• +1 (612) 333-0430
  • 528 Hennepin Ave., Suite 703 Minneapolis, MN 55403 USA

Barriers, Opportunities and Potential Models for the Western U.S.

Globally, wood and charcoal are the main energy sources for more than two billion people.[1] Production of energy using a renewable material such as wood can have positive impacts on the environment and the economy. It can also contribute to the nation’s energy security in a significant way by reducing dependence on imported fossil fuels. Despite these positive impacts and abundant, in some cases overstocked, forest resources, woody biomass makes up only about 2% of primary energy production in the United States.[2]

To better understand how biomass energy could be more widely adopted in the U.S., this project focused on identification of factors contributing to success or failure of biomass energy projects. The findings were used to identify barriers to and opportunities for achieving more extensive use of such systems. This project focused on addressing four primary questions.

What are the opportunities and barriers to wood-to-energy facilities?

What are the lessons learned from existing projects?

What are the potential impacts of non-traditional revenue sources (e.g., payments for environmental services)?

What models could be economically viable for development of wood-to-energy facilities in a western public lands environment?

Based on interviews, survey results, site visits, case study development, and a financial analysis that involved biomass energy facilities across the United States, a number of barriers to wider adoption of biomass energy production in the U.S. were identified.  Recognition that economic factors and financial concerns on the part of potential purchasers and investors are critical elements in biomass energy adoption and long-term success led to close examination of the economics of biomass energy production.  The result was the development of the Biomass Investment Multiplier (BIM) as an additional tool for use in economic assessment of bioenergy project potential.  This, in turn, was used to evaluate a number of model scenarios in which biomass energy was compared with more traditional energy sources. This evaluation illustrated how biomass energy investments compare with alternatives and opportunities to design financially competitive biomass energy systems. The availability of payments for environmental services can contribute to improving the financial performance of associated biomass energy systems. Applying biomass energy development as a more economically efficient wildfire risk reduction activity could provide opportunities to access non-traditional revenue sources.

The production of energy using a renewable material such as wood can have positive impacts on all three legs of the sustainability stool - society, the economy, and the environment.  Biomass energy development has the potential to foster economic development, address wildfires and associated risks and costs, and reduce dependence on fossil fuels.  There are critical strategic, organizational, and financial issues that need to be addressed in order to realize the considerable potential of biomass energy.  First and foremost, biomass energy needs to become an attractive and financially viable investment alternative.  This can be aided by strategically applying a wide array of market-based, as well as incentive and grant-based financial tools.

Prepared with support from the U.S. Endowment for Forestry and Communities and the USDA Forest Service via the Woody Biomass Joint-Venture Project, Grant 2012-002: Next Steps in Scaling-up Woody Biomass Energy: Learning & Priorities

[1]  Source: www.cifor.org/publications/pdf_files/factsheet/4063-factsheet.pdf

[2] U.S. Department of Energy. 2012. Energy Information Administration.  Energy Perspectives 1969-2011. (http://www.eia.gov/totalenergy/data/annual/perspectives.cfm)

Recent projects