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Projecting the wood biomass industry

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Projecting the wood biomass industry

December 12, 2011 - 15:11
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BEDFORD, MA, Dec. 13, 2011 (RISI) -RISI recently released its2011 North American Bioenergy Forecast. This is RISI's third time projecting the expanding wood biomass energy industry. In 2008, RISI released a report,Emerging Biomass Industry: Impact on Woodfiber Markets, amidst a slew of announcements for new pellet, biomass power and biofuel facilities. At that time, fossil fuel prices were extremely high, as was interest in renewable energy. Last year, when RISI released the2010 North American Bioenergy Review,the global recession had greatly impacted the development of the bioenergy industry. Energy prices had softened, financing had become difficult to secure and there was a great deal of uncertainty surrounding energy policy in the United States. Now that the global economy has started a slow recovery, there is more clarity on the development of the North American bioenergy industry. Energy prices are elevated, but not to the extreme levels of 2008, financing remains difficult, but projects with favorable characteristics continue to develop, and the regulatory environment is a bit clearer -- it looks as though there will be little additional regulatory support for renewable energy in North America.

This latestNorth American Bioenergy Forecastexamines the development of the North American pellet, wood energy and cellulosic biofuel industries through 2016. This includes an assessment of regional wood fiber supply and demand to determine the growth potential for bioenergy industries as well as the costs these industries will experience for feedstock over the next five years.

Some of the discoveries of RISI's analysis include:

  • Wood fiber consumption by bioenergy industries is projected to more than double over the next five years -- going from 17 million tons in 2011 to 38 million tons in 2016.

  • Wood pellet capacity will continue to expand at an impressive 19% annually from 2011-2016.
  • RISI has reduced its forecasted capacity for biomass power generation by 22% as of 2015. The forecast assumes successful projects will be associated directly with a utility or a forest products company.
  • Commercialization of cellulosic biofuels appears likely to occur within the next five years. Wood fiber consumption will remain on a relatively small scale, projected at 4 million dry tons in 2016. Growth of this industry could be greater than we assume.

  • The woodfiber supply/demand balance will become progressively tighter based on growth in demand by the pulp and OSB sector, in addition to new markets associated with bioenergy industries. However, fiber supply shortages are not expected to be a major issue in most regions with wood prices remaining fairly low on an inflation-adjusted basis.