IEA forecasts growth in bioenergy production through 2023

By Erin Voegele | October 08, 2018

In its latest market forecast, the International Energy Agency predicts modern bioenergy will represent the biggest growth in renewable energy sources between 2018 and 2023, with bioenergy in the power sector alone increasing by 37 gigawatts (GW) during that five year period, reaching 158 GW.

The IEA released its Renewables 2018 market analysis and forecast report on Oct. 8, showing that renewables will continue to expand over the next five years, accounting for 40 percent of global energy consumption growth. The use of renewables is expected to increase most rapidly in the electricity sector, and will account for almost one-third of total world electricity generation in 2023. The use of renewables, however, is expected to expand far more slowly in the transportation and heat sectors due to weaker policy support and other barriers to deployment.

According to the IEA, bioenergy will remain the largest source of renewable energy over the next five years due to its widespread use in heat and transportation, sectors in which other renewables currently play a much smaller role.

“Modern bioenergy is the overlooked giant of the renewable energy field,” said Fatih Birol, executive director of the IEA. “Its share in the world’s total renewables consumption is about 50 percent today, in other words as much as hydro, wind, solar and all other renewables combined. We expect modern bioenergy will continue to lead the field, and has huge prospects for further growth. But the right policies and rigorous sustainability regulations will be essential to meet its full potential.”

Information released by the IEA shows that modern bioenergy, excluding the traditional use of biomass, was responsible for half of all renewable energy consumed last year, providing four times the contribution of solar photovoltaic (PV) and wind combined. The IEA said most modern bioenergy is used in final energy consumption to deliver heat in buildings and for industry.

The IEA report shows bioenergy will be the largest source of growth in renewable consumption over the next five years. Bioenergy in the form of solid, liquid and gaseous fuels will account for 30 percent of the growth in renewable consumption from 2008 through 2023. The IEA said this is a result of the considerable use of bioenergy in heat and transport, which account for 80 percent of final energy consumption.

Although bioenergy will remain the predominant source of renewable energy in 2023, the IEA said its share of total renewable energy will decline slightly, from 50 percent in 2017 to 46 percent in 2023.

According to the report, renewables will provide almost 30 percent of power demand in 2023, up from 24 percent in 2017. During the five-year period, renewables are forecast to meet more than 70 percent of global electricity generation growth. Bioenergy is expected to meet approximately 3 percent of global electricity demand in 2023.

Bioenergy power capacity is expected to increase by 37 GW over the next five years, reaching 158 GW in 2023. The IEA said the forecast has been revised up from last year to reflect a more optimistic outlook for China, which is expected to account for 37 percent of global bioenergy. The forecast for bioenergy in the European Union has been lowered, although the IEA said the U.K. and Netherlands remain major markets. While the report states that bioenergy is not expanding rapidly into many new markets, it does not that Mexico and Turkey are showing signs of growing deployment.  

The report indicates that an accelerated cast for bioenergy shows potential for an additional 19 GW of capacity over the next five-years, a 50 percent increase on the main case. The accelerated case highlights potential higher energy-from-waste and biomass cogeneration deployment in China, along with enhanced policy support in India for the utilization of agricultural residues and increased bagasse electricity generation in Brazil.

In the heat sector, the IEA notes that modern bioenergy produced almost 70 percent of direct renewable heat in 2017 and currently meets 8 percent of industrial heat demand, mostly in sectors that produce biomass waste and residues.

The consumption of bioenergy by the industrial sector is expected to grow 13 percent over the next five years. According to the IEA, there is currently significant untapped potential to increase bioenergy use in the cement, sugar and ethanol industries. If key cement-producing countries were to introduce robust frameworks for waste management, the IEA predicts the use of bioenergy in the industrial sector could be further increased by an additional 13 percent.

In buildings, the IEA predicts bioenergy use will grow by 8 percent through 2023. In the residential sector, the report shows the European Union accounts for 54 percent of global bioenergy consumption. Italy leads the pellet stove market, while pellet boilers made up almost half the market in Germany. The IEA said the U.S. remains the largest single consumer of bioenergy in the buildings sector.

The transportation sector has the lowest penetration of renewables, with the share of renewables expected to grow from 3.4 percent in 2017 to 3.8 percent in 2023.

Biofuel production over the five-year period is expected to increase 15 percent, reaching 165 billion liters (43.59 billion gallons) by 2023. By 2023, biofuels are expected to account for nearly 90 percent of total renewables in the transportation sector. Fuel ethanol is expected to make up two-thirds of biofuel production growth, with biodiesel and hydrotreated vegetable oil making up the remainder.

Asian countries account for the majority of the growth in biofuel output over the next five years, with the IEA predicting China, India and member states of the Association of Southeast Asian Nations representing half of the global expansion in biofuel production. Latin America will be responsible for an additional 45 percent of that growth, particularly Brazil.

Under favorable market and policy conditions, the IEA said the growth in biofuels could be even more significant over the next five years, reaching nearly 206 billion liters of production.