Competitiveness


For a bioenergy enterprise, e.g. a Combined Heat and Power (CHP) plant that produces heat and power from biomass, the key to achieving competitiveness is to increase productivity from all factors of production, reduce costs, improve product quality and to intensify marketing efforts. A particularly important type of cost at the early stages, when the business still is defining itself and the market is generally ‘thin’, are the transaction costs, i.e. the costs for market search, measurement, negotiation, contracting and contract enforcement. As the business grows, innovative technical and organizational solutions are normally found that increase productivity and reduce costs, including transaction costs. In the example of the CHP plant above, cheap feedstock may be obtained in the form of biomass waste from some other industry, e.g. a forest industry; new contracting practices and quality standards improve market efficiency; feedstock deliveries will be better coordinated; innovation will take place etc. The success of a bioenergy technology will also depend on the degree and kind of competition in factor markets and in consumer markets. Policy measures on the national, regional and local level also influence the final outcome of the bioenergy business.

In our case studies the following important factors for bioenergy markets development and competitiveness can be identified:

• Integration with other industry or structure
• Scale effects
• Competition within bioenergy sector
• Competition with other business
• National policy
• Local policy and opinion.

Small-scale biodiesel production facility in Mureck, Austria		Competitive prices in a local shop – the same philosophy applies to biomass fuels too		Modern chipping technology in Slovenia increases the competitivness of local biomass production