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Energy
production costs
Energy production cost (cost per kWh or GJ of energy produced)
is the best criteria for comparing bioenergy with other energy
sources. The extremely varied nature of biomass, and the many
routes possible for converting the biomass resource to useful
energy make this whole topic a complex subject. However, it
should be noted that due to considerable R&D efforts,
costs of energy production from biomass are generally decreasing
and in many cases today, are comparable with fossil fuels
energy.
The comparatively large amount of subsidies
provided to conventional energy sources is another problem preventing
biomass-derived fuels from playing a more substantial role in
global energy supply. The amount of money spent by developed
countries of the International
Energy Agency on R&D from 1988 to 1990 was US$73 billion
for nuclear, US$12 billion for coal, US$11 billion for all renewables
and US$1 billion for biomass (OECD
data).
The bioenergy industry can also take advantage of scale effects
as the market grows. This will create markets for specialists
-- consultants, fuel dealers and brokers -- who will improve
the overall market performance. Larger series of machinery and
equipment and larger volumes of biofuels also contribute to
reduced production costs. And there will be more incentives
for spending on R&D, standardization, and marketing. A growing
market will therefore lead to reduced
costs at different stages and a positive loop
may be created.
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| Electricity production costs from different
sources: WE-Wind energy, BM-Biomass, HY-Hydro, GE-Geothermal
(From: DG TREN) |
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Efficient boiler from heating with
biomass |
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