Investment costs


The investment costs for biomass based energy systems varies, depending mainly on the type of technology used, the size and type of energy produced (heat, electricity, liquid biofuels…). However, the general conclusion could be that due to more complex logistics of biomass handling and still not fully developed market for bioenergy systems, their typical investment costs are higher then those for fossil fuels.

The investment costs for bioenergy power plants can be as low as few hundred US$ per kW for co-firing, and as high as several thousand US$ per kW for other technologies. The capital cost of building a biomass-fired steam-turbine plant is about $2000-2500 per kW of installed capacity, including a return on the investment, although capital costs are expected to decrease in the future. The currently high capital cost is a function of small plant size, which also increases operating costs in terms of capacity per employee. The capital cost of the advanced gasifier power plant is based on equipment costs alone, estimated at $1037 per kW (costs are projected to fall into this range by 2010-2020). Projected total costs for the year 2020 for electricity from biomass gasifier/gas-turbine combined-cycle systems range from 4.0-7.0 US cents/kWh

One of the problems when evaluating the economics of a biomass heating system is the difficulty of comparing biofuels and conventional fuels prices, due to the complicated conversion factors. Without performing a detailed price comparison, the usual conclusion of most people is that biomass systems are more expensive. However, recent studies on the economics of wood heating in several EU countries have shown that the total costs of a district heating system using wood chips are actually lower then when using conventional fuels. More about investment costs and other details about heating on biomass: www.bioheat.info.

Comparison of cost, efficiency and size for a range of small-scale bioenergy technology systems (From Ralph Sims: The Brilliance of Bioenergy, published by James and James Science Publishers Ltd.)		Investment costs for a small scale biomass heating installation in Austria (picture): Boiler and fuel feeding: 17500 €, Storage construction: 22000 €, Installation costs: 4400 €