“The average installed cost tends to drop in years when Asia dominates biomass capacity additions, as opposed to when North America and Western Europe (NAWE) or Latin America dominates,” the report read in part.
Asia is projected to contribute about 70% of the world’s biomass capacity growth between end-2021 to 2031 as it is expected to see an annual growth of 4.9%.
Fitch noted that costs for biomass power plants are higher in NAWE where biomass has been established longer compared to Asia. Western Europe has generated a total of 3 gigawatts of capacity in 1990, whilst Asia has generated only 76 megawatts.
The cost of labour is also lower in Asia, which consists more of emerging markets, in comparison to NAWE, further driving down the cost of installation.
“Given the dynamic of Asia as a hub of cheaper biomass power plants, total installed costs will experience downward pressures over the coming years as we forecast Asia to be the leader in net biomass capacity additions,” the report also noted.
