As we ramp up renewable energy production, sources of biomass, including wood, forestry thinnings and energy crops, will play an increasingly important role, especially in the heat sector. However, the development of a robust supply chain is crucial if we are to effectively mobilise this biomass.
This is according to Teagasc’s energy and rural development specialist, Barry Caslin, Barry Caslin.
He explains that while there are commercial structures in place for other agricultural enterprises, such as dairy, beef, sheep and crops, similar structures are needed to fully commercialise the use of biomass in order to meet our renewable energy targets.
The moisture content of the tonne directly impacts its energy content; a higher moisture content results in lower energy content.
To achieve this, there will need to be a number of different trading mechanisms in place for biomass supply chain groups.
For example, farmers with forestry may co-ordinate thinning with external contractors, while others may grow energy crops like willow and harvest them as a group to supply to biomass boilers within a 50km radius.
The supply chain group may take control of the resulting biomass, or, in the case of forestry, a third-party biomass supplier may work with the owners to co-ordinate the thinning process and distribution of the thinned biomass.
Converting gigajoules to euros
If, for instance, members of a willow supply chain were to come together and form a group (limited company or co-operative), it could offer to pay its members and other farmer suppliers, say €24/t for freshly harvested willow with a moisture content of around 50-55%. The moisture content of the biomass directly impacts its energy content – a higher moisture content results in lower energy content.
Customers only pay for the gigajoules of energy in the biomass and not the water content. Thus, the lower the moisture content, the higher the energy content.
Many customer require dry biomass but power station’s like Bórd na Mona’s Edenderry plant can burn materials at up to 55% moisture content, which simplifies the supply chain considerably.
The cost of transport remains a key question however and indicative rates for fresh biomass can be found in Table 1.
How much can I make selling to Bórd na Mona?
If we look how Bórd na Mona calculates a delivered price for willow, it uses the following formula to work out the energy (gigajoule per tonne):
Net CVa = 18.44 – (0.2090 x moisture content) = gigajoule per tonne (GJ/t).
If the moisture content of the willow is 55%, then this works out as 18.44 – (0.2090 X 55) = 6.945 GJ/t. If we assume a price of €9 is paid per gigajoule of energy supplied, each tonne supplied at this moisture content would work out at €9 x 6.945 = €62.50/t.
If working in a supply chain group, then it’s likely that the group could avail of cheaper harvest and transport costs due to higher volume, estimated to be between €24-€31/t. With an average yield of around 18 fresh weight tonnes per year, this could leave profit of between €567-€690/ac per year.
Local heating project
Another example worth exploring is if the farmer supply chain group delivers willow to a local district heating project, which heats the local hospital, swimming pools, nursing home etc.
In this example, let’s assume the group pays each other and other farmers €24/t of willow off the field.
The group then has to decide whether they pay for transport costs and harvesting costs, etc.
Let’s assume that the group pays and organises for the transport and the harvesting. It also dries down the freshly harvested willow from 55% moisture to 15% moisture content and stores it on its own site.
The supply chain group would incur the cost of harvesting, transporting and drying the biomass.
The group is paying the farmer €24/t per tonne, which, at 44 fresh tonnes per hectare per year, is €1,056/ha or €427/ac. This is after two year’s growth, but on a yearly basis, this would work out at around €528/ha or €214/ac.
This is much better than 66% of the beef farms in the country, who are not making a profit or are just breaking even, explains Barry.
These processes will cost the group approximately €24.57/t to dry the willow, €28.35/t (per dry tonne) to harvest, €24.57/t to transport and about €10/t to transport to district heat customers.
The group’s total supply chain costs are €132.85/t, as seen in Table 2. This excludes own labour and the capex repayments on building/drying facilities and innovative risk taken on. The group then sells the dry willow to the end user for €180/t, which will make a profit of around €47.15/t.
Benefits to the end user
The hospitals, hotels, etc, are purchasing heat at €180 per dried tonne, which holds 15.1 GJ (or 4,200 kWh) of energy. This equates to roughly 4.3c/kWh. Compared to oil, which costs around 10.4c/kWh, biomass is 2.4 times cheaper.
In addition to this financial advantage, the long-term stability of oil prices and the availability of oil for heating buildings is still uncertain.
To encourage a transition to biomass, the Government is offering subsidies for businesses. The development of biomass supply chain groups makes sense both in terms of land use and supporting rural viability.
As we ramp up renewable energy production, sources of biomass, including wood, forestry thinnings and energy crops, will play an increasingly important role, especially in the heat sector. However, the development of a robust supply chain is crucial if we are to effectively mobilise this biomass.
This is according to Teagasc’s energy and rural development specialist, Barry Caslin, Barry Caslin.
He explains that while there are commercial structures in place for other agricultural enterprises, such as dairy, beef, sheep and crops, similar structures are needed to fully commercialise the use of biomass in order to meet our renewable energy targets.
The moisture content of the tonne directly impacts its energy content; a higher moisture content results in lower energy content.
To achieve this, there will need to be a number of different trading mechanisms in place for biomass supply chain groups.
For example, farmers with forestry may co-ordinate thinning with external contractors, while others may grow energy crops like willow and harvest them as a group to supply to biomass boilers within a 50km radius.
The supply chain group may take control of the resulting biomass, or, in the case of forestry, a third-party biomass supplier may work with the owners to co-ordinate the thinning process and distribution of the thinned biomass.
Converting gigajoules to euros
If, for instance, members of a willow supply chain were to come together and form a group (limited company or co-operative), it could offer to pay its members and other farmer suppliers, say €24/t for freshly harvested willow with a moisture content of around 50-55%. The moisture content of the biomass directly impacts its energy content – a higher moisture content results in lower energy content.
Customers only pay for the gigajoules of energy in the biomass and not the water content. Thus, the lower the moisture content, the higher the energy content.
Many customer require dry biomass but power station’s like Bórd na Mona’s Edenderry plant can burn materials at up to 55% moisture content, which simplifies the supply chain considerably.
The cost of transport remains a key question however and indicative rates for fresh biomass can be found in Table 1.
How much can I make selling to Bórd na Mona?
If we look how Bórd na Mona calculates a delivered price for willow, it uses the following formula to work out the energy (gigajoule per tonne):
Net CVa = 18.44 – (0.2090 x moisture content) = gigajoule per tonne (GJ/t).
If the moisture content of the willow is 55%, then this works out as 18.44 – (0.2090 X 55) = 6.945 GJ/t. If we assume a price of €9 is paid per gigajoule of energy supplied, each tonne supplied at this moisture content would work out at €9 x 6.945 = €62.50/t.
If working in a supply chain group, then it’s likely that the group could avail of cheaper harvest and transport costs due to higher volume, estimated to be between €24-€31/t. With an average yield of around 18 fresh weight tonnes per year, this could leave profit of between €567-€690/ac per year.
Local heating project
Another example worth exploring is if the farmer supply chain group delivers willow to a local district heating project, which heats the local hospital, swimming pools, nursing home etc.
In this example, let’s assume the group pays each other and other farmers €24/t of willow off the field.
The group then has to decide whether they pay for transport costs and harvesting costs, etc.
Let’s assume that the group pays and organises for the transport and the harvesting. It also dries down the freshly harvested willow from 55% moisture to 15% moisture content and stores it on its own site.
The supply chain group would incur the cost of harvesting, transporting and drying the biomass.
The group is paying the farmer €24/t per tonne, which, at 44 fresh tonnes per hectare per year, is €1,056/ha or €427/ac. This is after two year’s growth, but on a yearly basis, this would work out at around €528/ha or €214/ac.
This is much better than 66% of the beef farms in the country, who are not making a profit or are just breaking even, explains Barry.
These processes will cost the group approximately €24.57/t to dry the willow, €28.35/t (per dry tonne) to harvest, €24.57/t to transport and about €10/t to transport to district heat customers.
The group’s total supply chain costs are €132.85/t, as seen in Table 2. This excludes own labour and the capex repayments on building/drying facilities and innovative risk taken on. The group then sells the dry willow to the end user for €180/t, which will make a profit of around €47.15/t.
Benefits to the end user
The hospitals, hotels, etc, are purchasing heat at €180 per dried tonne, which holds 15.1 GJ (or 4,200 kWh) of energy. This equates to roughly 4.3c/kWh. Compared to oil, which costs around 10.4c/kWh, biomass is 2.4 times cheaper.
In addition to this financial advantage, the long-term stability of oil prices and the availability of oil for heating buildings is still uncertain.
To encourage a transition to biomass, the Government is offering subsidies for businesses. The development of biomass supply chain groups makes sense both in terms of land use and supporting rural viability.
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