Forests are a source of potential energy. The time is coming (and is, in places, already here) when the role of forests will change from principally supplying logs to being a source of energy as well. This is being driven by rising fuel prices, climate change concerns and ambitious government targets.
The forest residue resource is large but varies widely by region. The market for the resource is developing and there are a growing number of potential users for the resource.
In the 1990s, there was little, if any, harvesting of forest residues as energy. By 2000, the amount being harvested for commercial energy was around 50,000 tonnes per annum. This figure is now around 250,000 tonnes per annum and set to rise over the course of 2008 as a number of initiatives in forest residue harvesting become a physical reality.
Currently only 27% of the easily-accessed material (landing residues) is being recovered. Operations are planned to recover cutover residues in areas where there is significant demand for wood fuels for industrial heat (Canterbury).
There are potentially as much as 1.8 to 1.9 million tonnes of residues that could be utilised from landings and rolling terrain. Anecdotal evidence from forest biomass recovery operators is that the published estimates are conservative.
Companies currently involved in recovering forest biomass for energy are:
For a list of contact numbers click here
Significant quantities of forest residue material are available throughout New Zealand. The volume of material available and at what extraction cost varies widely from region to region. For a breakdown of volumes available in each region, click here.
The government has set targets for the increased use of forestry derived biomass for energy in its New Zealand Energy Efficiency and Conservation Strategy 2007
The document outlines targets for various energy uses, including:
- to provide an additional 7 PJ per year of consumer energy from forestry residue by 2025 off a base of 0.8 PJ in 2005. 7 PJ per year equates to 800,000 green tonnes of forest residue.
- to provide an additional 3.5 PJ per year of residential and commercial consumer energy from woody biomass by 2025 off a base of 8 PJ per year in 2005.
These targets make it highly likely that in future residues will become a valued resource as opposed to an inconvenient waste.
Funding opportunities
The Forest Industries Development Agenda (FIDA) is a potential source of funds for companies to assist with developing operations to utilise forestry derived woody biomass for energy.
The Energy Efficiency and Conservation Authority (EECA) administers the Wood Energy Grant Scheme which aims to increase the use of wood residues as an energy source.
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A further driver on the use of forestry, or any other biomass for fuel, will be the cost of carbon emissions. If and when a carbon tax is initiated the cost of CO2 emissions will be added to the cost of fossil fuels, but not to renewable biomass fuels (which are deemed carbon neutral).
The cost of carbon is likely to be in the order of $15 to $30 per tonne of CO2 equivalent. The table below shows the additional costs ($ per Giga joule of energy) of various levels of carbon charge.
|
Carbon Charge |
$15 tCO2 eq |
$20 tCO2 eq |
$25 tCO2 eq |
$30 tCO2 eq |
|
Coal |
$1.473/GJ |
$1.964/GJ |
$2.455/GJ |
$2.946/GJ |
|
Gas |
$0.786/GJ |
$1.048/GJ |
$1.310/GJ |
$1.572/GJ |
|
Diesel |
$0.041/l |
$0.065/l |
$0.067/l |
$0.081/l |
|
Petrol |
$0.035/l |
$0.046/l |
$0.058/l |
$0.069/l |
Bioenergy can
play a significant role in reducing Greenhouse Gas (GHG) emissions. Industries can reduce GHG
emissions by converting from using fossil fuels to using a carbon neutral fuel
such as biomass.
The
GHG Footprinting programme has been established due to increasing international
pressure on export markets for information on the GHG
intensity for products throughout their life-cycle.
For more information on this programme click
here
The main user of wood residue as fuel is the wood processing industry (sawmills, MDF plants, pulp mills etc). This industry in its various forms will continue to be the most significant user for the foreseeable future. However, there is also potential to look for non wood processing industries to use wood residue as fuel in some locations. These opportunities include: dairy factories, cement works, meat works, food processing plants, and commercial scale heat plants such as schools and other institutional heat users (hospitals, hotels). There is also an opportunity for electricity generating plants to co-fire wood residue with coal.
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For many forest owners and managers there is a significant energy resource available, which is currently not being utilised. It is a potential revenue stream that is not being exploited.
In the past, there has been little demand for this material, but it is likely that due to some of the reasons outlined above (government policy targets, cost of carbon, energy demand etc) that a demand for this material will occur, and that a price will be attached to the provision of it. Initially this price might be quite low ($10 per tonne) but this may rise over time as the cost of competing fossil fuels increase.
For a forest with a harvest of 100,000 tonnes per annum the volume of residues could be 4 to 6,000 tonnes on landings and another 14,000 on cutover. If just the landing residues are sold at $10 per tonne, the extra revenue is $40 to $60,000 per annum.
For more information on the potential revenue from using residues for fuel follow this
link.
There are some barriers to the wider uptake of the use of forestry derived residues, these are:
Before large scale use of forestry derived biomass will be implemented by energy users outside the forest industry, they need to have a guarantee that residues will be available
The fuel supplied not only needs to be available year round, day in day out, but it needs to be of consistent (preferably high) quality.
Currently it is difficult to guarantee supply to large users, as the fuel suppliers are often contractors who work in the forests on a relatively small scale. Deals done at a higher level between forest owners/managers and the fuel buyer could improve the confidence in supply.
Typically woody biomass is being traded by the tonne, which is not ideal as the energy content and weight of woody biomass is affected by moisture content.
Simple means are available to move to a payment by energy system. Download the full report:
Payment by energy (PDF 164 kB)
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