Publications

Biomass projects are poised to undergo a new burst of interest as developers look for alternative sources to wind and wave technologies to meet the growing demand for renewable energy.

One of the principal challenges facing developers investing in a biomass project is to ensure that a secure and cost-effective supply of biomass fuel is in place.

The main sources of biomass fuel are not readily available in sufficient quantities across Europe to provide a secure supply to meet any significant growth in the use of biomass-based power generation and special energy crops grown as fuel for biomass are comparatively expensive and need large amounts of good arable land.

Developers are therefore looking to import wood chips or pellets from North and South America to fuel their power stations, taking care to manage the environmental impact of bulk transportation in order to preserve the green credentials of biomass as a renewable energy source.

These types of supply chain and cost management challenges have raised important questions for developers about how best to secure a sustainable, cost-effective and flexible supply of biomass fuel.

Among the issues that developers will need to consider before embarking on a biomass project are the optimum term for their fuel supply contracts and how best to manage the impact of currency fluctuation on the feedstock prices.

Moreover, developers will need to consider the most appropriate strategy to manage relationships with multiple suppliers effectively. They will also need to establish an efficient and environmentally sustainable transportation and handling process that will meet any future sustainability regulation that may be introduced by the European Union.

Read the latest Clifford Chance publications on biomass projects:

Regulatory issues in UK biomass projects (2 March 2012)

Construction issues in biomass proejcts (5 March 2012)

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