Challenges and opportunities

Biomass is being applied in new and innovative ways to heat homes, generate electricity and fuel vehicles. This has led to a growing biomass energy industry in Canada and worldwide. Future growth of the industry will be shaped by different challenges and opportunities:

• huge untapped potential
  Canada has vast amounts of biomass, much of which remains unused. For example, BIOCAP Canada Foundation, a university-based research organization, estimates that there may be enough unused biomass (agricultural wastes, mill wastes, unused tree branches) from Canada’s forestry and farming operations to provide about 27 per cent of Canada’s energy needs. However, the economic costs of gathering and processing this energy resource are not well understood.
  
  
• cost competitiveness of technologies
  One of the barriers facing expansion of biomass power is the need to make the industry more competitive with traditional fossil fuel power plants, which often can produce electricity at much lower costs. The technology used to generate electricity from biomass has become more efficient and cleaner over time, but the costs of capital equipment are relatively high and fuel costs remain high, because of collection, transportation and handling costs. Currently the average cost of electricity from new biomass power plants is about five cents per kilowatt-hour, compared with about 10 cents per kilowatt-hour in the early 1980s.
  
  
• transmission issues
  Another barrier to developing more electricity from biomass is access to transmission. Often the best sources of biomass materials are in remote locations, distant from power grids and far from cities where electricity is heavily used. So the development of biomass plants, which supply power to the grid, may require the need for new or expanded transmission facilities.
  
  
• environmental concerns
  Biomass energy has some environmental impacts. When burned, biomass resources release air emissions, such as particulate matter and sulphur dioxide, to the atmosphere. These emissions depend on the choice of biomass materials and the technologies and pollution controls used. The development of large-scale energy crops, such as corn, for the production of biofuels could lead to increases in pesticide and fertilizer use that are harmful to wildlife and habitat. And producing energy, in addition to lumber and paper, could put more stress on Canada’s forest resources. For more information, see renewable energy and the environment.
  
  
• competing demands for biomass feedstocks
  One of the uncertainties facing future development of biomass energy is competition for biomass materials. For example, animal manures have value as fertilizers, waste paper can be recycled and wood chips can be used in landscape mulches. Also using crops such as corn or sugar cane to produce biofuels could potentially conflict with the need to produce food.
  
  
• government policies
  Environmentalists and industry say that more government support and policies are critical to stimulating a strong biomass industry in Canada. For example, they argue that government programs such as the Wind Power Production Incentive (a program that pays an incentive of about one cent per kilowatt-hour to Canadian wind power producers) should be increased and broadened to support markets for other renewable technologies such as biomass. They also say that tax credits and renewable portfolio standards should be considered to further development of biomass energy.