Industry Trend Analysis - Austerity, Sustainability To Weigh On Biomass Outlook - DEC 2017

BMI View: We anticipate a slowdown in biomass capacity growth over our 10-year forecast period, as financial support for new projects will contract in line with the UK government ' s more austere approach to renewables. Growing concerns over the environmental credentials of biomass will place further downward pressure on growth.

We expect biomass capacity growth in the UK to slow substantially over the coming decade. This will be the result of falling governmental appetite to fund support renewable energy schemes, aligning with the austere approach to renewables that is currently in place (with the exception of offshore wind power). We also believe that the UK's heavy reliance on imported biomass feedstock will put biomass projects under increasing scrutiny on account of questions over their environmental credentials, weighing further on the government's willingness to stimulate growth in the segment over the long term.

We forecast capacity in the sector to expand by an annual average of 2.4% between 2016 and 2026. This forecast is buoyed by the 420MW Lynemouth coal-to-biomass conversion and the 299MW Teeside dedicated biomass projects, which are set to come online in 2017 and 2018 respectively. Between 2019 and 2026, we expect growth to slow to an annualised average of 1.1%. This forecast is underpinned by two main factors:

  • Biomass Sector In For A Slowdown
    UK - Biomass Capacity, MW
    f = BMI forecast. Source: EIA, BEIS, BMI.

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