirements. A 2% increase
in gasoline demand also increased the amount of ethanol that
could be blended while avoiding the 10% “blend wall”. 51 Ethanol
production in Brazil also increased by 6%, to a record output of
30 billion litres, due to a good harvest and government measures
that have increased the sector's attractiveness. 52 The other major
producer in the Americas, Canada, ranked fourth globally in 2015,
producing 1.7 billion litres (down 1% compared to 2014). 53
46