Economic Assessment of Biomass Based Power Generation

Abstract

Biomass based power generation systems can play a significant role to alleviate energy crisis and reduce fossil fuel dependency in the countries that possess abundance of agricultural and forest biomass resources. Particularly the countries to go for biomass energy in a large scale must know power and energy potential for biomass based commercial production with proper economic assessment of the possibilities. In-depth knowledge is must to assess the profitability and sustainability of the projects. Profitability measures how the investment in the project can be secured to have an ensured surplus to be shared by the stake holders and sustainability ensures the long-term existence in the business with a positive trend of gaining market share day by day or simply to be in the business. This chapter will present the details of the economic assessment of biomass- based energy projects in terms of net present value (NPV), internal rate of return (IRR), discounted payback period (DPB), and cost of energy. The economic profitability measure is a must before advancing to a venture whether it is self-financed or loan financed. So, it is hoped that readers of the chapter should develop a proper evaluation capability and know how to analyze the biomass-based energy projects.