China’s Biomass Energy Potential

China is, or will soon become, the world’s largest consumer of energy. As the nation’s living standards rise with its expanding economy, China’s energy consumption will continue to multiply. Although this energy is overwhelmingly produced with coal, the Chinese government has taken aggressive actions to diversify its power supply using nuclear, hydro, wind, solar means and other clear energy, such as wood pellets production. For more information of wood pellet and pellet production, you can read this pdf guide. Alongside these alternative energy sources, biomass fuel too looks as if it will play a significant role in China’s future energy supply.

One accommodating factor for the increased use of biomass energy in China is the availability of raw materials. To feed the world’s largest population, China generates the world’s largest agricultural output. With such output comes the corollary: an abundance of agricultural waste. One estimate places the availability of straw for biomass fuel purposes at 700 million tons, largely as a byproduct of rice—China’s top yielding crop—and corn—its number two crop. However, challenges exist in this regard in that the straw made from rice husks has a high ash content and is less dense than other materials. Nonetheless, China may be able to duplicate some of the success that Denmark has had in generating biomass energy using straw.

To realize this primarily straw-based biomass energy potential, China’s government has recently implemented favorable legislation. In early 2006 the Renewable Energy Law was passed. This made legal the use of a wide range of biomass materials for power generation, although was accompanied with little financial support. Nationwide standards in the industry were adopted as recently as 2009 through the efforts of China Energy Conservation Investment Corporation, a company wholly owned by the state. Coinciding with this was the most promising government initiative for the adoption of biomass energy: China’s Medium- and Long-term National Plan for the Development of Renewable Energy, in effect through 2020. This plan calls for the increased use of a number of renewable energy sources, including 30 gigawatts of biomass power capacity by 2020—equal to the amount of wind power envisaged.

But have businesses responded? Are enterprises capitalizing on the combination of China’s voracious demand for energy, its biomass material endowment and government incentives? Indeed some are. One of the earliest players was China Power Inc., a subsidiary of the U.S.-based China Holdings, which is constructing 250 megawatts of biomass power generation capacity in four Chinese provinces. Shenzhen Energy Group announced the construction of a biomass plant worth USD 365 million in 2009, then in 2010 National Bio Energy received a USD 4 billion loan to create 100 plants across the country. This year Everbright International set forth its plans to build three biomass power stations in Jiangsu province.

China’s interest in biomass power has even extended overseas. At the end of last year, Shenzhen Full Dimension Sustainable Energy Investment of China, along with IMS Holdings, invested USD 15 million to construct a 12 megawatt biomass power plant in Sri Lanka. This June in Russia, China’s National Bio Energy entered into a joint venture with Inter RAO Unified Energy Systems. The operation will largely focus on research and development to enhance China’s biomass energy capacity.

To assess China’s biomass energy potential, consider: In 2009 it surpassed the United States to become the largest international investor in clean energy. China then extended its lead in 2010 by investing a world-record USD 54.4 billion in the industry. Given the nation’s need for energy, and the number of factors supporting its development, China is set to retain its position as one of the biomass industry